FORGERY ON A GIGANTIC SCALE.

New Zealand Mail, Issue 1262, 7 May 1896, Page 8

FORGERY ON A GIGANTIC SCALE.

Special to the New Zealand Mail.

New York, March 20.

Wholesale forgery in the issuance of worthless charters for Lloyds fire insurance companies has just como to light. Three men have been indicted. These men are now being searched for by tho police, who have warrants for them, but so far they have evaded arrest.

Tho mon against whom tho indictments are said to have been found arc Graham McAdani, Frank W. Anthony and David Vandcrgaw. Michael J. Boylan, wdio was Mr Anthony's partner, is now a prisoner in the Tombs under the name of James Boylun.

The forgeries in which these men are said to be implicated are wide-reaching, and vitally affect insurance policies for millions of dollars. It is said that tho three men have taken a leading pait in tho manufacture and sale of bogus charters under which more than a hundred Lloyds fire insuraco companies are now being operated in this State. There are now nearly 125 Lloyds companies doing business in this city. Of this number Deputy-Attorncy-Genoral Richards estimates that not more than ten have genuine charters. Tho others aro said to be forgeries, and it is for making and selling them that tho alleged indictments were returned against the three men. The accused men have disappeared. Anthony and McAdam aro lawyers, and Vandergaw was in tho real estate business. HOW THE LLOYDS DO NUBINESS. The Lloyds concerns are entirely different in all their methods from the regular companies. The system is of Dutch and English origin, and tho first company was organised in England more than 250 years ago, taking- its name from its founder, James Lloyds. Tho companion are not incorporated, and are a partnership, the underwriters being personally responsible for tho losses which tho company moot. When these men are financially able to pay losses all is well, but there was no provision to prevent men without money from organising the companies. As a, consequence in ]H ( .)2 a, law was passed which took effect October I ol that year, and by the terms of which no persons were allowed to engage in the insurance business unless they formed a corporation and had a paidup capital of 250,000 dollars. This fact caused tho charters of tho Lloyds companies to be in great dsmand by those who .vanted to carry on a business free from the restrictions of tho now Jaw. With few exceptions the charters which were in existence and bad not lapsed wore being used by respectable companies. There were hardly more than a dozen of these at the time. Since then more than a hundred have como into existence. 'That these were operating on forged charters was charged timo and again, and efforts wore made to secure proof. Tho plans pursued by tho bogus Lloyds was to get eight or fen, and in some instances twenty or thirty, names and have thorn printed on policies end send them to country agents, paying in some instances lit) or 10 per cent, commission for the business which they sent in. HAD MANY AGENTS. Tho high commissions attracted irresponsible brokers and agents. Many of them did a thriving business for a few months, appropriating most of the premiums, excepting that which was paid to tho agents. Tho charters under which theso policies wore issued were, of course, fraudulent. Both the National Board of Underwriters and the New York Board of Underwriters feel that it is high time that tho alleged swindlers wdio havo taken advantage of the looseness of tho insurance laws regarding Lloyds companies should bo punished.