Evening star. [volume] (Washington, D.C.) 1854-1972, 1954-08-05
lcapehart AssaiIs
New Jersey Builder,
ICal!sAgency Racket
By Hector McLeon


Senate Banking Committee to-
day branded as 900 per cent
racket" a New Jersey rental
agency which charged tenants 5
per cent Of years rent to get
into scarce, Government insured
apartment houses in 1949.
He assailed the role OF George
I. Marcus, Hackensack, N. j..
lawyer, who set up the company
in connection with q project built
by two Of his clients.
Mr.. Marcus apologized both
verbally and in writing for his
conduct before the committee
two weeks ago. in which he ac-
cused the housing probers Of
shooting off" their mouths in
questioning his clients.
Formed Six Companies.
Today, he was back to answer
questions about six companies of
his own which built apartment
projects under the expired Sec
ton 608" program of the Federal
Housing Administration.
Senator Capehart said it was
strange" that Mr.. Marcus had
not mentioned his own involve
ment in "608" projects in three
previous appearances before the
committee.
Questioning disclosed that he
was a partner in construction
of SIS million worth of apart
ment housing in which he now
has only $4,000 of his own
money invested above mortgage
| loans.
Gained SIS Million.
Mr.. Marcus clients, Sidney
Sarner and Ralph j. Solow, built
the Teaneck Gardens Apart
ments in New Jersey for $2.5
million less than the mortgage.
Mr.. Marcus set up the Urban
Realty Co. to lease the apart
ments on a three-year basis.
charging five per cent of one
years rent for the service.
Out of $4,000 collected, he
said, $4,000 was later repaid
when the New Jersey Supreme
Court ruled that the fee was
similar to an increase in the
FHA-controlled rents. my total
profit was less than $4,000" Mr..
Marcus said.
Paid Antenna Charge.
| In another project. Linwood
Park, every tenant had to pay
$40 toward the cost of a master
television antenna, whether the
individuals had television or not,
it was disclosed.
Mr.. Marcus, who said he had
handled 40 or so 1908" projects
as an attorney, denied it was a
fraud on the FILA" when the
Linwood Park sponsors gave the
FILA an estimate of construction
costs and later revised the fig
ure in completing a contract
with the actual builder.
Senator Capehart recalled that
Mr.. Marcus had insisted earlier
it was impossible for builders to
construct 1903" projects with as
little as $4,000 in capital. He
pointed out that one of Mr..
Marcus own projects + involved
only $1,000 in invested capital.
Last in Series.
Today's hearing ended the
current series Of Investigations
into FILA scandals here, with
one exception.
Senator Capehart announced
he had appointed subcommit-
tee to investigate the commu-
nifty facilities operations of the
Housing and Home Finance
4 Agency, parent organization to
the FILA.
The chairman is Senator Ben
nett. Republican. Of Utah. 9th
er members are Senators Brick
err, Republican, of Ohio, and
Maybank, Democrat, of South
Carolina.
They will hold a hearing at
10 am. Tuesday in Room 301,
Senate Office Building, on
charges that the HHFA has il
legally financed construction OF
the town water system Of Law
renee, Ind.
| Asks Capehart Withdraw.
The charge has been pressed
| vigorously in Washington and
Indiana by William j. McGhee
Ia commercial photographer and
former unpaid member of the
towns planning council. He has
demanded that Senator Cape
hart disassociate himself from
the Lawrence investigation, on
the grounds of close personal
relationship with persons in
| yolved.
The full committee is sched-
uled to start a cross country
tour August "a, starting in New
York City. It is expected to
Y