Evening star., 1923-02-15
.DEFUNCT BROKERS'
ACTIONS REVEALED
How Washington and Other
Clients Were SWindled
.- Told by Trustee.
By the Associated Press

By the Associated Press.
NEW YORK, February 15.--Details
OF the failure Of the stock brokerage
hrm Of Dillon & Co., which collapsed
In September, 1921. with liabilities of
nearly $500. 900, are revealed in the
report Of Keyes Winter, trustee in
bankruptcy. filed with the referee
Assets Of $1.142 in cast and q few
securities OF small value were re-
ported.
The company was organized in
March, 1921. with a capital Of SEQ, 600,
which was dissipated In a week, ac-
eording to the report. and at the time
or ITS failure had received cash and
securities worth s575,800 from. GUS
toners. out Of which less than $220,-
0o0 mad been paid for stocks.
Inc trustee charged that fictitious
accounts were maintained and rams
company never at any time had real
iEed a profit as legitimate stock
brokers'. The firm was not connected
with any exchange, it was said. and
couiu not have earned commis ssions
as all its legitimate transactions were
carried through with members OF ex
changes, who received the commis-
sions.
N'0OO Used ON Phone Calls.
records showed that the company
mao only 264 bona-hde customers in
New York, Pennsylvania, Connecticut,
Washington, D. c.. and extending as
far west as Missouri The business
was carried on through travelling
agents. kilograms, telephones and the
mails, II was said. The books showed
That the company's telephone bill for
SIX months was $7,667.
-
important records and correspondence
had been destroyed by members of the
hrm and that the great majority of
the funds had been dissipated in
gambling and fast life" by firm
Philip Kastel. a firm member. was
declared to have withdrawn a total
or $lb0.000 from the accounts, and
uctitious names and expenses were
entered to further enlarge the with
urawais. kastel. under indictment for
me failure. disappeared at the time
OF the crash
Exchange Houses Scored,
The report further declared that
without the active cooperation of
tne actual brokers. members of stock
exchanges. this system practiced by
the bankrupt in looting these credit
OTIS would have been impossible"
The trustee has found" il added
that this business of matching or
crossing orders for the bankrupt with
us double commissions was actively
soiicited by t least two solvent stock
exchange houses: that particular en-
ployes of those houses were assigned
the duty OF stimulating the orders
from the bankrupt and that they re.
cefved and returned mutual favors:
that one OF these houses actively par.
ticipated in the details of the organ
ization of the bankrupt's business and
that the veiled reputation Of Philip
kastel and his connection with the
bankrupt was well known to both of
these houses.
Got Triple Commissions.
How profitable their illegal con-
version of the creditqr's purchases
were to these houses is glaringIy ap-
parent from the mutual accounts pass
ing between them and the bankrupt
chronicles of a monotonous series of
purchases and resales from which the
customer invariably derived nothing
but small losses, while these houses
took large profits in the form of dou-
ole. and. in some instances, even
triple. commissions. To this conver-
sion, apparent to even their office
boys. their only defense is a claim Of
innocence