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The illicit activity that caused Daugherty the most problems was a Smith deal with Colonel Thomas W. Miller, a former Delaware congressman, whom Harding had appointed Alien Property Custodian. Smith and Miller received a payoff of almost half a million dollars for getting a German-owned firm, the American Metal Company, released to new U.S. owners. Smith deposited $50,000 in a joint account with Daugherty, used for political purposes. Records relating to that account were destroyed by Daugherty and his brother. Miller and Daugherty were indicted for defrauding the government. The first trial, in September 1926, resulted in a hung jury; at the second, early in 1927, Miller was convicted and served prison time, but the jury again hung as to Daugherty. Though charges against Daugherty were then dropped, and he was never convicted of any offense, his refusal to take the stand in his own defense devastated what was left of his reputation. The former Attorney General remained defiant, blaming his troubles on his enemies in the labor movement and on the Communists, and wrote that he had "done nothing that prevents my looking the whole world in the face.