Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-02-04
Vice President of Mortgage
Company Accused of En-
bezzIing $162, 600.
INVESTIGATORS CONTINUE
STUDY OF FIRMS AFFAIRS
Several Days Expected to Be
Needed to Prepare Evidence
for InquiSitorial Body.

Preparations were being made today
to present to the grand jury evidence
gathered by the Government against
Edmund d. Rheem, vice president of
Swartzell, Rheem Sc Hensey, who was
arrested yesterday on a warrant charg-
ing him with embezzling $4,000
1t was expected, however, that in
vestigators for the Department of Jus
tice and the United States attorneys
Office will need several days to COM
plete their study of the companys af-
fairs.
The warrant for Rheem's arrest was
issued after Department of Justice ac-
countants discovered certain facts
which they said indicated that Rheem
had used mortgage notes left with him
for safekeeping to replace other notes
being held by bank as security for
an investment made through his firm.
Say Notes Substituted.
It was said that the bank had in
vested $162, 900 from funds in the estate
of Mr. Rheem's father in mortgage
through Swartzell, Rheem g. Hensey.
Last month, it was said, officials of the
bank learned that this mortgage had
been released. 1t was understood the
notes held by the bank had not been
paid, and that officials of the institu-
ton went to see Mr.. Rheem about the
matter. He is then said to have sub
tionable value which had been left with
Swartzen, Rheem & Hensey for safe
keeping by purchasers.
Rheem and his co-truStee, j. Newton
Brewer, today formally resigned their
trusteeship under deed of trust for
$4,000 on the Windemere Apartments,
1925 New Hampshire avenue, when
Avoub M. Rizik, 1918 F street, filed a
petition in District Supreme Court de-
claring they were unfit to continue
as trustees
Through Attorneys H. Winship
Wheatley and H. Winship Wheatley, jr.,
Mr. Rizik also obtained a rule on the
receivers for Swartzell Rheem & Hem
sey to show cause why they should not
return to him notes aggregating $4,000
secured on the New Haven Apartments
at 4l2 Third street, which had been
left by Mr.. RiZik at the Office OF the
bankrupt firm for collection.
Justice Jesse Q. Atkins signed an
order requiring the receivers to furnish
Frank Tomlinson, a builder, informa-
ton as to who holds his notes. Tom
linson, in a petition filed Monday
through Attorney Edmund D. Campbell,
explained that he had borrowed $780,
600 from the bankrupt firm and had
given a second deed of trust on GER
tain property, making $40 mortgage
notes, which he believed the firm had
disposed of to various persons. He
said he had received only approximate
ly $4,000 from the firm and that the
rest was still due him.
Bond Fixed at $4,000.
Rheem was released uneer $4,000
bond after the warrant had been served
on him in the Office of United States
Commissioner Needham G. Thrnage.
The young financier who directed the
affairs of Swartzel, Rheem & Hen
sey told reporters after his arrest that
he was anxious to do all in his power
to aid investigators in Strengthening
out the affairs of his company.
Il lost every dollar 1 had trying to
keep the company going" he said, but
I am anxious to do anything I can
to help"
The warrant was issued at the re-
quest of Assistant Attorney General
Nugent Dodds, United States Attorney
Leo A. Rover and Neil Burkinshaw, one
of Mr.. Rover's assistants. 1t was sworn
to by Louis Loebl and Aaron w. Jacob
son, special agents of the Bureau of
Investigation, who were among the
agents assigned to the investigation by
Director j. Edgar Hoover.
Notified by Telephone.
One of the most difficult phases Of
the investigation-the audit of the
bankrupt company's books-was handled
by Agents Charles T. Malone and E. j.
Armbruster, the bureaus expert ac-
countantS.
After the warrant had been pre-
pared, Mr.. Rheem was notified by tele-
phone and he came to Commissioner
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