SWINDLE ALLEGED

Evening Post, Volume CVIII, Issue 108, 2 November 1929, Page 11

SWINDLE ALLEGED

FINANCIAL SCHEME

ACTUARY'S EVIDENCE

(By Telegraph.} (Special to "The Evening Post.") INVERCARGILL, This Bay. the hearing was continued yesterday atternoon of the charge against David jNellson Johnston, of Duncdin,' of obtaining, from Andrew Lindsay Wilson £34.by falsely-representing that any, person by paying "£1 to Quarterly Dividends, Ltd., together with an entrance foe of Is, and a furthev sum of £1 to Kational.House-Purchase, Ltd., and thereafter paying £1 a month for httccu months to National House Purchase, Ltd., would reach the benefits of the £5000 class in Quarterly Dividends, Ltd., in. approximately seven , and a half years. There are five other similar charges. The Crown Prosecutor detailed what he alleged to be the essential unsoundness of the scheme, details of which would be given by the Government Actuary. The first depositor would, of course, get his money for a loan quickly, but the catch was. that no irian could reach the £5000 class, and therefore could never hope to See his money again. He would prove by the Government Actuai-y that the'scteme was a plain fraud,'that in regard:to states ments made by the accused any person of average mentality could see that the scheme could not; operate, arid", further, that scheme had been"denounced arid exploded, and yet ; the accused had still carried on operations.. It was not known what interest the accused had, but he had. been collecting so assiduously that'he, must have a. decided interest in the scheme. Mr.. J. C. L. White (Dunediu), who represented the- accused, said, that he was surprised that the Magistrate had not accepted jurisdiction to try the cases summarily. The intricacy of the scheme was of such aa extraordinary nature that it would be almost impossible for 12 laymen on a jury to comprehend it. "IMPUDENT SWINDLE." Tli c Government Actuary, Cecil Gostolow, read a report discoursing upoa the unsoundness of the scheme. Summing up, he- said it was of the "get-rieh-quick" or "bubble" type, and must eventually come to an. untimely end, with disastrous ■ results to thousands of comparatively poor people, tt was not too much, he said, to describe the scheme as an impudent swindle, run for the benefit of the promoters and to a less extent of the original members. After lengthy . evidence had ' been given, the Crown Prosecutor said that the nature of- the false pretences- in ■>ach case was ' practically the' same, with one. exception. It had been, clearly proved by a number of witnesses called that the accused had stated that by paying sums mentioned a depositor would reach the £5000 class. He claimed that it had been definitely proved that the achievement of results was, and had at the time of the alleged offences, been, quite impossible for the companies to carry out. The Government Actuary had stressed the impossibility of the companies carrying out their promises. The whole nature and trend of the statements-made had been intended to lead people to believe that the companies would carry out what the accused said they -would. The-- only inference- the Court, could' claim was that the accused was- either a rogue or an arrant fool; he was obviously not an arrant fool, as he had gone about deluding a number of people, and the natural inference was that the man was a rogue. The Crown Prosecutor submitted that a strong"prima facie case had been established' and'the accused should be committed for trial. Mr. "Whites said that he personally did not know whether the scheme was sound_ or not. The accused had said that it was, and it was a schema in operation all over the world. The first time that it should be the subject of a criminal prosecution was, as it were, at the world's end. If it was believed that a definite criminal offence had been committed tho Crown would have, to prove that the representation was an'existing fact, that it was'false, and that the accused knew it was false. The facts upon which the Crown relied were two future promises. ■ The evidence of some of the witnesses was uncertain in cases. Mr. White, contended that there was no proof that the accused knew that the statements he was making, were untrue, arid submitted that there was no such evidence in the present case. The Magistrate stated that he would give his decision on Tuesday.