Evening star., 1945-03-15
Jack kearns, 10ther,
Charged With Fraud
In Stock Promotion
~ til, Associated press.

BY the Associated Press.
NEW YORK, Mar. l5.--Jack
Kearns, 81, one-time manager Of
Jack Dempsey, was under arrest to-
day as defendant In a 26-count
indictment which charged that he
and two others violated the Securi-
ties and Exchange Act and COM
mitted mail friud and conspiracy.
Peter ]. Donoghue, executive as
sistant United States attorney, said
the indictment. which was opened
in Federal Court here yesterday by
Judge Alfred C. Coke, also named
Harry Lennon, A, otherwise known
as "Packy" Lennon, a prize fighter,
and Gloria Carruthers, As, known as
Princess Zulieka, an actress who
performs as an astrologer.
Mr.. Donoghue asserted that $780,
GOO was lost by the investing public
between January, 1910, and last jan
uary through the Federal Fire-Ex
Co., Inc, Delaware corporation
formed by the defendants and for
which securities were sold.
4 Operated In WASHINGTON.
Mr.. Donoghue added that invest
ors were told the company would
manufacture Nayy-approved fire ex-
tinguishers.
He disclosed that Kearns and Len
non operated in Chicago and WASH
tngton, and that Miss Carruthers
aided them in connection with sales
In Watertown and Newburgh, N. Y,
and In Washington. Most of the in
vestors lived in Washington, it was
said.
w. w. Chiswell, chairman of the
board OF the Peoples Life Insurance
Co., Washington, was said by Mr..
Donoghue to have lost $42 sol in the
venture
OF this amount, he asserted, $31,- -
25l represented loans made to Len
non, to be secured by company stock
placed in escrow, and $l1 $50 loaned
against notes indorsed by Lennon.
The total of the loans was to have
been used for promotional purposes,
the prosecutor Said.
Kearns Is matchmaker at the Chi
cago Coliseum. Lennon lived in New
York City. Princess Zulieka last was
reported living at the Hotel Martin,
Utica, N. Y, 1t was said.
II found guilty, Mr.. Donoghue de-
clared, the defendants would face
possible prison terms OF l27 years
each and fines totaling $79, 900 each.
The company never did manufac-
ture fire extinguishers, but bought
certain fire extinguishers from q
defunct New York company and
from a Chicago novelty manufac-
turer, Mr.. Donoghue added.
In Chicago, Police Capt. John
Grimm reported Kearns was arrest
ed at his downtown ofiice and Len
non was seized on the street. Taken
into custody with Lennon, the on
Ger added, were three men who said
they were statesmen. Capt. Griffith
said he knew OF no other arrests
in the case.
Hearing Today.
The five, held temporarily with
out charge, were taken to the De-
tective Bureau pending arrival from
New York of bench warrant and
certified copy OF the Indictment.
Later. Attorney George M. Crane
filed writs of habeas corpus on be-
half Of Lennon, and two of the men
seized with him. A hearing on the
writs was continued until this after
neen by Chief Justice Harold g.
Ward in Criminal Court.
The purported victims, the pros
ecutor said. included four or five
widows and q retired Government
employe, with individual losses rang
ing from $500 to $4,000. -3
Washington investors reportedly
lost lin excess Of $100,0 900" in con-
nection with the stock deals. the
Baltimore SEC Office reported. Mr.
Chiswell, who lives at 2825 Norman
stone drive NV. said he had made
$42,50l loan, with Fire-Ex stock
received as collateral. The money
was from his own personal funds,
he said.
The United States attorneys office
here said the case originated sew
eral months ago on a complaint by
Mr.. Chiswell, and had been turned
over to the regional ONCE of the
SEC at Baltimore.
Mr.. Chiswell said he had been in
troduced to Lennon by Washing
ton resident. and that Lennon, in
turn, had introduced him to Kearns
Poles in London Protest