New-York tribune., 1919-06-20
Score of Firms i'm Manhattan
Failed to Make True Re-
turns and Will Be Prose
cuted, Says w. HI. Edwards
Two More Arrests Made
Member of Audit Concern
and an Employe Held in
Bail byU.S. Commissioners

The Federal inquiry into income tax
evasions yesterday developed the fact
that the government already has been
defrauded of more than $4,000. 900 in
income taxes, according to William H.
Edwards, Collector of Internal Reve-
nue.. Mr. Edwards, after a hasty ex-
animation of the books and files Of
the Sterling Audit Company, which
were seized under a searc,. warrant,
said he had conclusive evidence that
scores of firms in the metropolitan
district had falsified their returns. At
least twenty arrests are expected this
week.
A. Lincoln Samuelson, a partner OF
Morris Rachmil in the Sterling Ac-
counting and Audit Company, of 366
Fifth Avenue, and Bernhard Joffe. an
employe of the concern, were taken
in custody yesterday by internal reve-
nue operatives. Rachmil was arrested
on Wednesday with Morris Rosen-
blum, an internal revenue INSPECTOR.
who is charged with having part in
the conspiracy to defraud the govern
ment.
Samuelson and Joffe were arraigned
before United States Commissioner
Hitchcock, charged with having con-
splred with others to defraLd the gov
ernment by falsifying the books and
returns of concerns making income tax
returns.
Held in Heavy Bail
Both we're held for hearing June
26. Samuelson was held in $4,000 bail
and Joffe in $4,000.
Collector Edwards said that all the
firms which had had their income tax
returns made out by the Sterling firm
will be investigated immediately.
Where evidence indicates fraud prose-
cutons will follow. Between fifty and
hundred Investigations are under
way.
To cite an instance of how much
the government stood to lose in each
case it is only necessary to refer to
the Coastwise Warehouses Company
case" said Mr.. Edwards. "The COM
pany's tax was more than $4,000, and
the amount submitted by the Sterling
Audit Company was $3,4O0. Of course
when this was submitted the officers
of this concern were working under
our direction for the purpose of trap
ping the persons responsible for the
fraud"
Rosenblum, the revenue Inspector
has made a statement to Assistant
United States Attorney De Witt in
which, according to the prosecutor, he
has named thirty concerns involved in
the plot to defraud the government.
Mr.. De Witt said that Rosenblum, in
his statement, said that he had double
crossed" the Sterling Audit Company
by informing the government of the
true amount due from corporations
whose false returns he had o. KID.
Talks of Double Crossing'
He further said, according to Mr..
De Witt, that Samuelson and Rachmil
had "double crossed" him by repre-
senting that they received but small
compensation from the firms whose
books and returns they had falsified.
The prosecutor said Rosenblum got
only about $500 for his part before
he accepted the $1,000 in marked
money from the Coastwise company,
while the Sterling concern was MAX
ing big profits.
There will be no DEVELOPMENTS in
connection with the case against Jaw
A. Weber, secretary of the Pictorial
Review Company, until next Wednes-
day, when he will be arraigned for
pleading to an indictment charging
him with offering a bribe of $25,-
600 to an internal revenue agent to
induce him to verify a false income
tax return.
Other income tax fraud cases are
now being presented to the Federal
Grand Jury. Indictments may be