The sun. [volume] (New York [N.Y.]) 1916-1920, 1918-09-19
PROMISES TO PROVE
Big RAMCOAT PLOT
Prosecutor Says vaughan's
Control of Contracts Made
Gouled's Operations Easy.
CAPTAIN IS TO TESTIFY
Unsuccessful Bidders Got
Orders After Officer Re-
ceived 81, 900, Is Charge.

Because CAPT. Aubrey w. Vaughan OF
the ouartermaster-Genera Department
was in absolute control Of the awarding
of $20.000.000 worth OF raincoat con-
tracts It was a simple matter for Felix
Gouled. a promoter. to manipulate con-
tracts for his own profit. 1t was as
serted yesterday by Joseph A. Burdeau
assistant United States Attorney.
Gouled, with David L. Podell, law.
yer, Is on trial in the Federal District
Court before Judge J. c. Hutchinson and
jury. charged with conspiring to de-
fraud the Government. Vaughan, a CO.
defendant. pleaded guilty and will be a
witness for the Government to-day.
Says Vaughan Got $1,000.
Mr.. Burdeau, opening for the Govern
ment, said he would prove Gouled and
Capt. Vaughan entered into an agree.
ment to share the profits Of the con-
spiracy. He said Gouled gave Vaughan
81, 900 and wrist watch, and that
thereafter a number of manufacturers
who had been unsuccessful bidders for
raincoat orders. received contracts. Po-
dell drew an agreement between Gouled
and the II. Rosenfeld Raincoat Com
pany. which was designed to conceal an
rillegal contingent fee transaction. Mr.
Burdeau said.
MIR. Burdeau said n peculiar situation
was created when the army began to
buy raincoats last spring on an I'M
precedented scale. He said Vaughan
who had recently entered the army and
been given a commission with Lincoln
Green Of the United States Rubber Com
pany as one Of his sponsors. was recon-
mended for procurement officer by a
committee OF manufacturers composed OF
Green, Theodore Hodgman of the IIodg-
man Rubber Company and Glare Ken
yon of the c. Kenyon Company.
Mr.. Burdeau said that after big con-
tracts had been awarded to the United
State Rubber Company and to the
Hodgman Company Vaughan entered
into the contingent fee transactions with
Gouled that led. to the indictment. The
manufacturers accused of completely In
the contingent fee transactions were not
indicted on the conspiracy charge. but
some of them were among a score or
more of manufacturers indicted with an
inspector OF the Quartermaster's De-
partment for alleged bribery and for al
legged sabotage in supplying the Govern
ment with defective raincoats.
Aaron B. Levinsky. n manufacturer
who admitted Gouled into his firm. was
the first witness for the Government.
He said that his firm, which consisted
OF himself and two brothers. had been
in the raincoat business for ten or
eleven years, but had done no work
for the Government until Gouled be-
came a partner. Gouled became a part
ner with an interest In raincoat war
orders on fifty-fifty basis. he said.
and contributed his share OF the cost
OF the materials.
Got Contracts for $4,000 Coats.
How many raincoats did the first
contract call for?" asked Martin W.
Littleton of counsel for the defence
1T called for $4,000 coats. but we
made and delivered $4,000"
What was the profit of the partner
ship"
twenty-five thousand dollars"
What was done with that money -
I'VE put II bac; into the business.
We moved to an enlarged factory in
Pitkin avenue, Brooklyn
And as the result of competitive
bidding the partnership got a second
contract, was il not?'
Yes, for 10000 raincoats"
I-evinsky said that in June after
10000 coats had been made and de-
livered, Gouled's office at Madison
avenue was raided by agents of the
Department OF Justice and he and a
score of manufacturers were arrested.
The contract was cancelled at that
time, he said but he later received an
order to go on with the work where It
had been cut off. All but 1000 coats
have been delivered he said
Levinsky said there was 10 con-
tingent fee arrangement with Gouled
on the contracts His testimony was
not very helpful to the Government.
5. Megl!tsky, manufacturer. tcstI-
fed he was approached by lawyer
who told him Gouled could get him
a raincoat contract He said he saw
Gouled and the latter proposed an ar.
rangement by which Is cents would
be paid to him on each army garment.
Meglitsky testified he told Goudel that
II he could not get a contract honestly
he did not want one.