The New York herald., 1921-08-17
COOPERATIVE Homes
FRAUDS NET MILLIONS
Widows Especially Are Vic
tins of Crooks With AL
Turing Promises.
BANKS GET CRITICISM
Magistrate Mancuso Will
Give Evidence to State
Acknowledgement.
SHARKS SCHEMES Barred
Woman, Taken In by own
Your Own Apartment Put
In $500; Got Nothing.
BANKS GET CRITICISM
SHARKS SCHEMES Barred

Details of a widespread swindle by
men who seized upon the housing
shortage 20 float fraudulent coopera-
tive apartment owning concerns, and
appealed 10 investors who could least
afford TO lose. were revealed yester-
dsy in John Doe proceedings before
Magistrate Francis X. Mancuso.
One of the sensational Developments
was the charge that barls appeared
70 be at the basis o: many of the
Misunderstanding over to the schemers
ancient dwellings, hitherto held TO be
uninhabitable and accepting as a first
mortgage the full purchase price. The
original purchaser. howsved promptly
became lost in the maZes % the oper-
ations, and the title 20 ths properJ
vestors ever viewed the ramshackie
object of their thrift. but those who
did declared their inability to get pos
session of Their apartments.
A woman who had been struck BY the
slogan "Own your own apartment" was
one of the witnesses. She said that she
had agreed with one OF these concerns
10 buy $500 worth of stock. and that
she had received assurances that for sl4
a month her purchase would secure 'or
her a s22 apartment for life. She paid
ir $500 on account of her stock, but she
never succeeded in getting possession OF
the apartment.
Theodore Waugh. Assistant District
Attorney, and James j. Wilson, who are
conducting the investigation. informed
Magistrate Mancuso that hundreds of
complaints OF similar Fleeing Lave been
received. and there was no doubt in
their minds that the cooperative apart
ment takers had cleaned up several mill
ions OF dollars.
The plan of operation was shown by
testimony concerning q house in East
Tooth street. 1t was an abandoned tene-
ment house. owned BY a bank. and had
been cond emned for habitation. A hors-
ing shark" bought II from the bank,
mortgaging 1t to the bank for It's entire
value Then he formed holding COM
pany to which the building was trans
ferred.
The holding company passed 1t on to
another corporation formed f0 the pur-
pose of acquiring title. The original
buyer obtained a second mortgage, which
was given by a relative. and the scheme
was then ready Tor breaking 10 an
apartment hungry public. The title
holding corpo.s ton advertised it for
sale or ocoy erative basis. offering
apartments TO tenants upon their pur-
chase Of stock.
1t was pol. bd out that the banks
owned great deal OF property which
had been considered OF little value prior
to tn, housing emergency. but when the
shortage came inspection OF these build
ings led TO the belief that they could be
refitted. To unburdrn themselves OF the
property. II vas sta ted, the banks often
sold 10 spectators.
willy Schemers' Cleanup Plan.
One scheme 10 force o quick liquida-
tion OF assets. Mr.. Waugh said, and one
that was practised especially in land
lotteries. was 10 . duce investors to COM
plete payments before they We're due on
q promise IN getting n quick proht for
the investors.
The resale OF the lot under these
terms was in many cases not carried
oL.. as there were no prospective buy
ers, but the money paid in was In the
hands OF the schemers, Widows espe-
cially were the victims OF these opera
tons, said Mr.. Waugh.
Magistrate Mancuso directed that the
attention OF the Attorney General OF the
state be called TO the evidence In the
hands OF the Investigators. This will not
halt criminal prosecutions. he said.
The Magistrate viii resume ot o'clock
tomorrow afternoon an investigation OF
the Ironbonnd Realty Company, Inc. OF
Raekman street