FRAUD CHARGE

Dominion, Volume 33, Issue 190, 8 May 1940, Page 11

FRAUD CHARGE

4 Chrystall And Aston Stand Trial CASE FOR THE CROWN Alleged Torpedo-Deflecting Device LONG HEARING EXPECTED A charge of conspiracy by deceit to defraud the former secretary of the New Zealand Racing Conference, Hartley Roy Sellers, of more than and six other associated charges were preferred against Harvey Maitland Chrystall, engineer, aged 52, Nelson, and Gordon Percy Aston, Christchurch, when they stood their trial before Mr. Justice Smith and a jury of 12 in the Supreme Court, Wellington, yesterday. A considerable part of the day was taken up with the outline of the Crown case, and when the Court adjourned last evening the second Crown witness was in the box. The Crown Prosecutor, Mr. AV. H. Cunningham, with him Mr. AV. R. Birks, is conducting the prosecution. Mr. W. E. Leicester, with him Air. R. T. Peacock, is appearing for Chrystall, and Mr. D. AV. Russell, Christchurch, for Aston. Mr. Cunningham said he expected that the hearing would occupy the Court the whole of this week and probably part of next week. Other counsel concurred in this estimate. His Honour said that in view of these circumstances it was proper for him to keep the jury together. Accommodation would be arranged for them in an hotel. The Court then adjourned to enable jurymen to make their private arrangements. Details Of The Charges. The following charges were prefered against accused: — That between October 1, 1937, and July 3, 1939, at AVellington and other places they did conspire each with the other by deceit to defraud Hartley Roy Sellers of sums of money totalling about £6705/1/9. That between March 9, 1938, and June 21, 1938, at AVellington, with intent to defraud by falsely representing that they as owners had sold to the British Admiralty a secret invention capable of diverting torpedoes away from ships for a sum of £280,000, the first payment of £lOO,OOO being due on June 1, 1938, and that they meantime required £3OOO to clear up sundry expenses in connexion with the invention, through the medium of a contract obtained by such false pretence, an agreement dated March 9,1938, made with .Edward Augustine Batt, they did obtain sums of money totalling £2091 4/6. That on or about June 3, 1939, they stole a cheque for £750, drawn on the New Zealand Racing Conference No. 2 account at the Bank of Australasia, Wellington, the property of the Racing Conference. That on or about June 3, 1939, at Wellington they did receive a cheque for £750 drawn on the New Zealand Racing Conference No. 2 account at the Bank of Australasia, Wellington, well knowing it to have been dishonestly obtained. That on or about June 3, 1939, ar Wellington, with intent to defraud by certain false pretences, by falsely representing that they as owners had sold to the British Admiralty, a secret invention capable of diverting torpedoes away from ships for a large sum of money, and that before final arrangements for payment could be completed with the Admiralty the Admiralty required them to clear a mortgage of £750 off the freehold property at Tahuuauui, Nelson, known as The Hut, and to send the title deeds to Melbourne, they did obtain from Hart' ley Roy Sellers a cheque for £750 drawn on the Neiv Zealand Racing Conference No. 2 account with the Bank of Australasia, AVellington. That on or about October 12, 1937, at Christchurch, with intent to defraud by certain false pretences, by falsely representing that £25,000 had been deposited by the British Admiralty in the Bank of England as a first instalment on the sale of the device, and that £5OO was required by them immediately iu order to purchase a boat in which to complete their experiments in connexion with the invention, they did attempt to obtain from Charles Christopher Davis £5OO. That on or about March 5, 1938, at AVellington, with intent to defraud by certain false pretences, by falsely representing that for the sale of the invention £BO,OOO had been paid by the /Admiralty into the Bank of England, and that they required £3OOO to clear up sundry expenses in connexion with the invention, they did attempt to obtain from Hubert Louis Nathan either directly or through the medium of a contract to be obtained by such false pretences, £3OOO. The two accused pleaded not guilty to all the charges. Outline of Crown Case. Opening the ease tor the Crown, Mr. Cunningham said .it Would probably prove to be a fairly long and a fairly difficult, case. It was difficult because the person who might have been the principal witness was dead. There was, therefore, the necessity to prove fl great number of .isolated facts from which Inferences could be drawn as Io What was the real story of the transactions. Mr. Cunningham proceeded to review the charges against the two accused. The essence of the charge of conspiracy, he said, was agreement between the two of them to go in for the alleged fraudulent dealings wit It Sellers. The other counts dealt with certain eriiniiml acts which were alleged to have been perpetrated after the conspirney alleged in I lie first count. ‘‘The evidence will lie fairly long and fairly involved,' - said Mr. (*u iiii i titrhsi in, "Iml I submit it will supply a fairly full account, ul" the dealings of the two accused with Sellers over a period of approximately 21 months.” Racing (’oiifei'enre .Accounts. In i h-iober. 1937. when the triinsucthiiis started, Sellers was secretary of the Racing Conference. lie was in receipt of a salary of £llOO per annum, a very comfortable salary, find was well known in Wellington and other parts of the Dominion. He had iiis private bank account tit the Bank of Australasia, and the Racing Conference had ils accounts al the same bank. There were four conference accounts, tlte general Recount. I lie imprest account. the An. 2 imprest ,'iceoillit. and the Xu. 3 itcvotinl or jockey trust fund. To operate all except the No. 2 imprest

account it was necessary to have two signatures, that of Sellers and some member of the committee. The No. 2 imprest account Sellers was able to operate on his own signature, and it was used principally for emergency payments and salaries. Chrystall at that stage claimed to have known Sellers for about 20 years. Aston apparently did not meet Sellers till toward the end of 1937. Chrystall, till three or four years ago, was a consulting engineer practising in Christchurch, and was also the agent of A. J. Park and Sous, patent attorneys, AVellington. Aston was interested in the radio and electrical goods business as a retailer. The Crown Prosecutor said there was not a single thing in writing to show what Sellers got as consideration or what he got iu the way of any sort of security for all the money he paid over to the accused. On October 1, 1937, a cheque for £lOO was paid by Sellers to Chrystall. Then came an incident in which Mr. C. C. Davis, a well-known business man in Christchurch, was visited twice by Chrystall between October 5 and 12. That was the first occasion where there was some independent evidence as to the story told all through from October, 1937, to July, 1939, by the two accused iu order to get these large sums of money from Sellers. Torpedo Deflecting Device. Chrystall wanted Davis to put up £5OO on a venture which he said some unnamed associate had undertaken, and that Davis would be repaid with a 50 per cent, premium in 10 or 15 days. Chrystall was very secretive about the venture and Davis refused to have anything to do with it. Later Chrystall told Davis that bis associate was Aston and that the device was for diverting torpedoes from ships. Chrystall said they had their own telephone system with the Admiralty in London. Davis said he did not believe the story and that if they had such a wonderful invention as this telephone they need not worry about anything else —that they were “made.” Davis refused to have anything to do with accused. It appeared that Sellers found the £5OO within a few days. Sellers was then introduced to Aston and found £l2l/10/6 on December 2. Records would show that after that Aston opened a bank account in the Commercial Bank of Australia in Christchurch, and paid into it then £5OO, and on December 3, £6OO/ He opened another account in Nelson on December 6 by a cheque from the Christchurch account, and on January 14, 1938, he opened a second account at Nelson. After the end of 1937, the moneys which Sellers paid amounting to more than £2OOO were not enough to complete the few small things that were required to free the large sum which was said to have been pai'd by the Admiralty. Sellers endeavoured to secure for accused a guarantor to guarantee £3OOO. Mr. H. L. Nathan, AVellington, was approached by Chrystall, who put the position to Nathan’s solicitor, Jessep. Jessep asked whether there were any letters from the Admiralty, and Chrystall replied that Aston was in direct communication with the Admiralty toy a special device which connected through the earth. Jessep would have nothing to do with the guarantee. Becoming More Valuable. Then Mr. E. Palliser was approached, and Chrystall was introduced to Mr. E. A. Batt. Batt’s evidence would be that about much the same story was told about the invention, except that the invention was becoming more valuable. In the end Batt agreed to guarantee the bank account at the Bank of Australasia. There was a very large premium to be paid to Batt for this accommodation. He was to get £6OOO over and above the amount of the guarantee. His evidence would be that that was freely offered by Chrystall. It was originally a three-month guarantee arid the bonus was to be paid in London. Aston was known at that stage as “Mr. X.” He did not meet Batt till later. AVhen they were introduced in May /Aston seemed to have jnade an unfortunate impression on Batt because he was rather the worse for liquor. The £3OOO was not repaid at the due date and another agreement was made extending the time for the repayment of the overdraft arid the payment of the bonus. That payment did not come to hand. Batt gave further time and the parties entered into a frosh deed to pay off the overdraft immediately, but postponing the payment of the bonus. Apparently the position was allowed to drift. Aston said final payment would be certain before March 31, 1939. There were four trips to Sydney and back by Aston and one bj’ Chrystall between May 18 and October. There was no information supplied as to what business they found to do iu Australia. Lord Chat field’s Speech. Mr. Cunningham said that on April 1 there appeared in the Press a cablegram reporting a speech by the British Minister for (.lie Co-ordination of Defence, Lord Chatfield, who slu’d that Britain 'had already found a measure to deal with subintirines. That had enabled accused to stall off the settlement date because their creditors assumed that that: statement referred to the alleged invention. Aston visited Australia and arrived back in AVellington on June 3. On that day the cheque on the No. 2 account of the Racing Conference was handed to one of the accused. It was cashed several days later in AVellington by Chrystall, who remitted it to Aston’s account in Christchurch. The Racing Conference auditor came into touch with the irregular drawings, and a meeting of the committee was held. Chrystall told the committee that ■the accused were taking certain documents to Sydney, and the moneys due would be paid over. Sellers was given 14 days to put the accounts in order. On June 16 both accused left for Australia. Sellers sent a series of cables to them in reference to the squaring up, and re'/eivisl a reply t.liut finance was arranged subject to Si'lleis guaranteeing /Aston s personal expenses. In July Aston returned from Anistralia and Sellers went; Io Hie Carlton Hotel, where ho spent. Hie day with Aston. He returned to the hotel, on the next morning, July 3. Thljt was the last day he was seen, and later his body was found on the beach at Ngahaiiranga. Police investigations started, but the two accused wore not arrested till early in January last. The Crown Prosecutor read a statement made to the police at Nelson on November 15. 1939. by Chfyst.'ill. nnd read extracts from statements by Aston. Company’s Director's Evidence. Charles Christopher Davis, managing ilirei'lor of Davis Gelatine (N’.Z.L Limited, ('lirisli'liuri'h. mid a director of the Cockatoo Dock mid liiigiiieering Company, Sydney, said Chrystall culled on him' in (h’lober. 1937. and asked him Io pul £5OO into the venture. Chrystall was very secretive nnd said he was sworn to seei'iM'y. He said they had an in iporlan! invention which hail been adopted by the Admiralty. !!<• said the Admiralty lad paid over £25.0110 to an account in the Bank of England, London. That was the first instalment of a very large sum. He said he wanted £5OO for a week or 10 days. He was to leave with mi unnamed associate for England at; the earliest possible date. Chrystall offered to repay the amount before he left, phis 50 per cent. Witness .-mid lie never went into ventures lie knew nothing about. A few days later Chrystall called on witness ngnin mid said he had authority to disclose the details, lie said his associate's mime was Aston, an inventive genius, mid that the proposal consisted of equipping ships to resist torpedoes. Cer-

tain plates of metal were fitted to ships and had the effect of diverting torpedoes. The Admiralty had tested the device in a naval port in England. Telephone System. Chrystall said Hie Admiralty Office, London, had toid biin of this by telephone. AVitness told him that the Admiralty did not discuss such matters over the telephone. Chrystall said they bad their own telephone system that went through the earth and was completely secret. AVitness told him that if they had anything as valuable as that telephone they need not bother with anything else. AVitness said he was not interested in bis proposal and did not believe a word he had said. Chrystall then became very agitated, carrying on like a demented person, HU witness insisted on him leaving bis office. Accused said they had a plant at Nelson, which he had designed, and said also the money they wanted was to buy a new launch. They had lost the boat used in their experiments, and had a suitable one to replace it in view. ... Cross-examined by .Mr. Leicester, witness said he had known Chrystall as a man who bad interested himself in numbers of schemes of a public nature. At the first interview witness formed the opinion that there was little credibility in what Chrystall was saying, but ho hud been given no details. Chrystall said he would be liable to be put against a wall and shot if he disclosed the secret. AVhen he came back the second time lie inferred that somebody higher up had permitted him to give the details. Member of Harbour Board. To Mr. Russell, witness said Chrystall had offered to show him the telephone, but he again replied that he did not believe a word of it. „ • , Re-examined by Air. Cunningham wuness said the activities Chrystall had bceii engaged in had been more or less political only. He was a member of the Lyttelton Harbour Board. His failure to get the £5OO disapopiuted him and bad a bearing on his state of excitement. . Alexander Cormack Jessep, barrister and solicitor, AVellington, said Mr. Nathan in March, 1938, consulted him on a proposed guarantee of an account lor Sellers. AVitness said the amount of the guarantee was to be £3600. Sellers saw him and gave him a general outline or what he was interested iu. Chrystnil came to AVellington from Nelson and saw witness with Sellers. There was a long discussion on an invention, Chrystall stating the inventor was one Gordon Aston, Christchurch. Chrystall stated it was a torpedo deflecting invention. _ It was impossible for Aston to be interviewed as he was under severe penalties. The sum of £BO,OOO bad been paid into the Bank of England by the Admiralty as an initial payment. Final details had to he attended to before this money could be drawn on. A Premium Offered. Sellers and Chrystall said they would be prepared to repay any amount drawn on, plus a premium, by the end of May, 1938. The amount they offered to pay to the credit of Mr. Nathan in London. They offered £2OOO plus the £3OOO if the bank account had been drawn to that extent. Chrystall stated that, they did not propose to permit the Admiralty to manufacture the particular metal. Those interested in it would manufacture it near London and sell it to the Admiralty at £3OO a ton. They expected to produce not less than 40 tons a week and that the total value of the invention was approximately £500,000. Chrystall said Sellers could give an agreement to a guarantor, and that Aston substantially controlled a company in Sydney, known as Cranwells. Cranwclis and a Jirm known as General Finance and Securities Corporation, both of Sydney, had become interested in the invention. On March 7 witness wrote to Sellers advising that his client could not see his way to enter into the guarantee. Accused were admitted to bail at the luncheon adjournment of the Court on their own recognisance of £l6OO each, on condition that they report at the Court at 2 p.m. His Honour made Hie same arrangement for the evening, the condition being that they report to the detective office at 9 p.m. and 9 a.m. The trial will he resumed at 10 o'clock this morning.