Evening star., 1943-02-16
Grand Jury |ndicts 7
In $4,000 Stock Fraud
Using Patriotic Names
R. H. KeIIs, W. A. Dowdinq
Accused Of SwindIe
In Promoting Sales

An indictment charging two per-
sons and two organizations with at
tempting to capitalize on the name
Of George Washington in perpetrat-
ing $4,000 stock swindle in a
reference library corporation was
handed up by the grand jury in
District Court today.
Defendants in the complaint,
which charges violation of the Sc
curities Act of 1888, are Robert H.
Kells. William A. Dowding, the Ma
tional Reference Library Corp. of
Maryland and the Mount Vernon
Foundation.
According to Assistant United
States Attorney George E. Mcneil,
who prepared the case for the grand
jury, the defendants used the Mount
Vernon Foundation as a front to
solicit stock sales in the National
Reference Library Corp.
Aimed to Sell Stock.
Mr.. Mcneil claims that Kells
formed the Mount Vernon Founda-
ton in 1889, allegedly as philan-
thropic, non-proflt organization to
carry out the terms of the last will
and testament of Americas First
President.
Mr.. Mcneil alleges the defend
ants inserted advertisements in To-
cal papers inviting rAsidents of the
18ttfict, Virginia and Maryland I'd
attend lecture meetings in different
hotels I'D the District for the alleged
purpose OF explaining the philan-
thropic aims of the Mount Vernon
Foundation in carrying out the aims
and purposes of George Washing
tons will relating to the dissemina-
ton Of education.
Mr.. Mcneil says the principal
purpose of the defendants in solic-
iting persons to attend these lee
lures and meetings was to sell them
stock in the National Reference Lii
brary Corp.
Defaulted on Loan.
The case was investigated by the
Securities and Exchange Commits
sion, and the investigators, accord
ing to Mr.. Mcneil, have stated that
approximately $4,000 was obtained
from the investing public.
The true bill detailing the alleged
swindle traces the history of Kells
alleged operations from the forming
In Minnesota. in 1927, of the Fire-
side Index Library Corp, for the
manufacture and sale of a Library
index system known as ''Filco,| :
Mr.. Mcneil alleges that
Kells tried unsuccessfully 4ea'ilh'
ket the product he formed Nv, in
corporation under heslaWia yester-
land in 1885. This swaG,o ~ s,.
the National Refere for for gasoline as lin
Corp. Shortly after "a ,en % triaI
Maryland corporatY 1una ~ tarro -o 90
Mcneil says, borros ~ A' ~
the Reconstruction orr,+s NJ
o.a,sa- De1- ~ a an0 @ complaint of
RFC obtained jf.t Isnn VIII, az
trict Court again, AVN "--'o'1
ing to Mr. Mcneil lbaroad tbat ,.rs
kells and the cd eioht o.IIone of
Joined from fud not pive nn anv
Vtoi1' 'ioi, Vi asked for them. She
"a VIC y grand jury on
Trans
Kells formed a L trial she testi-
ration in 1887, ? I'd if ga line with
transfer of a. It's ofp< on No
Reference Lii }ry Corp she had
land to a par .ership .prrender
himself, his Wife, Doroi. anct' ltis
mother-in- law, according to Mr.
Mcneil, who charges that the de-
PENDANTS "wilfully omitted to adj
wise stock purchasers" of the trans
fer of assets.
Mr.. Mcneil says the defendants
continued to sell stock of the Ma
tional Reference Library Corp. by
falsely representing to purchasers
that they would receive a good divi-
dend within year, that dividends
would be paid in 1910 and 194l, that
an investment in the stock would
greatly enhance in value, and that
the United States Senate had passed
bill calling for the manufacture
and Nation wide distribution of the
"filco' products.
Mr.. Mcneil says the National Ref
erence Library Corp. has never op-
Grated at a profit and continually
since It's inception operated at a
| loss