Evening star., 1931-06-26
SHAPIRO FACING
5 TO 60 YEARS.
Former Millionaire PenniIeSs
/ at End Of Skyrocket
Realty Career.

r Continued From First Pagel
years in prison or a fine of $4,000. or
both
ThA trial was completed in is days.
@wo days before the actual trial opened,
It became known yesterday, the defend
ant planned to request an attorney be
appca6tad to represent him.
Into tAe court room walked Mr.. New
myer, who had represented Shapiro at
his first trial last December and who
had withdrawn early this year. Learn
ing of his former clients predicament,
the attorney volunteered his services
and requested the court for two days
in which to prepare his case. The de-
fendantS first trial ended with a
directed verdict on motion by defense
that the indictment charging fraudulent
intent was faulty.
Z Mr.. Newnyer presented an able de-
fenSe against the preponderous evidence
adduced from approximately 30 Govern
lnent witnesses. He used the defendant
as a witness to show his innocence Of
having devised fraudulent intent in his
transactions with 20 or more home pur-
chasers whom the Government contend
ed had been victimized. ~.
Witnesses Prove Boomerang.
1Ue dIUOIHSy dlSO EGllcu OAl 1O UdLlA~
ers, mortgage brokers, real estate oper-
ators and title house officials to testify
as to the reputation Shapiro enjoyed
among his fellow men. This move, how
ever, had q boomerang effect, for the
prosecutor drew admission from all but
two of them that they knew nothing Of
the real estate transactions involved IN
the case.
From the other two character wit
Aka{v
aging evidence. One. title house offi-
cial. gave a recital of the code of ethics
used here by successful realty operators
on settling ground trusts on property
before closing a deal. From the other,
q banker, an admission was gained that
Shapiro's reputation was good until
these hidden trusts cropped out against
him
The defendant corroborated Govern
ment testimony by asserting he had
paid on ground trusts from one to three
years after completing deals with home
purchasers. and admitting he had kept
these trusts secret from the purchasers
because he alone was obligated to pay,
and did pay them of without monetary
loss to the property owners.
Fraud Is Described.
In the majority of counts in the
Shapiro schemed to defraud by sending
through the mails a nine-word letter, as
follows:
Enclosed herewith please find re-
corder's receipt for your deed"
. The receipt showed the property in
numbered only by two trusts, which the
purchaser had agreed to assume. In
reality, however, the second trust as
Sllmed became third trust because OF
kn nysf frrYg +
When the defendant said he was caught
short as the result. of the stock market
crash he was unable TO obtain money
to take care of these obligations. Sub
Sequently the purchasers were called on
to settle by the mortgages under the
usual foreclosure threats.
Shapiro started operating here in
1919, fresh. from a brilliant four years
as an engineering student at George
Washington University. Still in his
teens, he borrowed $1,000 to buy out
small real estate business, and for the
first year he devoted himself to being
the jack-of f-all-trades in his business,
painting and tacking up signs and rent
ing and selling properly.
Worth 100000.
After his twenty-first birthday, he
said, he borrowed money to buy land
and build house, which he sold for a
small profit. One year later he built
is homes and started 20 more, employ
ing the same financial methods. In
1926 s.ne took stock and found himself
with a fortune of $4,000, 900. Not all of
it was paper profit: he said, and with
his cash he Started constructing homes
on a wholesale scale. Early in the next
year he had erected q total Of 1000
houses.
"A, ,def1ation in the realty market here
. short time later cut heavily into his
equities. He testified he made enor-
nous sacrifices and was about to stem
the tide when the stock market crashed
This ended all hopes of recouping. He
found himself penniless and with a
summons to appear before a senatorial
investigating committee inquiring into
real estate practices here. From evi-
dence obtained by this body he was
brought into court.
In summing up his case before the
jury, Mr.. Newmyer clasSed the Govern
r1ent's action as persecution to satisfy
the boys up on the hill" MIR, Fihelly,
however, demanded the defendant be
sent to prison to end his career of
running illegally amuck, defrauding
every one with whom he came in con-
tact"