The Richmond Virginian. (Richmond, Va.) 1910-1920, 1916-04-12
TO PENITEAT|ARY FOR
FRAUD IN BANKRUPTCY
Judge waddiu Makes Striking Talk On
Violation OF This Important
Statute.
JUSTICE MUST, COME
AHEAD OF SENTIMENT
A. Eisenstein and S. Berstein, of Phiia-
dciphia, VIII Serve Terms For False
Oaths and Making False Claims.

/ a. ElSenSteln ana >. bernstein. DOtn
of Philadelphia, were sentenced by
Judge Waddill. in the District Court
of the United States yesterday after
noon to serve terms in the Federal
prison for one year and one day and
for eighteen months, respectively, and
| to pay fines of $500 and $1,000, re-
spectively.
| The sentencing Of the two men Gre
ated considerable interest among those
who attended the court. They were
charged with one, Lipman, now serv-
! ing a term in the Federal prison at
Leavenworth for violation of the
mails. with having conspired in bank
ruptcy proceedings OF Eisenstein.
through fraud by false swearing and
otherwise to cheat creditors. The
equied
Robert NJ TalIey appeared for
Bernstein Eisenstein stood alone
when asked if he had anything to say
as to why he should not be sentenced.
Mr. Talley briefly advised Eisenstein
that he had a right to make any state
ment he might desire to make to the
court.
The fraud committed by the two
consisted of a plan by which Eisen-
stein was to go into bankruptcy. max
ing Bernstein his chief creditor.
acknowled ging debts to Bernstein
amounting to 81 per cent of the total
Indebtedness, thereby making him the
chief creditor and giving him the ma
torfty power in the proceedings. AL
together 1t was plainly show that the
entire scheme was one of the shrewd
est and most dangerous that has ever
been brought into the District Court
in Richmond
Bernstein the Instigator
But the court recognized the fact
that Bernstein was the instigator of
the plan and that he had persuaded
Eisenstein to go into the conspiracy.
Bernstein to receive large claim on
the assets, which at the time Of the
failure about equaled the liabilities.
Bernstein had no real claim on the
assets. In other words all of the
property of Eisenstein was to he
thrown into bankruptcy Bernstein to
get half OF what Eisenstein owned
through claim as a creditor. though
Eisenstein owed Bernstein nothing.
The court IN sentencing the two
men declared that this was one OF
the most dangerous misuses of the
bankrupt law that had ever been
brought to his attention.
When the bankrupt Law was first
passed" said Judge WaddiT, II saw
and said that the one danger was that
Of false claims II Is one Of the
hardest things for the officers OF the
law to run down and one of the most
dangerous factors in a bankrupt Law.
/ have not before had such a case in
this court I feel deeply sorry for
these two men. Yet there may he
'Eisensteirs operating in every little
town in the country unless punish
nent Is melted out. These schemes are
chiefly concocted in New York. Phila-
deiphia and Boston. They can be
turned into a regular business, con-
troiied by shrewd minds, who use the
small merchant or foreigner to con-
duct such transactions"
Bernstein Had Hard Time.
Attorney Talley told the court that
Bernstein is the father Of three chill
dren; that he has also a wife, father
and mother and dead brothers wife
with her SLY children dependent or
him for support He has lost every
thing he has in the world said Mr..
Tailey, "and was penniless when he
attempted to make money in This
fraudulent way. am not defending
his methods, but l want to say that
Bernstein has had clean record un-
til this time: that he came TO this
country poor man. built up good
business and then lost all he had. He
has suffered much and I ask only
mercy at the hands OF the court"
Eisenstein. in his own behalf, spoke
briefly. He begged permission to go
back TO Philadelphia to see his wife
and children before going to prison.
The Court Ia Touched.
These appeals, naturally. touch the
heart OF the court" replied Judge
Waddill. am convinced that Bern
stein is the most guilty OF these two
men, II the court listened TO the i'm
pulse OF the heart II could not al
ways mete out justice. II Is necessary
that the laws be upheld. | am sorry
for these two men. I know they are
suffering and that they must suffer
more. But I might as well leave the
bench as to refuse 10 punish this most /
fragrant violation of law that was |
intended TO help worthy men In time
OF real stress The law was intended
to protect honest men; to give them
chance. These men have ignored
It's purpose. 1t is a most dangerous
thing-the court does not know of a