Evening star., 1931-06-21
Two Alternatives Open
NoIIe Pressing by Govern
ment or Guilty Plea.
EARLY DISPOSAL SEEN
OF BREWER INDICTMENT
Witnesses Subpoenaed to Appear
June 90 but They May Not
Be Called.

Criminal charges pending against
Edmund D. Rheem, executive head Of
the bankrupt SwartzelI, Rheem d
Hensey Co., will be disposed Of during
the next eight days by trial or other
wise. it was learned yesterday.
There are two alternatives to q trial
-nolle pressing Of the charges by the
Government or q plea Of guilty from
Rheem.
It was also learned that final dispose
tion will be made on or before next
Monday Of charges against j. Newton
Brewer, second vice president Of the
mortgage banking house
Both men were indicted last month
on charges of embezzlement and re-
moyal and concealment Of writings,
SubpoenaS have gone out directing
the Governments witnesses to appear In
District Supreme Court on June 20 for
Rheem's trial, but there were indica-
tionS that these witnesses may never be
called.
Rumors Of No Trial Persist.
Despite the vigorous efforts Of the
Government prosecutorS-ASsiStant At
torney General Nugent Dodds and Nell
BurktnShaw, special aSSistant-to pre-.
pare their case, there were persistent
rumors that the trial win not be held,
Although it was insisted that the
charges against Rheem will be pressed,
there was reason to believe more con-
sideration will be shown Brewer.
At recent creditors examination
Of officials Of the bankrupt firm, Rheenn
assumed fun responsibility for all trans
actions in which his company was in
volved. The other officers were de.
scribed as mere rubber stamps"
It was suggested shortly after thu
indictment was returned that the
charges against Brewer would be uoile
pressed and that he would testify as
a Government witness in event RSeeil
should be placed on trial.
Rheem In Doubt.
Rheem. T.ho. is represented In GRIM
inal matters. by Attorney William Z.
Leahy, said last night he '"didn't know
whether he was prepared to stand trial
or not"
The indictment charged that Rheem,
with the assistance cf Brewer, took
Sl62. 900 of mortgage notes left in the
vaults Of his firm. for safekeeptng By
the purchasers and placed them with
the Washington Loan a. Trust Co. as
substitutes for released notes In his
fathers estate.
It was charged the bank, upon learn
ing that the trusts securing the notes
in the elder Rheem's estate he'd been
released, insisted they be paid in cash
or replaced with properly secured notes.
Rheen1, 1t was said, directed Brewer
to bring him the notes from the vaults
and that he then turned them over to
the bank.
Has Never Made Denial.
Rheem has never denied the notes
were taken from the vaults and used in
this manner. He even signed q re-
! lease authorizing the bank to make the
allegedly embezzled notes available as
assets Of the bankrupt firm so that the
ultimate loss to the creditors might De
reduced in that amount.
| II was the discovery that the trusts
securing the notes in the bank had been
released which precipitated the crash
of Swartzell. Rheem g. Hensey Co.. re-
sulting in a loss to the investing public
expected to approximate $4,000, 900.
| 1t has been brought out at creditors
meetings that numerous trusts were
| released under ain unusual clause in
| the trust agreements which gave the
| trustees. usually Rheem and Luther
Swartzeil authority to declare the
trusts released after they had been
paid in full at the ONCE of the company.
In some cases the holders OF notes
, sold under the trusts we're paid cash.
In many other cases, however, they
were given substitute notes or merely
accorded O credit for the face value Of
their notes upon the company's books.
| It Is this latter class that Is facing
| loss.
MANY of them have decided to take
their chances as creditors Of the bank
rupt, and they are expected to recover
about so per cent of the face value Of
their holdings.