Evening star., 1936-07-19
EXAMINERS DELVE
INTO FINANCES OF
CLOSED LOAN FIRM
Fidelity Association Placed
in Charge of Receiver
After Probe.
$4,000 LARCENY LAID
TO FORMER PRESIDENT
Apparent Irregularities" Re-
vealed in Investigation by
Federal Agents.

With operations suspended. the
Fidelity Building g. Loan Association
was placed in charge of a receiver
yesterday. while Treasury and Justice
agents continued to delve into its
finances.
The association, with headquarters
at $40 Thirteenth street, and six
branches over the city, was closed early
yesterday afternoon, after the former
president, Fred B. Rhodes, co. promi-
nent attorney, had been arrested on q
warrant charging $4,000 larceny.
The closing was ordered by William
Prentiss, jr., acting controller of the
currency. He said an examination
had revealed apparent irregularities
and losses which exceeded the profits
and reserve accounts of the associa.
ton, which. in the judgment of the
controller rendered the association in
solvent"
1t was announced that the shut
down would be for at least 10 days"
and M. L. Barnett, jr., a bank ex-
aminer, was named receiver
Released Under $1,000 Bond.
Rhodes was taken into custody
shortly after pm. in his Offices in
the National Press Building by De-
tective Sergeant Paul Ambrose. At
police headquarters he was booked,
ffngerprinted and released under
$4,000 bond
There is not a word Of truth in
this charge" said Rhodes, who re-
signed several months ago as president
Of the association. II have never
taken a dollar from the association. =
At the proper time it will be shown
that everything have done was for
the best interests of the association"
Rhodes who is married and has
four children, lives at AIS Seven
teenth street. For several years he
has been identified with important
banking litigation here
The warrant was issued at the re.
quest Of Assistant United States At
torney Henry A. Schweinhaut, who
said transactions by Rhodes, in addi-
tion to the one described in the war
rant, are under investigation.
Charged With Obtaining Loan.
The former president was charged
specifically with obtaining a $4,000
loan from the Fidelity last November
through a STRAW" party, crediting
the proceeds to his own account at
the Fidelity to meet an overdraft. The
loan supposedly was made for use on
construction project in the Guilford
subdivision, Fairfax. Va. Schweinhaut
said. When the allege1i overdraft had
been satisfied. according to Schwein-
haut, only 1898 Of the $4,000 re-
msined.
Issuance Of the warrant followed in
vestigations by agents of the Treasury
and Justice Departments. working
with Assistant United States Attorney
Charles B. Murray, who is now out
of the city. These Investigations, it
was said. will be continued.
The Fidelity association has about
$4,000 accounts, most of them small.
1t is not a member of the District of
Columbia Building and Loan League,
and its accounts, officials said, were
not insured.
The associations statement OF assets
and liabilities, filed with the controller
on June 30, 1885, listed installment
dues paid in at that time at $780,
655. This. it was said, represented
the money owed the general public
by the association at that time. DR..
Ralph Bonnett, the president, said the
/ financial statement for 1886 had not
been completed when the Office was
closed
DR.. Bonnet said he would confer
on the closing tomorrow with I. 1.
Chorpening. chief national bank ex-
aminer. After a meeting with other
officials of the association. DR.. Bonnet
issued the following statement:
"The transaction which led to the
closing of the Fidelity Building and
Loan Association by the controller Of
the currency occurred before I be-
came president last March l. The
Treasury Department has been inves-
(See FIDELITY, Page A-49