The New York herald., 1920-01-09
.S156,0O0 DIVERTED,
COURT FINDS, FROM
VAUDEVILLE UNION
Justice Mitchell Sustains Report of
4 Referee in Action Involving White
RatS-Si6,Ooo Lost in Loans.

Justice Richard Fl. Mitchell IN the Su-
preme Court late yesterday gave deci-
sion sustaining report of Lewis Schuden-
frcA as referee, appointed in 1917. In an
action brought by Miss Goldie Pemberton,
a member. for an accounting In the matter
OF the White Rats Actors Union of
America
Justice Mitchell found that $4,000 had
been diverted by Junie McCree, William J.
Cooke and w. w. Waters. officers of the
union, and such directors as with them
had approved the formation of the White
star Realty Company. He also found
that s1o,47S had been diverted by Harry
Mountford and, William Fitzpatrick, in
that they had deposited the money in their
own names IN a bank and had never
satisfactorily accounted for it and that
the union was insolvent.
He directed that costs be awarded to
Miss Pemberton against the union and its
decision, are Fred Niblo. Frank North.
Sam Morton. Junie McCree, Johnny Bell,
George l.. Deimore and others. The deci-
sion does not state which of the directors,
all OF whom are named, approved of the
formation of the realty company, which
built the unions clubhouse
Mr.. Schuldenfrei in his report set
forth that the union filed with him a
summary as of June l, 1917, showing &
nominal assets of si17,STl.s0 and nom-
inal liabilities of s72.350.33. The as
sets included $4,000 in stock of the
White Rats Realty Company.
II find as a fact that such stock is
entirely without value" the referee con
tinues. Another item, $16,239.S8, is for
money lent TO members for which re-
spondent received promises of repay
ment on demand. That is also without
value. The respondent. therefore. Il
insolvent.'
Mr.. SchuldenfPe finds that when the
union was chartered, in 1910, it had assets
in excess of $4,000. There was talk OF
building club house, but Messrs. OBrien
and Malevinsxy, attorneys for the union
advised that the union had not the Legal
right to so into such an enterprise. Then
came the opportunity TO lease Nos. 2N-23l
West Forty-sixth street. and the referee
states that the attorneys advised the cre-
alton OF the White Rats Realty Company
The union backed this company, which was
incorporated, with $4,000 and $125,o00 was
paid by the union to the company for
bonds. When completed the club house
was rented to the union at SIS 900 per
annum. Nominally the realty company
both owned the building and operated it,
but the union. the referee reports. paid its
running expenses, advancing funds to the
realty company. although this was not
known to the MEMBERS. This venture
cost the union s156.000
Mr. Schuldenfrei reports that "all efforts
TO trace money spent to finance the strike
of 1916-i7 were blocked by Harry Mount
ford and William Fitzpatrick. who, claim
ing TO hear of a leak in the matter OF
from the Mutuol Bank and transferred
them to the Greenwich Bank, where they
deposited them in their own names. The
amount deposited was s10.47S.
with regard to these moneys, it must
abe held that they were diverted. No en-
tries as TO how they were spent were made
in regular books OF account, and records
were said to be kept on loose memoran-
DUN slips OF paper which were submitted
10 and approved by the Board of Direct
ors Neither the slips OF paper nor the
vouchers were produced. Tho failure to
produce them was attempted TO be ex-
planned by tho story of an alleged burglary
at the office Of the respondent. the union,
after this proceeding was commended
The police were not notified of this burg
larry. Mountford said that at the proper
time he would prove that hostile interests
were ba>k of the burglary.
Some $4,000 belonging TO the Associated
Actresses of America was taken over by
the respondent and mingled with its funds.
but could not be further traced