Evening star., 1951-09-29
Longfe||owB|dg
Stock 'Siphon'
in Suit
81 Million Involved
In Complaint Against
Mortgage Company

MoIt9u9e AomPony
The Attorney General brought
suit late yesterday to recover as
sets of about 81 million allegedly
"siphoned" from the National
Home Library Foundation into a
mortgage company.
Named as defendants in the
District Court action were the
Mount Vernon Mortgage Corp,
1406 M street NV; the library
foundation and the following in
dividuals:
L. Harold Sothoron, former
Maryland State Senator, of 14O6
M street NV: Robert T. High
field. president of the mortgage
corporation; E. Flavelle Koss, as
SiStant Secretary-treasurer of the
corporation, and Mrs. Fannie Ses-
sions Mittell.
The suit charges that at the
time of the illegal stock transac-
tions Mr.. Sothoron was trustee of
the foundation and vice president
Iof the mortgage firm.
Mrs. Mittell. now president and
trustee of the foundation, is the
widow of Sherman F. Mitchell,
former president Of the founda-
ton.
RFC Loan Enabled Building.
In 1888 the foundation, set up
as a charity organization. under
took to erect a building for its
headquarters with the aid of a
SIS million loan from the RFc.
| Out of this idea, the suit said,
grew the Longfellow Building
Corp. and the construction of this
Organizations building at Rhode
Island and Connecticut avenues
NV.
MIR. Sothoron was named vice
president and director of the
Longfellow Corp, it was said:
Mr.. Koss became assistant secre-
tary-treasurer. and Mr.. Highfield
ecretary-treasurer.
The mortgage company, accord
ing to the suit. was to guarantee
construction costs of the Long
fellow building if they were over
the SIS million estimate, although
the planners did not expect the
cost to go over this amount.
In 1910. it was said. the founda-
tion transferred 667 shares of
stock III the Longfeliow corpora
tion to the mortgage firm. receiv-
ing in return only $4,000 and a
token promise" to guarantee
above-estimate construction costs.
Valuation of Shares "Inadequate."
In 1943. a total of S33 more
shares were transferred at an
Inadequate" valuation of $3.50
per share, and 100 shares were
transferred to Mrs. Mittell at the
same price.
The suit says the 1900 shares
of stock transferred to the Mount
Vernon Mortgage Corp. repre-
sents three-fourths interest in a
property with an actual value of
81 million and an unencumbered
value of over So million.
"The National Home Library
Foundation. on the other hand,
which was to be the principal
beneficiary Of the Longfellow
Building, has no interest in the
building and is entirely without
assets of any kind"
The court was asked to appoint
substitute trustees to protect the
foundation from further exploita-
ton by the various defendants in
this action" The transactions, it
was charged, were brought about
'solely for. the benefit" of the
individual defendants and the
mortgage corporation.
Action in Behalf Of Public.
The suit bore the signatures Of
United States Attorney George
Morris Fay and Assistant United
Estates Attorneys Ross ODonoghue
and Jerome Powell.
The action was brought in be-
half of the public and unknown
beneflciaries of the foundation as
Originally established under its
charter:
ITO promote and inculcate in
more people the desire to read
igood literature, and to make home
libraries available to a greater
number of people"