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BANKS SUE TO GET BACK FRAUD LOSS $500,000 Sought by Six New York Institutions in Waggoner Case. By the Associated Press. DENVER, Colo., December 27.-Six New York banks filed suit today in Federal District Court here against two Colorado financial institutions and two individuals to recover $500,000 lost through the manipulations of Charles D. Waggoner, former president of the now defunct Bank of Telluride. The defendants are the Bank of Telluride at Telluride, Colo.; the First National Bank of Pueblo, Grant McFerson, State bank commissioner, who now has charge of the affairs of the Bank of Telluride, and J. C. Anderson, who was operating head of the Norwood Cattle Loan Co., one of Waggoner's enterprises. Second Court Action. The action is the second brought by the New York banks seeking to recover the half million dollars. The previous action in which Waggoner and two other New York banks were named defendants, still is pending in New York State courts. Today's suit followed refusal of McFerson to grant a claim of the six plaintiff banks against the Bank of Telluride for $500,000. Waggoner now is serving a term in the Federal penitentiary in Atlanta, Ga. He was captured in Cambria, Wyo., in September, 1929. Used Forged Code. Waggoner sent forged code telegrams to the New York banks, each purportedly signed by. a Denver bank and instructing the deposit of a total of $500,000 to the credit of the Bank of Telluride in the Chase National Bank. Most of the money then was transferred to Western banks to cover indebtedness. Plaintiffs in today's action are: Guaranty Trust Co., National City Bank of New York, First National Bank of the City of New York, Harriman National Bank & Trust Co., Chemical Bank & Trust Co., and Theosphilus De Mott, to whom the Equitable Trust Co. of New York has assigned its claim in the Waggoner litigation.