FRAUD CHARGE

Hokitika Guardian, 2 November 1929, Page 6

FRAUD CHARGE

“GET RICH QUICK” COYS

(By Telegraph—Per Press Association.)

INVERCARGILL, November 1

The Magistrate’s Court to-day heard a case in which a charge of fraud has been laid in connection with the Quarterly Dividends Coy Ltd. and National House Purchase Ltd.

’ ./The Crown Prosecutor, mr H. J,. AlaeAlister, said that it was necessary for him to give some idea oil the operations of the two companies, Quarterly Dividends, Ltd. and the National House Purchase, Ltd., of which the defendant was secretary in New Zealand. The charges arose out of the operations of the two companies. The companies were incorporated and registered in England some years ago. The promoter and head was a convicted criminal, William Taverner, who had been refused registration of the Society in Ei gland, on account of the unsoundness of the scheme, and on account of his pa c *j record. However, that had not prevented him from registering under tro Companies Act. There was a small capital. Shortly after the companies started in New Zealand, William Taverner toured tlie Dominion, and received a very hostile reception from He press everywhere. A man named Alou had been Secretary before the defendant, who had addressed meetings in ■Southland, and had made promises, and told what the schemes would oring. He also travelled with Bibles. .... “He came with a Bible in one hand and, a gold brick in the other,” re'marked the Crown Prosecutor. The scheme'was very involved —intentionally involved—so that anyone who did not read the scheme carefully, would he inclined to invest. It was stated that, by investing £1 in Quarterly Dividends, and £1 in National House Purchase, Ltd., together with an <ntrance fee of Is, and afterwards | aying £1 per month for fifteen months, the investor would reach what vns called “ the £SOOO class ” in about 74 years.

The Crown Prosecutor detailed what he alleged to he the essential unsoundness of the scheme, details off which would be given by a Government Actuary. Tlie first depositor would, of course, get his money for loan quickly, hut the catch was that no man could reach the £SOOO class, and therefore could never hope to see his money again. He would prove, by the Government Actuary, that the scheme was a plain fraud; that, in regard to Die statements made by the accused, m.y person of average mentality could that the scheme would not operate; and, further, that the scheme had i-een

denounced and exploded, and yet accused had still carried on operations. It was' not known 'what interest the accused had, but he had been collecting so assiduously that he must htve 'a decided interest in the scheme. J. C, L. White (Dunedin)', who represented the accused, said that he was surprised that the Magistrate had not accepted jurisdiction to try the cases summarily. The intricacy of the scheme was of such an extraordinary nature that it would he well nigh impossible for twelve laymen on a jury to comprehend it.

The Government Actuary, Cecil Costello, read a report discoursing upon the unsoundness of the scheme. Summing up, he said it was of the “ get rich quick” or “bubble” type, and must eventually come to an untimely end, with disastrous results to thousands of comparatively poor people. It was not too much, he said, to describe tlie scheme as an impudent swindle, run for the benefit of the promoters, and, to a lesser extent, of the original members.

Following lengthy evidence, the Crown Prosecutor said that the nature of the false pretences in each case was practically the same, with one exception. It had been clearly proved by a number of witnesses called that the accused had stated that, by paying the sums mentioned, a depositor would reach the-£SOOO class. He claimed that it had been definitely proved that the achievement of results was—and had at the time of the alleged offences been—quite impossible for the companies to carry out. The Government Actuary had stressed the impossibility of the companies to carry out their promises. The whole nature and trend of the statements made had been intended to lead people to believe thatthe companies would carry out vhat the accused said they would. The only inference that the Court could claim was that the accused was either a rogue or an arrant fool. He was, obviously, not an arrant fool, as he had gone about deluding a number of people, and tbe natural inference was that the man was a rogue.

The Crown Prosecutor submitted that a strong prima facie had been established, and that the accused should be committed for trial.

Mr White said that he personally did not 'know.: whether the scheme was sound or not-; The accused said that it was, and it was a scheme in operation all over the world. The first time that it should be the subject of criminal prosecution was, as it were, at the world’s end. If it was believed that a definite criminal offence had been committed, the Crown would have to prove that the representation was an existing fact; that it was false; and that the accused knew it was false. The facts upon which the Crown relied were two future promises. Tho evidence of some of the witnesses was uncertain in cases. Mr White contended that there was no proof that the accused knew that the statements he was making were untrue, and lie submitted that