The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-07-31
THREE INDICTED IN
RAINCOAT SCANDAL
Army Captain, David l..
POdell, Lawyer, and Felix
Gouled, Broker, Accused.
ALL TO PLEAD TO-DAY
Other Officers, Names I'M
known, Also Said to Be in
Conspiracy.
ALL TO PLEAD TO-DAY

Capt. Aubrey w. Vaughan OF the
Army ouartermaster Department. Da-
,id l.. Podell, lawyer OF AZ Broad
way. and Felix Gouled, a broker in cot
ton fabrics with offices in the Metropol-
itan and Flatiron buildings, were In
dicted by the Federal Grand Jury yes
terday. They are charged technically
with engaging in a conspiracy to de-
fraud the United States.
Two indictments were returned
against each defendant as the result of
a scandal in army raincoat orders
which led to the arrest of Gouled and
sixteen manufacturers July %. The in
dictments allege the existence or con-
spiracy by means of which Gouied was
able to swing raincoat contracts TO
manufacturers with whom he had
financial understanding.
Other Officers Involved.
The indictments allege that Capt
Vaughan. through his position In the
supply and equipment division of the
Quartevnaster- Generals office, was able
TO assist Gouied in carrying out the
agreement with the manufacturers. 1t
ia also charged that divers officers OF
the United States whose names are un-
known participated in the conspiracy
and shared In its profits
Podell Is charged with having drawn
up contracts and agreements which
were designed to conceal the character
of the transactions between GouIed and
the manufacturers on one hand and
Gouled and army officers on the other
The raincoat manufacturers. when ar
rested, were charged with bribing or at
tempting to bride inspectors Of the
Quartermaster Department to pass rot
ten raincoats. No indictments have
been returned against the Tanufactur-
ers. Gouled was charged with conspir-
acy to defraud the United States. The
details OF the fraud charges did not be-
come public until the indictments yes
terday.
Gouled is alleged to have gone to GER
tain manufacturers and said to them In
effect that IL they would agree to give
him a percentage OF their profits he
would, through his influence with the
authorities, see that they obtained army
orders.
The manufacturers named in the in
dictments specifically as among those
with whom Gouied made agreements
were Harry Rosenthal. Martin Stein
thai. the Norman Garment Company,
Inc, saul MegiNsky ana tne PARAMOUNT
Leather Products Company.
Vaughan in Charge Of Contracts.
Capt Vaughan had charge OF the
shoe. leather and rubber branch OF the
supply and equipment division OF the
Quartermaster's Department, and II was
part of his duties to receive and consider
bids for rancoats and other parts Of
soldiers equipment The indictment
charges that part Of the money that
Gouled exacted from manufacturers In
consideration OF their being awarded
contracts was given to Vaughan for
distribution among such officers as were
partners in the conspiracy to award con-
tracts fraudulently to manufacturers
with whom Gouled had an understand
ing.
Podell Is alleged to have assisted IN
incorporating the H. Rosenfeld Rain
coat Company of Mount Vernon on June
last. On the same day two agree
ments are alleged to have been drawn
by Podell. In one Of these. 1t is alleged.
Harry Rosenfeld agreed to pay Gouled
70 cents for each garment manufactured
by the H. Rosenfield ,Raincoat Company.
Inc. In the other agreement. 1t is al
legged, the H. Rosenfeld Raincoat Com
pany. Inc, agreed to pay Harry Rosen-
field % cents for each garment 1t manu-
featured
In similar agreements executed May 1,
1918. 1t is alleged that Martin Steinthal
hound himself to pay Gouled per cent.
OF the amount he should receive from
the Government in payment for soldiers
puttees. made on contracts obtained
through Gouled.
The Quartermaster's Department has
awarded ~S40,000.O00 worth OF raincoat
contracts. OF this 100000. 600 worth has
been allotted to manufacturers In New
York city.
The indictments were handed up TO
Judge Learned Hand In the Federal
District Court by Joseph 4. Burdeau.
Assistant Upited States Attorney. The
defendants will appear before Judge
Hand to-day to plead.
Podell issued the following statement
last night; MY friends require no as
surance from me that / would not con-
spire with any one to defraud anybody,
much less the United States Government
They know too we'll the many sacrifices
/ have made.
~ feel that have done nothing which
any reputable lawyer would not have
done IL the matter had come to him In