The sun., 1917-05-03
GOT $24,OOO,OOO
COMPANY FREE
Seven Men Accused of Con-
spiracy for Pittsburgh
Life Concern Deal.
MONEY BORROWED HERE
Inflated Bonds Said to Be Sub
stituted for Gilt Edged
Securities.

Jesse S. Phillips. State Superintendent
Of Insurance. yesterday made formal
complaint to District Attorney Swami
against a group OF men whom he ac-
cuses Of obtaining control of $24,-
100000 corporation. the Pittsburgh Life
and Trust Company. a life insurance
concern. through series of manipula-
their own capital.
These men, he alleges. purchased a
majority OF the stock with an initial
payment Of about $4,000. This money,
obtained from the Commercial Trust
Company OF this city. was successful in
ousting the old directors in favor Of a
board whose first act was to vote
enough TO cover the loan. Thus with
the money Of the Commercial Trust
Company the alleged conspirators, az a
company. redeemed the cash that had
obtained them control
Furthermore. the new board through
the immediate floating OF loans gained
bonds of lumber company. These
bonds, inflated to skiold value, were
subsequently paid for out Of funds Of
the acquired insurance company. The
bonds then were substituted for the in
surance company's high grade securi-
Aes which were sold and turned into the
account of the alleged main figure in the
transaction. Other operations OF the
board, that was made UP almost entirely
of dummies. involved the transfer Of
valuable real estate properties of the
-
Seven Accused of Conspiracy.
In P!t;sburg. where the main Office OF
the company is situated. J. Denny O'Neil.
Insurance Commissioner Of Pennsyl-
vanla. yesterday obtained an injunction
forbiddlng the company to continue bus-
ness. Also he had warrants sworn out
charging with conspiracy the seven men
who are alleged to have been concerned
In the transaction. The men named in
these warrants are:
Clarence +. Birdseye, Kellogg Birds
eye. his son; George F. MONTGOMERY. a
New York promotG': Alfred Leury and
W. D. MacCueston IT the newly installed
board o. directors q the insurance COM
riHy Robert r. More. president OF the
Commercial Trust Company. and Mr.
Watson, assistant secretary in the same
company.
R!rdseye the elder has been a prac-
',ing lawyer in this city for almost forty
Years. In November, 1914. he was sus-
Dendes from the bar for a year because
81 'ihhculty in handling the funds Of a
"'eH'. Both ne and his son could not
'' !0und Yesterday or last night. Neither
'tl.d Montsomery. who a year and a half
"so Das adjudged in contempt of court
!r falling TO satisfy Judgment. Mr..
moore yesterday issued statement In
""lch he lisavowed knowledge OF the al
:"yed conspiracy
Besinninx OF Ma nipulat tions.
The manipulations, as disclosed BY
superintendent Phillips, began in March
when Montgomery began to dicker with
ne owners OF the Dare Lumber Com
nany and the East Lake Lumber Com
biAy, corporations organized under the
Jaws OF New York and operating ir
North Carolina. The upshot was that he
agreed 10 buy the properties for $1,000.
600 but 40 far as is known he made nc
oepostt 10 bind the bargain.
About this same time the elder Birds
eN" made a proposition TO the president
Ana v!ce-preSident of the Pittsburgh
l"'e and Trust Company to purchase I
majority OF The stock at $50 a share
AZ that time II was selling for $55. Al
hsreement was entered into betweeI
nose controlling the stock and Birdsey,
Oy which the directors promised to re
hgn when Birdseye made an initial pay
tnent of $40 on each share. or a trih
ehs than 100000 In the aggregate. A
mat time the Pittsburgh Life was re
por'ed 10 have assets of $24. .000. 900 pro
er'Ing its outstanding policies.
March n a ",
formation given 10 the District Attorne.
oy Superintendent Phillips, the Com
heVciaI Trust Company agreed tenta
lVey TO loan Of tIoO,000. 4 note 70
ms amount was signed by Blrdseye an
,ndorsed by Montgomery. kellogg
nrdseye organized n number OF hi
friends into an excursion party to go t
IN'snurR TO assist In the reorganizatio
OF ne corporation.
The Blrdseyes and their friends lef
10y flttsburg on the evening of Marc
~ accompanied by Assistant Secrctar
NaiSn Of the Commercial Trust Con-
p'h! Although Blrdscye had estal
..shed with his note n credit Of $4,000
me bank was unwilling to give him
orti'led check for the amount until on
VI !'s officers approved Of the enterprls
Five Dummy Directors.
When the Birdseye party me. the d
''''"r' % the Pittsburgh Life next morr
~ ~ II O'Clock It was found that III
Ne" Yorkers lacked five for full boar,
LAWYERS were called upon and five me
volunteered 10 act as dummies.
When Watson saw that the transf.
W NE company was about to 20 throuR
" certified to two checks. one for Sl,3s
10 pay for the qualifying shares OF Il
N"" directors and the other for Sl04,52
N'''h represented the payment Of 81
zach share that changed hands vii
ne transfer Of the corporation. J
~" Old directors resigned their plac,
promptly were Allied by the men broug
ron New ioril for that nurpose al
10 uhs,Itu.es enrolled from law frr
The first act Of the new board aft