Evening star., 1933-06-25
GRAND Jury GETS
PARK SAVINGS BANK
CASES TOMORROW.
Indictment to Be Sought OF
Former U. S. Treasury Of
ficiaI and Others.
MOUNT VERNON BANK
r SHORTAGE is REVEALED |
Stunz Believed Informed Of Bank
Examiners Visits and Enabled
to Cover Up.

Evidence in support of criminal
charges arising out Of the failure OF the
Park Savings Bank, which has revealed
q shortage of at least $1,700,000, Will be
laid before the District grand jury TO-
morrow along with recommendations
for the indictment Of four men.
United States Attorney Leo A. Rover
who will handle the entire case, has in
dicated that he expects report from
the grand jury Wednesday, the last day
of its term.
Mr. Rover revealed yesterday that he
already has directed the presentation to
the grand jurors of evidence bearing
upon an alleged shortage of $5,626 in
the Mount Vernon Savings Bank. This
shortage, according to evidence gath
cred by the Department of Justice. re-
suited from two instances Of larceny and
one Of check kiting. The grand jurors
are also expected to report on these
charges Wednesday.
Former Ohicial Involved.
Outstanding among those against
whom indictments will be sought In
connection with the collapse of the Park
Savings Bank is q former Treasury De-
partment official who resigned In May,
shortly after agents Of the Justice De-
partment's Bureau of Investigation had
begun their probe into the banks fnan-
cial status.
1t Is believed the Government will
attempt to show that Robert Stunz,
former vice president of the bank, who
killed himself last March. was regu-
larlf informed by some one when Fed
eral bank examiners were about to
visit his institution. This information,
1t is said, enabled Stunz successfully
to conceal growing shortage in the
bank over a period Of several years. In
return for the information, it is al
legged he accorded his informant irreg-
ular financial favors."
the bulk of the 81 10000 shortage at
the bank resulted from bad loans and
not from any criminal act.
Connected with Embassy.
It has been reported that the Gov
ernment might seek to prosecute man
formerly connected with one of the To-
cal embassies, on the theory that he
furnished Stunz with liquor and re-
ceived In return special favors at the
bank. This man, however, is under
stood to have left the country. and 1t
is not believed an indictment will be
returned against him.
The other three persons against whom
indictments will be sought are said to
include former employe at the bank
and two customers OF the institution.
The nature of their connection with
the shortage has not been disclosed. but
1t Is believed the Government will at
tempt to prove they had guilty knowl-
edge of alleged irregularities on the
part of Stunz. The Department Of
Justice is said to have discovered that
he credited the accounts Of some de-
positors with sums which were never
deposited, and that promissory notes
protecting loans were Cancelled, Al
though the loans were not paid. The
investigators believe that other per-
sons connected with the bank may
have had knowledge of these transac-
tions.
Probe Not Completed.
In announcing yesterday that he
would present the case Monday. Mr..
Rover said he has not completed his
Investigation and that at later date
he may seek an indictments against a
NTH individual who was formerly con-
nected with the bank Witnesses to be
called tomorrow will include A. F.
Jorss, president of the bank; Mrs.
Emily Downey. head bookkeeper. and
E. c. Sauer, an accountant OF the Bu-
reau of Investigation.
After Stunz had taken his own life
a note in his handwriting exoneratng
other employees of the bank was founo
1t is not known what use, II any, VIII
be made of this note.
The evidence relating to the short
age at the Mount Vernon Savings Bank
was presented to the grand jury Thurs
day by Assistant United States Attor-
ney Charles Murray. 1t Is expected
that indictments will be sought against
two or three employees of this bank and
one customer.
The investigation, according to Muir
ray, revealed three separate shortages
The one involving the check kltlne
amounted to s2,345, while the other two
were fixed at s2,lS1.25 and sl'loo
Check Kiting Test.
Murray said the check kiting probe
would serve as a test case TO determine
whether other similar TRANSACTIONS car
be- successfully prosecuted. He oe-
scribed it as follows:
A depositor at the bank had frlene
who was employed there. The oepositoi
would persuade a third party TO wrlte
check on aother bank although ne knew
the third party did not have FUNDS or
deposit to cover the check. The depositoi
would cash the check through ms irlehe
at the bank. who Is also said TO nave
known that there were not sufhcien
funds on deposit in the other bank u
cover 1t. On the following day, now.
ever. the depositor would cash checi
drawn under similar circumstances ane
use the money derived from the secont
check to build up balance sumclen
to cover the first one. 1t Is alleged tni!
procedure was followed until the de-
positor had received some $4,000 u
which he was not entitled.
The failure of the Commercial Ma
tional Bank, through which the Noun
Vernon Bank cleared, led to the dis
covery OF the alleged kiting. Ordmarll.
the clearing house sent the checKs Y
the Commercial Bank before they wen
TO the bank on which they were drawn
When the Commercial Bank closed
however. the clearing house sent on
Of the checks directly to the home bank
The depc-xor is saio to have covere'
the checks during the time they wer
going through the Commercial Bank
and when this delay was eliminated tn
alleged irregularity was discovered.
At Issue With Committee.
Frank j. Sobotka, who is chairmal
of one of the three committees working
on the question Of trying to free de
positors' funds from the Park Saving
Bank. last night issued statement tax
ing sharp issue with the committee G
depositors headed by Joseph w. Thomp
son. over the question Of a receivershir
Sobotka Is strongly in favor of a re
ceivership as the bsst next step, Will
receivership pending development OF II
own plan, as yet undisclosed.
Sobotka said that despite the fac
Ast member Of the Thompson com