The sun. [volume] (New York [N.Y.]) 1833-1916, 1912-11-19
RAID IN ID CITIES
To SMASH FRAUD
Simultaneous Federal Ar
rests for Sl.5OO,0OO
World Swindle.
EXTENDS TO LONDON
International Stock Guaran-
tee Just a Bluff for
Fee, Is Charge.
MASON G.WORTH ARRESTED
Accused Of Acting as New York
Representative in Victim
iZing Promoters.

Simultaneous arrests In ten cities
including New York. yesterday smashed
an alleged International stock fraud
scheme to victiniize corporations which
were about to put stock on the market
After months of Investigation by Fed
eral agents in East. West and South
in Canada and In England informa ton
was filed before United States Com
missioners and in several cases indict- :
ments obtained from Grand Juries. nam
ing officers or brokers' agents of the
American Redemption Company OF
benture Company Lf Chicago. Use OF
the mails to defraud-between $500, ,00O
and sl.5O0.OO0 is said to have been OBJ
tained--was charged.
Then, when everything was in read-
ness, an exact hour was agreed upon
for the raids In the ten cities. Yes
terday to the very minute Federal Off
GERS raided the various Offices and the
arrests were made before warning sig
nails could be flashed from one Cit To
another.
In New York, Rochester Chicago
Cleveland. Buffalo. Philadelphia. Boston
Newark. Dallas and Dubuque. la. the
alleged offenders were taken by surprise
and within few hours they had been
taken before "a United States Commits
sioncr for preliminary hearing or were
on their way to face indictments in
Cincinnati and Buffalo.
The ring. with its International con-
nections in Canada and England. is said
to have had an easy time defraudlng
promoters and budding companies
through fees received on promise Of
guaranteeing securities and securing
their sale through stock and insura nee
controlled by themselves.
The post office people say fees also
We're secured for 'lnvest!gating" prop
erty and that some excuse always was
found by the men under arrest for fail
ing to render the promised service
The scheme, which was launched in
Cincinnati. Is said to have proved So
successful in netting thousands Of dol
lars from its dupes that II soon led to
the organization n the American Re-
demption Company and the Chicago De-
benture Company as clearing houses. "
The men who were arrested in the
ten different cities Yesterday merely
acted as the agents or "cappers" OF these
two central concerns. say the post office
inspectors.
Postal Inspector Entemann, who
caused the arrest Of A. Brice Crane Of
Hunter & Crane, 500 Broad street, New
ark. as one of the brokers alleged to
have been involved. gave an interesting
description Of the International Syndi-
Gates methods last evening.
He explained that the brokers advar-
tlsed, saying they were ready to dispose
of the stock OF any mining company on
a per cent. basis. In answer to these
advertisements the brokers received
many leads" They then would offer. II
is said, to handle the stock. bonds or
certificates OF the applicant company
after they were guaranteed"
Several days later the inspector
stated. the firm wishing TO dispose OF
its ock would receive letter from
the redemption company announcing II
was willing to guarantee the stock.
1t is alleged that the firm. after pay
IUS Il tFI lbIH t1dl uTDOse
was Informed that the money was only
a retaining fee. This II the interesting
pol. In the negotiations at which the
International Syndicate entered. More
money was demanded for the payment
of representative Of the lnterna-
tional company to inspect the applicant
company, after which the redemption
company would consider guaranteeing
the stock issue. After more money was
duly paid an engineer would inspect the
prol ,rty, 1t Is said In almost all cases
It is alleged, an adverse report would be
made by the engineer and "the appll-
cation" would be dropped.
The post Office inspectors cite an
specific case. In which they
sllege Crane was involved. 1t was that
OF the Plttsburs Superior Mines Com
pany OF Pittsburg which Is said to have
been duped out OF $500.
Transactions Crane had with the
company are said to have led
up to his arrest. The company entered
into negotiations with Crane for the sale
Of $500. 900 worth OF stocks. He Is said
to have notified 1t that the stocks
would have to he guaranteed. and a few
days later the Redemption company in
a letter to the Pittsburg concern Is al
eged to have expressed willingness to
guarantee the Issue for $1,000 for each
800, 900 worth of stock.
The mines company communicated
with Hunter & Crane about the Re
iemption company, and in the reply the
former concern received It was stated
hat the Rochester firm was bona flde
were then opened for the
first issue of stock and 1t Is said, 1000
was paid for the guaranty No action
was taken to dispose Of the stock. and
t is charged that when the mines COM
pany made complaint about the delay Il
vas put Off with various excuses.
The postal inspectors said that after
ninety days the mines company was
,otified that the $1,000 was only q re-
amer. When the broker was appealed