New-York tribune., 1919-02-11
Fraud Order
Sought Against
e. I'll. Unverzagt
Lightning Creek Promoter Is
Called to Washington to
Defend Stock Operations
Now Under Indictment
Charged With Using Mails
to Defraud; Federal Attor-
ney Plans for Quick Trial

Charles II. Unverzagt, of 400 per
cent dividend" fame, has been called
upon by the government to show cause
why fraud order should not be issued
against him.
The head of the Lightning Creek
Gold Gravels and Drainage Company
and its kindred corporation whose op-
erations were pictured exclusively in
The Tribune yesterday, will be given
& hearing before Solicitor William II.
Lamar at Washington tomorrow.
The granting of such an order would
close the mails to Unverzagt and Grip
ple his further stock selling operations.
The charges are that he sold approxi-
mately sl,500,000 worth of stock of his
several mining corporations during the
twenty years he has been promising
dividends OF from 100 to 600 per cent
annually on Lightning Greek invest
ments
But that is not the only discourage
ing news that probably reached Unver-
zagt's ears yesterday. Indictments in
which he and his wife, Mrs. Laura I'm
verzagt are charged with using the
mails to defraud are being hurriedly
prepared fo. trial in the near future by
Special Deputy Attorney General
Thomson. Of the firm of Towne. Bailey
& Thomson.
Indicted Last May
The indictments were returned last
May. but for various reasons it has
heen impossible to bring the case to
trial, the prosecutor said.
The proceedings before the Postoffice
Department, which are expected to be
decided at Washington tomorrow, are
the result of hundreds of letters of
complaint involving Unverzagt's stock
selling activities. An investigation
quietly carried on by postal inspectors
was followed by the production of
batch of Unverzagt's literature
before the postoffice solicitor, along
with a bundle of letters from
dissatisfied stockholders in his cor
porations. The letters charged that
none of the promises of large
profits ever had been realized. The
proceedings scheduled for tomorrow
morning resulted.
Letters to the government prosecu-
tors revealed the fact that not only
the possessor of small savings bank ac-
counts, but larger investors as we'll,
had poured money into the Unverzagt
projects. One man was shown to have
invested $4,000, another paid $4,000
FOR Lightning Greek securities, while
others paid $4,000 each and smaller
sums.
Corporations Involved
The Unverzagt corporations involved
in the present proceedings by the postal
authorities and in the Federal courts
include the following:
Lightning Greek Gold Grayels and
Drainage Company, incorporated in
1895 with an authorized capital of
$1,000, 900 Unverzagt acquired the
stock in this corporation in 1896,
when he began his present stock
selling operations.
British America Gold Mining Com
pany, stock sold for several years,
but no complete record of its opera
tons are available because the books
are said TO have been burned.
Great Cariboo Gold Mining Com
pany, authorized capital $4,000, 900,
incorporated in 1903, described by
Unverzagt as "stock holding COM
pany for the Lightning Greek Com
pany."
Mines Operating Company, incor-
porated for $3.50 900, controlling in
terest of its stock being held by Tn
verzagt as a reward for "making ad-
vantageous contract" with the Light
ming Greek and Cariboo companies.
Standard Finance Company, through
which Unverzagt finances and sells