Evening star., 1936-11-15
BUSINESS PIRACY
|SBAREDBYE.B.L.
Hoover Agents Arrest Many
on Bankruptcy Act Vio-
Iation Charges.
BY REX COLLIER.

Recent inquiries by the Federal Bu-
reau of Investigation have disclosed
that organized crime has invaded the
field Of business with racket that Is
netting its promoters huge prohtS.
Commercial piracy" is the term sp-
piled to the racket by j. Edgar Hoo
YER director of the F.. B. l. Numerous
arrests have been made by his agents
during the last few weeks, and ring
leaders have been charged with viola
ton of the not-so-well-known Federal
bankruptcy act.
The racket, in brief, begins with
the purchase, on credit, OF valuable
stocks of merchandise for the alleged
purpose of opening store. After the
goods are delivered by the unsuspect-
ing wholesale dealers, trucks are
backed up to the store" at night, and
the entire stock is carted away, to
be disposed of through fences"
Purchasers" Disappear.
! The purchasers usually disappear
about the same time. The frauds often
are not discovered until creditors in
stitute bankruptcy proceedings against
the missing merchants" whereupon
1t often is found the names Of the lat
ter are fictitious.
! A Federal grand jury at New York
8 City returned indictments last week
against IA members OF an alleged ring
! OF such commercial pirates" the So
called front man" OF which told the
: G-men he formerly was chauffeur for
the late Arthur c'Dutch Schultzo
Fiegenheimer, notorious gangster, slain
last year by underworld enemies.
The front man." Albert Thomas,
Is well known to police in New Jersey
and New York. He assumed the name
Hugo Berg for the purpose Of pos
ing as a business man. Nine OF the
men charged with conspiring with him
Ito conceal assets" have police rec
ords and tive have been convicted OF
previous bankruptcy frauds.
This ring, Hoover asserted. has
"swindled creditors OF merchandise
costing well over quarter Of mil
lion dollars" He said 1t opened in
Boston racket" known as the Aetna
Sportswear Co.. through which thou
sands of dollars of merchandise was
purchased on credit through various
fraudulent and deceptive devices"
Goods Disposed Of Quickly.
GAS rapidly as the merchandise was
received at Boston, Hoover said.
, "they would dispose Of 1t Immediately
by reshipping it to various other
points. where 1t would be disposed
. of at greatly reduced prices through
fences, and In some instances they
would conceal the merchandise by
storing it in hiding places known as
drops"
Hoover stated that when the cred
itors appeared at the place OF busi-
ress of the company they found no
one there and all stock gone. In an
effort to forestall Identification, he
declared, the racketeers had washed
all shelves, counters, walls and floors
before leaving.
The F. B. I. recently invoked the
bankruptcy act against another ma
tionally known Tin police circles)
swindler and ex-convict who had
worked a similar racket in widely
scattered parts of the country. This
man. Max Kennel Reiner, alias Harry
3. Rosen, was sentenced a few years
ago to five years in a Federal peni-
tentiary for "concealing assets" in
Los Angeles, Calf.
Diverted In Transit.
The investigation of Reiner showed
he was disposing of his merchandise
so rapidly that some 1t never reached
his store, but was diverted In transit
to fences" Reiner had operated In
Cleveland, Ohio; Denver, Colo; New
York City and other cities.
Agents Of the bureau are invesu-
eating cases of commercial piracy"
in other places, it is understood.
These inquiries are apart from
racketeering investigations authorized
by the Federal raeketeering statute,
which makes 1t a Federal crime TO
employ terroristic tactics against in
terstate trade.