Evening star., 1925-01-11
GOVERNMENT HELD
RENT GOUGE VICTIM
Rise From $4,000 to s75,-
600 on Justice Department
Is Laid to Pyramiding.

Uncle Sam was pictured as tenant
who had his rent raised more than
double through the alleged pyramid
ing of trusts in suit filed yester
day by Felix Lake, real estate oper-
ator, against the F. H. Smith Co, F.
II. Smith Investment Co, Columbia
Building Corporation, Fairfax Secu-
rites Company, G. Bryan Pitts and
other officials of the corporations. The
suit asks for an Injunction, an ac-
counting, and a receiver for the f. II.
Smith Co.
Uncle Sam, as the tenant occupying
the present Department of Justice
Building at Vermont avenue and h
street, had his rent raised from $780,
600 to $4,000 after the value of the
building, through sales, resaIes and
number Of trusts. had been raised
from. the plaintiff declares, S550,0O0
to $1,420,0O0.
Gives Version of Deal.
Mr.. Lake alleges in his bill filed by
Attorney r. l. Merrick that in May,
1921, on the eve of his departure
for Europe, he contracted with the
F. II. Smith Co to purchase the
present Department of Justice Build
ing for him at a sum of about $3.50
900, and he gave the Smith Co. notes
totaling $4,000 as deposit on the
purchase of the property. The build
ing was then sold by its owner. the
late Mrs. Henrietta NJ. Halliday, for
$3.50 600 to Harry Wardman ana
Thomas p. Bones, it as alleged in the
bill. After a number of transactions
which resulted in running the value
of the building up to Sl,420, 600, the
bill of complaint alleges it was pur-
chased by the defendants for Mr..
Lake.
Upon his return from Europe, Mr..
Lake declares he told Mr.. Pitts that
his agre eernent was for the purchase
OF the building at a cost of about
$3.50, 1000, but Mr.. Pitt contended that
Mr.. Lake had set d limit Of $500
600 as the price he was willing To
pay for the building, and that Mr..
Pitts further coutended he had bought
the property for $4,000 below that
amount.
Paid S2sO,GOO Additional.
Mr. Lake at first declined TO enter
further into negotiation, he states,
but declares in his bill that he was
prevailed upon by Mr.. Pitts to carry
the sale through, and TO that end
paid $290,000 additional in securities
to the Smith Company.
Mr.. Pitts, he alleges further, repre-
sented to him that as the Government
would soon quit the building. suitable
profits would be gained by the owner
through its use as an Office building.
He declares that Mr.. Pitts suggested
further that the property could better
be handled if it were placed in the
hands of corporation, and that the
Columbia Building Corporation was
formed for this purpose.
Mr. Pitts then went to the proper
Government authorities, according to
the bill, and represented that the
building had been sold for S1,40O,00o,
and that this increase in value neces-
STATED a greater return in rentals,
paid by the Government from $500
year to $4,000.
Wants Fun Accounting.
The bill recites that during the month
of December last Mr.. Pitts hired d
man alleged by the plaintiff to be q
private detective who attempted by
coercion and intimidation to have Mr.
Lake meet Mr.. Pitts privately and set
tie their differences.
He alleges that he has reason to
believe that the I. H. Smith Co. and
the F. H. Smith Investment Co. "are
on the verge of bankruptcy and are
insolvent," and asks that they be placed
| in the hands of a receiver. He further
asks that Mr.. Pitts be restrained from
departing beyond the District of Colum-
bia and that an accounting be rendered
Of all transactions involving the hand
| ling of the property.