Evening star., 1938-11-18

way of credit on the income, would
it not?"
Il presume so" the Federal agent
replied.
Mr.. Swain said Emmitt had
brought in only few of these slips
while his income tax was under in
vestigation. The witness recalled
that on one occasion the numbers
operator brought few of these slips
and a number of miscellaneous re-
ceipts for expenditure in two paper
bags.
The witness said: Il asked him if
he had kept the rest of the slips
showing withdrawal from the safe,
and he said he had not
In 1886, with his gross business
soaring above the million dollar
mark. according to the books which
his attorneys have brought into
court, Emmitt decided to pay his
pickup" man an additional per
cent a week as bonus. according to
the Federal agents testimony.
Discrepancies Claimed.
Mr.. Swain, going over the Govern
nent's photostatic copies of the War
ring books, revealed what he said
were many discrepancies in figures
shown in the books and those arrived
at by Government accountants.
There was one difference of approx
mately 50 900 in the hi" column for
one day.
There was a furry Of laughter at
one point, when United States Attor-
ney David A. Pine asked the witness
about one withdrawal slip shown on
the Government photographs of
receipts. Mr.. Swain said this item
was Fine. $50"
William B. O'Connell. personal
attorney for the Warnings, asked,
Did he say Pine?"
mo, not Pine" the District attor-
ney retorted.
With an adding machine beside
the witness stand, the Government,
delving into the intricate finances
of the Warning numbers business,
tried to show that the brothers and
their tax accountants. Gordon L. R.
Sadur and Henry L. Shee Sherr, had
concealed the $3.50 a week protec-
ton money under the loss column
and then tried to deny having done
so.
William H. F. Swain, special agent
of the Intelligence Unit, Treasury
Department, who went to the wit
ness stand late yesterday and re-
sumed his testimony today, de-
scribed in more detail the assertions
of Gordon L. R. Sadur, tax account
ant. and his Junior partner, Henry
L. Sherr regarding protection
Tells of Conversation.
"Emmitt Warning" Mr.. Swain re-
called, had told us he paid $4,000
that year for protection. When
Sadur came into our Office to discuss
the Warnings income tax, I asked
him about the protection. He said
that was taken care of-We would
just add $4,000 to the gross profits
and also to the expenses, which
would leave the returns the same.
I told Sadur we would add the
$4,000 to the gross profits, but not
to the expenses because it was not
an allowable deduction. He disputed
that. He then picked up a red pen
Gil and wrote in the item, with the
word pro by IT."
On later day, Mr.. Swain testi-
fled, he and other agents went to
Sadur's Offices in the Investment
Building and interviewed Sherr.
The Federal agent added:
"Sherr said the protection money
was taken care of. He said he had
taken it upon himself to add $3.50
to the lose column on the Warnings
books each week. He said when he
called the item to Sadur's attention,
Sadur said that wasn't the way to
handle the matter, and Sadur then,
in their Office, wrote in the red fig
ures on the profit and expense COL
umnS"
Mr.. Swain said he determined for
himself that the $3.50 had been
added to the losses on the books.
He had made an analysis of the
winnings and losses, he explained,
and determined the figure was added
arbitrarily.
Sherr signed an affidavit. attest
ing to the statement attributed to
him by Mr.. Swain and another
Federal agent, and the document
was introduced in evidence.
Mr.. Swain said at the time he
was first assigned to investigate the
Warnings income tax, he was prob