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The New York Times July 16, 1939
Treasury Lists Racketeers and Politicians Punished in Fiscal 1939 for Evasion
Narcotic arrests Up to 754 in This Area-- 700 Illicit Stills Spotted by Airplanes
Special to The New York Times

WASHINGTON, July 15. -- A report that the Treasury established a new record in the 1939 fiscal year for convictions for tax evasion by persons it describes as "racketeers and politicians" was made by Elmer L. Irey, coordinator in the Treasury Department, to Secretary Morgenthau.

A total of 114 persons were indicted as a result of investigations by the Intelligence Unit, and eighty-one were convicted. Fines of $130,000 were imposed and additional taxes and penalties totalling $39,237,830 were recommended for assessment.

Heading the Treasury's list of convictions is that of Tom Pendergast, political boss of Kansas City. Prominent places in it are given also to two New Jersey politicians, Enoch L. Johnson, boss in Atlantic City, and Judge Joseph A. Corio of Atlantic County.

Among the "racketeers" is the name of John Torrio, "predecessor and partner of Chicago's Al Capone."

The arrest and conviction of the radio stars, Burns and Benny, of Mrs. Edgar J. Lauer, and of Albert Chapereau provided the highlight in the report of Thomas J. Gorman, Deputy Commissioner of Customs. Burns and Benny received heavy fines and suspended sentences for their part in the smuggling of jewelry and expensive wearing apparel. Prison terms were imposed on Mrs. Lauer and Chapereau.

More Contraband Seized

During the fiscal year, narcotic seizures aggregated 902 and amounted to 26,675 ounces, compared with 638 seizures amounting to 5,278 ounces in the preceding twelve months, while seizures of smuggled liquor increased by 188 to a total of 3,488. Seizures of all kinds were 10,486, and increase of 308 in the year.

Arrests for violations of the narcotic drug law showed little change, numbering 3,196, against 3,206 in the previous period. Arrests in the Baltimore district increased from 113 to 212 and in the New York area from 681 to 754. Louisville, with a decrease from 193 to 106, and Chicago, with a drop from 378 to 290, led cities showing declines. In the Kansas City district arrests increased from 223 to 266.

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