The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-09-14
DEFUNCT BANK
CHIEFS FACE
$4,000 SUITS
Permission to File Action Is
Given by Judge Kern in
Belmont State Case.
CHARGE LAW VIOLATION
Cashier, President and
Directors Are Targets
in Complaints.

Superior Judge John w. Kern to-
day ordered Frank B. Ross, receiver
of the defunct Belmont State bank,
to file suits to recover 1851 900 with
which to pay depoSitors.
Permission for the suits was
granted following the filing of a
petition by Edward Fillion, Ross
attorney, charging George c. For
rey Jr., president; William j. Clark,
cashier, and five other directors with
"misfeasance, malfeasance and non
feasance."
Shortly before noon, Fillion filed
a $4,000 suit. in superior court four
against Clark and the American
Surety Company of New York, and
a $1,000 suit in superior court five
against Forrey and the surety COM
pany, to collect on the officials in
demnity bonds.
A suit for $250,000 against the
directors will be filed shortly, Fillion
said, since the complaint now is
being prepared from information
secured by auditors.
Suit to Hit Directors
The court order instructed Ross
to institute proceedings against
Louis P. Robinson, Ralph K.
Smith, Charles r. Keogh, Theodore
Stempfel and Elmer w. Stout, who
with Forrey and Clark formed the
board of directors.
Charges against Forrey and Clark
are contained in thirteen separate
points, with ali additional para
graph alleging that Clark arranged
4 personal loan through a third
party for the alleged purpose of
cheating and defrauding the bank
and evading the state banking
avs"
According to the complaint,
Clark, unable to obtain a loan as
an official of the bank, obtained
he signature of Fred Cooper Jr.,
On a note for $780, and made the
oan on June 80, 1926 On April l,
1927, Cooper refused to sign a re-
newal note, the complaint says.
Charge Loss Incurred
Clark is charged with then OBJ
aiming the signature Of Homer
w. Sears, which is alleged to have
in a loss of $3.50 to the
oank. The complaint alleges Clark
paid all the interest on the notes
when due and repaid $40 of the
Both Forrey and Clark are
charged with having parts in an
alleged transaction which took place
between June 80 and July /, 1881,
involving $4,000, in an alleged at
tempt to bolster the financial
statement of the bank at the close
Of business June 30, and deceive de-
positors.
The transaction, it is charged,
was arranged between the Belmont
bank, the Madison Avenue State
bank and the Fletcher American
National bank, whose directorate
also included directors in the Bel
mont bank.
Securities Bought, Sold
According to the complaint, the
Madison bank deposited $4,000
with the Belmont bank, where the
sum was carried as a demand de-
post. On June 30, the day of the
deposit, the Belmont bank is said
to have used the money to purchase
securities held as collateral by the
Fletcher American in the amount
Of $24983.33.
The next day, July /, the Bel
mont bank again sold the securities
10 the Fletcher bank and returned
The $4,000 to the Madison avenue
institution, it is charged
Another charge against the for
ner president and cashier recounts
business dealings with the J. C.
Seaman company, whose presi-
dent, James c. Seaman, now is
serving Q term in Indiana state
prison for diScounting fictitious
automobile sales contracts.
Loans Past Limit, Claim
Loans totaling $4,000 we're made
to the company, whe nthe legal
limit to one individual by state
law would have been only
5000; the suit charges.
The Seaman Company also was
permitted to ovedraw its account to
as much as s16,41911, on Aug. 6,
1881. it is alleged.
The former bank officials also are
charged with failure to use dill
gence in aScertaining true value of
notes" totaling 1920 and given for
automobile purchases on Oct. Is.
1882, and discounted with the bank.
The notes are valueless, the suits
allege.
Other allegations are that Clark
obtained a $3.50 second mortgage
on real estate he owned and mort
gagged for S6,250, when the actual
value of the property was INSULT
cient to warrant the second mort
gage.
Forrey, who also was president
Of the defunct Fletcher American
Company, is charged together with
Clark with loaning money to the
security company, although know
ing it was inSolvent.
The complaints allege the Bel
mont bank officials were com
pletely under the domination and
dictation of the Fletcher Ameri-
can company"