The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-06-08
HINT OF S2O,OOO,OOO
REVENUE TAX FRAUD
Treasury Department Admits
Hunt for L. s. Agent for
Southern States.
DISTILLERS INVOLVED

wasurNGrox, June 7.-By the ad-
mission at the Treasury Department,
to-day that search is being made by
secret service men for Knox Booth,
division revenue agent for Tennessee
Il Alabama. light was let into what
is declared to be a $50. 900 900 revenue
scandal. The scandal is said to ex-
tend through three Administrations.
Booth has been missing W weeks.
his disappearance being coincident, 1t
is said. with the arrest of John l..
Caspar at Fort Smith. Ark. on a
charge OF conspiring to defraud the
Government. Caspar Is head of a big
distiliery that is said to have evaded
payment OF a large part of its taxes
through alleged conspiracy with rev.
enue officers.
Brought Ia Light In 1907.
The search for Booth and the arrest
of Caspar. 1t is said. constitute only
the beginning of "A widespread in
v~estlgation into this branch OF the
revenue service. several other South
! ern States being involved. Ii will be
: shown. it is said. that frauds against
the Government averaged $4,000, 900 a
year for the past ten years.
1 The system was first brought to
light in 1907. records in the Depart
,o.,, 80 ,bo Troayurv ra,oat 4, ,ha
fall of that year reports on condi-
lions, particularly in Virginia and
. North Carolina, resulted in an lnves-
tigation by Chief Inspector David A.
Gates and in the conviction OF a num-
Der of augers and store keepers. The
inquiry was dropped. however, until
the following spring. when 1t was call
ed to President Roosevelt's attention
and was reported To have been the
subject OF IA Cabinet meeting.
\ conference. participated in by
Treasury officials and the District At
torneys from hose two States, was
held at the Department of Justice and
q plans were laid for a complete investi-
CATION, but the matter never came to
u head. No more prosecutions re-
suited. Gates was transferred 10
other work and finally quit the serv-
ice, accepting appointment az State
Tax Commissioner in Arkansas.
The present Revenue Commissioner
William III. Osborne. called Gates back
into the service and put him at work
on the d!stillery cases last December
Shortly afterward he was made deputy
Revenue Commissioner. The work of
completing the case at Fort Smith
was left TO Division Agent Barkman
with the resulting arrest of Caspar
and the disappearance of Booth. it is
said. 1t Is the fact that Gates has
o. been made Commissioner Osborne's
right-hand man that indicates an in.
. tention to go to the bottom of tn,
whole matter and forecasts a scanda
that may stir the whole South.
Charges Led On Expose.
Division Agent Booths district for.
merry embraced Arkansas and tn,
facts on which the prosecution 1.
based came to light. it is said, i'm,
mediately after the change in district.
was made.
The Treasury Department allege,
that for years II has been thu praCtic,
of some distillery operators to max,
tax payments of only 80 to 40 per cent
of the amount due the Government
The principal method of eva ding Il
said to be by "~crowdinG the mash
that is 10 say. by turning out {, mucl
larger quantity OF whiskey than tn
apparent capacity OF the plant. Thi
Is possible. il is said. only by c~ollus!oi