The Washington herald., 1913-04-22
JURY C0NV|CTS
FOR MAIL fraud
John r. Markley and Four
Others Found Guilty in
Lumber Case.
MILLIONS WERE INVOLVED
Washington Residents Said to Have
Suffered Through Purchase
of Stock.

Conviction OF five men in the United
States District Court, at Philadelphia, on
charges of conspiracy to use the mails to
defraud through the manipulation of the
International Lumber and Development
Company, by which they are alleged to
have made s6.000,0OO, aroused much in
terest in Washington last night among
officials of the Postoffice Department and
residents said to have suffered as a re-
suit Of the purchase of stock in the
company.
Those declared guilty by the jury,
which returned its verdict Saturday, are
John r. Markley, of Chicago; Isaiah III.
Miller, said to have been Marley S
partner: Charles NJ. McMahon. secretary
and treasurer of the International Lum-
Der and Development Company; Col. A.
@. Stewart, director and commissioner,
and William Armstrong, jr, general
manager of the company.
lnrestga ton of the alleged swindle
was started in February, 1872 by the
Postoffice Department. The defendants
convicted Saturday were indicted and
arrested i'm June. 1912.
All the defendants We're convicted on
three indictments. charging conspiracy
to use the mails to defraud. There were
three counts to each indictment, making
a total of nine counts for each defend
ant
The maximum penalty on each count
is five years Imprisonment. and the min
imum penalty two years Imprisonment.
Sentence Is Deferred.
The court .deferred sentence. pending
the disposition of a motion for a new
trial by counsel for the convicted men.
The convicted men were charged with
swindlng investors out of more than
S6,000,0c0 by circulating false and mis-
leading literature through the mails. 1t
was also charged by the government that
the swindlers paid s., 100000 i'm dividends
from the capital stock and not from al
legged earnings from the 2SS. 0o0-acre PLAN
tation of the company in the State of
Campeche, Mexico.
With witnesses present from all parts
of the United States and Mexico, the trial
began March 3. The government had
subpoenaed ninety witnesses, and the de-
Tense had AS many more.
A week was consumed by the govern
ment in reading stacks of alluring litera-
ture which was scattered broadcast over
the country by the company. 1t was
this literature that lured school teachers.
servants. and persons in all walks of life
10 draw their savings from banks and
invest in the stock of the company.
Inspectors Check Assets.
The defense suffered when Postal In
spectors Morse and Ryan took the stand
and checked up the actual assets of the
company with those represented in the
literature. The inspectors had visited the
plantation and made a personal investi-
cation.
Sworn statements of the inspectors
convinced the jury that the International
Lumber and Development Company was
a swndle. The mahogany forests alleged
to be on the plantation were proved not
To exist. and the reported profits on
tropical fruits. henequin. and live stock
were shown TO be a sham framed to
mulct the public.
Two master mariners testified that the
logs from other plantations and repre-
scented them to have been cut from the
forests of the company. Witnesses swore
that photographs of mahogany logs pub
lished in advertisements and literature of
the company were the logs of other con-
Germs
Testimony of an expert accountant was
that the books of the company showed
no profits of the plantation in Mexico
from the time of the company's organi-
"a ton i'm 1904. This destroyed the claim
of the company that il had paid dividends
from earnings.
Dr. William Il. Wilson. director of the
Philadelphia Commercial Museum. wit
rcss for the defense. acknowledged to
Judge Wilmer that the only asset the
plantation had was it's crop of honoquen. |
Col. Stewards audit was shown to be |
mass of meaningless figures. showing