Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-11-20

When he had finished teStifying.
Judge Chestnut announced he would
take the case under advisement and
pass sentence later. He said he had
already given the case considerable
attention" and will notify the attorneys
when sentence would be passed.
All during the hearing La Fontaine
sat listlessly. hardly paying any at
tention to the proceedings, until his
lawyers became confused in their Argyll
mentS over the disposition of funds in
the La Fontaine-Stamm account.
Then he perked up, conferred with
the lawyers and Strengthened them out
with respect to his gambling operations,
and was placed on the stand to explain
personally his financial operations.
E. Barrett Prettyman of Washington,
chief defense counsel, pointed out to
Judge Chestnut that LaFontaine made
no effort to conceal from Government
agents the amounts and sources of his
income from 1924 to 1929, the years in
question.
In TACT" said Prettyman, "LaFon-
tame showed the Government agents
his books for those years. He told
them he only paid $s,23195 In income
taxes over the years 1925, 1927, 1928
and 1929"
Thought Profits Exempt.
Morton p. Fisher of Baltimore, as
sociate defense counsel, told the court
his client has not concealed anything"
He said LaFontaine was under the i'm
preston that no tax had to be paid on
income derived illegally by gambling.
There has been a variance of laws
regarding the taxability of illegal in
comes" Fisher declared. and La
Fontaine believed his gambling profits
exempt under the law"
The attorney cited two cases prior to
1925 to subStantiate his defense of
LaFontaine. He admitted, however,
that under a United States Supreme
Court ruling in 1925 illegal incomes
were adjudged taxable, but insisted the
defendant did not know of the decision.
Prettyman, resuming his argument,
declared La Fontaine lis of moderate
circumstances and pays only $3.50 a
month in rent"
Then is Ia Fontaine q man to whom
$4,000 would be immaterial?" Judge
Chestnut asked. La Fontaine settled
his civil Indebtedness to the Govern
ment for $206,65 .09, according to Dis
trict Attorney Sobeloff.
The question befuddled defense coun-
sci.
IT wanted to know" Judge Chestnut
continued, 80 as to fix his degree Of
guilt"
Our client IS getting along in years, ="
Prettyman answered, land rather than
GO through long contests in court he
would prefer to pay the money now
and settle the CASE
Attorney Made Return.
One of the principal sources Of La
Fontatne'S income was revealed by his
attorneys as the La Fontaine- Stamm
establishment" business which Pretty
man said was run by others with the
financial backing of La Fontaine. He
said the funds were kept in a Prince
Georges County bank and were divided
every so often" between La Fontaine
and the operators.
Prettyman, reputedly an income tax
expert Of more than decade of
experience, told the court that Crandall
Mackey, former Commonwealth attor-
ney for Arlington County, Va, made out
LaFontaine'S income tax returns on re-
ports submitted by the defendant.
He said no returns on gambling prof.
its were made in 1925 and 1926, but
that in later years AaFontaine did pay
taxes on this income, under the head
ing on the income tax blank, "other
income"
The defense counsel told the court
LaFontaine had 10 or 10 bank &C
counts" Besides gambling, LaFon-
taine'S income was derived from rents
and from stocks and bonds.
Enters Plea Of Guilty.
La Fontaine went into the Baltimore
court yesterday afternoon as soon as
the indictment was returned against
him and pleaded guilty to the second
count. charging failure to pay SILL
622.62 in taxes in 1927 on his 1926 in
come.
The first count, charging evasion of
$1,349.97 in 1926 on his income for the
previous year, was nolle pressed by Dis
trict Attorney Sobeloff, who told the
court La Fontaine had paid the Gov
eminent $206, 651.09 in back taxes and
penalties on his income for the years
1924 to 1929, inclusive.
This amount wiped out the civil in
debtedness to the Government, Sobelof
told Judge Chestnut, and there remained
only finding by the court of La Fon-
taine's criminal liability for evading the
taxes.
La Fontaine's failure to pay the taxes
was explained by the district attorney
as due to the fact he had made the
money gambling. Sobelof said the de-
PENDANT admitted being gambler all
his life"
In fact" the district attorney said,
'it is part of the defense that La Fon-
tame was a gambler and that he was
not under obligation to report his in
come from illegal sources" Sobeloff told
the court. He also disclosed La Fontaine
had made two offers to compromise the
case without going to court one for
100000 and later for $4,000.
Had Made Returns.
Judge Chestnut asked the district at
torney to explain the difference between
La Fontaine's defense and that raised in
1.-The recent Chicago case"
La Fontaine is not that kind Of citi-
Zen," replied Sobelof.
The judge said he meant the legal
difference, without involving personali-
ties.
He was informed that whereas the
Chicago defendant, AL Capone, had paid
no taxes whatever, La Fontaine in each
year had made a return, paving S27 06
in 1925 and $3.50 in 1927.
The jurist then asked Sobeloff whether
any bargain had been made between
the Government and the defendant as
to the penalty If he pleaded guilty.
Declaring none had been made, Sobe-
loft read to Thea court an agreement
reached when La Fontaine settled his
civil Indebtedness, Stipulating he would
plead guilty to the second count of the
indictment and abide by the courts de-
cision as to the penalty.
Judge Chestnut then adjourned court
until 10 o'clock today after fixing bond
at $4,000.
Ended Investigation.
The indictment against La Fontaine
eliminated an intensive Investigation
into his affairs by special agents Of the
Internal Revenue Bureau. -
Alleged to be the chief source Of La
Fontaine's income was ''Jimmy's Place"
an elaborate gambling establishment
operating on Bladensburg road, just
across the District line, under the name
of the Maryland Athletic Club.
While many Prince georges County