Evening star., 1923-05-10
FRAUD ORDER BARS
USE Of MAILS To
COOKS OIL FIRMS
Post Office Department Acts
to CurtaiI Promotion
Schemes.
ACCUSED OF PREYING
ON LOSING INVESTORS
Charged With Claiming Mergers
With Defunct Companies and
Urging More Investments.

A fraud order designed to curtail
the oil stock promotion activities Of
Dr Frederick A. Cook of north pol
fame by denying him the use Of the
mails as an official OF any petroleum
company was issued today by the
Post Office Department The order is
the third Of its kind TO be authoriz ed
In the departments war on wildcat
Oil projects in the southwest
postmaster General New directed
that all mail addressed to DR.. Cook as
an ofhcer Of any of the oil companies
IN which ne is interested be returned
to the sender
This action was taken after special
agents OF the department had formal
~ reported that the one-time ex-
plorer was making false and fraudu-
lent representations intended 10
deceive and mislead prospective in
vestors' in the Petroleum Producs-s'
Association, OF which he was presi
dent.
Only 5000 Available.
The report showed that although
DR.. Cooks company had received NOR,
than $438, 900 on stock it had sold. on
January 81, 1923, there remained on
hand. from all sources, cash surplus
OF only a little more than $1,000. with
which to pay dividends aggregating
100000. There was outstanding stock
to the value Of more than $2,5oO, ,000
t> %
DIR. Cook organized the Petroleum
Producers Association, and as presi-
dent was to receive, by mutual agree
ment, one-eighth of the gross re-
ceipts In lieu Of all other compensa-
tion. He was the sole trustee. and
travel over the country to obtain lists
of stockholders in other companies
the Post Office Departments repre-
tentative reported
Claimed Many Mergers.
! The oil promoter received from,
these agents 500 lists, for which he
paid $85,000. He Immediately pub.
| lished literature, 1t is said, announc.
Ing a merger of his company with
those contained in the list, despite
the fact that in about 100 cases
neither the officers nor stockholders
OF those concerns knew anything
about such a merger. Other Of the
mergers were with companies that
were already defunct
Letters were Immediately dis.
| patched to the stockholders of ali
companies, it is said. inducing them
10 invest rs per cent of the total
value OF their stock lin the newly
merged" companies. The stockhold.
ers were told. according to the de.
| partments report, that unless they
paid the required sum everythine
they had already invested would be
his stock: He charged from rs cents
TO *2 a share, according to the client
| with whom he was dealing.
Promised Fabulous Prostx.
| In one circular DIR. Cook is alleged
to have made the following state.
ment: Your dividend is Just as safe
as any cash distribution can be in any
investment. That Is. it is safe for the
present rate Of per cent interest per
month or "a per cent a year, which
means 120 per cent per year on the
amount you invested in this COM
pany."
| The Post Office Department was in
formed that DR.. Cook never paid 1oO
per cent interest, or anything like
1T. To prove this the agents showed
that the revenues of the Petroleum
Producers Association up to January
81, 1928, from the sale of oil and roy
altfes owned by the company,
amounted to the sum of $3.50 Ss.''
| The stock issued at that time
amounted to $2,500,000.
Paid Two dividends
DR.. Cook did pay two dividends
amounting to $4,000. but It was
shown that at that time his receipts
from oil sold and royalties totaled
only $1,070.19, and the inference was
made that he declared the dividends
merely az a means of batting" more
Victims into his alleged swindle.
To substantiate this declaration the
government investigators showed
that on January 81. 1928, cash on
hand from all sources was only
$5,660.77. although the $4,000 divi-
dend was due. 1t was never paid.
| Retracing the former explorers oil
activities, the investigators declared
he first entered that field In Wyo-
ming as a member of the Cook Oil
| Company That venture was highly
| successful, but the public was never
! invited to share in the profits, IL is
said. In 1919 he organized the Texas
| Eagle Oil Company, with a capital
stock of 100000 and invited the pub
lie to join him.
DR.. Cook In Summoned.
| Some months later DR.. Cook was
declared to have organized the Texas
| Eagle Producing and Refining Com
pany. with a capital stock of $500, 900
In this venture, too, the help of
the public was solicited. Then the
| promoter reorganized both concern,
! into the Texas Eagle Oil and Refining
Company, and issued stock to the
value of s5,ooo.o0o. He invited the
public to buy it, and in 1921 the whole
concern failed. with almost a total
loss to all investors. A receiver wa,
appointed, and DR.. Cook merged his
interests with the Revere Oil Com
pany, which Is now under tnvestiga-
| ton.
An official of the Post Office De-
| partment declared today that the de,
partment had mo idea" where DIR
delighted to know" He was sum
moned to appear at the trial yester
day to present reasons why the fraut
U