The Wallace miner. [volume] (Wallace, Idaho) 1907-current, 1914-02-19
IMPROVED METHODS IN
FAKE NINE SW|NDLES
posToFFIcE INSPECTORS CATCH
CROOK AND TELL HOW
HE OPERATES.
Engineering and Mining JournaD

! Engineering and Mining JournaD
Time was when the ordinary lay
man was the "comeon" in mining
swindles but variations have been in
troduced in that game and prospectors
and companies Of small capital desr-
ing to float new issues Of stocks have
in the last few years been receiving the
attention of professional promoter.
who in offering to undertake STOCK
selling campaigns, demand "advan re
fees for circuarizing." On February
6, however, l. B. Adams was arrested
in New York on complaint of the pos
tai authorities, who alleged fraudulent
use of the mails. Among the specific
instances cited was the mailing of let
tiers to p. W. Braniff, secretary Of the
Cooperative Mining and Development
company, Of Wala Walla, Wash, and
others In which Adams represented
that as a security broker he was con
Quoting campaign to make market
for issues of new securities; that he
had force of sales agents in New
England states and had a large follow
Ing of investors who would be apt to
purchase the securities he handled and
recommended. 1t was further charged
that Adams falsely represented that h i.
would spend the advance fees demand
ed for his services, running from $S7 to
$780, in 'circularizing" investors, and
that in addition, he would bear one
third of the expense of the campaign
of exploitation and sale of stocks and
bonds in newly formed corporations
Inspector Explains.
| Our contemporary, Engineering
News, has received the following let
ter, which we are printing in the in
terests Of our readers:
Il desire to call your attention to
the arrest Of one l.. B. Adams, Of No. I
Broadway, New York, on February 6,
IA, charged with using the mails for
fraudulent purposes. Adams is sub
criber to your journal and 1t has been
his practice to persue your columns for
the purpose of securoing the names OF
mining and milling companies recently
Incorporated, or establish concerns
which are in need Of additional capital
to extend their business.
adams Immediately gets in touch
with such concerns, sending them 2
blank calling for Information as to the
capitaliza ton. officers, nature of their
business, etc. If the company in ques-
ton fills out and returns this blank
TO Adams, he replies with stock form
letter, stating that after such an in
vestigation as he has been able to
make he has satisfied himself as to the
merits of the concern; represents that
he has an organization capable Of
handling the sale of unlisted securi-
ties: that he maintains sales force
and that he has ample facilities for
the sale of such securities and recon-
mends that In order to place the mat
ter before the public the company in
question circularizes from 5000 to 90
600 of his investors, the circulariza-
ton to consist of fac-simile letters ad-
dressed to an individual, which usual
ly brings forth a reply which is for -
warded to this field organization for
personal interviews. The circulariza-
ton is priced at from 5000 to $1,000,
Of which Adams states that he is will
ing to pay one-third and pay the ex-
penses Of his agents in the field out
of his own pocket. He enters into
6O-day contract for the sale of the Sc
cureties on 10 per cent commission
basis.
1t is claimed by the government
that upon receipt of this advanced
Zee Adams does not carry into effect
the circularization which he promised
to do; that he has no organization;