Department of Justice
Secures Indictments For
17 ‘Black Market' Firms
Diversion into the blac-K marke4
of at least seven million yards of
cotton textiles is charged in 17 in
dictments naming 17 defendants
returned today by a Special
Grand Jury in the United States
Disrtict Court for the Southern
District of New York, Attorney
General Tom C. Clark announced.
Two of the indictments charge
conspiracy to violate the Emer
gency Price Control Act and War
Production Board regulati o n s.
Fourteen indictments charge vio
lation of OPA ceilings. One indict
ment charges violation of War
Production Board regulations.
Thpse are the first indictments
handed down by the Spec’al
Grand Jury, which has been in
session in New York since Decem
ber 12. 1P45, when it was impan
eled at the direction of Attorney
General Clark to consider evi
dence uncovered by the joint U. S.
Government drive to smash the
textile black market.
United States Attorney John F.
X. McGohey. assigned a special
group of assistants to the case,
who since that date have been
^ presenting evidence before the
Jury. The indictments are the
outcome of the investigation con
ducted by the Office of Price Ad
ministration, Treasury, the War
Production Board, and the Depart
ment of Justice.
Sixteen of the defendants are
associated with the textile indus
try; one operates a check-cashing
company.
Tt is alleged that the cotton tex
tiles were diverted into the black
market at prices up to 300 per
cent in excess of ceiling. The pur
| chasers of these cotton textiles, it
is estimated, paid about $3,500,000
over the OPA ceiling, which ul
timately came out of the pockets
of the consumer.
One of the indictments charges
a conspiracy by Singer, Toll. Ol
ster, Kahn, Lesser, Levy. Linn and
Blitzer to violate the orders of the
War Production Board by obtain
ing cotton textiles on priorities
and diverting them to the black
market.
It is indicated by U. S. Attornov
McGohey that Atlas Adhesives
which was organized in 1943. o^
^ tained twenty million yards of
cotton textiles by representing
that this material was to be use'*
in the manufacture of shoe Ininas
and for other essential purposes'
but that approximated spv«nt''*»n
million yards of the cotton tex
tiles so obtained were sold to
firms manufacturing dre s ~ ~
handkerchiefs, curtains, and other
items.
The second conspiracy indict
ment charges the same eight de
fendants and Goldberg with viola
tion of the Emergency Price Con
trol Act. This indictment charges
the defendants with selling the
cotton textiles that were obtained
at prices ranging from 20 percent
to 300 percent over the ceiling.
The overcharge is alleged to have
run as high as 50 cents a yard on
goods that legally could cost no
more than 17 cents a yard. The re
maining indictments charge all
the defendants except Blitzer and
Lesser with numerous individual
sales at over the ceiling prices.
In commenting on the black
market Attorney General Clark
said:
“These indictments are another
blow in the Government’s drive
against black marketeers—to save
the public from being gouged by
unscrupulous operators and to aid
the members of the textile indus
try in their legitimate operations.
“The investigative seed sown by
the Treasury. OPA, Agriculture
and Justice has begun to ‘bear
fruit. There shall be no letup in
our determination to smash the il
legal market wherever it raises
its ugly head. In fact, our united
efforts will be further extended.
“Inouirv is being made by the
Antitrust and Criminal Divisions
into reports that some manufac
turers are hoarding clothing
'men’s suits and shirts'. We intend
to find out if any Federal law is
being violated in this connection.
The Special Federal Grand Jury
continues in session in New York
City.
“I have received gratifying in
formation that the cotton textde
situation has eased up some in the
East and I hope than an improve
ment will soon be manifest in the
clothing field.”
As one fo the methods used to
conceal the tremendous diversion,
invoices were printed bearint? th«
names of non-existent individuals
as sellers of the textiles. These in
voices were filled out showing thn
amount of goods sold and the
price paid, and were given to t^e
manufacturers who bought the
material. These customers paid
with checks made out to imagin
ary names that appeared on the
invoices, and the checks were
cashed at the 31st Street Tradin"
Company without inquiry being
"'’h bv the chock cashing com
as to the identity of the per
sons presenting the checks, it is
revealed by the Unted States At
torney.
The investigation resulting in
+^p<;p indictments has been con
ducted by Assistant United States
Attorney Amedeo L. Lauritano
MINING, CONTRACTING
And INDUSTRIAL
EQUIPMENT
LOMEN
Commercial Co.
VALENTINE — Screen
actress, Jean O’Donnell, wears a
hat with a St. Valentine’s day
motif.
and Irving H. Saypol, and investi
gators of the War Production
Board and the Office fo Price Ad
ministration.
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