BOGUS CLAIMS

New Zealand Herald, Volume LXXV, Issue 23002, 1 April 1938, Page 11

BOGUS CLAIMS

COMPENSATION MONEY SIX MEU BEFORE COURT CARGO WORKING " INJURIES " I FIVE .sent to prison The existence of a systematic plan shipping and insurance companies, by fnlso claims; for compensation, was revealed yesterday when six young men appeared in the Polieo Court, beforo Mr. F. K. Hunt, S.'NT. Th.j accused, all represented by Mr. flobinson, pleaded guilty. A total of £34" 17s 4(1 was mentioned in the list of tlto charges, but it was seated by the police that the amount actually obtained was £571 Is Bd. Detective-Sergeant Nalder, who prosecuted, said that when a room used i j,y some of the accused was searched a local anaesthetic spray-gun containing a drug, which was used for stiffening iinger joints to simulate injuries, va3 found, together with an American detective magazine, in which was an article on bogus insurance claims. The article was headed "Fraudulent Claims Backet," a Year Paid on Faked Claims," "Sponsored by Reputable Physicians Acting in Good Faith," i'Here is a Supreme Challengo to Police." The' article gave full information on how false claims were made in 'America, on a much larger scale than the present offences. The Accused and the Payments The accused, the companies from Vliich they secured payments, and the total amounts appearing against their sanies on tlie charge sheet, were as follows: —

"William Arthur Reilly, salesman, aged 26, 21 charges, Northern Steamship Company, Limited, £52 17s 4d, Blue Star Line, £l9 10s, New Zealand Shipping Company, Limited, £23 10s fr], total, £125 17s lGd; Peter Freeman, frencli polisher, aged 23, 14 charges, Now Zealand Insurance Company, Limited,: £3l 10s, Colonial Sugar defining Company, Limited, £l9 lis 3d, Northern Steamship Company, Limited, £8 10s lid, total, £59 12s 2d; Edmond Percy Freeman, salesman, aged

26, Northern Steamship Company, Limited, £27:7s 2d, New Zealand Shipping Company, Limited, £22 10s, _ New Zealand Company, Limited, £4 10s, Huddart-Parker, Limited, £3 ISs 2tl, total, £SB 5s 4d; John Freeman, painter, aged 29, eight charges, New Zealand Insurance Company, Limited, £l9 10s, Huddart-Parker, Limited, £l4 18s 6d, New Zealand Insurance Company, Limited, £4 10s, total £3B 18s

Robert Varney, fireman, aged 27, five charges, for "a total of £l9 10s lOd, from Huddart-Parker, Limited; Kenneth Charles Parsons, salesman, aged 20, three charges, Northern Steamship Company. Limited, £ls 12s Bd, New Zealand Insurance Company, Limited, £3O, total, £45 12s Bd. Parsons also pleaded guilty to stealing; a watch, chain and pendant, valued at £6, the property of Robert McLachlan, on January 15. S'-- ' Detective'n Inquiries "These men are all casual waterBide workers, and not members of the Waterside Workers' Union," said De-tective-Sergeant Is'alder., outlining the cases. "They are well known to each other, and they came under the notice of Detective It. 1). L. Jones early in February. As the result of observations made by him he made inquiries, And it was then that these frauds •were discovered. When the inquiries Were sufficiently advanced the accused vere interviewed by Detectives Jones, F. Brady, L. Wilson arid myself. "All these men have been doing what is commonly known 011 the wharf as the 'double-up.' That is, on receiving an injury while working on a ship they would report an injury and be. placed on compensation. While still receiving compensation they went to work on other ships and under different names, reporting a similar injury for which they were already receiving compensation. Some of them were not satisfied with the 'double-up,' but worked the*'treble-lip.' " Reported Injury to Thumb

Enumerating the charges against My Mr. Nalder said that accused obtained work on the Kairanga on November 8, and after reporting an u jury to his thumb, vas placed on compensation,' at £3 18s 3d a week, Until December 20. On November -23 he got work on the Northern Steain--Bnip Company's vessel Kanginui, and ®gain reported an injury to the same thumb. After treatment by a different doctor, lie began (;o draw compensation afc the rate of £3 18s 3d, until January 11 and he was also paid £29 8s 4d in final settlement on February 20.

On December 9, while working on the Napier Star, accused reported yet another injury to tho thumb, and afterward received compensation at the highest rate, £4 10s a week, until |rebrtiary 28, Mr. Nalcler continued. On January 21, while working on tho ■lekoa, Jleilly reported an injury to i'ri 18 little finger, calling as a witness •k P. Freeman, another accused, who f-• working under the name of •Munro. Up till March 4 Reiliy was ?till claiming compensation for this inJury. Drawings by Two Men

. The average weekly income received bv Ite'illy from itrauds was approximately £9* a week," said Mr. ■j.j a l(!er. "iU'itlv has served two years the Hoixta-f for theft. Letters wore gjM®und in his possession from AYellingstating. "Plenty of work on the | *«Mf. All the boys oil compo. and ISrcPN? well.'How is the compo.? Mgg-o.K.r-p. Kiveman, said Mr. Nalder, rinv ''H! from four companies at v. same time, receiving an average .. £l4 a week over a period of four - Months. To overcome the difficulty ot lapSping under different names ho ob-

tained levy books under three false names. Prior to Lis arrest he liad shared a room with Iteilly, and it was there the American magazine and local anaesthetic spray gun were found. He had previously been charged with making false statements under tho Employment Promotion Act. As a result of his frauds, it was stated, Peter Freeman had received an average of £lO a week. He had no previous convictions.

"Tho Freeinans are really strangers to Auckland," said Mr. Nalder. "They came hero from Wellington a few months ago and immediately started this fraud racket." Tho accused Varney had also drawn £8:1 from the Union Steam Ship Company, Limited, for nil injury to a finger, but he was not charged in connection with that.

The youngest accused, Parsons, in addition to tho frauds, Mr. Nalder said, had stolen jewellery, from another man while drinking in an hotel. Mr. ltobinson said he wished to make a special plea for leniency on behalf of Parsons, who had suffered a genuine injury to his finger. Ho had got into trouble by associating with the others, and was under the influence of liquor when ho stole the jewellery. His father would take him back to his farm, where lie could work and secure money to make restitution. Varney had also suffered a genuine injury, while John Freeman had inflicted his injuries 011 himself. Peter Freeman had a position to go to in Wellington when he was released. At this stage the magistrate adjourned the cases until the afternoon, in order to consult tho probation oflicer. "Organised System of Theft" "1" look on this matter as a very serious one," said the magistrate, sentencing the accused. "It is an organised and planned system of theft. I think Mr. Nalder is correct when 110 says they got tho idea from the American magazine, but we have to stop these American methods. I am going to punish these offences severely. 1 am going to check it in the bud, so that it does not go any further. "Tho youngest one is Parsons. Against my better judgment I am going to give him a chance," continued tho magistrate, admitting accused to probation, and ordering him to make full restitution, £sl 12s Sd, for the frauds and theft.

"You stole a considerable amount, and you are old enough to know better," said the magistrate to Peter Freeman, sentencing him to six months' hard labour on one charge and to three months' hard labour on another, the terms to be cumulative, and fining him £4O on a third charge. "If you do not pay the fine as arranged after your release you Avill get another term," the magistrate added. A Final Warning

"The other four have all been convicted before, and have stolen a considerable sum of money," continued Mr. Hunt. "It might seem hard that young men of your age are sent to prison, but you have all been before the Court, and this was deliberately planned." The four, Reilly, Edmond Freeman, John Freeman and Varney, were each sentenced to six months' imprisonment on each of two charges, the terms to be cumulative, and were also fined £4O each..

"if there are any other of these offences I can assure the wrong-doers that this will be nothing to the sentence tliey will get," was the magistrate's final warning.