MILLIONS BY FRAUD.

Otago Daily Times, Issue 19844, 17 July 1926, Page 12

MILLIONS BY FRAUD.

THE LONG-FIRM EVIL. CASE AT OLD BAILEY. MENACE TO HONEST TRADERS. Once again an Old Bailey judge haa emphasised the menace to British traders by the widespread activities of the long* firm swindlers, and the necessity; for severe punishment to stamp out this class of crime. Addressing two men in the dock before him, the Common Sergeant, Sir Henry Dickens, recently remarked: “People do not appreciate the enormous losses which accrue to traders of this country by reason of these so-called long firm frauds and bogus companies. 'I have had to try a great number of them, and judges will have to bo severe in order to try and put them down. I am afraid I have not succeeded in doing so yet.” The invariable modus operand! is for the chief conspirators to got in touch with an old established company in low water, and order goods lavishly on credit. The goods are rapidly sold at under cost prices, the company goes bankrupt and all kinds of devices are used to account for losses. Sometimes it is a bogus burglary, or fire, and sometimes fictitious creditors are put forward as a blind. In the particular charge in which the judge made the comments quoted above, three men, Hyman Cohen. _ merchant, Erie Levy, traveller, and William Douglas Cliffon, caterer, were charged on a number of counts of conspiring to defraud such persons as should be induced to soil goods on credit to W. D. Cliffen and Co. To a series of charges of having been adjudged bankrupt, and attempting to account for part of his property by fictitious losses and bad debts. Cliffon pleaded guilty, and was bound over. Sir Travers Humphreys stated that since ho had been made a bankrupt, Cliffen had realised he was on the wrong road and had pulled _ up. At present he was occupying u position of trust with a firin. and they had intimated that if he were permitted to leave the court he could continue in his situation. MANY FICTITIOUS FIRMS. In opening the case against Cohen and Levy, Mr Fercival Clark stated that they arose out of the bankruptcy of Cliffen. Origsnally the last-named was a butcher, but the prosecution had reason to believe that at the instigation of Cohen he started the business of W. D. Cliffen and Go., which dealt in textile goods, and of which Levy was the manager. In December, 1922, Cliffen took premises in the city, and the company began, the prosecution alleged, with the sole object of eventual bankruptcy. n The firm created credit by giving small orders and paying for them. Later, larger orders were given, for which no payment was made. In the bankruptcy, bad dents wore alleged to liixv© boon H13.Q0 x\itl» a, number of firms. These firms wore purely fictitious, and existed for the briefest possible periods before going bankrupt. Uiften started his banking account tor the firm on money lent him by Cohen, who also introduced him to the bank manager. It was also alleged that the master hand in the whole business was that of Cohen. During the time the firm ran, d business to the extent of over £29,000, of which more than £15,000 went to bad delats The firm became bankrupt in September, 1923. Evidence as to the supp.y of goods bv a number of firms having been "ivon, Cohen and Levy withdrew their plea of not guilty, and pleaded guiltv. Inspector Kirclmer, of Scotland Yard, stated that Cohen had a wile and mx children. In June, 1910, he was convicted of receiving a quantity of overcoats stolen from a street barrow, and sentenced to 15 months in the second division, la 1901 lie started “S. Cohen and Co., Ltd., woollen and silk trimmings merchants which was wound up in 1921. He admitted that towards the close of the firm a career little business was done except a retail trade on Sunday mornings. TWO OFFENDERS DISAPPEAR. The company was stated to have supplied goods to the value of £2934 to another firm, which- in turn, failed, O’winpj something like £40,000. Two people who played a loading part in these transactions bad disappeared. Levy, known as Moss Levy, was educated at Lordqn university, and went into partnership in 1906 with a Russian ns Indies’ hat manufacturers, each partner having a capital of only £5. The firm went bankrupt, with liaoililios of £3012, and assets which realised £4 10s. , , ~ , _ , Mr J. 1). Cassols, on behalf of Cohen, declared that, as the result of the present proceedings, he was a ruined man. Although the evidence made it appear that he had made considerable sums of money out of the bankruptcy of Cliffen and Co., this was not actually the case. The Common Serjeant, in sentencing the prisoners, said he thought they were wise in accepting the advice of their counsel, and pleading guilty, for, if they had been convicted on 'the whole indictment, he would not have hesitated to send both to penal servitude. Cohen was sentenced to 22 months’ and Levy to 15 months’ imprisonment.