Omaha daily bee. (Omaha [Neb.]) 187?-1922, 1922-02-17
ChicagoPonzi
Seeks $4,000
From Nebraska
Suit Tried to Recover Funds
Lost by Failure of Brown
County Bank at Long
Pine.

O'Neill, Neb., Feb. l6.-(SpeciaI
Telegram. Raymond J. Bischoif,
the Chicago Ponzi, at present has a
case pending in the distric, court OF
Brown county, Nebraska. growing
out OF the failure OF the Brown
County bank Of Long Pine, in which
nc is seeking 10 recover from the
Nebraska state guarantee fund
S5O,OO0 Tor certificates CT deposit
which he alleges he paid $4,000 for
and which were issued by the bank
in the name of II. +. Bird of Brown
county and taken by Bird and How
ard Q. Wilson, cashier of the bank,
TO Chicago, where they were sold TO
Bischoff. The state is resisting the
payment OF these certificates, one of
the grounds being that they were
not regularly issued.
The case. tried several months ago,
is still under consideration by Dis
,rict Judge Robert r. Dickson OF
O'Neill.
Bischoff testified in person at the
hearing that he purchased the GER
tifcatcs through S. P. Buchanan,
whom he described as "my broker ex-
ecuting my orders for the purchase
and sale of bonds on the New York
Stock exchange" He testified that
a very great condition of confidence
existed between them and that
his transactions with Buchanan
amounted to as high as 100000
day.
Describes Brokers.
f. r. Rockwell, whom Bischoff de-
scribed as "a Chicago broker of no
great business standing but a man
about town who does everything and
anything he can" he said, repre-
sented Bird and Wilson in the deal.
Harry A. Massey & Co., traders of
Chicago, were mentioned by Bis
choff in the deal, also the Great
Lakes Trust company of Chicago,
his bankers, and Assistant Cashier
Augustus OF the trust company.
At the hearing December 20, last
year. in establishing his identity,
Bischoff described his business as
finance, consisting of brokerage,
financing corporations and invest
ments and banking business and that
he had resided in Chicago four
years. D
cashiers check of $4,000 and S4,5OO
in cash for the certificates and was
informed that later the $4,000 was
split between Luther +. Binkley,
Chicago attorney, 3013 East Wood
avenue, Bird Rockwell and Buch-
anan.
Biscoff, when asked what he
understood by bank deposit, said,
l take notes, bills of exchange, ac-
ceptances and deposit them i'll my
bank and get credit for them and
they Immediately become deposits
against which | can draw cash.
P. N. Dole, Chicago lawyer, and
Joseph B. Fradenburg of Omaha
were Bischoffs attorneys at Long
Pine.
Burnham Testifies.
c. T. Burnham, president OF the
Norfolk National bank, a director
of the Federal Reserve bank, until
January !, 1921, and a director in
the Tilden National, the Citizens
State bank, the Stanton National and
the. Norfolk Savings bank, testified
at the hearing that it was common
practice in Nebraska among state
banks to issue certificates of de-
posts without the deposit Of money,
with the tacit consent at least Of the
state banking board; that it was a
matter of very frequent occurrence
and that the state banking board
had taken no action to stop such |
practice to his knowledge. He af-
firmed that it was common prac-
tice at the time for the sale of these
certificates to be negotiated and |
that it had become a common prac-
tice to issue certificates of deposit
for notes put in banks or any other
collateral which the bank recognizes
as of value