davidaulloa/AmericanStories huggingface dataset:
Evening star., 1951-11-04
|hy?-7he Mystery Angle in Rash of Bank Frauds
By Quentin Mott

Toward the end of last month, 1t
was getting to be routine with Spe-
cial Agent Fred Hallford. in charge
OF the FBI Office in Pittsburgh. He
had made his 14th arrest in connec-
tion with the defalcation of funds of
banks and credit unions in his area
within period of 13 months. The
shortages totaled more than SO mil
lion.
The FBI. the bank examiners and
the Federal Deposit Insurance Corp.
all knew when and how the cases
came to light. but none of these
knows and probably ever will know
why.
Somehow in the shuffling of the
slippery deck of fate, the cards fell
face up for IA defendants in a series
OF cases involving seven banks and
a Federal credit union, all within
the Pittsburgh area.
Geographically, 1t smacked of con-
spiracy, collusion and conniving. Had
it been an epidemic OF communicable
disease. rather than a rash of short
ages, no more diligent effort could
have been made to track down and
isolate the source. But there wasn't
any connection. The defendants did
not know each other. They were not
related. The cases had no common
characteristic. Some of them were
fantastic. Others were routine. There
was no analogy of speculation. Rea-
sons for the loosely classified en-
bezzlements varied from market in
vestments and slot machines to just
plain living expenses.
In one town where two banks and
four defendants were involved, none
knew that the others were engaged
IN the various practices by which
shortages are covered up until
little slip bares the whole fabrication
to the watchful eyes of examiners.
Today, as the cases progress to-
ward judicial settlement and the
banks take up where they left off,
the question Of why SO million in
shortages popped up within a So
nile radius Of Pittsburgh remains as
@AA1SA "a . AySIcly as ever.
First Cose Wos Suicide
With the suddenness of a chain re-
action, or a hit-and-run driver or
skipping tornado. the first case
broke in the little town of Cecil. Pa,
20 miles from Pittsburgh, in Septem-
Der. 1850. Examiners dropped in one
Saturday to see why the First Ma
tional Bank of Cecil was DELINQUENT
in a report to the Federal Reserve.
Cashier John Wagner was out of
town, SO they said they would be back
Monday. They came back to find
that Cashier Wagner had sent the
errand boy out for the mail and in
his absence had committed suicide
beside the open bank vault. There
was a note. 1t revealed a series of
loans made outside the bank and
without the usual bank requirements
for security.
Examiners said they found a short
age OF $l.3 million; that the books
had been juggled; the deposits were
not all posted and there were untold
overdrafts. Wagner was q man of
modest means and habits. His only
luxury was a stamp collection. He
was just too generous with friends"
his friends said. The FDIC paid off
depositors with no loss to them and
the nearby Mcdonald National Bank
Evening star., 1951-11-04
took over the business of the defunct

took over the business of the defunct
Cecil bank.
The depositors at Cecil. Incl
dentally. were first to come under the
new policy of the FDIC to insure de-
posits up to $4,000 instead of the
former $4,000. 1t had increased it's
coverage only month before.
People were still discussing the
Wagner suicide when the second case
broke last July. Af'2r two bank rob-
berries. each Of which netted more
than $4,000. examiners were making
a routine check at the Peoples Union
Bank at McKeesport, Pa. southeast
OF Pittsburgh. They said they found
$4,000 more missing. Miss Hildur
Nystrom, 80. a teller. was charged
July 81.
The Jock pot Month
But August was the jackpot month.
The spinning wheels Of fate came up
with three lemons for President Lud-
wig r. Schlekat of the Parnassus Ma
tlonal Bank at New Kensington, Pa,
an eastern suburb. Examiners said
there were $150.000 in loans which
didn't show on the books and even
tually charged Schlekat with a $780,
900 shortage. The FDIC stepped in
and purchased the bank assets and
sent in liquidator. The Mellon Ma
tional Bank of Pittsburgh took the
business in its branch bank there.
Vance L. Sailor. chief of the exam
lining division of the FDIC. classifies
the case as fantastic. The examiners
findings plus Schlekat's confession
told how he had risen from teller to
cashier to president and controlling
stockholder-only it was contended
that Schlekat used bank funds to
purchase 750 shares of capital stock
from Charles r. Alter, the retiring
president. The agent or go-between
in the transaction unfortunately died.
Examiners claim an original short
age Of $35,00O mushroomed into the
100000 deficit.
That wasn't all to be heard from
New Kensington, but an interim case,
also in August. took the spotlight to
New Alexandria, Pa. Examines
thumbing through the ledgers at the
New Alexandria National contended
there was shortage of $28.189, and
Evening star., 1951-11-04

hidden under the Mann Act and
other laws. narcotics traffic was out
lawed, but the nemesis of gangland.
the tax collector. wasn't involved in
these operations.
II smart defense could swing
jury from guilty to innocent In its
verdict, the white SLAYER and dope
peddler didn't have to worry about
the revenue agents.
Harry Schneider. a veteran en-
forcement officer in the Revenue
Bureau who battled bootleggerS for
several years in the Southern rural
areas, has a theory about the men
and women who refuse to be content
with anything except big money,
picked up fast.
Eosy Money Is Cool
These people are diseased with the
idea of getting money easy" he says.
They don't mind hard work: many
OF them go after the big dough "a
hours day. Except for this passion
OF getting rich overnight. a lot of
them would be swell people. kind to
their families. considerate of their
neighbors and generous in their char
lty. But, they just can't be satisfied
with an average mans salary for an
honest 40-hour work-week. They've
got to make 1t big"
Mr.. Schneider doesn't expect the
Evening star., 1951-11-04
By Huqh Humphrey

Predictions that the new tax law
would force big-time gamblers to 90
out Of business apparently were just-
f1ed-temporarily at least-last week
as reports from Washington to the
West Coast indicated wholesale de-
cline in numbers and horse betting.
In Washington what is believed to
be the first test case of the new act
was started when an injunction suit
was filed to stop the Bureau of In
ternal Revenue from requiring gam
bier to list his Occupation" and his
co-workers' names when applying, for
the tax stamp.
Attorney Myron Ehrlich, who filed
the suit in District Court on behalf
of Hayes L. Combs Of Washington.
asserts that some of the questions
asked of an applicant for 'bookie
license" constitute an invasion Of
constitutional rights. Answers to
such questions, Mr.. Ehrlich declares.
might be used against the applicant
later in legal proceedings by local
law-enforcement officials. This would
be a violation of guarantees against
Standardization, the lawyer adds,
and on this basis he is seeking to
have the law set aside.
OecupotionoI Tox
According to the 1851 act, all gam
blers who receive bets or help in plac-
ing bets are required to pay an occu-
pational tax of $50 a year. They're
also liable for filing 10 per cent
tax on all wagers placed with them.
The law specifies that this action
does not exempt the gambler from
prosecution by State and local gov
ernments If the gaming is a violation
Of those laws. Thus the Federal Gov
eminent finds itself in the position Of
legally taxing an illegal enterprise,
which in some cases may be violating
Federal laws. as well as State and
local acts.
popular miSconceptlon of Inter-
nal Revenue Bureau procedures has
led to widespread belief that all tax
returns and files are confidential.
Under this idea, a Revenue Bureau
employe who received a $50 occu-
pational tax and a wager tax return
from a gambler could be adjudged
guilty of being an accessory to a
law violation if he failed to report
the deal to police. Actually these
records, If the gamblers file their re-
ports, will be open to public inspec-
tion at all times; therefore the reve-
nue. employees do not need to report
them.
The Books Are Open
That's the angle that worries the
bookies. They don't want any record
open to inquisitive citizens or law
enforcement agencies.
Many States and cities outlaWed
slot machines years ago, yet continue
to be plagued with illegal operation
of the one-armed bandits and pin
ball devices. Police stage raids, gather
up the machines and destroy them
periodically, yet new ones always
seem to take their places. The pub
lie demands action, and in many
cases police officials reply that they
don't know the men responsible for
distributing the machines, thereby
providing themselves with some form
Of alibi for failing to act. Slot ma
chimes have been under Federal IL
cenSe taxes for many years, and their
records are open to public inspection.
The new gambling law. in the opin-
ion Of revenue experts. isn't going
to prove tax bonanza. An occu-
Evening star., 1951-11-04

also contended that Mrs. Goldie Hen
sell Caldwell. As, mother of two,
was involved. They said amounts
had been taken from October, 194S,
to August, 1851. Mrs. Caldwell is
reported to have stated that funds
were needed for living expenses.
Surety bonds covered the loss.
Three Involved in One Bonk
Then in September, headlines
again blared about New Kensington.
This time 1t was 100000 shortage
in the First National Bank which had
been going on for 20 years. Exam
liners made a surprise visit in the
morning instead of afternoon and
scanned the ledgers and accounts.
They charged William Paul Smeltzer.
57-year-old cashier and father of
three. Smeltzer, it was alleged, had
been playing the stock market and
had ,covered losses by substituting
ledger sheets of his own for the
banks.
In october, two others also were
arrested and charged with more
shortages. Otto Grotefund, S.
teller. was alleged to have misapplied
$4,000 since 1947. Slot machines,
Grotefund said George r. Shiarella.
assistant cashier, with a 35-year
record at the bank, was charged with
$4,000 shortage. Shiarella admitted
stock market operations but said he
repaid every cent that was taken.
In the New Kensington First Ma
tional case, the controller of cur
rency stepped in and. since the bank
was going concern, it was not neces-
sary for the FDIC to act in behalf
of the depositors.
The Wells Were Dry
September also brought to light the
case most remote from the Pittsburgh
FBI office, down in ParkerSburg, w.
Va, in the Ohio River Valley. Ex-
aminers found that Teller Dennis D.
Layfield was on vacation from the
Wood County Bank. They also found
that ledger sheets had been withheld
in the savings accounts and this had
been going on since November, 1850.
They charged $363,000 shortage
In the Is months prior to the arrest.
it was alleged, Layfield had gone in
for oil well speculation in a big way.
Evening star., 1951-06-24

General j. Lindsay Almond, jr.,
said:
I'VE are highly gratif1ed with
the decision which confirms the
position We have always taken." :"
I'VE have made a careful study
of the record in the South Caro-
lima case and the decision was as
anticipated" Mr.. Almond added.
The matter of equal facilities has
been definitely settled heretofore
as a cold, legal proposition. If the
provisions of Virginia law on
mixed schools are to be sustained.
equality of facilities must be es-
tabliShed."
Evening star., 1951-06-24

The program. to originate in
New York. will feature a WTOP
graduate, Arthur Godfrey. Also
on the program will be: Chairman
Wayne Coy of the Federal Com
munications Commission; William
IS. Paley. CHS board chairman,
and Frank Stanton, president OF
that organization; Ed Sullivan,
Faye Emerson, Garry Moore and
Sam Levenson, television stars:
Robert Aida and Isabel Bigley of
the Broadway musical, Guys and
Dolls: the New York City Bal
let. Bill Baird Marionettes and
Archie Bleyer's orchestra.
Officials explained that the
owner of present black and white
Evening star., 1951-06-24

munication Commission.
CHS officials here said that any
make set can be fixed to receive
their color transmission in color
But at this time it is limited for
practical purposes to sets with
10 to - inch screens, they pointed
out.
Disc Is Utilized.
The CHS system. known offici-
ally as the field sequential
system" uses disc with blue.
red and green colors on it. This
operates at 1440 revolutions per
minute. This disc is called a con-
verter and adds color right att
the set, in front of the existing
black and white tube in the own
Evening star., 1951-06-24

af Wpepnot0.
HARVARD MEDICAL GRAD
Boston-Dr. Mildred Fay JEFF
ferson, "a, holds the distinc-
tion of being the first Negro
woman to graduate from the
Harvard Medical School. She
is the daughter of Army Capt.
and Mrs. Millard F. Jefferson
of Boston. DR.. Jefferson was
born in Pittsburgh, Tex, and
got her A. B. from Texas Col
lege and her nj. S. from Tufts
at the age of 20. Women have
been admitted to the Harvard
Medical School only since 1945.
Evening star., 1951-06-24
er's set, officials explained.

|er's set, officials explained.
The cameras, however. have te
operate directly with color in the
transmitting process. officials de-
clared.
A color TV program, "The
World Is Yours" conducted by
Ivan T. Sanderson, naturalist,
will become a regular part of
the CHS program beginning Tues
day, 4::30 to 5 pm, to be seen
Monday through Friday. It will
be sponsored by General Mills,
Inc, first national advertiser to
sponsor regularly scheduled
color TV series, officials pointed
out.
Evening star., 1951-06-24

The Columbia Broadcasting
System and Station WTOP-TV
tomorrow afternoon will launch
commercial color telecasts here
as regular service to the public.
b. But the converters and adapters
necessary for existing television
sets are not yet generally avail
able to the public. How fast
color TV catches on" with the
public win depend on its reac-
ton, how fast the manufacturers
can produce the necessary parts
and what they will cost.
On Channel 8.
The CHS color-TV program will
be inaugurated from 4:30 to $50
pm. on Channel 8 here.
Evening star., 1951-06-24
Virginia Group Continuing
Anfi-Segregation Fight
By the Assosiufsd Pres,

RICHMOND. Va, June %
The National Association for the
Advancement of Colored People
will carry on its suit to end Vir-
ginia's public school segregation
despite the uphoIding of a similar
racial barrier by three-judge
federal court in South Carolina,
Attorney Oliver w. Hill said to-
night.
But Gov. Battle and Attorney
Evening star., 1951-06-24

TV set needs an adapter to re-
ceive the color transmission in
black and white. He requires a
converter to make that black and
white picture appear in color.
$50-$l0O Estimate.
A number of manufacturers
have said they viii have convert
ers and adapters on the market
shortly. The manufacturers have
given a preliminary estimate that
they viii cost around $50 to 500.
] The Radio Corp. Of America,
which lost its Supreme Court fight
to have its color-TV system made
official, is continuing to expert
ment.
But RCA can not 60 on the air
Evening star., 1951-06-24
u. 5. Offers Assorted
Items as Part of Debt.
For vogeIer Release
BY the Asseeioied Press

FRANKFURT. Germany, June
23.-The United States invited
Hungary today to haul away a
motley collection of articles from
West Germany in part payment
for the liberation of American
businessman Robert A. Vogeler.
AUnited States High Commits
sion announcement said the col
lection reportedly worth less than
500, ,000-has been identified ais
Hungary's. 1t listed as available
for shipment these articles looted
by the Nazis:
Seventy five motor vehicles "in
various states of disrepair," elec-
trical motors, scrap metal, fur
niture, some Bronze Age relics
from a museum and religious ar
ticles from a country church.
Doesn't Mention Crown.
Today's announcement made no
mention of bejeweled st. Stefan's
Crown, symbol of Hungarian SOW
ereignty for 1000 years. Hungary
had demanded that the United
States restore the crown as part of
the ransom for freeing Mr.. Vogeler
from Budapest prison in May.
But American officials have denied
repeatedly they agreed to have it
returned.
Although the whereabouts of
the crown is an official secret, it is
believed here that the Vatican
may have it now. Americans got
it from Hungarian war prisoners
captured in Bavaria in 1945.
Mr.. Vogeler. now in the United
States, was sentenced to Is years |
Imprisonment after 'confessing'
to spy charges. After II months |
of negotiations between the United |
States and Hungarian govern /
ments. he was released and re-
pudiated the confession as in
duced by torture.
Figures in Mindszenty Trial.
The crown also figured in the
trial of Josef Cardinal Minds
zenty: who was jailed by Hungary
on charges of plotting against the
Communist government. One of
the charges against Mindszenty
was that he worked to prevent
the return of the crown to Hun
gary.
A newspaper published here by
Hungarian refugees said the
Communist delegation is asking
$427,000 worth of property in the
Vogeier deal.
Under the terms of the 1947
peace treaty with Hungary, it's
was to have been re-
turned from Germany at that
time. But the Communist gov-I
ermnent began confiscating Amer
ican holdings in Hungary, caus-
ing the United States to take
cotsiter action in West Germany.
Other conditions the State De-
oartment met in negotiating Mr..
Vogeler'S release were the re-
opening of Hungarian censulates
n Cleveland and New York and
approving travel by Americans in
hungary. u
Evening star., 1951-06-24
mA Head Vows 10 Keep
Civilian Production Up
BY The Assoeioted Press

~ ',>'eea ''es' ~
SARANAC INN, N. Y, June %,
The National Production Au-
thority is determined to maintain
a reasonable output of civilian
goods throughout the current
crisis, Manly Fleischmann, NPA
Administrator, said today. y
Mr.. Fleischmann declared "it
would be criminal folly to abandon
civilian production" because un-
employment and dislocation would
result.
Evening star., 1951-04-15
MOTORCYCLES

MoToRBIKE. 1949 whizzer, pace
maker: excel. cond;: cost S225. will
WIZZER MOTOR BIKE, good condi-
1850 $50 PUcH. geei 0 iss; ezcellent condition;
CUSHMAN 194S; new paint, perfect
mschanieal condition; S145. Call
INDIAN NDi S'eai CHEF 1s47; f,ne mecAani-
MOTOR SCOOTER i946; 3-wheei
transmission. battery, generator
lighting and horn, stake body; $5o
,,;9s cash; b.. "a; !. A; s512 or OK. oI47;
'SsaAs sises SIS ana s5S %h'safF III nGsSs seod
HHRLEY-DAvIDsoN 1880 49,;
good condition.; best offer takes it
Phone DU. 4072 after 12 Sunday.
A: J; s.. l946; 300 &C.; excel. cond.
ls4s SIsii aAshEY.pAvrDsoN XII g1Sii "45"; mus,
sell Immediately; S225 or best offer
MoToRcYCIEs&BsA dssl'taIe sa and al sun6sam S,
all sizes and models from 1850
santsm to 85occ Gloden Flash
motors: lowest prices on accessories
expert repairing. Always see BLA
Lock CYCLE CO.. Sly Ga. aye.
Silver Spring. sE; $3.50, -15
overhauled. $500. LO. 5-0311
10511 Ga. ave-. Sill. Spg. -15
HARLEY 1946; new motor; ney
paint: oil accessories; $500. Cal
CUsHMAN 1947 scooter; S75: ais
girls bicycle. S12.50; both in goo'
| PARK. 81. 1906. III
Evening star., 1951-04-15
TRAILERs

es-FT. HOWARD all.steel trailer for
sais,-9 rms. attached; exc. cond.
40 Ttr.r'e Trailer VILLAGE, A'fx-
1888 sSSfIni InniiBHERrY, BHEaRrY "a IT.; CT transfer;
2 bedrms.. bath: kit. ny; rm. sxtras;
finance arranged. NATIONAL TRAIL
Err COURT. ColleGe Park, Md. --l6
ZIMMER. 27-fty sleeps 4; like new;
bottled gas. TefgrHsr -wnsei' ases sies'
WANTED. CHEAP TRAILER for con-
BnfIS Stflfs'GF n 9ouRsELFvFront-end lSS I4 @ for
treiler. good tires and tubes. $50.
LU. 4-0104.. 1914 Fairlawn ave. sc.
TrkILFr, wheel luggage, Sears,
HOUSE Hy TR2iLHRs wanted; immediate
cash; want any make, model, year.
Bring them out or call HI. 5450.
1000 Central ave. Sc. Call anytime.
KIT. COMPANION. 1s4e, .1s-ft. alu-
ssao. MAKELY. Lot "A. Ancient
Oaks PARK, Fails Church. 49,
1860 MODEL, 81 It. de luxe. 6 mos
old, completely equipped and set up
Available inmed. AL. 2464 ewes
ss.FT. s.isTf SUPREME house trailer. eoot
condition. refgr., stove. incl. newl.
built 20-tt,. side porch: lots Of win
dows, 2 doors; reas. priced. Fl
BETEvLE, Lot "A, Temple Traile
Village, Alexandria.
Evening star., 1951-04-15
CADILLACS WANTED
TRUCKS. FOR SALE

FORD 1947 2Ia-ton stake body; good
condition; sacrifice: $3.50. MIR.
WALTERS, OW. 5000. -15
INTERNATIONAL 1850; fully equip
ped; ton yanette; sat net mstrS erlSa hSay; & a.
va. XII. s-407l. Ask for Joe t.
JEEP 1943 Willys; excellent; S495.
CENTRAL NJ MOTORS. 1901 oronoce
wILEgs vi 9s; as 4SYG; four W. D. 1-ton pick.
up; perfect eond.; $745, KENNY
FORD iss4; 1s4s motor; hydraulic
S302 Monday after 9 pm.
CHEVROLET 1947 merchandise
panel; clean: can excel. cond. Call
CHEVROLET 1S4e M-ton panel; low
anteed: S495. Ma. $40.
FEDERAL tractor t947 3-ton. 900
x20 tires; ideal for medium duty
work. May be had for unpaid bal
ance. SHERIFF MOTOR CO., 9ot
JEEP M-ton panel; Al condition
| $1,o95; "a months. 129 K st. NV
FEDERAL tractor 1e4e; As ton
sleeper cab, 1100x2O tires. A.
condition. May be had for unpait
balance. SHERIFF MOTOR CO.. 90l
cond. SHERIFF MOTOR CO., 90
4eYp. i ). issi DHMP r BODY, s.rause 81 steel
with 6-yd. ends and cab shield in
:. : cluding heavy-duty hoist. e.
: LYONS CONSTRUCTION CO.. IA
679o. III
Evening star., 1951-04-15
AUTO & TRUCKS WANTED

VAN TRUCK. any size Job. prompt
service; reas.; local or long distance
ia. 1887: after z pm. GE. 1416.
NICE CLEAN USED CARS, regardless
Of age. win pay highest price In
city for extra nice ones. HARRIS
AUTO SALES. 500 Ga. ave. NV.
pLYMoGTHs. LSi s9Tpi FoRDs, cHE@zS cHEvs.@zSwe
Selling AuTo rs ouTGET 81 iIe Difs ESQ nsisde slsd
enburg I'd. me-. Ii. 4-os5s, LII. 4-9772.
sTUDEBAKERs 1s47 to 1851: also
all other makes. METROPOLITAN
M9T9Rs' s03TSs' 1900 BladsnsAurs rdj; 10. La
wEsrisaN sis9i suYEk mas lmmsa. 81 sasn
ior nice low mileage cars, MORRIS
PREMIUM PRiCEs tor clean. late
poeei pM@ saTs .s6D 5DMoMps S,IoIs MOTORS; bSyC
n Jackson. Arl- Va. fDr Lc No
e.ToN. for farm use. in exchange
for riding garden traetor and
WsIaaqa Stsds6akeS Md aStSii WSidor, TRoiMaPK1Ns'
waiting at PARKWAY-FoRD. 3O5l
M st NV. MI O1s5.
FAlk, HONES1 APPRAIsALS OF a.l
| makes OF cars are assured al
MeKEEooPoNT1Ac 1884 1 ct nv
PRfvATE PARTY would like '4e
Ford IS" club coupe; ST00. no
We SPECIALIZE in Ford, Ply. chev
and other makes: We PAY the tor
is' LET. Fl sIso tH' sladensburs 81 1oiS "a. o ne
BEST Is; eIsnsT; AUSTIN. $500 cash will buy;
no junk. ia S-6899.
1916 TO 1961-All makes and sta.
wagons. Drive in with your title
W GSst SSis g. H fzh 'ss sSa e ss
VIII hiHi' raT AZ cash Cash for clean cars, any
ROYAL III MOTORS. s' NC. Is Ken
cafyRoLRT. hex z, RiE Plymouth or Ford
Inspection. IA. 1914 Sunday.
PVT. PARTY wants 1871 Chev., Plym
or Pontiac, in excel. all-around
pisHslE1 sSnd S dealsss shssoN MI xafs 5sse bvsr.
early oldsmobile. sH. 47se.
TRUCK WANTED - Van delivery
truck, 1947-l95l; must be cash
bargain. Call FIR. 3304. is
FAIR PRICES FOR CLEAN, late
| model used cars. MOTOR MART
NC 1906 Ga. ave-. JU. S-5353 OF
FOR WARM WELCOME and colo
cash. see or call us before selling
| your car. HAINES MOTOR co.
| 5000 Bladensburg rd.. Cottage City
| Nd. WA. $500 or is Mass. ave. NV
| ST. 22SS. open ewes. and Sunday.
HIGHEST PRICES paid for Chevrolets
| Fords and Plymouths. BY one o1
Washington's oldest new-car dealers
CHEVY CHASE MOTOR CO., INC
7725 Wis. ave. OIL. 6100 so
MECHANIC will buy '46-'51 ,burnet
| 7-54S4. -22
ANY MAKE, ANY MODEL
Drive in open lot, see Mr.. Beach, 70,
cash. trade terms.
BEACH MOTORS. 1910 14th st. NV