The sun. [volume] (New York [N.Y.]) 1833-1916, 1914-01-25
U. s. TO CLEAN OUT
BANKRUPTCY RING
Evidence shows Gang Has Made
81. 100000 in u Year
by Frauds.
CONFESSIONS EXPECTED
Varied Schemes Worked to
Cheat CreditOrs-Lawyers
in Ccnspiracies.
CONFESSIONS EXPECTED

United states Attorney Marshalis Of
flee is busy with plans TO prosecute a
ring of conspirators who have defrauded
creditors by bankruptcy proceedings. The
gang IL alleged to have cleaned up more
than $1,000. 900 within u year
The arrests Of the last few days ia con-
nection with the failure Of Jacob Stein
a Sons is part Of the result OF the In
vestigation. Evidence is being gathered
to show how the various schemes worked
and TO bring about the conviction of those
engaged in the wholesale frauds.
1t is said that mercantile firms, banks
and creditors have been duped and
, cheated 10y alleged bankrupts who have
concealed assets before filing petitions in
bankruptcy. II has been the belief Of
b the prosecutors for long time that an
apparently well organized gang was maxi
/ ing pront out Of creditors by fake pro-
ceedings. hut no evidence could be OBJ
tanned to link the Individual cases to-
Z, th.r
several cases Ui alleged conspiracy 20
! defraud creditors by concealing assets are
/ pending before the Federal Grand Jury
and the United States Attorneys office
! is preparing others to present as fast rs
! the evidence can be put into shape II
/ is expected that before long confessions
will be made by some of those under ar
rest which will involve lawyers AS well
as bankrupts in general conspiracy.
One case Involves s5OO,OOV.
J -, ana, ,,.. o,,,,. h.,,. ,.,,,.,...., ,,,
! ~ -. ~ -, -" H. 80, 81 ~
i na,. -, 3D.. A., - 49,. - v.i,n -
spiracy to dupe creditors by making away
I with the. firms assets $500, 900 Is involved.
Tn. company failed IL little more than a
Year ago assistant United states Al
ar,to, as wan a., h.lT a do1sn Others ~
s,,,il., nature Ranks los, about s1Oo :
ann in this ono failure
/ 1, w,s no,p,.d on, last nIxh, ,y IA inv.
var working In behalf OF creditor, of a
! BANKRUPT charged with conspiracy that
! rIr. on, ~ ton cases Of commercial ba nix
run,cS u.,. f,kcd 70 ,., awav with as-
Sos which really belonged 10 creditors He
said thar, vas som.,hinx ou.stiousb BILE
4 ,hou, nearly All ,f them. IA. also en-
q h.siz,d TN, fact that groups of layy ers
4 oIv,ys tnk. tho sid. Of either the creditors
40 ,ha banLrunt. md consistently TAX. the
s.,,. stda in an cn.es thus acting "A. spe-
clalists
1.hs rruifaa states Attorney has now
,,,,.r .,o,side,a,ion changes In the bank-
-,n,rv la,. which will make the workings
- ~. alleged ring dI,,cul, and impose
h,,,,I,r u.ualti.s for conspiracy In cases
b..r. ia Ia. ,sfalli shed MI Mar
.n,u has found IL difiicult To prosecute.
? ,.,.r,,r,s :, IN. limit h..caus. creditors
49,. -, Inclined :, .e,tla for aluos,
a", ,,uo,,, and then ir. the case drop
,,s,,ad N, ASSISTING. TN. prosecu,or
A, ASSISTANT United states Attorney
ala -, nigbt thai ,h.r. vas a ring Of
,,,.,,ir,,,rs IA ms city that has mad.
80. No., s,.oon ooo out of Fraudulent
hankruntcy pr,r.edlngs in about n year.
r. ,o u.x. rrusters Named.
Tbi. Government Official said II was
EVIDENT tina. hanXrupts found no difficulty
in having their own receivers and trustee
appointed They also md II easy 10 make
terms with their clients and creditors and
at tne same time come out ahead.
The ways OF the ring, SAID announcer
lawyer experienced IN bankruptc! pro
cecdugs.. AR" as devious as the ways 81
breaking mo mouse, VI c"uTss W.!
thine - uN-u W. ~ auNahee VI '''. '''"'
4" lht P'"''' y" pa'". ~
'""h.n w pI'l, ,, u. go
va. ,.,t",, 80, IN. l,..dorai IA, a
90 So Wv .,f,,,, Ca arrang. m
: ~, 80 ~. .rya,a an ,n,ernrisln,
b 1',.,., ,,,n, 10 ,,,r,. intsliiyent than the,
!, -, ,l,n and carry ont tn. fraud
. ."rh,. rn.rchandis. and books vi tn
, ,,u,n,nv arr, 80 iuggl.d that when tn
y p.tttioner is adjudg,d "a bankrupt every
thing Looks bona tiu,. They have An
number ~ schemes, almost always an