THE CROWN'S OPENING.

Press, Volume L, Issue 14974, 22 May 1914, Page 2

THE CROWN'S OPENING.

EXTENSIVE FRAUDS ALLEGED. Mr P S K. Macassey, iv opening for the Crown, said that this ca=c- arose out ot wuat were known as tne Customs frauds. Accused joineu the bovenimeiic service iv the Customs Department ou April Ist, 1901, and was appointed a landing wa.ter on December sth, 1911, wiuci position he occupied until December 2nd, 19 iJ. lio nad always been regarded by the Department as a smart, keen, alert officer aud ono who could be absolutely trusted by his superiors. Barlow Bros., the other parties mentioned were large merchants, who imported tobacco from Melbourne. A young man named Norman Barlow (not now in New Zealand) used to pass entries lor tho . purpose of getting the tobacco out. • The course was for the British Empire Tobacco Company in Melbourne to send a soecificution to Barlow Bros., show-ino-"tho type and weight.oi the tobacco betng forwarded. A copy would-aiso bo sent to the Wellington branch of the British Empire Trading Company. That branch would then make out a complete invoice to send to. Barlow Bros. Young Barlow was practicady the Customs clerk of Barlow's, and it was his duty to make out a prime entry from the invoice wnich Barlows received.

"CLEARING" TOBACCO. ' He would deal, said counsel, with the snec.iic method of "clearing tobacco*. The procedure iu-passing plug tobacco was for the importer to fill in a prime entry form with a copy ol the marks and the number of cases, and present it with an invoice to the landing waiter, who weighed the tobacco on tho scale. Then the waiter checked the weight and initialled or signed as to the correctness thereof. The clerk then filled in three other copies arfti presented all four copies with a cheque to the cashier in the building in the square, who received the duty and kept two copies, but returned the other two to the clerk putting the entries through. These two copies ?and the 111----voico he took direct to the landing waiter, who allowed Barlow's to then open the case and stamp the cases. After this the waiter gave the railway, permission to deliver the tobacco by signing his name on the fourth copy, which then was termed a "may-go." The landing waiter then retained the first prime entry for the purpose of his papers. "It would be the duty of the landing waiter," said counsel, "to see that the prime entry agreed with the invoices. When the case was opened by Barlow, the.landing waiter should examine the contents to 'see whether the tobacco was 'plug 1 or • .'cut.' It would be impossible to make a mistake in this connexion." "

j ; COLLUSION ALLEGED. [ "In the first charge," continued Mr Macassey, "there were five cases of tonacco—three of 'piug-' and two ot "cut." In tne secouu charge, involving "five cases also, lour were of plug and one of cut- tobacco. In the third charge there wero two cases, both ol cut tobacco", but one weigned 1001b and the other 200ib. The landing, waiter was the sole check upon goous which were being passed outright, as he alone saw the invoice, it was important to notice that Runale's office was right opposite the weighing machine, so that even if he aid not do the weigh.ng, he could see it done, and class or. tobacco it was. '.'Young Barlow drew cheques for the correct amount of duty, and paid in deficient sums to the Customs Department. He stole the money," explained counsel, "and accused is indicted as a principal offender, because we contend no acted in collusion with Barlow "in the way he did, aud in appropriating the money of Barlow's. We cannot pioye that ilundle . received any of these moneys, but we shall prove that he assisted Barlow in passing false entries, and was therefore in collusion with him." THE MODUS OPERANDI.

"The total weight of the five cases in tho first cnaige was 7lb'lb, including three cases or "plug' tobacco, each of 1721b—5161b in ail —and two cases of cut tobacco, of TOOib each. The weignt was shown in the prime entry as 500 ib, and purported to be five cases of cut tobacco. oi'TOOib each. The invoice? would, 'however, show the cor-rect-weight of 7161b. It was the duty of the landing waiter to compare tho invoice with the prime.entry, so that if he! were, acting, honestly, ho could not fail to see tne deficiency. The same - position arose in regard to the second charge. In that instance, the weight would: bo four cases of plug tobacco totalling 692 ib, and one case of cut tobacco of IcOlb-r-a total of 8421b. The prime duty showed five cases of cut tobacco of 1001b each—soolb, making a .deficiency;of 3421b in weight. In the third charge, there were two cases of cut tobacco. In the. invoice these were, given as one of 100!b and one of 2001b, whereas the prime entry showed two cases of.lOOib each. SPLITTING THE CHEQUES. "In the first' caso, the amount of duty that should have been paid was £125 6s. Young. Barlow drew two cheques, one. of £87,10s and one of £37 I6s. What he actually paid over was the one for :£B7 10s. He, kept tho other otto. In tho second case, the amount of duty payable was £147 7s.' He actually paid to the Customs £87 10s, and" kept the balance of £59 17s.' To pay this duty he drew a cheque for £269 17s, which,he cashed, and paid duty on another entry of £122 10s, and £87 10sC"in respect -of the tobacco. This made a total payment to the Customs of £210. while Barlow kept the balance. In the third charge, the actual duty was £52 10s, but Barlow paid only £35, leaving a deficiency of £17 10s. Ho drew two separate cheques, one for £35, which he paid Ito the Customs, and the other for 1 £17 10s, which he appropriated and cashed with Mrs Davis, a bbartling-house-keeper. ." OTHER DEFICIENCIES.

"There have been other deficiencies in regard to tobacco," said counsel, "about which I intend to put in a statement. We rely upon these other deficiencies to prove that those three charges arise through fraud on Rundie's part, and not by carelessness or neglect. , His Honour: To show a system? "Yes," said Mr Macassey, «*to show a, systematic fraud." ! ,r lt was the duty of the landing waiter," continued counsel, "to see that the Customs stamp was put upon the cases, and in Rundle's book this rule Was underlined with red ink. This showed that his attention had been

particularly directed towards this regulation. MAIN POINTS. "The Crown relies upon these main points," .summed up Mr Macassey:— '"1.. That a comparison of the invoices with the prime entries would have revealed these discrepancies. We say that it is impossible for Bundle, if he were acting honestly, not to have discovered the deficiency in the weight on comparing the 'invoices with the prime entry. "2. We may say that when he was stamping the tobacco he must have noticed, he must.have seen, that it was plug and not cut tobacco. _ *•. Un these Prime entries, which 7d 5 0 + . pU l befo^c - vou > accused has ticked the items m the wav that the landing waiters do, showing that he has chewed those items with the 'nvoice—or purported to do so. CURIOUS FEATURES. "There are nine different actual wrong, entries which w shad put in," said counsel. "The extraordinary feature ahw *t. Havehick shinments d 'fcg «~ Bundle was stationed iif W f ,,e colonial office. They ceased'wheneve" he was stationed elsewhere. Anoth" important feature is this: that hi thele shipments some or tho „ mese cleared and some ?eil putTJS and all casef which were n,i+ ; "V i bon l' where there was c" k Xli "their c , orrec : l «™&h*s given and duly properly pud upon them; where-* in AN OBJECTIOV 815S k T^dS?V'° fflcer in the British willed l S C ° mpan - V ' Weston, h - Pl " opoScd to P ufc iv cop.es 01 the invoices. 3Tr Raymond objected Ti,„ ; he propced'to be X those transmitted to .Barlow Bros These could not affect accused we^e r w a S ey tr id thafe tho originals «p?es ' theS ° Wer6 on| y Press

thaf tl^ij o**0** *» **™ proletnar-*" * * ffl »«*>*.!» to stood down for the time

THE LOSS PROVED «M,'f K«l McJ !f e> ac s° untan *>, employed by Barlow Bros., Christchurch, sahi that a search had been made for the origina invoices sent from Wellington % 2m Br "?v September loth, 1911. and December 3rd, 1913 but she had been unable to find them! 1 hey were not in the usual place, ami she did not know what had become of tliem.

MATTERS NOT ADVANCED. Mr Raymond said this evidence dir 1 not advance the matter. The question of the admissability of the copies had not beon settled; The point desired to be made against accused was that these invoices were sent to the accused, and all that had been established by this witness was that certain invoices came "'o™ Wellington to Barlow Bros. Ana went in the ordinary course to accused," said his Honour. "Yes, if they were honestly used by man Barlow >" replied Mr Raymond.I hero is nothing to associate ac- k cused with ' them, so far. It is not proved that these invoices were ■• produced to accused. Norman Barlow has admittedly stolen the money, and my contention is that he himself, to protect himself, has burnt the entries." His Honour: Even if Norman Barlow aid not burn them, it was in the interests of Barlow Bros, to get rid of them. .

Mr Raymond:. Barlow Bros. ? . ll , is ,.^r our: Yes ' because they have civil liabilities. SECONDARY EVIDENCE ADMISSIBLE. - After further argument, his Honour said that as-the primary evidence had gone, he thought secondary evidence would be admissible. 2\lr Raymond contended, that if Norman Barlow went to accused with a false prime entry he would also have a faked invoice to support it. and he therefore objected to these copies beiner admitted. He admitted the destruction of the originals, and assumed that it was improper. His Honour to Mr Macassey: Yon must show that, accused had means, if he werojiot careless, of seeing lhe«e invoices. Mr Macassey: All we can show is that these invoices, when produced* must have had the heading of the British Empire Trading Company upon

His Honour: I think I shall admit the evidence to the jury, but I shall take a note of the objection. EVIDENCE ABOUT INVOICES. Frank Larway, recalled, gave evidence as to the method of invoices being supplied to Barlow Bros. He supplied an exact copy of-the invoices in connexion with which fraud was alleged—nine in all. Mr Raymond: I would suggest that the invoices _ concerning these charges only be admitted.

AIL the copies of-invoices were admitted, but it was explained to the jury that tho first three only referred to the three charges against accused: the other six were advanced as-a-pos-sible assistance in .establishing systematic fraud.

A great deal of technical' evidence from the books of the Tobacco-Com-pany was given in relation-to the invoices.

CUSTOMS OFFICER'S EVIDENCE. Hugh Sherwood Cordery, officer of the Customs Department, said-that accused had been ten years in the Customs, and was, in his opinion, a capable and exerienced officer.

Witness outlined the method of passing entries for plug tobacco. "Is. it possible for a landing waiter of any experience to mistake a case of plug tobacco for a case of cut tobacco, or vice versa?" asked counsel. "Quite impossible," replied witnes . "I.think therp has been some laxity in the use of that tobacco 6tamp?" asked counsel. . "A certain amount of laxity, I know, but how much I cannot say," replied witness.

Accused's book of rules was produced, and special orders bearing upon the use of the stamp pointed out. •

Counsel handed in the official, prime entry, purporting to pass five cases of tobacco, ex Warrimoo, on April 26th, 1912. "It does not," said witness, "correctly pass the first five cases on the invoice from the British Empire Trading Company. Although the marks and numbers in the press copy of the invoice are not completely brought out, I can identify this prime entry as dealing with the same oases."? According to the invoice, said witness, the weight of the five cases was 7171b lOoz, .but as the ounces were eliminated in each case, the correct weight for duty would be 7161b. The prime entry showed only 5001b on which the duty was £87.*105. This was the sum paid. The duty payable on the 7161b was £125 6s. i The difference was £37 16s, which was still unpaid. The duty on 1001b of tobacco was £17 10s. Exporters' weights of tobacco were set out on the.outside of the large case as, well as on the smaller "caddies. The prime entry was made out in the handwriting of Norman Barlow, which-he knew very well. ACCUSED'S ASSOCIATION. "What landing waiter dealt with that entry?" asked counsel. "Accused," replied witness. . Has he made any marks on it?— Yes, he has ticked the weights per case, the total weights, tho value, and has mado i

a declaration that he has stamped the cases.

Could he have stamped the cases personally without discovering the discrepancies —No, he could not have done so.

Witness further said that on the samo day a balance of 5001b of tobacco from this shipment was correctly placed in bond by Norntan Barlow. Accused also dealt with this entry, which, would be subject to the testing of a number of other people. THE SECOND COUNT. In dealing with the second count, witness produced the prime entry for the passing of five cases of tobacco ex Moana, on May 25th, 1912, and, after establishing purported identity with the invoice for the same shipment, declared that the description and weight were wrong. The invoice dealt with 8421b of tobacco, and the prime entry gave only 5001b. This again was in Barlow's handwriting, and accused was the landing waiter, and had given the usual certificate, but had not ticked tho items. Tho discrepancy in weight was 3421b. Tho Department had received £87 10s in duty instead of £147 ( 7s, leaving a deficiency of £59 7s, which was still unpaid. There were nine cases | in this shipment, but four were bonded. The total weigßt of the shipment was 12421b, and the prime entry and the bonded entries accounted for only 9001b. Another prime entry had been put through on the same day for cigarettes and cut tobacco from London, and the duty payable was £122 10s. The correct amount of duty to be paid on all lots that day was £269 17s, but only £210 was paid. The body of the cheque and the back bore the handwriting of Barlow. The back showed that the cheque had been cashed in two sums, one being for £59 T7s.

THE THIRD CHARGE. The samo course was pursued with the third charge. In this instance the invoice showed two boxes of cut tobacco, one of 1001b weight and the other of 2001b. The prime entry gave a total weight of 2001b. The same parties were concerned, and the usual certificate had been granted. The amount of duty short paid was £17 10s; £35 had been paid for duty on 2001b, and this cheque was made out in the handwriting of Miss Mcßae. "I think," said Mr; W T right„ "you have been making an investigation of Barlow Bros.' books?"

"That is so," replied witness." The first cheque for £3o was dated December 6th, and the second, for £22 18s, was dated December 23rd. This last sum consisted of two amounts—this £17 10s and an amount of £5 8s duty for C.L. and Co. The £17 10s was debited as duty to the British Empire Trading Company's account, and so far as he could see could refer to no other tobacco than that involved in this charge. The £17 10s had not been paid to tho Customs.

TO DISPROVE "MISTAKE." "I now propose," said Mr Wright, "to shortly lead evidence of these other six cases to rebut the probable defence of mistake." Mr Raymond said he did not think he could object to this course. His Honour explained to the jury that this course was for the purpose of establishing a system of fraud.

Witness cited in detail six other cases in which prime entries had been passed which did not agree with the invoices. The usual practice was for cases of plug tobacco to be declared to be cut tobacco. A case of plug tobacco weighed about 1731b;- and cut tobacco 1001b. All the transactions took place between Barlow, and* Bundle, and the deficiency in duty-involved in the sis cases was £213 -17s. '-"' The dates between which these amounts disappeared were March 15th, 1912, and February 14th, 1913. Witness produced tho manifests of the boats by which the tobacco had come, in order to establish

that no other tobacco than that mentioned came for Barlow Bros. The Court adjourned at 5.20 p.m., and will resume at 10 a.m. to-day.