The sun. [volume] (New York [N.Y.]) 1833-1916, 1915-06-21
$27,OOO,OOO LOST TO
U. s. BY OLEO FRAUDS
More Than 200, 900, 900 Pounds
Tntayed or Sold as Butter
= i'm Is Years.
CULPRITS SENT TO JAIL

W q y Its. ~
wAsHrNGroN. June 20.-Commissioner
of Internal Revenue osborn has discov-
cred widespread violations Of the oleo-
margarine law extending over the last
thirteen years which have caused an
cetima'ed lcys CT revenue to the Govern
inent Of s21 200. 600. according to al
announcement from tire Treasury de-
partment tonight.
The investigation made by Commits
sloner Osborn. It is announced, has dis
closed that since 1902 more than 200.-
o0o, 900 pounds OF colored oleomargarine
have been manufactured II sold as
ne uncoloi eo product or as butte
Without the paymen OF the Federal tax
Of 10 cents a pound. The Treasury
statement expresses the opinion that the
vigorous investigation. made by Com
missioner Osborn together with the series
OF prosecutions undertaken by the De-
partment OF Justice has had the effect
of checking the frauds.
The statement issued by the Treasury
Department says:
"Approxlmately 1885, 900. 900 pounds
w Nf'Ef @FVE'V'sN'N Iot'' 1900
by ole%oinargarine manufacturers to
dealers as uncolored oleomargariue and
then I'm many cases sold to the ultimate
consumer as butter. The remaining
$4,000, 900 pounds were made by butter
manufacturers and sold as butter with
out the payment of any tax.
THE Commissioner has already re-
covered and deposited in the Treasury
sS5I.0 600. with the prospect OF further
t..oa np1logtInpa Enrty-twO viola tors
have been convicted since January |.
1918. twenty min OF whom have been
sentenced 10 terms In prison ranging
from thirty days to three and one-half
years.
.'Totai fines OF sl4s.00O have been
imposed These fines are exclusive OF
the recoveries mentioned above.
Ten More Mig Indictments.
Ter OF the other more fragrant VIC
lators Of the law are under indictment
awaiting trial In addition there are
many smaller criminal cases pending
in the courts.
"The law lmnoses n tx Of 10 cents
n Mound on colored oleomargarine and
o%ne-uuar;er cent n pound on the un-
colored produce. In perpetrating THESE
frauds oleomarCarine manufacturer
have paid only the one.quarter cent a
pound on colored oleomargarine, wher
they should have paid 10 cents a pound
or in the case of butter manufacturer
who sold the product as butter no taS
was paid when .he Government should
have received 10 cents a pound.
at is confidently believed that this
inves,iga tion has checked. II not stopped
the extensive fraudulent practices. and
IL Is the determination OF the Treasury
ofhcials to bring every lawbrealier &c
justice.
"while the facts set forth in the Com.
miesioncr's preliminary report relate
primarily to o.eomargarine frauds de
veloped during the past year. the ac'
tivities of the bureau during the present
Administrator nave resulted In the de-
lection OF a total OF approximately 5000
frauds or Illegal practices Of this char
acter. As a consequence OF this rigid
enforcement OF the statute the receipts
Of the Government from oleomargarins
taxes during these two years have beer
the greatest In the history OF the law.
'"The offenders resorted TO variou,
means TO deceive the Government AM
the publio. The methods employed by
fraudulent oleomargarine manufactures
10 color their product were 10 purchase
palm oil and by circuitous routes shit
IL 10 the factory. where IL was put into
oleomargarlne in correction with othei
ingredients TO mask this c~oloring chemi'
cal. when IL was placed ON the marke'
under tax paid stamps at one-quarte'
cent n pound. when II was subject e
a at 10 cents a pound.
manufacturers OF butter were dis
covered to have been engaged in tn
manufacture Of a product by compound
ing country butter with Oleomlrgarln'
oil. which brough' IL within the classi
fication OF oleomargarine. subject to III,
tax OF 10 cents a pound. This p-oduc
was placed on the market as butter.
Large sums Recovered.
"Amorg the larger cases are the fol
lowing
zone onpan whose president ant
secretary pleaded gull y and were sen
fenced TO one year and one day In tn,
penitentiary and to pay "A fine Of $1,000
each, and whose plant was seized, hav,
been assessed s1?s.G96.
Another concern. six Of whose Off
Gals and employees pleaded guilty an,
were fined an aggregate OF $4,000 arr
whose plant was seized, has been assesse,
ss12.391.
in st. Louis thir,y-four persons wer,
convicted, twenty-seyen receiving priso.
sentences and being fined a total o
Sl3S,0 00.
I'm another city one manufacture
was assessed by the COMMISSIONS
s32, 900 special and stamp taxes. whicl
have been paid. As II appeared tina
he was Ignorant of the act that the oil
used contained tumeric. the Unite
States attorney reported thai crimina
proceedings could rot be sustained.
"One company, whose president. treas
urer and secretary are under indictmen
on charges of oleomargarine frauds an
-.