Atlanta tri-weekly journal. [volume] (Atlanta, Ga.) 1920-19??, 1922-11-04
CAROLINA COTTON
MEN DRAW FINES
IN TAX LAW CASE
Charged With Evading In
come Tax Laws and Are
Fined in United States
Court

GREENVILLE, S. c., Nov. s.
Campbell Courtenay, st. John Court
enay, Ashmead Courtenay and Hen
ry Rutledge BUST, former officers
and stockholders of the Nurtenay
Manufacturing company, of Newry'
S. c., pleaded guilty before Judge
Fl. H, Watkins, in the United States
district court here Wednesday to
indictments charging them with
evading the federal income tax laws
and received sentences, as follows:
Campbell Courtenay, of Columbia,
S c., on two indictments, $4,000 Tine
or four months in jail on cL in
dictment; st. John Courtenay Of Co
lumbia, S. c., fine of $4,000 or
eight months IN Jail; Ashmead
Courtenay, of Charleston. S. c..
fine Of $4,000 or four months in jail;
Henry Rutledge BUST, of Charles
ton, S. c., fl. of $4,000 or four
months in Jail.
The proceedings today practically
ended two years of civil and crlml-
anal actions in which the two
Courtenays, both long prominent fig
ures in the textile industry in this
state, and considered among the
state s wealthiest men, have been
reduced to virtual insolver 90. their
fortunes swept away, according to
their attorneys. The fines were
paid.
The criminal prosecutio grew
out of Investigations instigated by
the government, following the filing
civ snit by W. L. Gassaway and
the ISaque.na mill.
.-GassaWay. ;--ld the Isaqueena mill,
bought the Courtenay Manufacture
ing company in 1920 for S1.2O0,0Go,
of which 100000 was paid in cash
and the balance covered by notes.
When the first instalment Of notes
mt-tured, the purchasers used to
pay them alleging that The Courte-
nay Manufacturing company had
1lsisrepresented the earnings of the
mill for 1919, upon which the
purchase price was based.
Mr.. Gassaway, and the Isaqueena
mill. thereupon instituted civil pro-
c Gin to have the contract of sale,
declared pull and void d-tn- force
the Courtenay Manufacturing conf-
Da:ly's former stockholders to- take
IL 49, r-n{. no
amount of, money paid on the
purchase contract.
The case was settled a w days
ago by the payment on tn, part of
the Gassaway interests of S150,000,
and the cancellation Of the 100000
in notes. The Courtenay's realizing
Just a fraction over $4,000 from
5000, 600 worth of notes, I'LL the bal
ance of the $780, 900 being paid in
taxes and penalties.
Conspiracy Indictment
The conspiracy indictments
against Campbell Courtenay, ST.
John Courtenay, Henry Rutledge
BUST, Francis J. Pelzer and Edwin
P. Frost were mol pressed by the
United States attorney on the entry
of pleas of guilty.
Edwin r. Frost, of Charleston,
w was a defendant in the con-
spiracy indictment. sometime ago
made an offer to the commissioner
of internal revenue in settlement of
his individual civil and crimina' liza
bilities and paid in settlement there
of $38,727.38, which was accepted by
the government. Franz J. Pei
yer, of Charleston, who was a de-
PENDANT in the conspiracy Indictment
iaIo oil w
paid % the government his addition
al taxes and ad valorem penalty of
S20,056.56 and has made an offer to
the commissioner of internal reve-
nue. of :. sum in lieu of indictment.
The uses have been, for the past
several months, under the direct SUI
p,rvision of the attorney general of
the United States. Representatives
OF the attorney generals office and
the secretary of the treasury have
been in South Carolina to push the
cases to a speedy trial, and the gov
eminent for some time has been
: .dy to take IN the trial of the in
dictments.
Penalty Assessment
The assessment of the add 'onal
taxes and penalties was made by the
commissioner of internal .-enue on
.OClOUeF {, anu Ine TOTAL dInOLnt OIL
the assessment sent to t federal
collector at Columbia was $3.50, 900.
The inv, stigations of the income
tax returns of the various taxpayers
which led to the institution Of crimi-
nal proceedings, have been in prog
ress for more than a year, under the
direction of John M. Roberts, inter-
nal revenue agent in charge for
South Carolina, and under his direc-
ton, have worked Internal Revenue
Agents Thomas c. Reed, E. C. Cath
cart, David w. Blocker and E. T.
Huntington.
Attorney V. G. Gregory and a for
mer bookkeeper of the Courtenay
Manufacturing company were the
principal witness in the various
proceedings.
It was stated by Mr.. Littleton,
special agent of the attorney gen.
eral, that other similar cases in
volving probable criminal prosecu-
ton are now under consideration by
the internal revenue department.