Evening star., 1925-03-26
THIRD MAN IS HELD
IN TAX7SLASH CASE;
MILLIONS INVOLVED
Arrest of Auditor in Revenue
Bureau Follows Those of
Two Ex-EmpIoyes.
RAILROAD SAYS PROMISE
OF REDUCTION WAS MADE
Collusion With Workers Inside
Treasury Said to Have Been
Part of Plot.

Frederick Sutherland, an auditor in
the Bureau of Internal Revenue, has
been arrested here in connection with
alleged attempts to. reduce taxes by
misrepresentation.
Sutherland who was appointed from
Connecticut, was arrested several days
ago, but the action was kept secret
while the bureau continued its investi-
CATION This, bureau officials said. ap-
parently was near an end Sutherland
Is free on personal bond of $4,000.
More Arrests Likely.
The Treasury declined to make any
statement as to the sums involved, or
TO name other persons than Suther-
land, although they declared addi-
tional arrests were expected here
The arrest in Milford, Conn. yes
terday of James ]. Clifford and John
r. McCarren is expected to lead to
the apprehension of a fourth man
here, Treasury officials said today.
Clifford and McCarren were taken
into custody after Joseph D, Brady,
connected with the New Haven Rail-
road. had given the Department of
Justice information as to their on
eratfons. 1t was alleged that they Of
fered to have reduced the income tax
on the road.
Left Treasury I'm 1921.
Records show Clifford resigned
from the Treasury March Is, 1921,
and McCarren was discontinued from
the service November 16 of the same
year.
Treasury operatives have been
working for some months to deter
mine whether outside agents were
working on tax-reduction cases
through employees inside the Revenue
Bureau.
Charges Are Defined.
Outlining further details of the
charges, the Bureau of Internal Reye
nue. issued a statement in which ii
said the railroad had fully Cooper
ated" with the Government in the in
vesugation.
The defendants are charged" said
the statement, with an attempt to
de1raud the New York, New Haven
and Hartford Railroad Co. of a large
sum OF money by means of repre-
sentfng to the said company that the
Government was about to assess
taxes of over s1,000,000 against sub
sfdlary railroads and that said de-
1ennants could have this tax reduced.
McCarren and Clifford, it is charged,
appeared in New Haven and solicited
the handling of the business. 1t Is
charged that Sutherland subseuuent-
Iy drew up for McCarren and Clifford
a so-called assessment letter, show
ing alleged taxes due of over 81. 600 :
900; that said assessment letter was
given to McCarren and Clifford and
by them shown to a representative
of the New York, New Haven and
Hartford Railroad in substantiation
of their statement that a tax was to
be assessed and they had influence
with persons in the depa rtment and
would be able to have the tax reduced.
Road CO-Operated Fully
The New York, New Haven and
Hartford Railroad Co. has fully co
operated with the bureau in the in
vestigation of these proceedings. The
intelligence unit began work imme-
dlately on its investigation and at no
time has there been any possibility
of loss to the Government in cnDDec.
tion with the case"
McCarren, according to the Bureau of
Internal Revenue. was discontinued
with prejudice" November l6. 1921
He had been appointed to the bureau
from Lowell, Mass. Clifford resigned
from the service March Is, 1921. ue
had been appointed from Pfttston. Pa
sutherland had been appointed from
Stepney, Conn.,, March l, 1921.
CoLLUSION IS CHARGED.