The sun., 1918-07-24
MORE ARRESTS IN
RAINCOAT SCANDAL
Lazarus, Head Of Manufactur-
ers, and Chief L. s. Inspec-
tor Are Seized.
CONFESSION Is REPORTED
Thousands of Defective Army
Garments Found Here
Payments Stopped.

The Government struck heavily IN
several ways yesterday in the raincoat
phase of Its nationwide campaign to
eliminate immense losses due to fraud
In war orders and trafickng in war
order contracts.
Harry Lazarus. president of the Rain
coat Manufacturers Association and
head of the Lazarus Raincoat Company
OF 800 Sixth avenue and IS University
place, and thirteen directing officers OF
raincoat concerns were arraigned be-
fore United States Commissioner Sam
uel NJ Hitchcock charged with bribing
or attempting to bride Government Of
ficers
Lazarus, last to De arrested in q
round up of manufacturers who are
alleged to have foisted raincoats with
uncemented seams and rotten cloth upon
the army for soldiers going to France,
is said by Government officials to be
member OF committee Of raincoat
manufacturers which advised the War
Department which manufacturing plants
were properly equipped to handle large
| war orders. He was arrested on the
Twentieth Century Limited at Albany
early yesterday.
Thousands Found Defective.
On completing an inventory of the
thousands of raincoats In the depot OF
the Quartermaster's Department hero
yesterday 1t was announced that thou
! sands of defective raincoats had been
discovered in the stores. This investi-
cation was begun on complaints from
Gen. Pershing that the raincoats of his
men were falling apart virtually on be-
ing put on.
Capt F; C. weightman. L. S. r.. in
charge OF raincoat inspection. served
notice yesterday on the concerns impII-
Gated In the alleged frauds that the
Government would accept no more min
coats from them until further notice II
| Is estimated that raincoat contracts
worth $4O.OOO.000 have been given out
! ny the Quartermaster's Department. OF
this about s20.000.0oO was allotted to
manufacturers in New York. The big
gest contract given here was for l.ooo,-
600 coats at more than IS apiece
Major Thomas McGrath. L. s. r, in
charge OF the inspection of all war ma
terials in this district. directed that
payments be suspended to all the con-
Germs under charges. The payments
| thus ordered suspended include thou
| sands OF dollars for coats already in
| possession Of the Government.
Government officials in charge OF the
| Investigation refused yesterday to say
| whether the stoppage Of deliveries and
! payments was an indication either that
| existing contracts will he cancelled or
the plants taken by the Government
Charles L. Fuller. chief inspector Of
| a.
district, was arrested yesterday by
agents of the Department OF Justice.
! Officials said that Fuller made a con-
| fession in which he admitted accepting
brides from some Of the manufacturers
under arrest to pass defective rain
coats In the complaints upon which
these manufacturers were arraigned
| Fuller Is named as the Government Of
fetal to whom they paid money. He is
said to have been on the weekly pay
roll Of these concerns.
| Contingent Fec Traffic Charged.
Felix Gouled. dealer in cotton goods
with an office In the Metropolitan Build
| ing and another office In the F'latiron
| Building. was arraigned before United
| States Commissioner Hitchcock yester-
| day charged with conspiring to defraud
| the Government. Although Gouled was
| arrested In the roundup OF raincoat
makers, Huston Thompson. Assistsn Mt
| Attorney General. and Joseph A. Bur
! deau, Assistant United States Attorney,
who are in charge of the raincoat inves-
tigation. said yesterday that he Is not
charged specifically of completely with
| the manufacturers now under charges.
| Gouled is said to have trafficked gen
orally in war orders In many lines on
contingent fee basis. usually and 5
per cent. of the gross amount of the
contract.
The complaint against Gouled charges
that he ION or about July l. 1918. and
! every day thereafter up to the date OF
, this complaint. did unlawfully conspire
with a certain manufacturer and an
! officer of the United States Government
in violation of section 81 of the United
States Criminal Code to exact from
| various persons commissions and bo-
muses. upon sales to the United States
| Government"
1t Is further charged that ito effec,
the objects OF the said conspiracy the
said Felix Gouled did on July IS. 1918,
visit the said manufacturer and then and
there use the telephone"
The complaint adds that the name OF
the manufacturer and the Government
officer involved with Gouled is known
but is withheld for the present
The discovery that many rotten ,rain-
coats had been used in filling war order RS
! came after an investigation was begun
in March into rumors that war con-
tracts In many lines of supplies had been
| jobbed on a contingent fee basis The
raincoat inquiry thus has two distinct
phases.
More Arrests Predicted.