£20,000,000 FRAUDS.

Hawke's Bay Tribune, Volume I, Issue 27, 14 January 1911, Page 2 (Supplement)

£20,000,000 FRAUDS.

CRUSADE AGAINST “GET-RICH-QUICK ’ FIRMS.

New York’s Postmaster-General, Mr. Hitchcock, taking a leaf out of the b-xik of Mr Loeb, the Customs collector, has started a crusade against "get-rich-quick” firms. The first victims were the Burr Brothers Corporation, with a large office in the Flatiron Building, NewYork. which was raided by a force ot inspectors head d by Mr. Hitchcock. All the officers of the concern were arrested, but were released on bail ot to.00') each. It i.s alleged that the Burrs used the mails to sell worthless stock in scores of bogus oil ana mining companies, and that they swindled people in New York and in Europe to the extent of £10,000,000. “This i.s one < f the worst swindles >n the historv of the country, ’ said Mr. H tchciwk’ "Since the. Burr Corporation was organi-ert in 1907 it has unloaded ■ lietween £8,0“0.000 and £10,(1)0.003 worth of bogus securities on the jxddic. Tiie worst of it is that the amounts have only been paid by persons of small means and those unacquainted with business methods. Millions of circulars have been sent through the pest, containing seductive promises of anywhere from 20 to <■> pet «?“nt. dividends. It is stated that hundreds of thousands of farmers and small subscribers have bought certificates fiom this firm. Widows and old men who have entrusted nil their savings to the prisoners formed a pitiable assembly outside th* offices. On? old lady who inve-t?d C°oo inMtrance money left by her bn-bind refused to have the office;, declaring, tearfully: "I hey told m? jus’ :o wait and that I should get th? m'.r.cv. Snr.lv they wouldn’t deceive r.n old worn."nt” Amcrnnn; call the credulous people who :nv.-;t in mic’i schemes as those put ‘ok-nr I bv the Burr -C-ornoration '•’sucker.-.’ A detective engaged in th ’ fxrO'iir.’'* declared that thv-o speenritors met somewhere in the Adirondack*, exch-mco list— of “sit-kers, and, devise fre-h s--homes for securing their savWlioa the authorises s'arehed th* piomises tccanied by the arrested dii ec-

tors they found fresh contracts for advertising involving an expenditure of CGO/ICO. At the time of their arrest the -orperation officials were arranging to send a private car with seventeen customers to California to inspect some oil sells The police allege that the only oil well owned by the corporation is worthless, and that the prisoners’ scheme was to exhibit to their customers real spouting wells belonging to eomeone else

Mr Hitchcock says:—“For many months Government agents have lieen on the watch tor frauds of this character, and ever s-’nee last June, when the members of the United Wireless Telegraph Company were arrested, similar eases have been reported, until wo now have information concerning over eighty companies who have in the past five years defrauded investors—and these chiefly small investors—of the enormous sum of £20,000.000. “ "We intend to proceed against these companies as rapidly as possible, and the easiest method of procedure is to charge them with the fradulent use of the mail;, since the greater part of the stock selling is accomplished through the j:o-t, though a part of their bus’ness has be-n done by a house-to-house canvass.”