Evening star., 1935-12-10
.HARDGROVEDEN|ES
HE BANKED $4,000
OVER 1924-S PAY
Former |. R. B. Official Ad.
mits Winning Big Sums
on Races.
TAPPED-W WIRE EVIDENCE
HELD MISINTERPRETED
Telephone Conversation Dealt
With Discussions of Personal
Nature, He Testifes.

While admitting winning large
amounts on the races. John W. Hard
grove, former internal revenue official
charged with income tax conspiracy,
denied in District Supreme Court to-
day he banked sS1 900 more than his
Government salary between 1924 and
1888.
Hardgrove, former associate chief
conferee of the bureau, was subjected
to a vigorous cross-examination by
United States Attorney Leslie G. Gar
nett concerning his admitted gam
bling operations and about $500 in
payments made to him by a Mr..
Pierce" identified as a man who had
some tax cases pending before the
Internal Revenue Bureau.
Hardgrove took the witness stand
in his own defense and denied We
hemently the Governments accusa-
tions that he conspired with Hen
ming R. Nelson, former employe Of
the bureau, and Frank B. McElhlll,
New York tax consultant, to defraud
the Government by fixing the tax case
of Thomas w. McCarter, New Jer-
Sey public utilities executive, for q
fee of $4,000.
Denies Trust Accusation.
Garnett brought out that Pierce
recorded a deed of trust as security
for the $500 subsequent to Secre-
tary Morgenthau's revelation of the
alleged McCarter plot.
"As a matter of fact" Garnett de-
manded Of the witness, didn't you put
that deed of trust on your house.
so as to make it appear that Pierce's
payments to you were loans and not
gifts?"
Hardgrove denied this. He agreed,
under Garnett's questioning, that he
paid no interest to Pierce until after
the deed of trust was recorded. Hard
grove denied, however, having had
anything to do with Pierces tax cases
in the bureau.
Quizzed by the district attorney
about deposits running into thousands
of dollars which Hardgrove made in
banks here and in New York City, the
defendant said he got some Of the
money out of box, some of it from
his wife and much Of it from betting
on horses.
Asked specifically about a $4,000 de.
posit at a local building association,
Hardgrove replied: That was some
money had"
Where did it come from?" Garnett
inquired.
well. did little gambling prob
ably-on race horses"
Garnett asked if his income in eX-
cess of his Government salary in 1888
did not amount to $4,000. Hard
grove estimated he had won about
SIS 1000 that year on the races.
Agents Were in Error.
Hardgrove under further croSS-eX-
animation asserted internal revenue
agents were in error when they testi-
fed they overheard references to the
McCarter case when they tapped in
on Hardgrove telephone lines.
William H. Collins, attorney for
Hardgrove, sent parade of character
witnesses before the jury this morn.
ing. Those who testified that Hard
groves reputation was good were
Stanley G. Willis. next door neighbor
to Hardgrove on Varnum street; John
e Mcclure, attorney; Olin G. Card
ner, accountant; Dana Burnett, for
mer internal revenue commissioner;
Robert Mancill. internal revenue en-
ploye; John E. Walker, attorney;
Richard S. Doyle, attorney, and Ar
| thur D. Furlong, Harry P. Reed.
Frank A. Lindsell and william T.
Spear, all of the conference section Of
| the income tax unit.
Spear. q reviewer in the section,
testified he had approved and signed
the McCarter tax adjustment without
previously having discussed it with
Hardgrove, who occupied the adjoin-
ing desk.
The telephone conversations were ex-
(See TAX TRIAL, Page 81