GUILTY OF FRAUD.

New Zealand Herald, Volume LXVIII, Issue 20870, 12 May 1931, Page 12

GUILTY OF FRAUD.

CASE AGAINST ACCOUNTANT. A BOOK-KEEPING COMPANY. INVESTMENTS BY YOUNG MEN. The affairs of a book-keeping company wei'O inquired into in the Supremo Court yesterday, when Francis Joseph Huddlestori, accountant (Mr. Noble), was tried before Mr. Justice Herdnian on six charges of false pretences. Huddleston was charged with making false representations about tho "New Zealand Traders Book-keepers' Services, Limited," and by means of these obtaining, with intent to defraud, £SO from Cecil ITenry Ratt ley. £2O from Bruce Youdan, £l2 10s from Oeorgo M. T. Adams, and attempting to obtain £62 10s from Herbert Cecil Heald. The Crown Prosecutor, Mr. Meredith, said the accused inveigled these men into taking up shares in a company known as the New Zealand Traders Book-keepers' Services, Limited. Some such company had been started in Wellington, but it was a hopeless failure and as far as operating was concerned it was out of existence. It lost its premises because tho rent was not paid. Whether it was a genuine attempt to form a company was extremely doubtful The accused came up to start a branch of tho company in Auckland and offered accountants five-year engagements at £5 10> weekly in return for their hiking up 100 £1 shares in tho company, continued Mr. Meredith. The office set up in Auckland was Gilbcrtian, as no business came in, and when tho employees started looking for wages nono were forthcoming. The thing simply fizzled out and all the employees lost their money.

Interview With Accused. Cecil Henry Battley, accountant, described how ho camo into contact with accused through a newspaper advertisement. Accused said the business of tho company was to keep tho books of small tradesmen and to advise them about their businesses. He said the company was so successful in Wellington that it was establishing three branches. Witness was to be the Auckland branch accountant. Accused submitted to him an agreement under which, in return for the investment, of £ICO in the company, witness was guaranteed employment for five years at £5 10s a week. A fairly large suite of four rooms was taken in the Dilworth Building, continued witness, and Iluddleston showed witness larger rooms that ho was going to move into. Accused advertised for lecturers in accountancy to instruct clerks in the company in their duties, and it was witness' duty to interview about 50 applicants. When difficulties began to arise accused suggested that witness should go to Wellington with a letter from accused to the company's office, demanding more support. A Reply irom Wellington. When accused could not find the travelling expenses witness refused to go. Witness said he later wrote to the Wellington office requesting a refund of £SO he had paid in, but he received a reply that Iluddleston had no authority to act for the company and that witness must recover from him. When asked to explain what had become of tho money invested with him, Iluddleston said he would produce vouchers for it later on. While ho was with the company the accused tried to get only one piece of work, but failed. In answer to Mr. Noble's suggestion that witness would eventually get his money hack witness said his solicitor had so far failed to get it. Evidence of similar representations ni£:de to him by accused about the flourishing condition of the Wellington company and of a similar agreement entered into was given by Bruce Youdan, accountant. Similar experiences with the accused were described by George M. I. Adams, clerk.

William Gordon Carlisle, accountant, of Wellington, gave evidence that lie had entered into a contract with tlio New Zealand Traders' Book-keepers' Services, Limitod, in Wellington last October through the accuyd. He paid in £SO and was to have five years' employment at a minimum 'of £4 10s a week. lie worked for a fortnight without receiving wages The company was taken over in November and reorganised with James W. C Young as managing director. Young held 1900 shares and his wife. 100. but no money was put in. There was a staff of from 20 to 25. The company ceased to operate on January 31. It owed witness £62 in wages. No books were kept at all. Accused's Authority to Act. "Hucldleston happens to be my stepson," said James W. C. Young, caretaller of Exhibition Park at Titirangi. Witness said he had been chairman of directors of tlio New Zealand Traders Book-keepers' Services, Limited, which was registered on November 17 last, anil took over the liabilities of a previous linn run bv Iluddleston and C. S. Williams. The new company took 18 employees over from the old. Witness said he advanced TTucidlr.slon £5 from the company to ennblo hipi tc go and open a branch in Auckland. Witness denied having sent any telegram to Hattley saying that Huddleston had nc authority to act for the company. When he found such a telegram had been sent he telegraphed that Iluddleston had authority.

In reply to Mr. Noble, witness said the business was a sound, flourishing on<* provided they hc.tl been left alone. His Honor: You had £5 to your credit, unywnv. Witness said he personally had an estate of £2050 in the hands of the Public Trustee. Iluddleston had full authority to act for the company in Auckland. He thought the company received £l2 to £ls in December for book keeping service, but nothing in January. Cheque Recovered from Bank. Herbert Cecil Ilea Id, salesman, described his negotiations with the accused and the. paying over to him qf a cheque for £62 10s. Acting on legal advice witness quickly recovered tho cheque from the bank. Mr. Noble said there had been no evt der.co that accused's statements wore false or made ivith fraudulent intent. Tho employees of the company hud a civil remedy "If you find tho element of fraud tainting the whole of (lie transactions into which the accused entered with these young men, that will carry you a very long wav indeed," His Honor told the jury. He pointed out that although the company's capital consisted nf £2OOO. not a sixpence • was subscribed, nor a penny put into tho company's coffers. Very little light, had been thrown on the curious transactions of this concern, but it had two sources of revenue. One was sums of money entrusted by young men anxious to obtain employment and the other wa.-i payments by clients. The latter sour<-o yielded only about £l2 in Wellington in December, and still less in January. Yet the company was declared to bo in a flourishing condition. After a lengthy retirement the jury rei timed a verdict of guilty on all counts. "It may interest you to know that the prisoner has already boon convicted of being a rogue and a vagabond and imposing on private people," said His Honor, when the verdict was announced. The prisoner was remanded for sentence to-morrow.