Evening star. [volume] (Washington, D.C.) 1854-1972, 1929-09-03
WOMAN SUSPECTED
IN SHORTAGE OF /.
$4,000 At BANK
Ex-Second National Employe
Under Surveillance While
Audit Is Made.
ARRESTS ARE EXPECTED
WITHIN A FEW DAYS
System Known in Banking Circles
a. "Snowballing" Declared
Employed.


A woman, for nearly 40 years an i'm
portant and trusted cog in the human
machinery Of the Second National Bank,
500 Seventh street, has been under
constant surveillance Of Department OF
Justice operatives for the past fortnight
while bank examiners struggle with an
audit of the banks accounts which Is
expected to show q shortage OF approx
mately $4,000, Victor B. Deyber, presi-
dent of the bank said today.
At District Attorney Leo A. Rover's
once this morning 1t was 1ntimateo
that q man also may be implicated IN
the shortage.
The investigation Of the shortage
began when q Treasury Department
bank examiner discovered discrepancies
in the banks accounts, which caused
him to turn the case over to the De-
partment of Justice for investigation.
Two accountants for the district at
torneys ONCE and an accountant Ior
the bonding company by which the
banks employees are protected, Stii arc
working on the audit. ........-
Expect Arrests Soon.
Arrests In the case are expected with
IN the next two or three days, after the
completion of the audit which Is ex-
pected to reveal what Is regarded ny
the bankers as an amazingly simple
system Of peculation covering perioo
Of three years. -
PuZzled by the cleverness Of the
thefts, which consisted chiefly OF pocket
ine small deposits and crediting the ac-
counts with money. taken from the
larger depositors. the bank ofdcials have
proceeded warily in their Investigation.
MP, Deyber said this morning that the
exact amount Of the shortage Is not
vet known, and that until the case is
fully worked up, no action VIII De
taken to apprehend the persons under
suspicion. A close check on the former
woman employees movements Is being
maintained, however.
The bank is fully protected in the
shortage by bonds many times the esti-
mated amount of the shortage.
Woman Resigns Post.
A mistake IN her accounts early in
June. REGARDED at the time as simply
a letting down in her efficiency. caused
the rendering of the resignation OF the
wnEaan under suspicion. Her reSigna-
ton was accepted.
Il was this mistake, one guarded by
q veil of innocent appearance, that
finally led to the discovery OF the
shortage in the accounts. just what
blIlS IAlSt@&G sFaA ~ AlVt 0AcC10OC0 Ny
The bank. A complete checking over
Of the accounts revealed discrepancies
In several Of the larger depositors' de-
posits. All of the bank books of the
bank were called In and carefully
checked.
Then the bank oficials gave the De-
partment Of Justice agents the name
Of the woman ut whom the finger OF
suspicion was pointed and careful
- 10 az
This has gone on while auditors were
working to trace the shortage down to
the last penny. =
System Termed "snOwbalIing."
Mr.. Deyber today called the system
used to obtain the money 'snowballing."
Like a rolling SNOWFALL. the money TAX
credited with other money taken
from the large deposits mounts. 1t
il q system of theft against which
hanks have great difncuity fighting, for
+hs reason that the only check the
bank has on the theft Is In the de-
positor's bank book, outside the bank,
hnd the theft Is not revealed unless
there is an overdraft in one OF the ac-
counts 30 juggled. The clever thief is
careful to take his cut" from the ac-
count which Is never overdrawn, the
account which maintains q balance
which would permit the theft to so
unIlotieed for months, maybe years.
According to Mr.. Deyber, the thefts
were small and infrequent, when they
started three years ago. AS time went
on, however, and the system worked, the
regulations became larger, and the
greater portion Of the missing money is
believed to have been taken in the two
or three months preceding the resigna-
Hf
washington police have been kept
entirely out Of the closely guarded secret
Of the banks shortage, Inspector Will
liam q. Shelby Of the detective bureau
declaring today that he had received no
1ntimation Of q shortage ut the bank,
and that he had not been asked to make
any arrests in any such case.