Hopson Guilty

• Share

Fat, flour-faced and fiftyish, the defendant shuffled out of the first-aid room and into the court. While the judge took his place, while the jury filed in, he crossed & uncrossed his legs, scratched his head, moaned. Charged with mulcting the vast, metaphysical Associated Gas & Electric System (now in reorganization) of almost $20,000,000 in the greatest utilities fraud of all time, Howard Hopson was about to hear the verdict.

It had been a bewildering trial. Allegedly ridden with involutional melancholia, depressive psychosis, and heart disease, Hoppy sucked cough drops to stave off a cold. His alternate moans and mumbles kept the jury awake during eight weeks of corporate figures, which few could follow. The court stenographer admitted that his "mind had lost its continuity." Defense Attorney Fred A. Ironside Jr. owned to the same complaint. So confused was the court at times that even Howard Hopson smiled.

Chief witnesses for the prosecution were members of the crew Hoppy had taken with him on his high-buccaneering through A. G. & E.'s uncharted archipelagos. Mostly stenographers and clerks (some of whom had been raised to figurehead officials and directors), they pieced out the odyssey between them. They told how Howard Hopson had once netted $2,000,000 from selling parts of a $63,000,000 bond issue back & forth between member companies via a $10,000,000 rubber check (TIME, May 20); how operating companies had to pay two salaries for each of many employes, one to the employe and one to Hoppy; how Hopson deducted huge bills at the lavish Palm Beach Sun & Surf Club from operating income; how he had induced investors to buy non-voting securities while he held control with $100,000 of voting stock. Estimated Hopson bilkings: $12,225,726 from bond manipulations, $7,043,896 from padding bills, $354,676 used to settle stockholders' claims outside of court, thereby quashing publicity.

Nonplussed, Attorney Ironside could not but be a weak apologist, based the defense on moral issues. In developing Associated, said he, Hopson had worked tirelessly for the common weal. He was a creature of the wildcat '20s, should be judged in the light of those times.

The jury thought differently. In short order they found him guilty on 17 counts of mail fraud, spent the rest of the 25-hour recess in clearing his lawyers, Charles M. Travis and Garrett A. Brownback, of being accomplices. As Foreman Houston A. Hiers returned the verdict, Hopson's moans & groans broke out afresh. He faced at least five long years in federal prison, plus a $1,000 fine.

Of Hoppy's fabulous plunder, most (invested in A. G. & E. securities) had disappeared in the depression. Besides his $20,-000,000 (more or less) liability to A. G. & E., he owed about $4,000,000 in back income taxes to the Federal Government.

Little of this could be recovered. If he enters jail. Hoppy will leave less than $2.000,000 behind — that, and the name of an accounting genius, who was convicted of stealing more money than anyone else in modern times.