New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1914-11-20
SIEGEL "PADDED"
MILLIONS, SAYS AID
Continued from page |
total would agree with tho ledger. This
was done with MIR SiegeIs knowledge.

q
was done with Mr.. Siegel's knowledge.
"But there had been $4,000 added
/ 10 the building account, which 10 was
l impossible TO conceal, so the examining
auditors made an adverse report which
scared the prospective investors of
Shortly after this the late Frank A.
/ Vogcl, who invested 100000 in the
/ enterprise. came 10 New York from
/ Chicago. Then came the midyear in
ventory, and when Vogel saw the con
ditions he called me into his private
/ Office.
"He was very angry" Prall said, land
! he asked, What have you been doing
/ told him we had ADDED $4,000 to the
/ first inventory and $4,000 had been
| added 20 the building account. lie SAID
| he had been sinking his good money
/ in the business.
81 saw Siegel afterwArd and told him
what had happened, and he told me
not to say anything TO Nogel about the
! padding, but told him it was too late.
The before closing statement for
/ February, 1915" he asserted, was pre-
pared at the main Office by Mr.. Nogel
and myself. After we had finished No-
Gel went TO Siegel and said, Henry u
shows the same old losses. What profits
shall we show for last Year, Business
conditions had been bad that year, and
Siegel replied, Show the losses Just as
they are. If we show proht they VIII
know we are liars.
Later, Prall was instructed by Vogel,
he testified, TO prepare the credit state
ment 10 show profits of S25,OOO or S3o'-
coo. He showed the statement pre-
pared, and it was verified by Nogel.
Start of Bank Loans.
In 1904. Prall testified, the practice Of
borrowing money from the Fourteenth
Street Store bank was begun. lie hrst
began to help prepare the credit state
ments for the purpose OF borrowing
money from outside banks IN 1906. Inc
Fourteenth Street Store, he said, was
doing a business of 100000, but at
loss from the start. The credit state
ments always showed profit. These
statements were sent to the mercantile
agencies and to banks the Siegel enter
Irises were doing business with.
81 saw Siegel practically every day
he was in New York" Prall said. I'm
1910. from February TO June, Nogel
was sick in the hospital, and ! moved
into the main Office and took his desk
there with Siegel. January ] | had a
statement, and we discussed business
conditions of the Fourteenth Street
Store. which had lost 100000 up TO
that time.
After Vogers return Prall asserted
he received instructions TO open up
set of books which would show the
capital unimpaired. This set was pre-
pared by taking out OF the books al
ready in operation all accounts that
showed losses for the Fourteenth Street
Store and all items Of inlerstore in
debtedness.
These deleted entries were kept in
a second set Of books, he said. called
the private ledgers, 20 which the gem
eral bookkeepers did not have access,
as they were kept in a safe. You had
TO take both sets Of books together TO
get at the truth Prall remarked.
He then passed TO conversation he
had with Siegel i'm April, 1913, about
the National Bank of Commerce. Il ls
from this bank that Siegel is accused
of stealing S6s4 % in the indictment By
means of these false credit statements.
"Siegel told me" Prall said, that the
National Bank of Commerce telephoned
thew wanted 70 see Vogel, but as Nogel
was out of town he would go and see
them, and while there would try to get
them to raise the line of discount Tor
the Fourteenth Street Store to 100000
from 100000. This was to be used TO
raise the tangible assets so a deal could
| be put through with Leo Price for TAX
! ing over the Rothenberg store.
"When Mr.. Siegel returned from the
bank he said they had told him they
! had heard rumors we had hypothecated
/ our instalment accounts. lie said the
bank wanted credit statements for the
/ Simpson Crawford store and the Four
teenth Street Store. ! got some from
our supply, he signed them and | sent
| them to the bank"
The witness chair from the opening
Of court to the time Prall came on, at
o'clock, was occupied by John Flint
the prosecutions expert accountant,
who analysed the Siegel books.
He was under cross-examination
most of the time by Mr.. Lowell, who
kept him figuring percentages, adding
up figures and piling confusion after
confusion into the record.
Wrangle Over Accounts.
''You are asking me TO add figures
together that mean nothing" Mr.. Flint
finally said. 81 refuse to do it."
yes, you will" replied Lowell, and
at the courts direction Flint did add
them.
Another point or controversy was
about 400 outstanding checks of the
Boston store, amounting to Sl,l46,0S3 40.
Mr.. Flint had charged them up as liza
blities TO the store. Lowell drew from
him the admission they had been can
celled in the stores stub books. Under
redirect examination by Train, Flint
explained that these checks had been
! issued by the store I'm exchange for
money received from other Siegel en-
terprises and not paid back any other
way.
/ The cancellation consisted merely OF
putting a rubber stamp opposite entries
referring TO them in a check register
book. The rubber stamp read, Date
/ Paid" But the checks were never put
/ through q bank.
This method seemed to rouse particu-
! lar interest in the court.
"Were these checks ever paid by any
one? Were they issued, never cashed,
but just marked raid?" said Judge
/ Clark.
They have never been through any
/ bank, and we held them TO be an out
standing Indebtedness. and to-day they
are an obligation" said Mr.. Train