The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-05-20
HUGE FRAUD is
LAID TO DEFUNCT
BANK OFFICERS
S1,750,000 Loss to Patrons
Of Washington Trust Is
Held Criminal Act.
CONTINUED From Page OneJ

the directors knew of the act
'purged' Morris?" Miller asked.
No, but in my opinion I though
that there was fine point to b,
decided as to whether the time o
giving notice of default had net ex
pired with the knowledge of tn,
directors, even before the bank wen
into receivership.'
Morris Needed the Money
Gender then corroborate
Downey's testimony regarding ar
admission by Morris that he hac
released mortgages totaling $4,000
I'VE (Conder and Downey) asked
him why he did it, and he replied
I had to, because I needed the
money" Gender said.
Il told him that he must make
restitution" Gender continued. %
thought it was better to have a
bird in the hand. I knew he had
his home, which was valued at
S125,000 and, at our suggestion, he
NtSN0CA Az w VIC u uOO.
At conclusion of Conder's testi-
mony, a general discussion followed
regarding the possibility of collect
ing on the bonds.
Cox announced at the conclusion
of the hearing that he would order
suit Immediately upon receipt OF
information from the attorneys re-
garding legal points
Losses Pass Million
In a summary handed to Coz
during the hearing the auditors list.
ed acts of the officers and directors
with the note that losses specifically
accounted for totaled S1,114,261.25.
Other losses mot specifically as,
signed amount to $685., 831.16, bring.
ing the total loss to 1,751 ,09241.
Among the charges are:
Permitting president to borrow
for himself and corporations il
which he was interested and to givt
worthless paper, 48,565.O2.
Permitting the president to sci
worthless paper to the bank, $154,
377.63.
Permitting the president to sci
worthless paper to the bank, SAT-
O72.42.
Relative BOrrOWS Money
Permitting loans to corporation
in which directors we're interested
and accepting worthless paper, $375,
1851.
Permitting relatives of the presi
dent Qrvin Morris, a brother) to Dor
row for himself and for corpora
ton in which he was interested anc
to give worthless paper, $45,640.76
authorizing dividends to be paiC
contrary to law, $4,000"
Other acts for which specific loss
eS were not assigned include:
Carrying bad notes at face value
omission of liabilities from the
records.
Permitting officers to pledge as.
sets twice as collateral"
Reveals Large Payment
Downey also was questioned
about a specific act during his term
of receivership, in which payment
Of large sum Of money had been
made to the Fletcher American
National bank to release collateral
held on a loan.
In his final report, submitted re-
Gently, Downey explained that the
payment was made because it was
his opinion that the collateral was
Of greater value than the amount
of the loan.
He admitted from the stand that
no court authority had been given
for the payment.
DoWney also declared that Scott
Brewer, former president of the
State Savings and Trust Company
owes a personal note for $4,000 to
the Washington bank. Brewer later
was connected with the State Saw
ings and Trust Company, also de-
funct, and now is associated with
a Louisville bank.