Evening public ledger. [volume] (Philadelphia [Pa.]) 1914-1942, 1914-11-03
FLAGG CONVICTED
OF USE OF MAILS
FOR STOCK FRAUD
Promoter, Connected With
Prominent Men Now Un-
der Indictment, Is Found
Guilty on Six Counts.

NEW YORK, Nov. 3-Jared Flagg, the
81 per cent. year stock broker and pro-
moter, who has been on trial before Judge
Rudkin and Federal jury in the United
states District Court en- an indictment
charging him in six counts, with fraudu-
lent use of the United States mails and
seventh count charging conspiracy, was
declared guilty late last night by the
jury on all charges save that OF con-
spiracy.
Intense interest centred in the case so
far as the United States District At
torneys Office was concerned by reason
Of the fact that Flagg had as his asso-
ciates number OF prominent and influ-
cntial men, who arc also under indlct-
ment and the prosecution of whom de-
pended to large degree upon the result
Of Flagg's trial
Chief among FlaEgs associates in busi-
ness was Daniel n. Morgan, treasurer OF
the United states under President Cleve-
land Others were L. G. Sewal the Rev
James T. Schoch Cwho has since died,
y. 70. Dc Wolfe, James Allen, Rufus p.
Hankey and Alvin NJ Higgins. FIagR
conducted his promoting schemes in Of
fees in West 10th street.
In summing up for the prosecution yes
terday Assistant United States District
Attorney Thompson asserted that the
circulars issued by Flngg and his asso-
ciates represented to possible investors
that they would realize So per cent. net
profit upon the principal invested. He in
sisted that Flaggs books showed that he
had defrauded his customers by throwing
their money away in Wall street and
collecting double commissions on the
transactions.
He charged that the defendant had
never won any money in the course of
these transactions, and declared that the
Government had proved this through a
careful auditing of Flagg's business.
Mr. Thompson declared that Flagg had
never used more than 10000 margin in
Wall street and that he did not live up
to his written representations.
'If the contention OF the defense IL
true" said the prosecutor. "and Flags
really earned through mis- stock gambling
the 100000 which he paid out as profits.
why was it that when his offices were
raided only $4,000 was found, Where did
the remainder Of the $l,20o,0OO invested by
his victims go"'
Mr.. Thompson read extracts from
Flaggs circulars and from a booklet
issued by him, entitled How to Take
Money Out of Wall Street"
John y. Coleman, counsel for FlagE,
cOntended that no evidence had been ad-
duced 10 show that his client had entered
into a conspiracy with Morgan, Sewall,
Schock ct al. He insisted that the addl-
tional charge of conspiracy had been
urged by the Government for the purpose
of strengthening weak and incomplete
case.
While Assistant District Attorney
Thompson was addressing the jury he al
luded to the fact that the defense had
attempted to make capital out OF the use
of Mr.. Morgan's name.
at is unfortunate that Mr. Morgan. a
former Treasurer OF the United States,
should be involved in such proceedings"
ne said, "but such man owed 1t TO the
peopIe who had honored him to live A
clean and honest life. and not be carried
away by the desire to sell his name for a
paltry profit"
In his charge to the jury Judge Rudkin
explained that the offense with which |
Flagg stood charged was punishable by |
$4,000 fine, two years Imprisonment or |
both.