The New York herald., 1920-12-30
Grand Larceny and False
Audits Charged to Comp
trOller. His Successor
and Agent.
FOUR COUNTS EACH
Defendants Plead Not
Guilty to Wasting States
Money in Purchase
of Securities.
ALL ADMITTED TO BAIL
If Convicted They Face Three
and 0ne-half to Five
Year Terms and
Heavy Fines.
ALL ADMITTED TO BAIL

Eugene NJ. Travis, State ComptrolIeF,
and James A Wendell, Comptroll sY%
elect, we're indicted yesterday by tire
Additional Grand Jury on charges ~
grand larceny and fraudulently au ~
ing the books Of the Comptroller's o.
fee. The indictments are the ressiiiS
of the John Doe inquiry into the ~
vesting of State funds in bonds eur
chased through brokers at higher tHAr
market prices. With the ComptrpNar
and Comptroller-elect the Grand jury
indicted Albert L. Judson, a broker, ON
similar charges. Each was held by
Judge Mcintyre of General Sessions
in $1,000 bail.
The indictments contained four
counts each The John Doe proceed-
ings were held just before election ana
testimony was offered to the effect
that Travis purchased through Judson
$2013, 900 worth OF New York city
bonds at rate seven points higher
than they could have been purchased
for in the open market at that time.
and that later Travis bought sS.25o,ooo
worth OF bonds at a rate that cost the
State $4,000 more than II they had
been obtained in the open market. II
was alleged that the state might have
saved more than sI50.ooo on the first
deal had the bonds been purchased at
| the open market price.
Pleas Arc Entered.
Ill ~
not guilty. For Mr.. Wendell a repre-
/ sentative OF John b. Stanchneld ap-
! peared. The Comptroller was represented
by Max steuer. and Judson. who Is a.
most blind. was led into court by his
attorney. Walter r. Herrick. They had
no personal comments to make. but Me-
Steuer applied for the right to inspect
| the minutes OF the Grand Jury. after
which. he explained. he intended NOV
ing for a dismissal OF the Indictments
The argument thereon will be heard
! tomorrow morning.
Mr.. Travis made a brief statement
following the announcement Of the
Grand Jury's action. "All ] can say
now is that am innocent OF the charges
made against me and this innocence will
be shown in due time" he said.
Not a word" was all Deputy Comp
trolled Wendell would say.
Mr. Judson contented himself with the
remark that indictments seem TO be as
popular now as appendicitis used TO be-"
II convicted the three men will oe
I liable to imprisonment for from three
and half TO Ave years on each count
and to be fined Ave times the amount
| Of money the state lost BY their trans
actions. II seems likely that other In
! dictmcnts on similar charges will be
returned The Grand Jury in state
ment to Judge Mcintyre said
1--WE have presented 20 this court
several true bills which we have found
upon the evidence submitted to US in
! this investigation. and our labors therein
are not yet concluded. We deem IL 20
be our duty at this time. however. in
I view OF the fact that the Legisaturs
will soon convene. through this court. TO
| call the attention OF that body and tho
attention Of the Governor to the cx-
trome iaxity Of the methods by which
these public funds have been invested.
| These methods. in our opinion, do not
| properly safeguard the interests OF ths
people. We earnestly recommend that
\ the Legislature devote serious effort 20
the correction by suitable legislation OF
/ the abuses which under lax methods
have characterized tho investment of
these public funds"
HAD sal 100000 20 Invest.
Comptroller Travis had s3i.0o0.o0o OF
I state funds to invest In municipal bonds I
( and tho way IN which tho investments /
D rff sYts r.- ?
suited IN John Doc hearing befors
chief Justice Frederick Kornochan OF
/ tho Court Of Special Sessions. Assistant
\ Dis,ric, Attorney Ferdinand Pecora
/ conducted the Investigation. calling as
witnesses Comptroller Travis and Mr..
Wendell. who l. = Deputy Comptroller.
I and who tncn was running for election
to Mr. Trayiss Job. u was testified
( that, the bonds purchased through Mr..
I 1udson had ncttcd tho latter profit
I OF about $500. ooo II was testified. too,
I that virtually all Of the s3i,00o,ooo
worth Of bonds purchased were obtained
/ from a small group Of brokers and that
: Tn numerous Instances the prices paid
I by Mr Travis were In excess cf prices
quoted by other brokers In the open
market Among the favored brokers. Il
was testified, were MIR. Judson. William
s Fanshawe and Gibbons * Co. When
Mr. Travis took the stand he was asked
/ directly why he purchased some New
York city bonds at SO when he might
have gone into the open market and got
! them for 50. and why he had limited his
purchases to so narrow circle Of brok-
/ ere.
lie then explained that he had not
been enthusiastic about making these
purchases at the higher figures, brf
that he felt that he was under "moral