A DISGRACEFUL FRAUD.

Samoa Times and South Sea Gazette, Volume 2, Issue 59, 16 November 1878, Page 2

A DISGRACEFUL FRAUD.

Tin* promoters of tin Albion Lift* Assurance Company have met with the fate which they richly deserve. The jury, which has for ten days patiently listened I to the history of this cruel and heartless fraud, found the prisoners Wood, Northcolt, Thompson, and \\ illiani Shaw guilty of obtaining money by false pretences, and also of being parties loan illegal conspiracy; and Mr. Justice Hawkins sentenced all of them, with the exception of Shaw, to penal servitude for live years. William Shaw, who was merely a clerk ami to some extent the tool oi the other prisoners, was sentenced to two years’ imprisonment with hard labour. The jury found Slinker, who was a subordinate in the office, guilty of conspiracy only, and the judge sentenced him to nine months’ imprisonment with hard I labour. The two other prisoners, ( Jeorgc Sba'.v and Thomas Shaw, the evidence against whom was doubtful, and turned on difficult questions of handwriting, were acquitted. The charge brought home to the majority of the seven prisoners was that they had been engaged in obtaining money by false pretences ; that they bad organised a company which was not bona title, but a bubble or sham; that the loan offices in connection with it were snares and delusions ; and that the prisoners were parties to a cleverly conceived and lucrative fraud which had remarkable duration. it appears that the total actual capital of the company, which was llrst formed in November of ISO.’}, was at first £2OO. The nominal capital was £50,000 ; but the public did not subscribe, and the only shaves taken up were those held by the directors, the auditor, the medical referee, and the secretary, hi fact only £S!).SO had been paid up on the shares. And yet during a period of twelve years this tliinsy company insured lives to the amount of £1.770,000; and its receipts amounted to £70,120. At the time when the bubble was pricked by the disclosures in the course of the trial of “ Jcx-lilake v. the Albion Company,” in (he Court of Common Ideas, the company’s books showed liabilities on life policies to, the amount of £120,000, and total assets variously estimated at £I7OO ami £BOOO. It is true that they had made payments on policies which matured to the amount of £.‘12,000; this was essential if the game was to continue. The facts revealed by the books alone sufficed to raise a presumption of guilt against the promoters ami active managers of such a company : but they did not exhaust the case against them. The business of the company came to it chiefly through agents; only a small fraction of it was brought directly to the head office iu Chancery Lane. In point of fact it was fcil by a number of loan offices scattered over London. One agent alone* who passed by the names of Wood, Card, Rogers, Brown, \*c,. introduced to the office policies to the value of more than a million. Two other agents introduced business to the amount of 111 4!LOGO and .C 121.000 respectively. Tlr* manner in i which the company and its confederates

swindled tlio public was at one** simple and effectual Cue of the agents issued uii advertisement offering to lend money upon personal securities and on liberal terms. 1 The termsoffered were attractive, as is proved hv the tact that at one office applications for loans tu tho amount of JL222,1>21> were made between 1575 and the end of 1877. When a person came to borrow he was informed that he must insure in an ottice to be selected by the leader, and it always turned out that the office selected was the Albion. f l he Hist condition always imposed was that tho bonower should insure his life in that company. If the applicant complied with this indispensable term in the bargain, lie was sure next to be informed by the money-lender that ho must pay a few cuim as as “ legal charges incidental to \ our loan.’’ This sufficed to disgu stillest persons, and to induce them to givu up all attempts to complete their negotiations. When Mr. .lex-Blake brought an action to recover the premium which la* had paid to the Albion olliee on a policy, it is doubtful whether he or his ’legal adviser altogether at first realised the exact nature of the company. They found in the early stages of the litigation difficulty in proving the extent of tho fraud ; and it was only when an examination of the books and cheques of company disclosed a system of aliases and marks that it became perfcethqplain that the company and the loan olliees formed part and parcel of one conspiracy. Hie disclosures which have been made in tho course of the trial at Westminster and of that at the Old Hailey pnust 4 set many minds considering how it is possible that frauds of this gross character should have been so long undetected, of what avail has been all the legislation intended to protect the public from bubble insurance companies, when for twelve years the Albion Assurance Company could live and flourish i After tin* break up of the Albert and European Companies Parliament took much pains to enable the public to discriminate between the solvent and the worthless, rieketty concerns which competed for lheir custom. It endeavoured also to weed out the latter.'• Tiesimple moral of it all would appear to be that people ought to eschew loan offices, and ought to deal directly with insurance companies, of whose solvency they should endeavour to satisfy themselves by a careful study of the accounts. Perhaps aC-, looking to tie- fact that persons were connected in an official position with the Albion who do not appear to have known its true nature, we ought to add that the whole ease is a warning that it is not safe to he a merely ornamental director or official of a company, the affairs of which necessarily require close supervision.— European Mail.