Evening star. [volume] (Washington, D.C.) 1854-1972, 1962-07-14

dith, chief examiner of the
Maryland State Insurance De-
partment and the first witness
for the State.
The fees, paid in addition to
the regular premiums, were
never submitted to or approved
by the Insurance Department,
he said.
Calls Fees Unusual
Mr.. Meredith said that. aside
from eligibility fees ranging
from 81 to SIS for hospitaliza-
ton insurance policies, eligibil-
ity fees in the surety business,
the type engaged In by Security
Financial. were unusual.
In addition. he said, not all
savings and loan firms were
charged the amounts, according
to the firms records.
The matter of eligibility fees
were only one facet of Security
Financials operation by which
the State sought to justify its
reasons for seeking receiver
ship and dissolution of the
privately chartered insuring
| institution.
In a suit brought June 20.
the Insurance Department said
Security Financial was fraud
ulently conducted, insolvent by
at least 100000 and in viola
ton of State law. About IL
savings and loan institutions
currently under some form of
court control are insured by
Security Financial.
Review Data
The first days testimony
largely reviewed data already
published-the firms organ
ization in 1859. with stock
holders identified as leading
Baltimore County Democratic
politicians.
In his opening statement,
Assistant Attorney General
Harrison M. Robertson. jr., said
Security Financial faces posi-
BILE loss of 81 million on asso-
Citations it insures and which
are in receivership or conser-
vatorship.
The firm also made a loan
Of $100,799 to the Commercial
Savings g. Loan Association
taking $7,055 as a commission
according to the States exami-
nation.
Security Financial, the report
; said, also loaned 1901 900 to 81,
associations last January
/ Mortgages put up as security
were not Endorsed over to the
, insuring firm in most of the
cases. it said.
Statements Sought
In other developments on
the savings-loan front:
l. Attorney General Thomas
B. Finan sought statements
from eight current and for
mer figures in Security Finan-
cial in connection with the
firms So million suit against
three State officials.
In asking Baltimore's Supe-
rior Court to set July "a and
July 26 for deposition-taki
Mr.. Finan named, among the
eight. two Baltimore County
legislators, A. Gordon Boone.
House majority leader, and Del
egate Charles F. Culver.
The firm. in a separate ac-
ton from the receivership pro-
ceedings, filed the suit, charg-
ing conspiracy to destroy It's
business, against Insurance
Commissioner F. Douglass
Sears, Albert w. Ward, head
of the State Department of
Assessments and Taxation. and
Harry B. Wolf, jr., his assist
ant.
2. Mr.. Ward issued orders
to three savings and loan firms,
including two in Montgomery
County, to stop restricting
Withdrawals in violation of the
regulatory law.
/ They are First General Saw
inngs & Loan Co. of Bethesda,
the Maryland Financial Savings
& Loan Co. of Kensington and
First Financial Savings & Loan
Co. of Baltimore.
In addition, Maryland Finan-
cial was ordered to return about
100000 in shareholders saw
ings transferred to it by Com
merical & Loan Association of
Baltimore last February with
out consulting the shareholders.
3. Two men indicted June 20
by the Prince Georges County
grand jury on conspiracy
charges in connection with the
FreeState Savings & Loan
Association were identified by
States Attorney William L.
Kahler as Howard Mallek. stock
broker and former head of the
American International Saw
ings 81 Loan Association. and
George A. Murdoch, head of an
Ohio corporation, Utility Goals.
The third man indicted and
previously named is Baltimore
Attorney Harold Applegarth,
who faces trial Monday in
Baltimore Federal Court on
mail fraud charges.