The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-05-09

result Of efforts on the part Of the
United States District Attorneys Of
Ace TO prosecute with equal severity
the merchant If big business who finds
(, economically profitable to plead in.
solvency and the little shop keeper
whose assets only amount TO q Re a.
thousand dollars.
According 20 Assistant United states
District Attorney Samuel Hershen-
ssin- whose activity in the proeecu-
ton Of Bankruptcy frauds has won
him praise from the New York Credit
Men's Association and other business
organizations, the professional bank
rupt IL beginning TO realize for the
dsVe time that the Government IL on
hb tra!! and that there II no chance
TO escape once the machinery OF the
law sets IN motion.
mall merchant that he cAnt make
gvuv WITH an amount a. low a. $1,000
thfss oases have been prosecuted
within the last three months in which
- aOets IN question all fell within
slAt amount. There are records on
Al IN the Office to show that there
have been more prosecutions already
Ia is1b under the bankruptcy act than
there vere from 1910 to 1912 inclu-
s,vA There were two and . half times
a many IN 1914 A. in 1918. Hitherto
The Government spent its energy on
tire big offenders. now II brings to
trial both big and small.
A. an example OF the increased ef-
0c.ency Of the ONCE and the despatch
with which offenders are brought 20
,uStice, Mr. Herehenste!n mentioned
the case OF the aradinger Brothers,
which came UP for trial last fall. The
petition was filed on a certain day. he
said. and four days later an !nvesti-
ration was started by the United
States Attorneys ONCE.
on the eighth day a warrant was
Issued and on the day following the
brothers were indicted. Four days
later they were sentenced 20 long terms
IN Atlanta. II took Just thirteen days
70 close the case. This OF course, ls
a record. and WAS made possible by
the defendants pleading guilty
This was q typical case, said MI
Hershenstein In outlining for readers
~ THE SUNDAY SvN the scope OF the
bankruptcy law and some OF the i'm
portant cases falling within the juris-
Action Of his Office. The defendants
sold $40. 900 worth or merchandise be-
fore they failed. and distributed the
proceeds among relatives for safe
keeping. Some OF II was stored in
warehouses under fake names.
They destroyed the books Of ac-
count and were making ready for
departure from these shores when the
Government authorities discovered
their intent and arrested them. Had
here not been quick action in this.
case the estate would have been left
peuu!,ess.
Sometimes clever bookkeeping de-
vices are used 10 cover a dissipation or
assets. hut no matter how clever they
may he there are skilled Government
accountants who can detect fraudu-
lent system. Let me cite the case OF
Lang Lang, who pleaded guilty in
February.
THE charge against them was
conspiracy 20 conceal assets. casual
examination OF their books-cash
books, ledgers and tournals-showed
they were in balance. Through
stray entry In the ledger. however.
Z was found advisable 20 send form
letter 20 the customers o. rhe defunct
Arm TO ASCERTAIN whether the sales Of
merchandise and payments therefor
were entered on the books.
Thousands OF returned bills and
certified checks came 10 this ONCE in
answer 70 the form letter, and an ex-
animation Of these proved that many
sales had not been entered on the
Books That was one form OF conceal
ment There was another, however.
TIE cash books showed Tor one day
cash receipts of 81. 600. say. from three
or four sources and a corresponding
deposit for that amount, Externally.
you see, {, appeared that every cent
was deposited.
IAN examination Of me original de-
post slips subppnaed by the Govern
msnt disclosed an interesting state Of
Affairs. II was discovered that al
hough the deposits on the slips
equalled the amount received by the
firm on Q particular day, a. shown In
the cash book, that amount was made
ce!ved ny tho firm and in part nv a
made out TO the names OF fictitious
persons and Endorsed by the Arm or
!ts agents in the name OF actitlous
persons. II took A corps OF skilled
Government accountants 10 discove:
this"
Mr.. Hershenstein then dwelt upon