Evening star. [volume] (Washington, D.C.) 1854-1972, 1920-06-30
THREE EMPLOYEES
Of WAR RISK HELD
ON FRAUD CHARGE
Losses Which May Reach
Hundreds of Thousands
Likely to Trap Others.


of war risk insurance locked UP under
charges of having defrauded disabled
soldiers out of part of the money due
them from the government, secret
service agents are today Investigating
to what extent, if any, other en-
ployes of the bureau may be implicat-
ed in the frauds, which may reach
into the hundreds of thousands OF
dollars. Additional arrests are ex-
pected momentarily.
The three now under arrest are Will
liam F. Salisbury Of Buffalo, N. Y;
Patrick OBrien of Des Moines, Iowa.
and David NJ. GriSwold of Brooklyn.
N. Y, all of whom were employed
in the claims division of the war risk
bureau. They were arraigned before
United. States Commissioner Mason N.
Richardson shortly before noon. where
they waived examination, pleaded not
guilty and were held for the grand
jury. their bonds being fixed at $4,000
each.
Oppose Reduction in Bond.
William E. Leahy. former assistant
district attorney. appeared as counsel
for the mon. He later asked the Dis
trict Supreme Court to reduce the
bonds. Assistant District Attorney
Chief Justice Mccoy ordered the
bonds to stand at $4,000 and pending
arrangements for bonds the three
were locked up.
Aroused by what he termed was a
fraud too despicable for words" Chief
w. H. Moran of the secret service is
giving his personal attention to run
ming down the men Implicated, but he
said it was too early to say how much
money was involved or how many per-
sons were in the plot. From other
sources it was limited that the amount
would exceed 100000. but the number
of men who had been sharing in the
spoils was not thought to be large.
Handled Claims of Soldiers.
More than twenty former service
men who asserted that their claims
had been handled by men who agreed
to get them increased compensation
from the government on fifty
fifty" basis, today reported their cases
to the secret service operatives, and
through these informants it is be-
lieved the whole case will be worked
out.
Three witnesses appeared against
the men arraigned today. They were
Joseph F. Delavigne, Clyde v. Crutch-
field and Hillery Rose. 1t was
through Delavigne, whose home is in
Prescott, Ariz.. that the first intima-
ton OF the alleged plot was dis
covered.
According to the secret service
operatives, the plan OF the war risk
employees was to tell a disabled serv-
ice man whose compensation had ac-
cumulated for several months that
the government would allow him only
a part of what he actually was en-
titled to have, but that they could get
him an additional amount "for a con-
sideration." For example, If the for
mer service man was entitled to
$4,000, they would tell him that his
claim was worth but $1,000, but that
they. could get him $500 more if he
would give them half.
Held ON Charges of Fraud.
In many cases the claimant agreed,
sometimes giving away half the, al
legged extra amount, though in a few
instances not quite SO much.
The charge against the three men
now, under arrest is that Of eonspiring
ito defFaud the government, a clause
IN the Law covering cases in which
the defendant accepts fee or other
emoiumsnt to get money from the
public Treasury improperly. The ex-
IRENE penalty under that statute is a
fine of not more than $4,000 and two
years Imprisonment.
Cases Up to Secret Service.
Director r. 6, Cholme1ey-Jones of
the bureau of war risk insurance
was in conference with Treasury on
Gals today, bat would make no state
mont for publication. The officials
of the bureau are leaving the whole
case in the hands of the secret serv-
ice men! s..r
The first suggestion Of something
wrong in the claim department Of
the bureau. came to Detective Sergt.
Frank c. Helan. assigned to the Dis
trict attorneys Office, who was seen
by Delavigne. after the latter had
told Senator Ashurst of Arizona that
the suggestion had been made to the
FORMER service man that his compen.
sation could be increased for a
Sergt. Helan at once reported the
case to Assistant District Attorney
Arth, who told him to communicate
with Chief Moran. Hardly had Mr.. Mo-
ran ceased talking to the detective
when he was called by an official of
the war risk bureau, who asked that
detectives be sent over at once, the
two reports coming in almost stimuli
taneously. 49,
The ease does not In any way af-
feet the life insurance division Of the
bureau's' activities. but is confined to
the payment of compensation for par
tial or total disability, entirely apart
from the insurance act officials said.