New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-11-03
FLACC GUILTY
ON SIX COUNTS
Promoter Convicted OF
Using Mails to Defraud
Customers.
ESCAPES CHARGE
OF CONSPIRACY
Decision Affects Cases Against
Daniel n. Morgan and Other
Prominent Men.


Jared Flacs. the - per cent a year
stock broker and promoter, who mas
been on trial before Judge Rudkin ana
federal Jury in the United States ms
frict Court. on an indictment charging
him in six counts with fraudulent use
Of the United States mails, and n sew
enth count charging conspiracy WAS
declared guilty late last night oy 'ne
Jury on al charges save that OF con
spiracy. The case was gwen 10 the
iurv AZ $40 o'clock yesterday afternoon
and the verdict was returned shoruN
before 1880 last night.
Intense interest centred IN the case
60 far as the United States District At
-ornev's Office was concerned, by reason
o. the fact that FlaGG had as his asso-
ciates number Of prominent ana N
auertiql men. who are also under IN
6ictment. and the prosecution Of Wh3m
denended 20 a large degree upon the
result Of FlaEg's trial =:
Chief among Fiagg's associates IN
business was Daniel y. Morgan treas
urer of the United States under Pres
don't Cleveland Others were r. "
Sevall. the Rev. James 1. Schoch t"ho
has since died). r. r. De Nohe. James
Allen. Rufus 7. Hankey and AVN NJ
Higgins. FlaCg conducted ms pIotlo.-
ING schemes I'm Offices in West 4Uth ST.
IL summing up for the prosecution
,esterdav afternoon Assistant Unlteu
stare District Attorney Thompson as
serted that the circulars issued oy
FlarC and his associates represented
"a nosible investors that they would
realize 50 per cent net profits upon the
nrincinal invested. He insisted that
Fiarr's hooks showed that hehad de
franSed mis- customers by throwing
their money away in Wall Street ana
collecting double commissions on the
transactions.
Never Won Any Money.
He charged that the defendant had
never won any money IN the course
nj these transactions. and declared
that the government had proved TINS
through careful auditing OF flagg
Sir. thompson declared that Flagg
had never used more than SlVO,OOV
margin i'm Wall Street and that he ala
not live up to his written representa-
uonS. s..... -
III the contention Of the defence IS
true" said the prosecutor, land tIagg
reallv earned through his stock gam
bling the 100000 which he paid out as
nrofts. why was il that when his OF
ices were raided only $4,000 was
found? Where did the remainder OF
tbe S1.2OOOOO invested by his VIC
TINS 90? ....,
Flagg's circulars and from booklet
issued by him entitled. How 70 Take
Money Out of Wall Street
John VI. Coleman, counsel Tor Flsgg
coutended that no evidence had Deen
adduced 10 show that his client nad en-
tered into a conspiracy with Morgan
SewaU. Schock, ct al. he insisted tnai
the additional charge OF conspiracy nae
teen urged by the government l0r 'nt
pirpose of strengthening weak and
incomplete case.
No Customer Closed an Account.
Nv Coleman asserted that the case
y-qs one of the most peculiar when ne
had ever tried, IN view Of the TACT tha'
,ot one OF Flagg's customers mad CLOSED
hi, or her account.
.'There is no complainant, he Cd
served. except this little hailowed
sacred group. which Is supposed 20
represent the government 90.
Counsel for the defence also llul-
culed the prosecutions attempt %
make capital out OF the dinners glver
for the entertainment Of customers anC
prospective investors.
While Assistant District Attorney
Thompson was addressing the jury M
alluded to the fact that the defence
mad attempted 20 make capital out o
me use OF Mr.. Molgan's name.
ut is unfortunate that Mr.. Morgan
former Treasurer Of the Unite,
States. should be involved IN sue
proceedings." he said, but such ma
owed IL to the people who had honore
him to live a clean and honest llf'
and not be carried away by the desir
10 sell his name for paltry profit
In his charge TO the jury Judge Rue
kin explained that hte offence wit
which Flagg stood charged was pun
i.hable by $4,000 fine, two years IN
prsonmeut on both.
After the jury announced ITS We
dict Nh Coleman moved that bail !
fixed until hearing of his formal m'
ton 20 set aside the verdict and ord'
"a new trial Judge Ruckin set the hea
ing for the motion down for Frda
afternoon at , o'clock and bail wa
fixed in $4,000