The New York herald. [volume] (New York, N.Y.) 1920-1924, 1920-10-05
Grand Jury Includes Two
Fuel Firms and Two
Company Officials.
HUGE FRAUD CHARGED
Light, Heat Rates Held IL
legal, Based on False
Expense Reports.
PROFITS WERE DIVIDED
Adelphia Coal Co., lnc., HAD
Monopoly on All-Sales,
Says Indictment.
PROFITS WERE DIVIDED

indictments charging widely
spread conspiracy to mulct the public
through profiteering and boarding coal
were returned yesterday against the
Brooklyn Edison Company, Inc, the
Adelphia Coal Company, Inc. OF 1
Broadway; the B. J. Lynch Coal Com
psny, Inc; Walter F. Wells. vice.
president and general manager of the
Brooklyn Edison Company, and Harry
p. Wood it's operating engineer In
charge of all coal transactions.
1t is alleged that the conspiracy has
been in operation ever since the Lever
law went into effect, October 22. 1919.
The evidence was submitted to the
Federal Grand Jury by William Nc
Murtrie Speer, Special Assistant United
States Attorney General. and the in
dictments We're handed to Judge A. N
Hand in the Federal District Court
They are said to be the forerunner OF
similar indictments against pubic
utility corporations which are ex-
DeCtcu as u result VI DlttA . 80
vestigation.
The defendants were notified last
night of the finding of the indictments
and are expected to appear for plead
ing probably to-day.
Hundreds Of thousands of dollars
are involved in the alleged frauds The
maximum penalty in case Of convic-
ton is a $4,000 fine for the corpora
tions and similar fine and two years
imprisonment for the individuals
The chief accusations are twofoid
IT Is alleged that the Brooklyn Edison
Company has been making false returns
to the Public Service Commission re-
earding the price it has paid for its
coal In that II has been knowingly and
wilfully paying more than current mar
ket rates AS result of this practice
It ia charged that the company has been
permitted by the Public Service Com
mission to charge higher rates for light
and power to the people of Brooklyn
than the cost of production warranted.
Extra Commissions Charged.
II is asserted also that no one could
sell coal 10 the Brooklyn Edison Com
pany save through the Adelphia Coal
Company and that double commissions
we're exacted. The Edison company so
the indictment SETS forth, uses a thou
sand tons OF btuminous coal day In
the conduct of It's business.
After setting forth that under the
public service law the Brooklyn Edison
Company was allowed to collecet from
It's customers for light and power rates
determined by the Public Service Com
mission In accordance with the quanti-
ties Of coal purchased by the company
and the price paid. the indictment al
leges that IL was the duty of the COM
pany to buy its coal as cheaply as
possible and truthfully report only such
amounts as actually had been disbursed.
Because of misrepresentation. IL is
charged, the company exacted from its
customers excessive rates for the cleo
trlc light and power supplied TO them.
The Brooklyn Edison Company, IL Is
asserted bought coal from the Adelphla
Coal Company. Inc. when there were
many other persons. firms and corpora
tons In the city engaged in the whole
sale coal business who we're ready. able.
willing, and who offered 10 sell Il coal
OF at least as good quality at prices
Substantially lower than were being paid
the Adelphia concern. These other firms.
I. is maintained. were ready to do busi-
ness without the payment of any boz
muses. commissions or brokerage by the
Edison company. and without the pay
.nent by the seller of the coal OF bonuses
TO any third party In order to effect
the sale.
Tho Indictment further alleges that
from October %, 1919. to the day of its
return. the Brooklyn Edison Company
the Adelphia Coal Company. Waiter +.
Wells and Harry Il. Wood consplred 70
violate section of the Lever act by
engaging In discriminatory, unfair
deceptive and wasteful practices" In
dealing In coal.
Says Profits Were split.
According 20 the evidence obtained
by Mr.. Spcer the Brooklyn Edison Com
pany bought coal only OF the Adelphia
concern or other dealers through H.
These dealers. II IL asserted In the In
dictment. paid bonuses to the Adelphia
Coal Company for the privilege OF un-
loading on the Brooklyn concern at
prices well above the market rate.
I'm the Instances In which the Edi-
son Company would purchase coal from
dealers who would pay bonuses or COM
missions to the Adelphia Company" the
Indictment says, such purchases would
be made only from the dealers who
would pay to the Adelphla Company
bonuses or commissions largely In ex-
cess of the fair and reasonable value
OF any services rendered by tne Adel-
phia Company and In such Instances
the Adelphia Company would. IA fact.
render no services to the Edison Com
pany."
The profits and bonuses accrung TO
the Adelphia Company through the al
legged conspiracy were divided, so the
Indictment. charges, between Il and
Harry +. Wood ard other persons whose
rames are unknown. and their existence
sas kept secret and not reported to tho
Public Service Commission. In pur-
, auance Of the conspiracy which the
Government maintains exists, II Is as
yerted that between December 5. 1919.
rnd April s, 1920. the Adelphia Com
rany deposited in the Liberty National
Bank checks drawn by the Brooklyn
Ndison Company for $3.50, s7.227.
ss,E65, s1,e71 and two for $1,000.
Mt. Wood II Is charged. visited the