The sun. [volume] (New York [N.Y.]) 1916-1920, 1919-07-24
INDICTS FOUR ON OIL
FRAUD CHARGE HERE
Federal Grand Jury Alleges
$3.50, 1000 Loss by Tar ISL
and Corporation Backers.
MANY INVESTORS LOSE,
H. B. Wood Of Wood & Co.; G..
w. Wright and w. I.
Cherry Accused.

Federal Grand Jury indicted yester-
day four men charged with using the
Tar Island Producing and Refining Cor
poration to defraud investors of $780,
900. The defendants are Howard B.
Wood, Cuthhert w. Wright and William
I. Cherry OF New York and Or. z. York
Ames OF Shreveport, La. The technical
charge is use Of the malls to defraud.
Wood. who did business as Wood & Co.
In Ill Broadway. Is alleged to have been
the guiding spirit In the exploitation of
the Texas oil company that is alleged
to have been advertised to be in such
prosperous condition that II could pay
dividends at a time when the properties
to which 1t claimed title were producing
no oil.
Or. Ames. president of the company,
was interested in the Tar Island propo-
sition before Wood entered its affairs
Cherry was sales manager.
The company was organized under
the laws OF Delaware with a capital
stock OF s2.ooo.ooo The indictment
charges that all of this stock was turned
over to DR.. Ames as consideration for
the rights and properties of the earlier
company. It Is alleged that there was
posits shares worth s1,400.000 face
value in the company's treasury and
that $4,000 shares were to be promotion
stock 1t was further agreed. 1t Is al
legged that Wood should have the right
to purchase 1000. 900 shares at 10 cents
a share.
II Is charged that Wood sold the
shares he bought at 10 cents each for
between 60 cents and 81. Statesmen d.
rected by Cherry are alleged to have
operated in this city and in New Eng
land. It Is charged that the defendants
made false representations regarding
the condition OF their company to inves-
tors, among which representations are
alleged to have been the following:
That all the titles and leases of 1000
acres in Marion county, Texas. In what
is known as the Cadoo or Ferry Lake
district, near the Louisiana State line,
has been investigated and approved 4;
that the company had flowing wells
producing 100 barrels of oil day: that
it's pipe lines we're ample to take care
Of whatever oil might be developed and
that equipment was being assembled for
a daily production OF 500 barrels; that
the company was about to begin drill
ing several more wells. that II had no
bonds, mortgage or debts, the policy be-
ing to pay cash for all purchases and
carry a safe bank balance: that the
management OF field work was In the
hands OF experts. and that IL was paying
quarterly dividends of per cent on
stock that had been subscribed for In
large blocks by discriminating Investors.
According to S. Lawrence Miller, As
sistant United States Attorney. who
caused the indictment, the Tar Island
company owned no property but merely
had permits to prospect on land on
which there are two abandoned wells.
He declared that one OF the wells pro-
duced oil about the time the company
records show that II paid $1,000 for oil.
Wood was arrested a month ago and
has been free under bail The indict-
ments we're presented 10 Judge William
Robert Smith and warrants issued for
the arrest Of the defendants.