COMMITTED FOR TRIAL

Taranaki Daily News, 23 December 1931, Page 10

COMMITTED FOR TRIAL

CrREY PLEADS NOT GUILTY

AUDITOR AND DETECTIVE IN 'BOX. JUNE THEFTS OF MONEY ALLEGED . 'Pleading not guilty to all of mine WW.py* of ithefit involving £4103 12s 2d,. Qemgo Grey, a 'bankrupt, and formerly • solicitor, was yesterday committed for trial to the Supreme Court at New Plymouth in February. Messrs R. W. D. Jlohertson and A. 'E. Washer, J. «P., conBanted to a renewal of bail in a personal Jbond of £230 and two sureties of £vjO The main evidence yesterday was that ■f the investigating accountant and the £tective who arrested Grey and made. Sn police inquiries. Four witnesses were heard yesterday, making a total of -8 fer the two days occupied by the pre-. Itmlnary proceedings. Seventy-four exShits were produced to the Court. Caradus, district land registrar |tt New Plymouth, produced certified tecplea of titles to properties, and mortwages connecitSd with the case. : Guy Macallan, solicitor, said he had itamduffted a search of the chattels reMater in the Supreme Court office from She beginning of 1924 to the present. B« found bo record of security given by x L. Martini, or his wife, or the West©oast Timber Co. to G. Grey, and there jira* no record of Grey having received liny security. . . Clinton iH. Wynyard, public accountant, eaid that towards the end o£ April hr the beginning of May it was arranged for hinl'to Audit the trust account of Grey and Grey. This arrangement was at the-instance of the Taranaki District T Society, which had brought pressure to bear, as a result of which Grey dispensed' with his auditor, and permitted. witness to make, the audit. He started the audit towards the end W May. He found' the books had been balanced and that balances had been carried down; and were more or less Arithmetically correct., There were certain matters, however, upon .which he foquisitioned iniformation. He made an Appointment with G.,_Grey to discuss these matters. Witness was unable to see him on. two occasions, hut when he did so. Grey asked that the questions Should •be reduced to writing. Witness put these in a, letter dated . -Tune -9 and eent it to .Grey and Grey's office. He did not receive, a reply. He had asked Grey to put his replies in, writing, but U was not until July .13. that he received a reply. In the meantime he had written to Grey on July 4 requesting S reply, and on J"uly 9 to-Grey end Grey. On July. 13 witness received authority ' from the .Law Society under section 23 otf the Law Practitioners’. Amendment Act, 1929, to conduct an audit of Grey and Grey’s accounts. A certificate of »«dit should have been rendered the fiolicitor-General by June 30, but because witness was unable to complete the audit, in time the certificate could >tot be given. He had obtained an extension of time. I FULL INFORMATION REQUIRED. I The memorandum from Grey received bn. July 13 was not satisfactory and jtfd not give the full information reBirirod. "On July 14 he wrote again to Groy. Next day he met Grey and his lawyer in the street and it was ifhen Arranged , that all matters should be Maced before the lawyer, to whom he wrote on July 16 asking him to furnish toopies «f all relevant correspondence, Ate. Witness met Grey in the street bn. two or three occasions after that. ’ Grey said ho was getting the matters fixed up. On another occasion he said fete lawyer would have things in order. saw the lawyer, who had no pnifonmationfor him. > i As time was running on witness was i impelled ultimately to furnish an injpmpiets certificate to the SolicitorSeneral and to report to the Law Sodety under the authority given. He had ||Aceived no written reply to his letter pf July 16. i Dealing with the account of Otto Bman Knofflock, witness said his Unctions from Knofflock fl solicitor » to carry out a special investigation • ttf this account in the trust ledgers of Grey and Grey. The first account inspected was in the No. 2 ledger and showed phat on March 9, 1921, there was a fcredit entry—“By cheque "for investment, jfeOO.” On March 24, 1921, was a debit entry—"To transfer to account of J. ft Davidson, £800.” 'This sum of £BOO was entered on the credit side of J. C. Tlavidson’ft account in the ledger AS felarch 24. 1921. By transfer from account 0. H. Knofflock, £800.” In the teame account appeared a debit entry — •March 24, 1021, to cheque paid into Sank of New Zealand, £800.” In red |nk. was a note *,Also £2OO out of office.” Witness had ascertained that £lOOO was paid into the account of J. C. Davidson about that date. George Grey’s cash book, used up to March, 1922, indicated that on October (, 1921, there was an entry—'Knofflock, 0. H., debit G. Grey, half year’s interest on £BOO, £28.” It would appear that this payment of interest was made by G. Grey out otf the office account and had not passed through the trust account. . The next sum dealt with was the £750 referred to in the charges. In No. 2 ledger, on December 9, 1921, was an hntry on the credit side of Knofflock’s Account—-“By cheque, for investment SMomona), £7'50.” On the same day a transfer was made from Knofflock’s account to that of Momona Tamihana and from that account disbursed. The “statement and costs” book No. 3, was headed on page C 67 y Momona Tamihana in Account with George Grey, of New Plyinouth, solicitor.” In this statement was jm entry on December 9 —‘‘By advance, 4750.” In red ink was a note —“Lent by Knofflock”; this would have 'been added after the statement was press copied. A mortgage wai given by Mo■wna. to Grey in February, 1923, secur■og £BOO. On December 6, 1926, this piortgage was, discharged. In the trust ledger, No. 3, in the acAtrant of Momona Tamihana was the following credit entry —'“December 6, 2026, by cheque, Standish and Anderson, Inpayment George Grey’s mortgage, £1024 9s Id, etc., £800.” On the same date this £BOO was transferred to G. prey’s account on page 7. , EVIDENCE OF TRANSFERS. I On September 6, 1927, a cheque for 1771 17s 6d was received from J. Sinclair |md credited to Knofflock’s account in ledger No. 3. On the same date £7OO (was transferred from Knofflock’s account to the account of G. Grey, the Autry in Knofflock’s account being “Sepfomber 6, 1027, to account G. Grey investment, £700.” A pencil note read "re Martini.” This indicated that the £7OO bad .been transferred to G. Grey’s acteount. On page 78 a transfer entry was faltered in G. Grey’s account as “Sepfomber 6. 1927, 'by transfer account 0.. yr. Knofflock investment, temp., £700.” After this £7OO had been credited to 0. Grey’s account and the following deJjit appeared —“September 7, to re-trans-Ho gladden, F. M. (re Oakes’ mort-

gages (etc.), £100.” Alto--" September 7, to transfer to account Sladden, F. M. A., £2O (etc.).” Also —■“September 21, to re-transfer to account W. G. Grey (etc.), £100.”

On September 21 a. credit appeared-— “F. Webby’s interest, etc., £7 10s 3d.” A further credit on 'September 22 was “By transfer from account Clow’s estate (etc.), £250.” Other entries showed the disbursements of these bums. On February 19, 1930, there was received from Sinclair £34'5 ‘for Knofflock. On March 3, 1930, £3OO of this money was shown as transferred to Grey's account in ledger No. 3. This amount was credited to Grey’s account and on the same date was transferred to the account of Martha Smith, in reduction of advances previously received by Grey from her. The import of these entries was that Grey used £3OO of Knofflock’s money to repay money privately borrowed from Martha Smith.

■ Witness had investigated the trust account" ledgers regarding the estate of G. H. Herbert. On page 320 in No. 3 ledger it was shown that between April I, 1930, and December 16, 1930. £-1313 6s 2d was received by Grey and Grey on"behalf of the estate. The items were:. May 30, 1030, £lOO, Cole; June 30, 1930, £794 17s -9d, Farmers’ Co-op.; July 1, l((3b, j£237 10s Bd, Cole; July 10, 1930, £2 173 9d, Farmers’ Co-op.; October. 3, 1930, £l7B, sale of shares; In addition to these was a transfer of a credit of '6s from page 297, being a dividend on Farmers’ Co-op. shares. These items totalled £1313 12s 2d.

Oh June 13, 1930, there was £894 l’7s 9d in: the trust account to the credit of the. estate. On that date there was a transfer of £BOO from the estate and the entry on page 320 was “June 30, 1930, to transfer to account E. Grey on mortgage over Vogeltown property, £800.” On page 284 £BOO was credited to Mrs. Grey’s account under date of June 30, 1930. This sum was shown as disbursed as follows- “July 2, 1930, to cheque Weston and Billing, repayment mortgage Vogeltown (etc.), £459 11s 9d”; “July! 2, transfer to account G. Grey, balance, £340 Ss 3d.” Witness had ascertained that the mortgage to the New Plymouth Savings Bank on the Vogeltown property 'belonging to Mrs. Grey was. repaid two days after t'he transfer of the £BOO from the account of the Herbert estate; that was according to the books.

. On July 25, 1930, a cheque for £660 was received from the Taranaki 'Building Society and the entry in the ledger in 'Mrs. Grey's account was “July 25, 1930, by transfer from account Taranaki Building Society, £660." On the same date £635 Ils lOd was transferred to the account of G. Grey from Mrs. Grey’s account. CREDIT FROM HERBERT ESTATE. On July 1, 1930, a further sum of £332 8s 5d was transferred from a credit of the Herbert estate account and credited to G. Grey’s account in the ledger. On October 8, 1930, £l5O was transferred from the credit of the Herbert estate account and credited to G .Grey’s account. On the same date there was a debit entry in G. Grey's account —“To cheque, credit private account. National Bank, £150.” Witness produced a cheque drawn by Grey and Grey on the trust account for £l5O, payable to G. Grey; this was endorsed by G. Grey. On October 11,. 1930, £3l 3s 9d was transferred from the Herbert estate account and credited to G. Grey’s account. On the same date there was an eiitry in Grey’s account —“To cheque, balance Herberts, paid into private, £3l 3s 9d.” The position was that four transfers were made from the account of the Herbert estate —one for £BOO to the account of Mrs. Grey, another for £332 8s 5d to G. Grey’s credit, and two others of £l5O and £3l 3s 9d to Grey’s credit, a total of £1313 12s 2d. Hence, all the money received for the estate was transferred to the account of Grey or that of his wife.

Regarding the £5OO transferred to the credit of Mrs. Grey’s account, witness spoke to Grey, whom -he met in the street with his lawyer. He asked him whether there was any security for this money. Grey said tlhere was none. Referring to Mrs. Quinn’s account witness said his investigations were made under instructions from tne Justice Department. In ledger No. 3 under date December 17, 1926, it was shown in Mrs. Quinn’s account that £3OB 10s Sd was received from Roy, Nicholson and Bennett in repayment of Medway’s mortgage and was credited to Mrs. Quinn. On the same date was an entry of a transfer from her account of £3OO to the account of G. Grey; it was shown with the explanation —“Taking Martini’s securities, June o.” In Grey’s account was an entry, “December 17, 1926, by transfer account M. J. Quinn, taking Martini, P. B/S., security of June 5, £300.” On. the same date and page *wflß shown a transfer from G. Grey’s account to the account of Mrs. Jordan of £2OO.

Regarding the payment of interest on £3OO to Mrs. Quinn, the first payment after Decernbmer, 1926, appeared to be shown on page 112, where there, was a note on August 30, 1927, of a payment of £9 15s to Mrs. Quinn. This was transferred .from G. Grey’s account, where there was a de mt en try sho wing the payment to Mrs. Quinn reading, “To cheque, interest on £3OO, 'Medway, 0J per cent, (etc.), £9 los.” On page 112 on February 2, 1028, another interest payment to" Mrs. Quinn of £9 15s was recorded, the amount having been transferred from G. Grey’s account. On page 178, on June 21, 192'8, and January 18, 192 b, were two payments of £9 15s each for interest to Mrs. Quinn, and both amounts were shown as transferred from G. Grey’s account. In tttie. entry relating to the payment of January 18, 1929, there appeared for the first time in respect to Mrs. Q.uinn a reference to JoMan. On July 2, 1929, February 19, 1930, and June 19, 1930, there were further interest payments to Mrs. Quinn, in each case there being a transfer from G. Grey’s account. According to the books, on December 17, 1926, the account of G. Grey in the trust ledger was in debit to t'he trust account for £1022 15s Id. According to ■Ohe ledger indexes there was Only one person with the name of ‘ A. Jordan. DETECTIVE BEGINS HIS WORK Detective P. Kearney said that on November 23, 1931, accompanied by Detective Meiklejohn, he called on Grey at his house in Vogeltown. Detective Meiklejohn told Grey tney had some documents to show him. “I expected it,” said Grey, as he took them inside. They said tlhey had come to eee him regarding complaints about alleged thefts of trust money. On being asked, Grey said he knew Knofflock well. They said Knofflock had complained to the police about moneys he had given Grey to invest. Grey was shown a cheque for £BOO. He examined it and said the endorsement “G. Grey” on t'he back was in his Writing. The receipt for the amount was slhown him, too. He examined it and said it had been issued under his authority. Witness told Grey tnat Knofflock said the £BOO had- been paid by him to be invested on the security of a second mortgage on a farm owned by F. J. Greenway, Barrett Road. Witness said he had been unable to trace a mortgage from Greenway to Knofflock. Grey was asked where it was. “You fellows want to know too much, (he said. “I think 1 shall see toy solicitor.” Referring to the other documents, Grey said the correspondence had

been eent by him or with bls authority. "I will not shelter behind anyone else in this matter,” he added. “I will shoulder it all myself.” Asked again wlliere Knofflock® money or the securities were, Grey said, “That is 'a matter I will reserve. I can see there is going to be a prosecution in this matter when two of you have come to see me.” Ho was asked if he had authorised the transfer of £BOO from Knofflock’s to Davidson's account and the other amounts transferred to hie own account. Grey said they had been carried out by himself, or under ilia instruction.

Questioned regarding the transfer of £BOO from the Herbert estate account to Mrs. E. Grey’s account on June 30, 1930, the money having been disbursed in payment ef *n outstanding deed of mortgage for £459 Ils 9d on the Vogeltown property to the New Plymouth Savings Bank, and the sum of £340 8s 3d transferred to his own account, Grey eaid he Would have to see his books first. He was told that on July 25, 1930, there was an advance of £660 on the security of his wife’s property in 'Ballance Street. Were those securities identical? he was asked. “That is hardly correct,” he replied. “I can’t remember the £BOO from the Herbert estate.”

WOULD HAVE TO LOOK UP BOOKS.

Detective Kearney told him that £322 8s 5d (July 1), £l5O (October 8. and £3l 3s 9d (October 11, 1930) were transferred to his account from the Herbert estate account. Had he any authority to make those transfers? He would have to look up 'his 'books before ho could tell them anything about those entries, said Grey. The detective showed Grey various cheques relating to the Herbert estate account. Grey handled them and then -said they had gone through his account. Asked if he had sent an unsigned statement to Mrs. Herbert in March last showing a credit of £514 15s sd, Grey said his clerk (E. Brokenshire) would have done % t'hat. Grey explained that he was ill in bed at the time t'he statement was sent.

Regarding the uncompleted mortgage to Mrs. Grey, t'he detective said that when executing a search warrant at the Office of Phillip Grey on November 27, 1931, witness found that the mortgage was not on the Herbert estate file. Later, at the police station he told G. Grey he could not find t'he mortgage. Grey said he knew where it was, and later that afternoon he left it at the police •station.

Referring to Mrs. Quinn’s complaint, Detective Kearney said that when interviewed on November 23, Grey was told about the alleged theft of £3OO repaid on a mortgage to (Medway on December 17, 1926. Grey was shown the cheque from Roy, Nicholson and Bennett; he said it had gone through his account. Asked where the £3OO, or the security, was, or who “A. Jordan” was, Grey said: “You fellows want to know too much. I’ll have to reserve that till later.”

■Shown a telegram dated March 14, 1927, he said he had eent it and that the- correspondence on Mrs. Quinn’s file had either been sent by him or at his instructions. On November 27, when executing a search warrant on P. Grey a ■premises witness took possession of a file relating to the transaction betweenMedway and Mrs. Quinn. On the same day, by arrangement with Grey’s lawyer, Grey was brought to the police station about 11.20 a.m. and was arrested on a warrant charging him with the theft of £BOO from Kuofliock. The warrant was read to him. “Very clear,. Mr. Kearney, very clear,” he said. He was shown the unregistered mortgage and. asked if the instructions on the back were in his writing. After making an examination he said he thought the note was written by bis clerk, Brokenshire, in accordance with instructions.

The books of account produced by Mr. Wytiyard were U'ken possession of at P. Grey’s office. They were shown to G. Grey at the police station. He said they were his. The court granted the application of ,Grey(s tor a, free copy of the depositions.