Motley’s Crew Bilked Investors in Oil Stock Scandal

The Flint Fountain on the south lawn of City Hall was installed in 1933 as a tribute to U.S. Sen. Frank Putnam Flint, who helped bring water to Los Angeles almost a century ago. Flint also got a namesake town -- La Canada Flintridge.

His younger brother, Motley, has no such civilized memorials. His name appears more often in court records as a swindler in the city’s notorious Julian Petroleum Scandal, which ranks with Teapot Dome as one of the great frauds of the 1920s.

Many of the 40,000 outraged investors, some of whom lost their life savings in over-issued and counterfeit oil stocks, blamed Motley. Not a single person was convicted of the swindle, but there was jury-fixing, bribery, even murder.

In the 1920s, the Flint brothers -- Motley, a banker-millionaire, and Frank, the bank’s legal counsel -- epitomized the aggressive boosterism, business and politics of Los Angeles’ ruling elite. The brothers, born in Boston and reared in San Francisco, moved to L.A. in their 20s during the land boom of the 1880s. They plunged into politics by colluding with Southern Pacific Railroad, which essentially ran the state government as a corporate subsidiary.

By 1897, Frank had become U.S. attorney for the Southern District of California. The next year, Motley became L.A. postmaster, according to “The Great Los Angeles Swindle” by Jules Tygiel, published in 1994.

In 1905, the Flints left government for private enterprise, opening Metropolitan Bank & Trust Co. with Frank as president. Later that year, with the political power of the railroad behind him, Frank was elected to the U.S. Senate and turned over the bank presidency to Motley.

After his first term, Frank chose not to run for reelection when Gov. Hiram Johnson challenged the supremacy of the railroad’s political machine. Johnson’s Progressive Party instituted the initiative process, a way for voters to circumvent elected officials and check the power of the railroad.

By this time, the bank had merged a few times. Frank and Motley became directors of First National Bank and two of the most respected business leaders in the state.

Frank prospered in a law partnership and in several real estate developments, while Motley liked to boast that, for 30 years, he was a “Santa Claus to Los Angeles.” As president of the Los Angeles County Relief Administration, he earned his reputation by finding jobs for the unemployed and helping the poor.

Meanwhile, in 1922, Courtenay Chauncey “Call Me C.C.” Julian, a flamboyant oil huckster with a silver tongue and a golden touch, hit a gusher in Santa Fe Springs. He founded Julian Petroleum Co. and opened a chain of gas stations.

Reeling in investors, he advertised: “Widows and Orphans, This Is No Investment for You! ... My appeal is addressed to people who can legitimately afford to take a chance.” In a matter of days, more than 175,000 people had arrived at his door, eager to part with their money.

Julian lived the high life, soaking in a gold-lined bathtub, spending $25,000 on a weekend spree and tipping a taxi driver $1,500. He begged people to “walk in and shoot me” if he ever betrayed their confidence. Someone else would take that bullet for him.

By 1924, prosecutors suspected that he was cooking his books and watering his stock. The Times stopped printing his ads. Charlie Chaplin decked him at Cafe Petroushka. And Julian had to dodge three bullets fired into his Los Feliz mansion.

With his oil operation a shambles and a federal indictment pending, Julian sold his interest for $500,000 to Sheridan C. Lewis -- against whom a federal indictment was pending in Texas on charges of stock manipulation -- and hustler Jacob Berman, a.k.a. Jack Bennett.

Motley and his fellow bankers loaned the pair $10 million and organized a “Million Dollar Pool,” backed by Julian stock. It was one of many such groups that purchased the stock at below-market prices.

When Motley spoke, people listened; he possessed the charisma of a Hollywood star. He promised cash dividends, high interest rates and stock bonuses. Banker Henry Robinson and industrialist Harry Haldeman played small roles in the scheme, along with movie magnates Louis B. Mayer and Cecil B. de Mille, who also invested.

The way it worked was: Those with big bank accounts or big names got into the pool first, making money because of the contributions of the no-name investors who followed them. The big guys bailed out before the crash, making huge profits.

Frank Flint acted as attorney for several big stockholders.

Meanwhile, Motley formed more stock pools and loan schemes to manipulate share prices. True to his word to the rich and famous, he delivered 57% profits.

Within weeks, everyone wanted aboard the money train, and new stock pools opened. Soon, over-issued stock poured out “like sausages coming out of the mill,” as Dist. Atty. Asa “Ace” Keyes put it.

On May 7, 1927, the bubble burst, leaving 40,000 investors holding the bag. The fraud would exceed $150 million.

Motley and other key figures were indicted on charges of conspiracy to obtain money under false pretenses, conspiracy to violate securities laws, conspiracy to violate state usury acts, forgery and embezzlement.

With the crash came the outcry. The Rev. Robert P. “Fighting Bob” Shuler wielded his fire-and-brimstone preaching and powerful pen to put the bulk of the blame on “the bankers.” In his pamphlet “Julian Thieves,” he warned that Motley was “as close to Lewis and Bennett as triplets in the womb.”

Lewis and Berman were tried first and, after a four-month trial in 1928, they were acquitted. Indictments against Motley and the others were dismissed.

The verdicts stunned the public and the press. The Examiner said the verdict “makes robbery easy in Los Angeles.” The Times blamed “the incompetent and bungling manner in which the case was presented.”

Rumors flew that three jurors had been bribed and that Dist. Atty. Keyes and Chief Deputy Dist. Atty. Harold “Buddy” Davis had taken payoffs to throw the case. A diary of payouts, including money, golf clubs, two automobiles and a watch, along with dates, fell into the hands of reporters and made headlines.

Keyes and Davis were convicted of receiving bribes and served 18 months at San Quentin.

Lewis and Berman were convicted of 15 counts of mail fraud stemming from a different swindle and sentenced to seven years in federal prison.

But no one was ever convicted for the Julian swindle.

Frank Flint was never indicted, but he was tormented by the scandal and his own financial reverses. To help recover from a nervous breakdown, he signed on for an ocean cruise in February 1929. He died in his sleep aboard ship.

The stock market crash in October 1929 “would douse the speculative fires that had raged throughout the 1920s,” Tygiel wrote in his book. The crash also established the Securities and Exchange Commission as stock market policeman.

Many Julian investors blamed Motley Flint, who had recruited so many with his charismatic personality. One of them was a penniless machinist and Inglewood real estate broker named Frank Keaton, who lost $35,000.

Motley had been indicted five times; four indictments had been dismissed. A trial stemming from the fifth was scheduled for July 1930.

On July 14, just days before his trial was to begin, Motley testified in a related case. When he stood up to leave the witness stand, Keaton shot him three times. Then Keaton tossed his gun at the crumpled body and sank back into his chair. He squeezed his eyes shut, clenched his hands and cried out, “Oh, my God, why did I do it?”

When police arrived, they found 10 cents in Keaton’s pocket, along with Shuler’s pamphlet, “Julian Thieves.” Motley’s pockets bulged with $63,000.

With his will, Motley became Santa Claus again. He left two-thirds of his $750,000 estate to “poor children, the aged in want, and young men and women in need of help to start them well in life.”

The man who started the scam and invited disgruntled investors to shoot him, C.C. Julian, fled the country, surfacing in Shanghai. Down to his last dollar and long deprived of that gold-lined bathtub, he took poison and died at a dinner party in 1934. His friends passed the hat, collecting $46 to pay for a proper pauper’s burial in China.