FRAUD CHARGES

Hokitika Guardian, 15 November 1929, Page 1

FRAUD CHARGES

PRO,SECL’TJON’S CASE. “QUA RTER L Y Di V 11) EN DS. ’ ’ (By Telegraph—Per Press Association.] JNA'EECAR GILL, Nov. 12. The case in which there are six charges of false pretences against James Xeilson Johnston in connection with the Quarterly Dividends and National House Purchase, was begun to-day at the Supreme Court, before Air Justice Kennedy. In his charge to the Grand Jury, the Judge had pointed out that the mere fact that Johnston was an agent would not excuse him. The false representations alleged were that by paying £1 to one concern and £1 'to another and by paying £ls in monthly instalments, the .subscriber would be able to draw £SOOO in seven and a half years. PJis Honour said'that he failed to see how a| concern doing no trading, but merely juggling with money, could produce such results. On the evidence, the Grand Jury should have no difficulty in finding a true bill. Addressing the jury, the Crown Prosecutor first mentioned that companies were promoted in England by one, Wm. Taverner, who in 1928 toured New Zealand organising his companies in tiie Dominion. The accused had | hben appointed Secnetpry for New Zealand, and had conducted an active campaign for depositors. He would point out that the two companies were in reality one concern, operating as two companies, but under the control of one man. The companies were small concerns, with a few shareholders, who were in control. He stressed the fact that the depositors did not become shareholders,-, 'Jbut merely deposited their money for investment, and had no say in the control or management. The money having been deposited, a series of “paper loans’’ was granted to the depositors, 'until the £SOOO class was readied, when it was stated that depositors would he entitled to draw dividends on mat amount for the rest of their lives. The dividends were also stated at twenty per cent. The allegation against the accused was that he had informed the prospective depositors that by the payment of £2 Is, and fifteen monthly payments of £1 the depositors would reach the £S(XH) class in 7-} years. He would call the best actuarial evidence to show that tne waiting period for the second loan of £SO would he ten times the waiting period for the first loan, which tne experience of New Zealand depositors indicated would lie four years. The waiting period for the second loan would therefore be JO years, and so on down the list. The waiting period went on automatically increasing down the list. The Crown Prosecutor reviewed the evidence at some length, and said that the Crown would call evidence to show that the accused knew that the scheme was unsound—had in fact, been informed that it was unsound; and yet, despite this, he had carried on, trading on the faith that ignorant people were apt to place in a mini who, on occasions, preached the Gospel. The accused was not ail ignorant man. On the contrary, he was a men with a University education, and was no fool. It would not be necessary for the jury themselves to try to unravel the scheme, since evidence for the Crown would he given by a Government Actuary, who would pronounce the whole scheme unsound. Evidence along the line's of that given in the Lower Court was beard, after which the Court adjourned till to-morrow.