New-York tribune. [volume] (New York [N.Y.]) 1866-1924, 1917-03-11
u.,hert Reeves's Defalca-
tons Cost Mrs. o. H. r.
Belmont $l2s,0OO
Fraud Undecided
For Ten Years
Mortgages Juggled on the
Books of Bronx Build
ing Association

- Lewis Of Brooklyn that he was
80, s12s.OOO in his accounts with
a.. n II. p. Belmont, whose power Of
',..,rev he held. His shortage in the
-, association he placed at $4,000,
Ibis total dcfaleation at more than
$4,000
r,fortunate speculation in Brooklyn
80, estate and an unsuccessful effort
:. so,, a life insurance company are
,.,ribed By Reeves as NE cause Of his
esEnisll.
= sot into hole ten years ago ne
,.n district Attorney Lewis, "snd 70
,,ou, Of II had TO dig deeper one.
rnI had TO keep on digging, losing
gul. dirt each time until ] was in
rsr, TRAN s250.000.
~" u always Beloved that things would
xsrk out so that ] would owe nobody
dollar
mined up 20 the moment he was ar
,ss,ed Friday night Yesterday Robert
II Elder. his attorney, declared mat
had his client being given thirty hours
-ers the moneys due the building and
le,u association would have been paid.
Troubles Began in 1907
Reeves told District Attorney Lewis
~ rs troubles. which began IN 1907.
wan the panic found him the promoter
,f,b, Eastern Life Insurance Company.
", Rad nut much money into this, and
70 ret the 100000 necessary 10 do
business had 70 make loans with the
cd Oriental Bank. one Of the concerns
hat went down in that crash. About
IA. sane time property IN the Wildwood
section Of Brooklyn, on which he had
made loans al boom prices, sagged IN
value
4 thought things would work out
alright" he said. "and that, ! suppose
sail there Is 20 IL. | certainly nave
nsde mess OF things"
Reeve after his confession. was ar
nigned before Magistrate Wiley IN the
Adams street court on the specihc
taarg, OF having uttered forged mort
tsrs FOR IS 900 on a piece Of Flatbush
property 20 which he had affixed a
t,rus seal OF Register Edward T..
OTsuxhlin. This he turned over 10 the
Model Building and Loan Association
for cash. on his plea of guilty he was
k,lt for the grand jury without bah.
President Also Guilty
Meantime John S. Hanson. the sixty
fyt.year-Old president Of the loan as
socistion was pleading guilty 20 the
forrery o. a note for $500 in the Nor
rissnis court. he was held in $4,000
bail for the Bronx grand jury after he
Rad told District Attorney Martin that
he knew there had been irregularities
IN the affairs % the association for
more than ten years.
i got very little out Of IT," he said;
very little. Reeves got about every
thing. Ten years ago / did put over
had mortgage Tor $1,000. but that and
ihls $500 note Is ALL
District Attorney Martin. in telling
81 hsnson's confession. insisted that
The arrest and arraignment OF Reeves
% Brooklyn was most unusual, and
hat he would ,rv 20 have him turned
over 70 Bronx authorities. To this Dis
iriei Attorney Lewis replied with the
declaration that Rceves's affairs had
teen under inyestigstion in Brooklyn
ior some time. and that as soon az II
vas established that ne had committed
erme in the county he was arrested.
his Brooklyn investigation was
'1ried when the Title Guarantee and
lust Company found that some Of the
'sy the least irregular.
Orgnaly these were loans made by
Reeves for Mrs Belmont a. eXecutrix
me Smith estate. The security was
poof m some cases. the loan being for
ne iull value OF the property. When
ne mortgagor was unable 20 make good
4 usre would be a sale under foreclosure
Foeeedings, IN which Reeves. through
s9nmies, would buy IN the property
men a new loan would be made to the
sanmy. In this way the loss would
o concealed, for Mrs. Belmont would
pad interest regularly. II was not
thul few months ago that she dis
covered there was anything wrong. So
l1i she has made no complaint 10 the
astaorties
Payments Not Recorded
IN the case Of the building and loan
association, Reeves method was 70
~ fictitious mortgages. or, in cases
Nhsre mortgages we're paid, fail TO re-
.ofo the fact % payment on the COM
gahys books and hold the money. In
sis way the company accumulated
s<tOOO IN mortgages that the Bank
" department now says do not exist.
me amount OF these mortgage APP
Pa'sntly overdue and unpaid was OBJ
.seed 70 By the Banking Department
~, Than a year ago At that time
~ ioan sssocistlOn was advised that
s,e was an undue proportion Of such
.n among It's assets and that the
Wnt should be reduced. The de-
n'tmsnt also objected 20 the fact that
tsst one-third Of the mortgage pa
~ Of the company we're not IN its
N "sts, but IN the Office Of Reeves.
-. 60 e
preeauhon Of counting the seeuri-
and checking them Of against the
1ou The fact that there were irreRu-
npes would have been apparent then
MS ~ not one Of the practices OF
II department in examining loan as
.enpns' though the practice Of bank
,hefs ~ 20 cheek securities and
ri 's. Nor VAS any effort made 20
go ns number Of mortgages sppsr-
~ we with The records IN the regis
s ~ deeds IN New York and Kings
.us1 Ihis would have shown that
,tsgst 70 the face value Of 1921 900
,,gyy'eo 70 be held by the association
II "H little or no value.
No Run on Association
ne explanation Of the Ranking De
uafrt Is that there was nothing in
e'oss 70 Indicate any irregularity.
IA. Vas no run on the rooms Of
a., Den sssociston in The Bronx yes
~ Most Of is 600 members live
y..''ssiyn and other Long Island
"stnhester and in Jersey.
l,wss' who u self-sducated man,
u rehsr Of Alfred Reeves. formerly
hs,eer % the Columbia Law School
IsT He was formerly IN the firm
,sFe,, Sloan 4 Todd. Of which Al
"a, ssssYss - The head, but was forced
la ne hrm w year, ago. A. that
"-l u Va u ID .DaanrAaH hla nor.