Evening journal., 1915-02-15
Stores were PAWNS
IN CREDIT SWINDLES
ST., 100000 Conspiracy
Trial Revealed Quick
Exchanges of Goods
WILMINGTON
MAN INVOLVED

ST. LOUIS, Feb. 15.-The trial of
alleged conspirators in the so-called
"million-dollar swindle" which was
concluded in the Federal Court here
last week after eight days of taking
testimony. resulted in the assessment
Of aggregate penalties of 1-2 years
In prison and fines Of $4,000 against
10 men and revealed how the promot-
ers Of the scheme operated in many
cities and by their system of failing"
cleaned up profits estimated at as
much as s1,OOOOOO from wholesalers
and manufacturers.
The indictments and arrests on
charges of using the mails to defraud
followed the failure of the Great West
ern Jobbing House, in st. Louis. in
1913 This enterprise marked the per-
iod Of greatest activity of the conspir-
ators and was followed by the estab
lishment of seven stores in six cities
in less than eight months. all of which
subsequently failed" after members
of the gang had exchanged references
to obtain credit and, using assumed
names. had shipped large quantities
Of goods back and forth to eluda cred
itors.
The scheme had its beginning,
Charles l.. Greenfield said, when his
business. in which Sam Brown of Will
mngtOn. Del, and Meyer Rotman were
partners. failed in Philadelphia They
concealed $4,000 worth of the mer-
chandise from the trustee in bank
ruptcy and surreptitiously removed
this TO Carlisle. Pa, where they open
ed another store Some of this mer-
chandise they sold at once to obtain
cash to run the business.
When that business failed, Green
field testified, he came to st. Louis,
and the Great Western Jobbing House
was started. In the meantime the
LiebOvitz brothers. cooperating with
Greenfield, had founded a business in
East ST. Louis Both concerns at first
made small purchases for which they
paid. in ten days. Greenfield testified.
This. he said. was to help them estab-
lish a credit rating
Then they exchanged credit refer
ences and began TO buy large bills of
goods. AT this time, according to
Greenfield. Rotman established a ficti-
tious firm under the name of IN. Rot
man a. Co" lie had letterheads print
ed giving his location at Broadway
and Washington avenue. where, Green
| field says. he did not even have an Of
fee The sole purpose of this firm was
/ 90 furnish credit references for other
enterprises and a letter written on
! this stationery was introduced which
stated that the writer had sold goods
TO IN. l.. Lubovits g. Co." which was
the name under which the Lieboviti
brothers were operating in East st
Louis
Rotman was sent to Kansas City e
open a store. He stayed three weeks
and went bankrupt" Two months
later Greenfield testified Rotman was
sent to Louisville, Ky. to open store
| Then Steinhardt went 10 Louisville
and opened another store. Rotman's
stock was secretly transferred to tho
Steinhardt store, Greenfield said. and
Rotman went bankrupt" fours weeks
after he had started in business. leav
ing a store full of empty boxes foi
the creditors. Steinhardt later wen
into bankruptcy and moved to Balti
more where he opened another store
Before deciding TO "fail" in 81. Louis
Greenfield said. he shipped a larg
quantity of his goods TO Alfred Gold
d. berg and Harry A. Cohen in Philadel
phia. He then moved to Philadelphia
where he organized the Philadelphia
Salvage Company. into wich most o
the concealed goods of the other store
found their way.
The profits Of the consiprators wer
made by their selling merchandise Z
one another at large discounts: III
goods thus obtained then being sold a
retail prices. II was the bushes
of tho Great Western Jobbing Hous,
Greenfield said. to procure the good
from manufacturers. for which pay
ment was never to he made.