New-York tribune., 1922-04-06
Is Accused of
S2,OOO,OOO
Oil Swi11dle
tcentluucd from paac one)

investing public on these shares unless
some radically different selling points
could be discovered. 1t was then that
the Century Oil Company was renamed
and capitalized for $4,000, 900, The
assets of the smaller concerns we're
taken over and a gigantic selling cam
paign was launched
Million in Stock Already Sold
The corporations which figured in
the merger were the Ranger Oil Com
pany and Ranger Petroleum Company
controlled by Dixie L. Peters. of Los
Angeles: the Hercules Oil Company
and the Queen Oil Company, promoted
by Boncwitz Y. Dawson. of New York,
and the Shannon Oil Company. All
these individuals and concerns arc
made defendants in yesterdays indict-
ment, but the Brooks Syndicate, the
sixth Of the small companies. was not
incorporated and consequently is not
liable to prosecution. At the time of
the merger $1,500,000 worth of the
stock in these ventures had already
been sold, although the only producing
knocked down, the prosecutor declared
at receivers sale for $4,000,
The hrs1 step in the selling cam
p'4S IT, N4I. NdlNUCk QcCi&tcL. Was tIt
organizing OF the Acme Financing Cor
poration, another defendant, which con-
tracted to underwrite the Century Con-
solidated stock, one-hfth of which is
alleged to have been turned over to the
Se!ilNE company as bonus. The
shares were placed on the market at
prices huCtuating between 90 cents and
81, Of which the Century Consolidated
it is charged. in some cases received as
little as 80 cents. Dawson, Peters and
Mrs. Butler went into the Acme com
pany, together with Ernest S. Phillips
and Walter y. Clarke. the womans s
former employer and the intermediary
between her and the original pro-
moters. These five. with Mark S
Mathews. alleged TO have sold large
blocks of Century Consolidated inde-
pendently max Sc up the list Of six in
dividual defendants
Federal investigation into the al
legged fraud began before the selling
campaign could get under wav, and
the government believes that the fear
of prosecution halted the operations of
the promoters before much more than
100000 had been mulcted from credu-
ious investors to add to the 81 100000
which had been raised before the
merger BY September the public had
become suspicious and compla ints had
begun to pile up at the District Attor-
ney's office, chiefly from walters. clerks
farmers or inmates Of homes for the
aged.
In the letters and circulars sent out
to advertise the Century CONSOLIDATED ID
stock, according to the indictment, it
was set forth that the corporation con-
trolled leases on 10000 acres of land
in proven fields; that its production
averaged between 500 and 900 barrels
day; that it operated 100 producing
wells; that it was drilling fourteen
others in proven fields; that it had a
surplus of property assets totaling
$1,600,000, and that it had recently
acquired large producing tracts in
Kentucky and Illinois.
All these statements. it is charged
were false. The government believes
that the Century Consolidated did not
have more than half dozen wells
under its control, and three of these
were the property Of idiaries which
promptly went into bankruptucy.
Most OF the property described in
the circulars belonged to. other con
Germs, Mn. Mattuck declared, basing his
statement on the results of lengthy
investiga ton conducted for the + ederal
authorities by E. A. Schwab, until re
Gently postof1ice inspector but now
special Investigator for the national
vigilance committee of the Associated
advertising Clubs of the World.