Evening star., 1938-06-02
FREAR'S HEARING
ON EXTRAD|T|ON
SET FOR June 50
Broker Under indictment in
Connection With Alleged
.SWindIe.
is STILL UNDECIDED
ON RESISTING MOVE
Issues Statement Denying Any
Guilt-Charges Come After
Dewey Probe.

Police Court Judge Hobart Newman
today fixed June 80 as the date for
an extradition hearing in the case of
Philip A. Frear, 44-year -old Washing
ton broker, who is under indictment
with five other men in New York
in connection with an alleged $16,000,-
600 securities swindle.
The continuance was requested by
Assistant United States Attorney Da-
vid A. Hart, who explained that the
necessary removal papers had not ar
rived from New York.
Frear, son of former Representative
James A. Frear of Wisconsin, said
yesterday he had not participated in
any wrongdoing. He has not yet de-
cided whether he will resist extra
dition. His attorney, William c. Sui
livan, said decision would not be
made for several days on that point.
If Frear decides to resist eXtradition
It will be necessary for the New York
authorities to forward a certified copy
of the indictment to the court here
and also witness to identify Frear as
the man under indictment.
Dewey Investigation.
The indictment which led to Frear's
arrest in his office in the Woodward
Building yesterday, was returned after
an investigation by District Attorney
Thomas E. Dewey of the alleged loot
ing of seven investment trusts with
combined assets of more than $16,-
100000.
Mr.. Dewey said the six defendants,
with total investment of only S.,
obtained control of four investment
trusts with total assets of $13, SOC, 900
and soon dissipated s4,30o,0oo of the
money.
The ringleaders, Mr.. Dewey said,
devised a method whereby investment
trusts were made to pay TO their own
acquisition and stripping. The only
original expenditure, he asserted, was
IS used to incorporate Canadian
holding company, the Fiscal Manage
ment Co., Ltd, through which con-
troll of the investment trusts was OBJ
tanned,
Frear, president of Frear & Co.,
was arrested after Inspector Bernard
w. Thompson had received a tele-
gram from New York Chief Police
Inspector Alexander C. Anderson re-
questing that he be held for grand
larceny to the amount of S700,000."
After a conference with police Of
ficials and United States Attorney
David A. Pine, the broker was re-
leased under $1,000 bond
Two Arrested in Boston.
Two of the other defendants,
Thomas w. Morris and Ralph H.
Robb, Boston lawyers, were arrested
in that city as fugitives. A fourth
man, Vincent A. Ferretti, a lawyer,
was taken into custody in New York
and held under $4,000 bond. Mr.
Dewey said Ferretti was one of the
originators of the scheme, acted as
attorney in various transactions and
received substantial legal fees in addi-
ton to a share of the proceeds from
the scheme.
The other defendants presumably are
still at large.
All four of the men under arrest
were among group of Al individual
and corporate defendants against
whom State Attorney General John J.
Bennett, jr., obtained temporary re-
straining order last Friday preventing
fhnYn frpy,o doo 1f-,rv ;y, IN In
in certain type of securities. A hear
ing will be held June 7 to determine
whether that order should be made
permanent.
The Indictment against the six,
voted last Thursday, contains 10 fell
ony counts, 6 for grand larceny, 2
for receiving stolen property and 2
charging the bringing of stolen prop
erty into the State.
The four investment trusts of which
Mr.. Dewey said the men acquired
control were named by him as the
First Income Trading Corp, CONT
mental Securities Corp, Administered
Fund Second, Inc, and Reynolds In
vesting Co.
Three of the defendants-Mr. Dew
ey did not say which three-are also
accused of acquiring control of three
other trusts, Burco, Inc; Bond g.
Share Trading Corp, and Insuran-
shares Corp. of Delaware, Inc, with
assets of $2,500,o00.
Mr. Dewey said the men acquired
the Continental Securities Corp. on
October Is, 1887, when its portfolio
contained marketable assets of $4,000,-
900. Within two and a half months,
Mr.. Dewey said, this figure had shrunk
TO 100000, and on March 81 last
had dropped to $4,000.
@ This, said the district attorney, rep
resented almost total loss for thou
sands Of investors who had purchased
$2,778, 900 in debentures and 81, ,402 900
in preferred stock.
= Traced to Holding Firm.
= Mr.. Dewey said the alleged swindle
was traced back to the formation of
the Fiscal Management Co., Ltd, a
Canadian holding company, which.
he said, had paid-in capital stock
Of S.. Five qualifying shares in the
company were issued, Dewey said, and
later Fiscal Management Co. issued
stock which was used in the process
of acquiring control of the investment
trusts.
1.-The defendants, Dewey said, made
arrangements with Paine, Webber g.
Co, New York Stock Exchange firm,
for loans against lists of securities
: which turned out to be portions of
the portfolios of the trusts they were
10 acquire.
The grand larceny counts in the
indictment are based on the alleged
removal of the valuable securities from
Continental Securities Corps portfolio
and their replacement by Fiscal Man.
agement Co. stock.
In statement issued after his
arrest, Frear said:
II had promised officials of the