The New York herald., 1921-06-10
CHARGE POLICE AID
FAKE BANKRUPTCIES
New York Credit Associations
Agents Are Rounding Up
ConspiratOrs.
$500, 900 LOST IN FRAUDS
Swindlers Gain Control Of
Small Companies and Get
Credit to Limit.
100000 LOST IN FRAUDS

Agents for the New York Credit Mems
Association, who for several months
have had the active cooperation Of
Assistant United States Attorney Max
we'll s. MattuclS, are rapidly rounding
up a band of commercial conspirators,
numbering probably dozen, whose
fraudulent enterprises have cost the
community close to 100000. Some of
them, it Is charged have had police
collusion and aid
Generally the process whereby these
swindlers operated has been to obtain
large consignments OF goods from
merchants or manufacturers, either by
riding upon the credit Of a genuine
corporation bearing a name similar to
or identical with the name Of the
fraudulent concern, or, as has hap
pened in other instances, by gaining
control OF some genuine small cor
poration and working It's credit to the
limit.
The next step, the Federal prose-
cutor AYERS, was for the crooks to 30
into bankruptcy with little or no vis-
ible assets. After affairs had been ad-
justed they quietly withdrew from
warehouses where they had concealed
them the tangible assets fraudulently
hidden from creditors and finally they
realized handsomely upon their sale.
THE NEW YORK HERALD told yesterday
how United States Commissioner Hitch
cock had held in $4,000 bail Joseph Mar
gel and Herman Sobel of the Globe Man.
ufacturing Company. Jobbers in novel;
ties, Of S84 Fifth avenue, on charges
that they had been concerned In conceal
ing assets Of their corporation. which
recently went into bankruptcy. listing
liabilities OF $4,000 and assets Of only
sl.O0o.
Assistant District Attorney Mattuck
was IN conference yesterday with F. r.
A. stefel manager Of the prosecution
bureau OF the New York Credit Mems
Association. Mr.. Stiefers office Ii In
the headquarters OF the association. $40
Broadway.
"In addition to the case of Margel
and Sobel" said Mr. Mattuck, 'the
Grand Jury also has indicted HAIRY
Marks and Edward Schreyer. who oper-
ated under the name OF tho Cambridge
Manufacturing Company from S34 Fifth
ayenue--the same building wherein the
Globe Manufacturing Company had Its
Headquarters Now, IT happens that
there is n genuine Cambridge Manufac-
turing Company doing business at 217
Centre street BY using the mails and
trading upon the credit OF the Centre
street concern OF the sne name we
charge In the indictments Marks and
Schreyer cleaned up about $4,000.
'-Thefr method OF operating was very
similar 10 that OF Margel and sobel. and,
indeed, we expect to show when they
come to trial that number of these
swindlers--probably about twelve or
them. for we are not yet through casting
the net---have been moro or less asso-
ciated and interlocked In their crooked
enterprises.
But there is another class who get
control OF what has been heretofore an
established. more or less going corpora
ton and then plunge II into fraudulent
bankruptcy for their own profit. One
Of the men who also rests now under
a Federal Grand Jury Indictment IL Hill
Cummings. He IL illustrative Of this
latter class. we allege. He was asso-
ciated with two concerns. the so-called
New York Novelty Company and the
Chicago Bargain House OF 272 Canal
street. In the case OF the New York
Novelty Company, when II went into
bankruptcy. Mr.. Stifel. who took pos
session and made an investigation In
behalf Of the credit men. found listed
liabilities OF about 100000. with assets
consisting Of $3.50 In cash. plus the fur
niture and fixtures of the establishment.
"a second Indictment against Cum
n,ings charges him with concesling as
sets with intent to defraud creditors OF
the Chicago Bargain House, which went
into bankruptcy with liabilities of
100000. There were assets In this
case OF about $4,000. These. we
charge, would have been much smaller
but for the fact that Cummings part
ner, who was not in harmony with the
latters methods went to some OF the
creditors and warned them before the
conspiracy could be consummated. Thus
tho creditors actually realized upon
some assets In merchandise and there
was about $4,000 which Cummings had
not vet drawn out Of bank