Evening star., 1936-07-18
FIDELITY LOAN CO.
ORDERED CLOSED;
.EX-HEAD ARRESTED
Fred B. Rhodes Is Charged
With Larceny of $4,000
of Deposits.
WARRANT Is SERVED
AFTER FEDERAL PROBE
Use of Funds to Cover 0verdraft
in Personal Account Laid
to Attorney.
BULLETIN.

BULLETIN.
The controller of the currency
today closed the Fidelity Building
& Loan Association and appointed
a receiver for the company
William Prentiss, jr., acting con-
troller of the currency, in a state
ment, said he had appointed M. L.
Barnett. jr., as receiver, and that
the receiver has taken possession
of the assets and the books and
records of the association.
The action Of the controller weS
taken while an examination of the
condition of the building and loan
association was being made by ex.
aminers from his Office. The exam
ination revealed apparent irregu-
larities and losses which exceeded
the profits and reserve accounts Of
the association, and which in the
judgment of the controller rem
dered the association insolvent.
"All Offices of the association will
be closed to the public for a period
Of at least 10 days in or1er to
give the receiver and his staff suf-
ficient time to prepare the neces.
sary records of the receivership.
THE main ONCE of the associa-
ton is located at 6lQ Thirteenth
street. It operates six branches,
located at 3072 M street, 3008 Four
teenth street, 735 North Capitol
street, 1927 H street northeast.
Eighth and X streets southeast and
43l 1lth st."
The Treasury's action followed
the arrest earlier in the day of
Fred B. Rhodes, an attorney in the
National Press Building, and for
mer president of the association. on
a charge Of larceny Of $4,000 of the
company's funds.
The warrant was served on
Rhodes at pm. and he was i'm
mediately taken to police head
quarters. booked, fingerprinted and
then released on bond Of $4,000.
The Fidelity Association has about
10000 accounts, most Of which are
small. 1t does not belong to the
District of Columbia Building &
Loan League, which includes most
Of the city's building and loan as
sociations. and its accounts are not
insured. 1t was incorporated in
March, 1929. Rhodes became presi-
dent in 1888.
A warrant charging Fred B. Rhodes,
well-known attorney and former
president of the Fidelity Building g.
Loan Association. with larceny of s13,-
900 from the association was issued at
1915 pm. today by Police Court Judge
John P. Mcmahon.
Rhodes arrest will culminate an In
vestigation by Treasury and Justice
examiners and the Office OF
the United States attorney. which be-
gan some time before last February
when he resigned as president of the
financial institution.
The Fidelity is one of the city's
larger building and loan associations,
having q main Office located at 6l0
Thirteenth street and six branches.
Warrant Given Detective.
The warrant was issued at the res
quest of Assistant United States At
torney Henry A. Schweinhaut and was
placed in the hands OF
Detective Sergt. P. E. Ambrose for
service.
Schweinhaut said other transactions
of Rhodes besides the one described
In the warrant are under investigation.
Rhodes was specifically charged
with obtaining a $4,000 loan from
the Fidelity last November 8 through
a straw" party. and with credit
ing the money to his own account
at the Fidelity to meet an over
draft. The loan repeatedly was for
construction on land in. the Guilford
Fairfax County, Va. When
the overdraft had been met only $398
was left of the $4,000. SchweinhaIt IT
stated his investigation showed.
Larceny Under Code.
The former banker was charged un.
der q section of the District code
which states that miSappropriation
Of money Of building and loan as
sociation by an officer Of the associa-
ton shall constitute larceny.
Schweinhaut said the Fidelity has
some four and a half million dollars
Of deposits.
Schweinhaut said both the Treasury
and the Department of Justice will