New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-07-06
Fake Bankruptcy Inquiry
Results, in Discovery
of Big Plot.
DIAMONDS SHIPPED
IN ROLLS OF BRAID
Indictments Are Expected his
Week-Canada Likely to
Deport Men Wanted.


ere now pending in the Oniteo N'@'Vs
court. will be indicted again TINS weeA'
this time for smuggling. United states
Attorney Marshall's Office. IN us IN
ouirv into the affairs Of the bankrupt
firm Of Joseph Samuels e. Son and al
lied concerns. has developed proof OK
2 scheme whereby members Of the ring
brought diamonds valued at hundreds
Of thousands of dollars into the United
States duty free.
As the duty on unmounted diamonds
is 20 per cent. the saving to the gang
ran into the tens Of thousands.
Involved in the scheme is a Montreal
firm of diamond brokers. At least one
Maiden Lane broker has something ne
will be called upon TO explain, ana
numerous pawnbrokers who advanced
money on the struggled goods are also
relied on to furnish evidence against
the men accused of smuggling.
Most Of those against whom the new
indictments are directed are already
under heavy bail. awaiting trial on the
bankruptcy indictments. and no fear is
expressed as TO the ability of the gov
eminent to get them when wanted.
Others in the plot are in Canada and
exempt from prosecution. as the eX-
tradition treaty will not allow of their
being brought back.
II negotions now under way, how
ever. are successful. those Of the gang
now in Canada that are not citizens
of the Dominion may be reached by
the simple eNpedient Of the Dominion
government expelling them as unde-
sirable citizens. The practice is to
send such undesirables TO the country
whence they came. and. if il is decided
TO expel the men wanted. United States
marshsls will be waiting for them at
the border with welcome home greet
ings.
Braid Firm Bankrupt.
The conspiracy dates back several
years. TO the time when Joseph Sam
uels & Son. q braid and trimmings
house. ranked as one of the leaders
in that trade. with rating of $780,,
COO The individual members of the
firm were also rated as wealthy out
side OF their partnership holdings, and
they we're interested in many other
businesses.
Two wears ago il began 10 be whis-
pered about in the trade that the firm
was in trouble. and in July, 1912. it
went into bankruptcy. II owed $780,
600 then, and it's tangible assets. 80
far as the trustee in bankruptcy, Cen
eral A. 6. Webb, of the Lincoln Trust
Company. could learn. consisted of
goods and cash worth but $4,000. The
troubles Of the firm. it was then stated.
were due to expansion and to the fact
that its credit had been destroyed by
the practice of members Of the firm of
indorsing notes for a consideration.
When Samuels failed other concerns
ha 81 al Fol,
being in excess Of s1,OOO,O0O Among
them was the house of Aaronson &
Gutenberg. pawnbrokers and dealers
IN diamonds and other precious stones,
in Montreal. Early in the following
year Herman j. Detz. diamond
broker. with Offices in Maiden Lane,
failed with liabilities Of $4,000 His
notes had been Endorsed by the Sam
lie Is firm for a large amount; and.
when diamonds could be procured in
no other way. the house bought the
goods direct for him, taking his notes
IN payment. At the time of the fail
ure the receiver found nothing in his
Office of value but safe and some fur
niture, including a set of jewellers
scales and weights.
As trustee for the Samuels firm Mr..
Webb caused rigid investigation to be
made. The results Of this inquiry he
turned over to the United States Dis
trict Attorneys office. and after months
OF work the grand jury in February Ia st
returned indictments against several
members OF the Samuels firm and Mrs.
Ray Abrahams, a sister Of several of
the members and a daughter Of an
other; Charles Hepner and Isaac An
derson. who were employed by the firm:
Dictz. and. in the last batch Of indict-
lawyer.
No Duty Paid on Diamonds.
These indictments will be moved for
trial IN the autumn. unless the new in
dlctments. which il is expected will be
handed down this week. prove more
important, rather remote contingency.
Meantime, hundreds Of thousands of
dollars in goods and money were un-
covered BY the trustees Of the several
firms and their attorneys
The discovery OF the diamond plot
was incidental TO the uncovering Of the
merchandise that had been made away
with. In tracing this stuff through
what remained of the bankrupts' books
some question was raised as TO how the
diamonds u was known had been pur-
chased were brought into the country.
There was nothing on the books to
snow the payment Of duties AT any
port. and the records at the Custom
House were also silent There was no
doubt. however. that the stones had
been brought iu.
u was no part Of the trustees duty
70 furnish evidence 10 the government
that would lead 20 further charges
against tho estate held for the benefit
Of the creditors Of The several firms.
bat II WAS part Of the District Attor-
ney's duties 20 look after lust such
cases, and as that Office is particularly
DESTROYS Of putting the members OF
this gang where for a long time they
vii not trouble the authorities. spe-
cal agents Of tho Department Of Jus
tee working under the direction of
Assistant United States Attorney
Roger Wood took up the leads.
Chase Leads 10 Canada.
The chase took them into Canada
where proof Of the purchase and ship
rnent Of the diamonds and other pre-
cious stones was forthcoming. There
also was found proof that the jewels
had been struggled IN in rolls Of cloth
and braid. These goods were bought
100 the usual way and unpacked. The
stones were concealed in the rolls,
which were restored 20 the original
wrappers. boxed in the usual way and
rhipped from the house which had sold
the drygOOdf.
About the goods when they reached
the Appraizer's Stores in this city
there Was nothing 20 indicate anything
irregular. Markings, tags and wrap
PER- we're intact, and the questions the
aDgraisers we're called on 70 answer