Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-09-21
SMITH CO. TRIALS
ARE SET OCTOBER 5
Pitts, Henry, AnadaIe and
Edwards to Face Court on
ENLIGHTENMENT Charge.
Continued From First Page.l

COAtt1ttNEd IACiA 4 a ~ aSVsJ
is expected to represent the Depart
ment of Justice. Associated with him
in the prosecution will be a representa-
tive of the United States attorneys Of
fee. probably BurkinShaw.
The activities of the Smith COM
pany, which, the Department of JUS
tice charges. have resulted in the loss
of millions of dollars by thousands of
investors in this country and abroad,
first came TO public attention when
Senator Smith w. Brookhart attacked
the company several years ago in a
speech on the Senate floor.
In May, 1929, Pitts was indicted for
perjury in the Hamilton Hotel bank
ruptcy case. Then the Department of
Justice began an investigation of the
company under the direction of MIR
Dodds.
Built Up Gradually.
The Governments case against the
officials of the company was built up
gradually, largely through a deduc-
tive process of reasoning. Most of the
work was done by Mr.. Dodds, assisted
by Special Agents Louis Loebl and
Aaron w. Jacobson and Accountants
Charles T. Malone and Frank Powell
In December, 1929, the District grand
jury returned an indictment against
seven men identified with the Smith
company, charging them with use of
the mails to defraud In addition to
those going on trial next month, the
indictment named Representation Fred
erick N. Zihlman of Maryland Daniel
r. Crissinger, former controller of the
currency, and Henry g. Maddux
I'd
ment was returned, charging Pitts with
embezzling 81 ,156 900 of the company's
funds. The last indictment was re-
turned April IT.
The validity of the mail fraud In
dictment was attacked by Wilton J..
Lambert and Rudolph H Yeatman. at
torneys for the accused, on the ground
that a bailiff had been permitted to
remain in the grand jury room while
testimony was being taken by the
jurors.
Chose Conspiracy First.
II is believed that one reason why
Mr. Dodds elected to 60 to trial first
on the conspiracy indictment is that
the Court of Appeals may sustain the
contention of the defense attorneys
that the presence of the bailiff in the
room tnvalidated the indictment There
Is also the fact that the conspiracy
indictment covering the alleged efforts
Of the accused to destroy and conceal
records is fundamntal in nature and
leads up naturally to the other charges.
In the indictment which will be tried
next month, the Government charges
the defendants with 100 offenses against
the United States.
1t is alleged that In order to finance
the construction and for the operation
of its buildings, the Smith company
from time to time issued and sold
shares of its preferred stock, aagrega-
ting $7,500,000 to a large number OF
persons, some of whom had also pur-
chased bonds through the company.
Records Of these sales and receipts
were kept by the Smith company
Lists a5 Instances.
The indictment further charges that
the defendants, with intent to defraud
the Smith company and other corpora
tons and individuals, m 95 instances
embezzled money belonging to the
Smith company in its capacity as a
corporation.
With intent to conceal the thefts
totaling $4,000 900. the indictment
alleges, the defendants conspired and
took away, concealed and in at least
one instance burned records covering
the alleged embellishments.