The Washington times. [volume] (Washington [D.C.]) 1902-1939, 1925-11-21
.BANK||VGTHEFTS
INCREASE FOR
YEAR
Sentences Aggregate 235
Years, With Fines
Of $40, 600
Revealing ! serious increase IN

Revealing serious increase In
bank defalcations, embezzlements
and other violations OF the National
banking act, an official report Of
prosecutions under this law 1cr
the past year, has been made public
by Attorney General Sargent.
The National Bankruptcy act
likewise was marked with a greater
number OF violations. Officials said
that about $500 900 worth Of property
was recovered by the department
in insolvency matters and that tines
Of $4,000 and sentences totalinR
1876 years were imposed.
"Investigations Of violations Of
the bank act resulted IN the con-
yiction of many officials Of bank
ing institutions. the department
said. Sentences imposed in Fed
eral courts aggregated 235 years,
with fines totaling s26,OOO.
Punishment Swift
1T was explained that ''violatcrs
Of the National bank act are usual
" officials OF national banks who
are in q position to successfully EN-.
bezzIe funds or otherwise defrauo
banks, with consequent loss to ~.
nocent depositOrs as well as STOCK
holders"
sIndicative Of the dispatch with
which cases OF lnis character were
disposed Of during the year, may
Be cited III the case Of William ~.
Camp cashier Of the Commercial
National Bank OF Greenville, Texas.
who through use of forged notes.
defra1Ided that bank Of $4,000, &
the department declared.
ION April s, 1926, this bank was
closed by order OF the Comptroller
of the Currency, following discovery
az the shortage. investigation by
an accountant OF the Bureau Of IN.
yestigation was concluded May u
1925. Camp was arrested and on
4 plea OF guilty May ~. was
sentenced to q term Of two years
at I4eavenwortl1.
al case of particular note invOlv-
Ing the bankruptcy laws. accord
ing to the department, was that Of
a chain store corporation operating
forty-two branches. In the in
yesffgation widespread fraud was
shown resulting in conviction o.
twenty defendants.
This case was unusual the de-
partment said. for the reason thar
the original company was conceived
I'll good faith ana operated Tor 2
time on q sound basis. but. due 20
poor business management ana
keen competition. its officers
turned to questionable transactions
which developed into fragrant viola
tons Of the criminal statues.
How Scheme Worked
'.The original company was Cper'
atine with d deficit of over $780,
600 In 1921 when its officers formed
d corporation known as the Union
Food stores Company for the pt1r
pose Of absorbing the original com
many and encouraging stock sales
in the new company ap.
parently to obtain fresh start.
aThe Union Food Stores Com
pany was never on e. sound finan.
cial basis. investigation disclosed
vet q quarter Of q million dollars
in stock was sold and new stores
opened from day to day, while divt
dends were declared quarterly fol
more than a year, solely It was
ALLEGED, for the purpose Of adver
Using the stock, and az an IN
ducement for new stock purchases
'.The profits on stock sales were
said to have been used to pay ex
orbitant commissions to stock sales
men. dividends to investors, while
q portion was retained to conduct
the business and the remainder
dissipated by the officers. OF the
twenty seven persons indicted
twenty were convicted"
b