New-York tribune., 1920-11-07
Comptroller Fined $3.50
for Contempt, Then Case
]s Ordered to Grand
jury for Criminal Action
Court Prepared to
Call for Arrest
Penalty Is 5-Year Term or
$4,000 Fine; Other In
dictments May Be Asked

State Comptroller Eugene NJ. Travis
was held yesterday for the action Of
the grand jury on two charges involv-
ing the alleged fraudulent audit and
payment OF claims against the state.
This was the decision announced by
Chief Justice Frederic Kernochan of
Special Sessions, who has been presid-
ing over the John Doe investigation of
bond purchases since January, 1915.
The inquiry began on October and is
now concluded except for the action
the grand jury may take in regard to
Travis and the testimony which As
sistant District Attorney Pccora an
nounced yesterday he will place before
it. This will deal with the part played
in the alleged irregularities by Deputy
Comptroller James A. Wendell, Albert
L" Judson, bond trader, and William
S. Fanshawc, a broker.
In addition to being held for the ac
tion of the grand jury, Comptroller
Travis was fined $3.50 for contempt Of
court as result of his refusal to
answer questions relating to his per-
sonal financial transactions during his
term OF office. He was given the alter
native OF spending thirty days in Jail.
jurisdiction Test Planned
George q. Medalie, attorney for MIR.
Travis, announced that he would bring
an action to test the jurisdiction of
the court in adjudging his client in con-
tempt.
Justice Kernochan's decision hold
Comptroller Travis to have specifically
violated Sections 1868 and 1864 of the
penal law, which provide that public
ol1lcer who knowingly audits or pnys
a fraudulent claim against the state
is guilty Of felony and subject, upon
conviction, to Imprisonment for not
more than five years or fine of not
more than S5,000
- In rendering his decision Justice
Nernochan reiterated that there was in
suflIcient evidence on which to connect
Deputy Comptroller Wendell with the
bond purchases. Mr.. Wendell was
elected on Tuesday on the Republican
ticket to succeed MIR. Travis as Comp
tro Of the State of New York. He
will take Office January |.
The investigation had developed the
fact that q vast majority of the pur-
chases made by the Comptroller's Of
fee in the last five years were ne
gotlated through Albert L. Judson and
that he had profited by them to the
extent of almost 81 100000
Justice Kernochan said yesterday
that he was uncertain as to whethe I
Judson's testimony, given after he had
refused to sign Il waiver of immunity.
would not act as a bar to crimina /
prosecution. He requested Assistant
District Attorney Pecora and Walter
c. Herrick, attorney for Judson, to sub
NIT briefs on this point.
The ''moral obligation sale" of No.
vember l6, 1917. in which the state
purchased S2,013,000 worth Of New York
City bonds from Judson through the
brokerage firm of William S. Fanshawe
& Co., was made the basis in Justice
Kernochan's decision for the charges
against MI Travis. In this transaction
the securities were purchased by the
state at s91a, despite the fact that the
current market price was 82. The loss
to the state as result of this pur-
chase amounted to S140,000.
Bond Dea, With Brokers'
When Mr.. Travis was called as a
witness early in the investigation he
said that he had agreed to take these
bonds from Judson and Fanshawe in
the fall of 1916 at' "a. The broker
accumulated the securities with the
idea of disposing of them at that price.
but the transaction was not completed
until almost year later. Bv chat time
.he market had dropped to 50. Mr..
Travis said that while he felt "morallv
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