Evening star., 1941-04-17
Schenck, Convicted, /,
Faces 10 Years for
Income Tax Fraud
Movie Mosnote Guilty
On Two Counts, His
Eostern Aide on Ore
Ry the Associated Press.

NEW YORK, April l7.-Multimil-
honaire Joseph M. schenck was
convicted early today of income tax
evasion in 1885 and 1886 and faces
possible Imprisonment for 10 years
and fines of $4,000.
A Federal Court jury deliberated
10 hours to find the movie magnate
guilty on two of four counts, but
acquitted him of tax evasion charges
for 1897 and of conspiracy to defraud
the Government.
Codefendant Joseph MoskoWitz,
Mr.. Schenck's Eastern representa-
tive, was convicted on the 1886 tax
charge and acquitted on the three
other counts.
Mr.. Schenck, board chairman of
the Twentieth Century-Fox Film
Corp, was accused of evading $412,-
600 in taxes during 1935-36-37, while
his defense was he had overpaid by
$l65,000
AS Jury Foreman Emerson Hemp
stead read the verdict at 2:33 am,
the FINLAND pioneer slumped back
in his chair and, although his face
was red, shrugged his shoulders.
Mr.. MoSkowitZ, who faces a pos
sible five-year prison sentence and
a $4,000 fine, also was red-faced
and tears welled in his eyes.
To Be Sentenced April "a.
Judge Grover Moscowitz set April
"a as the date for sentencing and
filing of any defense motions.
In his 21a-hour cnarge, which the
jury caused to be reread late last
night, the judge declared that ''this
case is important to the Government,
because the income tax laws must
be enforced"
Both men left the court without
comment.
Thus ended the ven-week trial,
during which the Hollywood mag
nate heard himself described as:
"A great builder of a great in
dustry-a man loved by every one
fair to his friends and fair to the
Government" by Defense Counsel
Harold Corbin.
'Liar-cheat-fraud," by United
States Attorney Matthias Correa.
Will Hays, head of the movie in
dustry, Charles Chaplin and other
film personages testified the repu-
tations of Mr.. Schenck and Mr.. Mos
kowltz were above reproach.
Owes U. 8. sa53,6s2. /
The prosecution produced records
showing that Mr.. Schenck had
claimed in his tax returns huge
gambling losses; that he neglected
to report winnings and that he de-
Quoted as business expenses" free
handed expenditures on women and
pleasure parties in Hollywood, New
York and Europe.
The trial was further marked by
q parade of befurred young women
who testified that Mr.. Schenck had
lavished gifts on them ranging from
q S50-a-week job to an expensive
automobile.
One, Grace Poggi, dancer, said
58-year-old Schenck gave her a car,
the use of his yacht and an apart
ment, the furnishings for which cost
some $1,000.
The defense claimed that what
the film f1nancier did with his
money along these lines was his
own business.
AS result of his conviction Mr..
Schenck owes the Government a
total of $253, 1892 62-s1s9, 1851 for
1885 and s64,1s731 for 1896.
Ran $500 Into Millions.
Mr.. Schenck, who as a Russian
immigrant doled out pills and pow-
ders in a little Chinatown drug
store, saved $500 and ran it into
millions.
He invested the $500 in Paradise
Park, New York, and turned a neat
profit. He bought Palisade Park,
on the New Jersey side of the Hud-
son River, and made a small for
tune.
One day, man named Marcus
Loew walked into the park, asked
Ior permission TO snow moving
pictures" in an automobile on the
grounds. Mr.. Schenck gambled and
invested with Mr.. Loew.
Then Mr.. Schenck went West, en-
tered the production end of movies.
and signed such stars as Roscoe
Fatty Arbuckle, Buster Keaton,
Norma Talmadge, whom he mar
r1ed in 1917, and scores of others.
In 1924 he was elected board
chairman of United Artists Corp,
resigning in 1885 to head Twentieth
Century Pictures.
Mr.. Schenck, now SO, also is a
in several banks, backer of
theatrical enterprises and big
scale investor in real estate, build
lngs and oil wells.
He was man." said his counsel