PLAINTIFF brought suit for approximately $680,000 interest on an Alien Property Custodian claim for $7,000,000 which had been allowed and paid in 1921. The government counter- claimed the $7,000,000 on the ground that the original claim was fraudulent, and that its allowance had been secured in joint conspiracy of Thomas W. Miller, former Alien Property Custodian and Harry M. Daugherty, former Attorney General. * * *
Miller, who was the Alien Property Custodian who recommended the allowance of plaintiff's original claim in 1921, and Harry M. Daugherty, who was the Attorney General who ordered the allowance of the claim, were indicted as a result of this transaction and prosecuted in New York in 1927. Miller was convicted but the jury disagreed as to Daugherty, and the indictment against the latter was dismissed. A portion of the liberty bonds making up a part of the property paid over to the plaintiff under its claim in 1921 were traced into the possession of Thomas W. Miller. In the same case the government claimed to have traced similar bonds into the hands of Mr. Daugherty. The defense presented in behalf of Mr. Daugherty, who did not testify at his trial, was based on the claim that his name was used by others as a dummy and that he knew nothing about the bond transaction.
Proof adduced in the present trial was to the effect that the bank in which the proceeds of the sale of the bonds had been deposited in Harry M. Daugherty's name had failed, and that in 1930 Mr. Daugherty filed verified proofs of claim for that particular account, alleging under oath that he was its true owner.