Evening star., 1938-11-13
Warnings Trial.
On nTaxChdrqe
Opens tuesday
Numbers Racket
Revelations
Expected

orators, and two tax accountants
will go to trial in District Court
Tuesday for alleged conspiracy to
evade income taxes on gambling
profits.
Interest in the trial centers not
only in anticipated revelations con-
corning Washington's numbers rack
ct, but especially in a charge in
the indictment concerning money
which the Warnings were said to
have paid out for protection" It
was part of the purported conspir-
acy, the indictment said, to conceal
under tax-exempt entries in the
books OF the numbers business
payments of large sums" to per-
sons unknown to this grand jury"
to obtain immunity from prosecu-
ton for violation of the laws of the
District of Columbia prohibiting
gambling"
If any Of the Warnings take tho
witness stand. the prosecution un-
doubtedly will try to develop on
cross examination who, If any one,
was paid Off"
Close to 80 witnesses for the
Government had been subpoenaed
yesterday. 1t is expected the Gov
ernment's case will require a week.
Defense plans have not been dis
closed, but indications are the trial
will last 10 days or two weeks.
Justice Bolitha j. Laws, latest
appointee to the District bench, will
preside. Selection of a Jury is
scheduled to begin at 10 am. Tues
day.
Facing trial are Emmitt R., Leo
Paul and Charles Richard (Rags)
Warnings, Gordon l.. r. Sedur, in
come tax accountant, and his busi-
ness associate and brother law,
Henry l.. Sherr.
The brothers are charged with
reporting for income tax net profits
of about $4,000 during 1894, 1885
and 1896, whereas, according to the
indictment, they had made more
than $237,000 out of the numbers
business during those years. The
tax accountants are accused of aid
ing in the alleged conspiracy to
withhold income tax.
The protection" angle is based
on an alleged statement of Emmitt
Warning, described as founder and
head Of the business, to income-tax
authorities. The Government Is
expected to offer evidence intended
to show that he told the income
tax authorities he had charged
off" certain sums which he had
paid for immunity from arrest, but
refused to specify to whom the
money allegedly was paid.
Government Contention.
The Government, to be repre-
sented at the trial by United States
Attorney David A. Pine and As
sistant United States Attorney John
]. Wilson, will contend tho War
rings defrauded 1t of taxes totaling
$28,249.31.
This is Washington's first prose-
cution for income tax conspiracy.
Illegal enterprises elsewhere have
formed the basis for similar trials,
notably in the case of AL Capone,
Chicago vice overload, who was sent
to Alcatraz for 10 years for evad-
ing income tax.
The defense in the Warning case,
which has fought the indictment
tenaciously with numerous prelim-
mary motions, most of which were
overruled, includes Attorneys Harry
r. Whelan and William B. O'Con-
nell, representing the Warnings;
Leo A. Rover, q former United States
attorney, appearing for Sadur, and
Irwin Goldstein. an ex-AsSistant
United States Attorney, counsel for
Sherr.
Because of some novel legal points
involved, spectacular court battle
Is forecast.
The defense succeeded, in one pre-
iminary motion, in forcing the Gov
ernment to reveal where the alleged
conspiracy occurred. The Govern
ment said in Washington, Maryland,
Virginia and Georgia.
District income tax returns are
made to Baltimore, and charges of
evasion against Washingtonians usu-
ally are tried there. In this case
the Government alleged conspiracy
that had its inception in the Dis
trict.
Bonds Set for Brothers.
When the indictment was re-
turned, rags" Warning was serv-
Ing a term in the Atlanta Peniten-
tiary for implication in the shooting
and dangerous wounding of Joseph
Edward O'Brien in gang feud.
rags" since has completed his SEN
tence. He and his brothers are un-
der bonds Of 5000 each. The two
accountants are under $500 bond
each.
If convicted, the five men would
face possible maximum penalties of
two years and $4,000 each.
The indictment followed q long
Investigation by the Intelligence
Unit of the Internal Revenue Bu-
reau, the Department of Justice and
the United States attorneys Office.
. With pleas of not guilty entered
BY each of the defendants, their
counsel have not revealed how many
witnesses they expect to call or
whether any of the accused men will
testify. These developments prob
ably will depend largely on the Gov
ernment's case, which defense at
torneys are expected to assail out
on legal grounds.
The Warning prosecution is re-
garded as a major thrust against the
numbers racket. Despite the strin-
gent District gambling law which
the last Congress enacted, no big
shots" in the game have been ar
rested, and the police say virtually
all numbers headquarters have
moved into Maryland or Virginia. It
will be part of the Governments
case to try to prove that the income
which the Warnings are accused of
undertaking in their tax returns
was derived from the numbers.
Sofety to Be Discussed