The weekly times-record. (Valley City, N.D.) 1912-1922, 1916-11-23
Bank WreCkers Enter
Sudden Plea of Guilty

Fargo, Nov. 1S.-Pleas OF guilty un-
der Al Of 81 counts charging misappli-
cation Of funds and false entries on
books and statements of condition
were entered by Richard C. and Will
liam F. Kittel, former president and
cashier, respectively, Of the First Ma
tional bank of Casselton, in federal
court before Judge C. F.. Amidon this
morning.
The entrance of the pleas termin-
ated the biggest case Of it's kind ever
heard in the state, involving approxi-
mately $1S0,000. Though the hearing
had been under way ten days and the
prosecution had not completed it's case
the decision of the defendants was
anticipated by reason Of repeated con.
ferances between counsel and adjourn
ments of court yesterday.
The defendants, through their chief
counsel, Judge Edward Engerud,
pleaded guilty to IL of 16 counts charg-
ing misapplication of funds, and 80 of
IS counts charging false entries on
books and statements of condition.
The indictment charging embezzle-
ment was withdrawn.
The penalty for each count, as pro-
vided by law, Is not less than five and
not to exceed ten years. Sentence
will not be passed on Richard G. Kit
tel until the latter part of the month
or the first of December. William F.
Kittel will be sentenced later.
Both defendants, until sentenced.
will be at liberty under the original
bond of $4,000 each. Reason for the
delay in passing sentence is to allow
the Kittel brothers to arrange local
affairs.
In Diminishing the jury from further
service in the case, Judge Amidon laid
considerable stress on the need OF a
federal statute absolutely prohibiting
officers or trustees of a national bank
from loaning depositors' money to
themselves, declaring that bank Of
fticer could not be good officer when
on both the loaning and borrowing end
of such transactions.
Judge Amidon added that the ma
jority of bank cases involving similar
circumstances were directly due to the
resultant abuse of this now enjoyed
privilege.
In presenting the pleas of the de-
PENDANTS to the court, Judge Engerud
stated that he could not consistently
argue the case in view Of the strength
of the governments evidence.
The condition of the bans affairs,
which resulted in the arrest of the two
defendants, did not become apparent
until late in November, 1915. NJ G.
Straus, of Casselton, then president Of
the bank, engaged the services of an
expert accountant from Minneapolis,
whose findings resulted in the original
indictment.
At a directors meeting, held on Sun
day, Dec. 5, 1915, it was decided to
close the doors of the bank until a
thorough examination of the books
and affairs could be made. The doors
were not opened until four months
later, after the bank had been reor-
ganiZed
An examination made by Alfred E.
Radert, Of Nashville, Tenn, national
bank expert of the United States de-
partment of justice, revealed the fact
that the accounts were short some
$180,O00. Previous to the reorganiza-
ton and opening Of the doors, each of
the six directors put up 100000 to cov-
er the shortage.
During the present hearing Mr.. Ra-
dert was one of the governments
strongest witnesses
Large loans were made by the Kit
tells to themselves from the funds Of
the bank, subsequently used in the
purchase of farm lands, which could
not be turned quickly, and the conse-
quent manipulation of figures to cover
the transactions, extending over a per-
iod OF several years, made up for the
major portion of the shortage.
R. C. and w. F.. Kittel owned the
controlling interest in the bank, and
were held in high esteem in the vicin-
ity OF Casselton, and in banking cir.
cles. Until true facts of the banks
conditions were made known to the
directors, their methods of doing bust
ness were never questioned