Evening star., 1939-02-05
Warning Profits
Still Mystery,
Trial Reveals
Tax Agents Unable
To Get Figures
On Expenses
By CARTER BROOKE JONES.

AN" AAoS2A AAAoAASy eA4S SAAAS SS w "a
ring brothers withdrew from a num-
bers business that had a gross play
of above 100000 for less than
three years-what they did with the
proflts-how much it cost them to
live-these items remained mysteries
to Federal agents after months of
investigation, testimony indicated
yesterday at the retrial of the income
tax conspiracy case in District Court.
Agents of the intelligence unit,
Internal Revenue Bureau, said they
made futile efforts to learn from
Emmitt. Charles and Leo Warning,
at different times, how much they
spent during each of the years un-
der inquiry, 1934-5-6.
The money, these witnesses ex-
planned. was kept in cash in safe
at the house in the $500 block of K
street NV, which then served as
headquarters for the gambling syn
dicate. The Federal agents counted
the money there twice, once finding
fraction over $4,000, another time
a trif1e under $4,000. Emmitt had
told them, they said, he usually kept
between 100000 and $4,000 in the
safe to run the business.
Slips Not Saved.
And the brothers, according to tes-
timony, explained in separate inter-
views with the income tax people
that they simply drew out money,
each according to his needs, leaving
slip indicating the amount. The
three shared and shared alike" and
each was entitled to whatever money
he wanted-and could fnd-and to
the use of the partnerships several
automobiles, houses and other pos
sessions. But only a few of the
safe slips were turned over to the
tax investigators, they testified, and
the rest were not saved, despite in
structions to Emmitt to do so.
The Government did discover
lot of expenditures-such as pur-
chase of cars, town house, cot
tage at Colonial Beach and boat
but the living expenses and what
ever the brothers frittered away on
luxuries had to be estimated, the
Federal agents will contend when the
trial is resumed tomorrow. There
was testimony at the previous trial
which resulted in a hung jury
that Emmitt and his brothers lived
modestly and spent very little for
anything. The defense objected vio-
lently to the $4,000 and $4,000 apiece
annually which the Government
variously estimated for living ex-
penses, but Justice Bolitha j. Laws,
presiding again at the present trial,
allowed the estimates to go in after
| the prosecution also had computed
the taxable incomes on another set
of figures based on expenses of a
mere $4,000 year each. Which
estimate, if any of the three, was
plausible was left up to the jury.
Any Amount Needed Drawn. !:
Failing to find out how much EN-
mitt had pulled out of the safe
beyond a handful of slips showing
some ,000-William H. F. Swain,
| intelligence agent, testified yesterday
that he pressed Leo for such infor-
nation. But Leo, according to Mr..
Swain, hadn't any idea how much he
or his brothers had withdrawn from
the cash depository.
Taking 1885, the year the books
of the business showed the greatest
profit, net play of around ST ESQ.,
900, Mr.. Swain asked Leo if he drew
out as much as $100 a week. Leo
said he probably did, according to
the witness-some weeks it might be
more, some weeks less, other weeks
perhaps nothing at all. 1t was all
according to what he needed.
Mr.. Swain said he reminded Leo
that he was supporting wife and
two children, contributing to up
keep of the headquarters and cars
of the business and taking care of
himself. The agent said he told the
defendant he didn't believe all this
could be done on S100 a week, and
Leo said: Il agree with you," and
promised to dig up more definite
data, but never did.
The witness described an interview
with Charles Warning in Atlanta.
Charles, said Mr.. Swain, was ex-
tremely vague about how the busi-
ness was run, what its hackers made
out of it or what his personal share
had been. The agent quoted Rags"
thus:
1885 Banner Year.
when want money, I go to the
safe and get it. I don't know how
much I've taken out. See my brother
Emmitt. He's the business man"
1t was in 1935-the banner year
of the Warning numbers bank-that
the three brothers returned for tax
alton incomes, $1.860 each. United
States Attorney David A. Pine is
hammering hard at this point in
an effort to convince the jury that
this was "ridiculously small" profit
for men to draw out of a business
which, according to their own
books, brought around $l,250,O0O to
their headquarters. This sum was
the 10 per cent of the gross play
which they got, writers" keeping
the 80 per cent, and did not include
expenses, commissions or salaries of
the business.
| The spotlight was turned for a
time yesterday on Emmitt Warnings
business relations with Eddie Kill
leen, gambler, who was killed by a
girl friend in 1885. Agent Swain
testified that Emmitt told him he
owed Killeen $4,000 at the time
of the gamblers death, but so as
serted only at the prompting OF
Gordon L. r. Sadur, the public &C
countant who is on trial with the
Warnings, and only after the taz
authorities had pointed out thei,
discovery that Emmitt had spent