The New York herald., 1921-01-04
2 ACCUSED IN THEFT
PLOT IN CITY OFFICE
Comptroller Craig Has One
Trusted Employee Under
Arrest; Another Sought.
CONTRACTORS CASH GONE
SO. 900 Man Said to Have Run
an Endless Chain in Use
of Surety Deposits.

One man was under arrest and detec-
tIyes last night were searching for a
second person alleged to be involved In
a scheme to rob the city of large Sums
Of money through the larceny OF Liberty
bonds and cash deposited in the Comp
trollers office by contractors as evidence
of good faith in connection with city
contracts.
Comptroller Charles l.. Craig began
an investigation yesterday thatSnay in
volve several bureaus within the depart
ment He wants TO find out how wide
spread the peculations are and just how
il was possible for $4,000 year clerk
to manipulate bond transactions run
ming into thousands of dollars in way
that was disclosed only through COM
plant of an outsider and not as re-
salt Of any vigilance within the depart
ment.
The man under arrest Is Charles
Nloos 1881 Greene avenue. Brooklyn. an
accountant in the Finance Department.
Kloos is about 35 years of age and has
been in the department eight years.
The man for whom the police are search
ing is James T. Harris Of 467 st. johns
place, Brooklyn, contract clerk III the
department whose salary is $4,000 and
who has been in the city's employ since
1898. Both men are charged with grand
larceny.
Comptroller Craig explained the meth
DDS by which the alleged defalcations
were made. One mans money was used
apparently, to make good prevfou;
shortage and as long as clients KEEP
coming in and no complaints were re-
ceived the scheme might have been KEEP
going indefinitely.
Kloos reported for duty at the Finance
Department yesterday morning and wa:
summoned Immediately to Comptroller
Craig's office. where he was examined
by Assistant District Attorney Ferdi
nand Pecora and, it is said, agreed tx
assist in the search for Harris.
1t was Harris's duty to register al
! contracts filed with the Finance Depart
ment He was not supposed to handle
any cash or bonds deposited as securit,
for the performance of contracts. bu
as a convenience occasionally accepted
such securities. giving receipt and de
posting them later with the security de
posit clerk of the audit bureau. He die
this as a matter of course, being an -olt
and trusted employee of the department
| But 1t was the laxity of the system tina
! permitted this course that Is held In par
/ responsible for the present mixup,
Discovery Of irregularities in the de
partment was made last Friday, whei
/ Michael Del Balso. a Bronx contractor
/ complained that he had difficulty in re
I covering all OF depoa Of $3.50 III
\ had made as security on an asphalt con
! tract. He had substituted a surety bono
/ for his cash security and complained
that he received his cash back in install
ments. getting the last $500 only oil
! Friday.
Comptroller Craig refused to admi
that the total defalcations would run al
high as S10,0 900. Some of the first loans
may have been repaid and the bonds de
posted as collateral returned to th'
finance department vaults. he explained
Only a complete audit and checking III
of current contracts and the correspond
ing securities can disclose the exact ex
tent in which the city may have beer
mucted.