The New York herald., 1922-01-05


signed TO the Central Drug Company on
q permit of the series 24T 600. The mat
ter was called to Mr.. McQuillan's atten-
tions and he Immediately bagan an IN
vestigation to determine whether the
permit was genuine"
This investigation. Mr.. Mattuck SAID
led To the discovery chat 500 permits
had been lost from Director Harts
office Eventually more than l0o OF
these were recovered The remainder
On which 1t was possible 10 release Wv
100000 worth OF liquor were used.
1t IS charged in the Indictment that
these 800 withdrawal permits, wnich
bore the serial numbers 247,OOl to 24I'-
800. were permitted BY Hart TO get INTO
circulation prior 10 the time at whicn
they could be legally released. The IN
dictinent further charges the amounts or
liquor for which the permits called were
much in excess OF what the drug COM
panies were entitled to under their pasic
permits.
'It was part Of the conspiracy" the
indictment reads, that the aforesaid >.
& b. Drug Speciality Company, Centrai
and Alps Drug companies. VINO We're
then and there holders of these paslc
permits, should make applications to the
director through the said William a.
Orr for the withdrawal of intoxicating
liquors for nonbeverage purposes.
Call Orr Middleman.
In this way, It charged, Orr acted IS
niddleman for all these companies IN
their dealings with Director Hart. Mdr-
ply and Duffy are said to have been as
soeiated with Orr in bonding the drug
companies named as defendants
Reddy Harts chief assistant, was m
trusted with the countersigning or all
withdrawal permits after the director
rubber stamp signature had been anlAeo
to them Lynch received the registered
mail, and is said to have had Key TO
the cabinet in which the serial num-
bered withdrawal permits were kept.
The defendants according to the In
dictment, prepared their own verinca-
tions of the permits and sent these 20
the distilleries as well as forging the
withdrawal permits obtained from Hart
Office. 1t was part of the plan, the IN
dictnent states. for no RECORDS 10 De
kept Of this particular series of permits
at enforcement headquarters in order to
conceal from the Treasury Department
all information concerning these with
drawals.
It Is charged as an overt act in the
Indictment that on or about July 20
Hart employed as a clerk Miss Lotta
Walsh, who was formerly in prohibition
headquarters in Washington. She will
comes to trial. On the same day, ac-
cording to the Indictment. Orr visited
Harris Office and made the Directors
acquaintance. On August l Reddy re-
ce,ved the key to the cabinet containing
the withdrawal permits. On August 10
Lynch was permitted to take regis
tered mail from a receptacle In Harts
office in which this mall was supposed
to be kept.
Leakage Is Discovered.
As soon as this leakage was discov-
ered through the seizure OF the truck
in Philadelphia, bound from Baltimore
to New York. Mr.. McQuillan sent Agent
Walter p. Murphy, to whom he gives
credit for having done most to unravel
tho alleged conspiracy, to prohibition
Headquarters, to inquire about the miss
inr 300 permits. Both Hart and Reddy.
Mr.. McQuillan said, denied the permits
were missing and declared that sa mat
tef of fact they knew nothing about
them and had not seen them come into
thskoffice McQuillan then sent to Wash
ington and learned that the 147,000
series had been forwarded to the New
York Office some time previously.
ON August 23 Hart announced that
300 permits were missing.
on the aame day, according to Mr.. Nc
Quillan, man named Michael Morrison.
claiming to represent permit holder
in Catskill n. Y, went to prohibition
headquarters and carried off under his
coat 400 more permits.
With informatio supplied by Lynch.
the clerk in Hart's office, who is named
as a defendant, Mr.. McQuillan said he
sent Agent Keyes to Philadelphia, who
arrested Morrison in hotel there, and
recovered 100 of the permits. The other
500, with a capacity for the withdrawal
~ "a n n-n
been used. with the exception OF few
Intercepted and brought to McQuillan's
office.
Mr.. McQulllan said that as soon as he
ws3s aware OF what had been happening
he Informed Prohibition Commissioners
Haynes. 1t will be remembered that
toward the end of August Il. c. Yellow
ley. chief general prohibition agent, was
sent here with his staff from Washing
tor. and given powers equal to those
OF Director Hart. Almost Immediately
Mr.. Yellowley began to make seizures OF
large quantities of liquor in transit.
fonnd on the piers and at railroad ter
rninals. These consignments, Mr.. Nc
Juillan said, were part or the liquor
fIlkealIy released through Hert's office.
Hinder terms OF the conspiracy Mr..
McOuillan declared the drug concerns
were to pay from SIG to $50 n case to
fhe persons involved in prohibition head
utra rters to be divided between them.
for all liquor released under the alleged
Arrangement.
5E Statement by Hart.
Mr.. Hart issued statement last night
sn reply to the statement by Mr.. Nc
Onillan al can't recall the date" me
declared. but the day Mr.. Murphy OF
Nf. McQuillan's staff called to my at
tention the fact they had found in Phila-
dciphia permits bearing the serial num-
ber 247,O0o, had an inventory of ous
blank permits made. We found permits
247. DOL to 247.30 missing from the cabi-
nrt. | wired the Commissioner in Wash
jrigton to put stop at all distilleries and
ptohibition directors offices against
withdrawals bearing those serial num-
bers.''
Col Thomas =. Fielder attorney, at
les Broadway, who will assume gen.
eral charge OF the defense for practically
all those named in the indictment. is
sued a statement indicating the line of
defense which will be taken.
tFvrhese men," he said, ARE charged
wsith conspiracy to violate the Volstead
att in that they are alleged 10 have
Issued or caused 10 be Issued an excess
or withdrawal permits. An analysis OF
the Nolstead act shows the quantity OF
permits to be Issued Is wholly within
the discretion OF the State Director, and
unless his discretion is palpaby abused.
obviously there can be no violation OF
the law.
.Judge Hart never issued a permit
either wholesale or retail unless the ap-
sx1f..o%fnt, of c,trl1 az haJ fba n m.