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Full text of "Investigation of organized crime in interstate commerce. Hearings before a Special Committee to Investigate Organized Crime in Interstate Commerce, United States Senate, Eighty-first Congress, second session, pursuant to S. Res. 202 .."

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INVESTIGATION OF ORGANIZED CRIME 
IN INTERSTATE COMMERCE 



HEARINGS 

BEFORE THE 

SPECIAL COMMITTEE TO mVESTIGATE 

OEGANIZED CEIME IN INTEESTATE COMMEECE 

UNITED STATES. SENATE 

EIGHTY-FIEST CONGRESS 
SECOND SESSION 

AND 

EIGHTY-SECOND CONGRESS 

FIRST SESSION 
PURSUANT TO 

S. Res. 202 

(Slst Congress) 

A RESOLUTION AUTHORIZING AN INVESTIGATION OF 

ORGANIZED CRIME IN INTERSTATE COMMERCE 



PART 12 



U. S. TREASURY DEPARTMENT 



U. S. DEPARTMENT OF JUSTICE 



FEDERAL AND STATE OFFICIALS 



MISCELLANEOUS WITNESSES 



JULY 11, 1950; FEBRUARY 16, 17, 20; 
MARCH 9, 22, 24, 26, 27, 29, 1951 



t^Mi- 



Printed for the use of the Special Coinmittee To Investigate 
Organized Crime in Interstate Commerce 







INVESTIGATION OF ORGANIZED CRIME 
IN INTERSTATE COMMERCE 



,.,, o +, HEARINGS 

U/^.L/ff\5(tti^ .J^HAU BEFORE THE 

^' SPECIAL COMMITTEE TO INVESTIGATE 
OEGANIZED CRIME IN INTERSTATE COMMERCE 
UNITED STATES SENATE 

EIGHTY-FIRST CONGEESS 

SECOND SESSION 
AND 

EIGHTY-SECOND CONGRESS 

FIRST SESSION 
PURSUANT TO 

S. Res. 202 

(81st Congress) 

A RESOLUTION AUTHORIZING AN INVESTIGATION OF 

ORGANIZED CRIME IN INTERSTATE COMMERCE 



PART 12 



U. S. TREASURY DEPARTMENT 



U. S. DEPARTMENT OF JUSTICE 



FEDERAL AND STATE OFFICIALS 



MISCELLANEOUS WITNESSES 



JULY 11, 1950; FEBRUARY 16, 17, 20; 
MARCH 9, 22, 24, 26, 27, 29, 1951 



Pr'iEited for the use of the Special Committee To Investigate 
Organized Crime in Interstate Commerce 




UNITED STATES 
GOVERNMENT PRINTING OFFICE 
48958 WASHINGTON : 1951 



U. S. SUPERINTENDENT OF DOCUMENTS 

MAY 10 195t 



SPECIAL COMMITTEE TO INVESTIGATE ORGANIZED CRIME IN 
INTERSTATE COMMERCE 

ESTES KEFAUVER, Tennessee, Chairman 
HERBERT R. O'CONOR, Maryland CHARLES W. TOBEY, New Hampshire 

LESTER C. HUNT, Wyoming ALEXANDER WILEY, Wisconsin 

Rudolph Halley, Chief Counsel 

n 



CONTENTS 



Testimony of — Page 

Adamy, Clarence T., acting executive director, national office, 

AMVETS, Washington, D. C 316-321 

Andrews, George H., chief enforcement officer, North Carolina 

Alcoholic Beverage Control Board 263-265 

Anslinger, Harry J., Commissioner, Bureau of Narcotics, United States 

Treasury Department 662-668 

Argo, William, investigator, Alcohol Division, State of Tennessee. _ 268-291 

Avis, Dwight E., Assistant Deputy Commissioner, Enforcement, Alco- 
hol Tax Unit, United States Treasury, accompanied by Robert B. 
Ritter, attorney. Alcohol Tax Unit 293-315, 447-448, 659-662 

Blanning, W. Y., Director of the Bureau of Motor Carriers, Interstate 

Commerce Commission, accompanied by Mr. Brady, counsel 694-707 

Brink, James H. Covington, Ky., accompanied by Sawyer A. Smith, 

attorney, Covington, Ky J 723-742 

Brodson, Sydney A., Milwaukee, Wis 449-498 

Brookfield, John W., trial attorney. Federal Trade Commission, Wash- 
ington, D. C 15-43 

Caudle, Theron Lamar, Assistant Attorney General of the United 

States 544-546 

Carroll, James J., St. Louis, Mo., accompanied by Morris Shenker, 

attorney, St. Louis, Mo 327-384 

Cogan, Fred, New Orleans, La 100-109 

Coy, Hon. Wayne, Chairman, Federal Communications Commis- 
sion 563-577 

Croft, John, Cincinnati, Ohio, accompanied by Charles E. Ford, attor- 
ney, Washington, D. C 747-758 

Delaney, Frank Jack, Solicitor, United States Post Office Depart- 
ment 713-717 

Doyle, John, Gary, Ind 171-188 

Evans, James C, commissioner. Department of Finance and Taxation, 

State of Tennessee 222-237 

Evans, Neal, special investigator. Alcohol Tax Unit, Louisville, Ky_ 292-293 

Farrell, Louis Thomas Fratto, Des Moines, Iowa 396-446 

Folev, Hon. Edward H., Under Secretary of the United States Treas- 
ury 647-652, 673-682 

Goldschein, M. H., special assistant to the Attorney General, United 

States Department of Justice 1-13 

Guzik, Jacob, Chicago, 111 385-394 

Hewitt, Covell R., superintendent of liquor control. State of Missouri- 247-255 

Hoover, Hon. J. Edgar, Director, Federal Bureau of Investigation. 524-542 

Kleinman, Morris, Cleveland, Ohio, accompanied by William J. Corri- 

gan and Timothy McMahon, attorneys, Cleveland, Ohio 628-636 

Lauderdale, Harry, investigator, Alcohol Division, State of Ten- 
nessee 268-291 

Leibowitz, Hon. Samuel S., judge. County Court of Kings Countv, 

N. Y '547-562 

Lichtenstein, Leo, president and treasurer, Harlich Corp., Chicago, 

111 66-80 

Loss, Louis, associate general counsel. Securities and Exchange Com- 
mission 717-721 

Mackey, A. R., Acting Commissioner of Immigration and Naturaliza- 
tion, United States Department of Justice 546, 577-584 

McGrath, Hon. J. Howard, Attorney General of the United States 502- 

523, 543 

O'Brien, William G., Miami, Fla 742-746 

ni 



rV CONTEINTS 

Testimony of — Continued Page 

O'Hara, Lawrence Edmund, Baltimore, Md., accompanied by George 

Harlan, attorney, Baltimore, Md 189-220 

O'Neil, Charles P., Chicago, 111 44-62 

Redwine, Charles D., revenue commissioner. State of Georgia 237-247 

Remer, Richard, Miami Beach, Fla 83-99 

Rosenbaum, Louis, Cincinnati, Ohio 109-153 

Rothkopf, Louis, Cleveland, Ohio, accompanied by William J. 

Corrigan and Timothy McMahon, attorneys, Cleveland, Ohio 636-642 

Saunders, Clyde W., director, Virginia Alcoholic Board of Control, 

Richmond, Va 266-268 

Schoeneman, George J., Commissioner of Bureau of Internal Revenue, 

United States Treasury 652-659, 669-673 

Ticoulat, Gabriel J., director, Pulp, Paper, and Paperboard Division, 

National Production Authority, Washington, D. C 707-717 

Uvanni, Joseph, New York, N. Y., accompanied by Morris A. Shenker, 

attorney, St. Louis, Mo 153-170 

Winston, R. W., chairman, North Carolina Alcoholic Beverage Control 

Board 255-263 

Zwillman, Abner, Deal, N. J., accompanied by Morris Shilensky, 

attorney. New York, N. Y 588-628 

Schedule and summary of exhibits v 

Tuesday, July 11, 1950 1 

Friday, February 16, 1951 15 

Saturday, February 17, 1951 81 

Tuesday, February 20, 1951 189 

Friday, March 9, 1951 221 

Thursday, March 22, 1951 323 

Saturday, March 24, 1951 395 

Monday, March 26, 1951 499 

Tuesday, March 27, 1951: 

First session 645 

Second session 693 

Third session 723 

Thursday, March 29, 1951 747 

Appendix 759 

Supplemental data 767 



SCHEDULE OF EXHIBITS 



Number and summary of exhibits 



Intro- 
duced 
on page 



1. Reports, circulars, and punchboards, submitted by John W. 

Brookfleld, Federal Trade Commission 

2. List of customers of E. M. O'Neil & Co., Chicago, 111., sub- 

mitted by Charles P. O'Neil, president 

3. Catalog of the K. C. Card Co 

4. Advertising circular of the K. C. Card Co 

5. Order blank of the K. C. Card Co 

6. Report re narcotics, by the legislaiive committee of the Crime 

Prevention Bureau, Chicago, 111 

7. Photostatic copy of Western Union money order for $4,000, 

payable to Dick Remer, dated November 22, 1950 

8. Western Union money order, payable to Dick Remer, dated 

November 22, 1950, and signed "Rosey" (Louis Rosen- 
baum) 

9. Western Union money order for -$5,000, signed by John 

Mooney, dated November 22, 1950 

10. Western Union money order for $10,000, payable to Joseph 

Uvanni, dated January 25, 1951, and signed by John 
Mooney 

11. Western Union money order for $10,000, dated January 27-. 

12. Draft for $5,000 (Uvanni) 

13. Document showing sums aggregating $24,025.23 paid by John 

Doyle to Automatic Coin Machine & Supply Co., for period 
January 21, 1948, to March 3, 1949 

14. Check payable to John Mooney by Maryland Agricultural 

Association 

15. Receipt from Norman Helwig to Maryland Agricultural Asso- 

ciation 

16. Check payable to E. M. Dobkin by Maryland Agricultural 

Associati on 

17. Letter from president of Southern Maryland Agricultural Asso- 

ciation to Howard Sports Daily, dated January 5, 1951 

18. Transcript of record of U. S. v. John Pearson, District Court, 

Western Tennessee, May 24, 1950 

19. Photostatic copies of D. R. Senter's operations in Cairo, 111. 

(shipping liquor into dry sections of Tennessee, Georgia, 
etc.) 

20. Copy of minutes of meeting in Atlanta, Ga., March 29, 1950, 

of commissioners from Georgia, Tennessee, etc 

21. Photostatic copies of application for retail liquor dealer stamps, 

submitted by Charles D. Redwine, revenue commissioner, 
State of Georgia 

22. List of bootleggers in the State of Oklahoma, submitted by 

Covell R. Hewitt, superintendent of liquor control, State of 

Missouri 

23* Report of Illinois Department of Revenue for November and 
December 1950, showing 30,000 gallons of liquor shipped 
from Illinois into Southern States (Illinois tax-exempt") 

24. Check dated September 23, 1949, for $18,000, payable to 

J. B. Wenger, found in possession of A. L. Graham, while 
transporting liquor illegally into North Carolina 

25. Photostatic copies of portions of record of State of N. C. v. 

A. L. Graham 

26. H. R. 1278, introduced by Congressman Albert S. Camp, of 

Georgia 

27. Two newspaper photos of Southern Creosoting Co. truck, 

found hauling liquor into Tennessee by inspectors of Ten- 
nessee Alcohol Division 



35 

47 
63 
64 
64 

65 

94 

94 
161 



162 
162 
163 



177 
208 
208 
208 
217 
231 

242 
244 

247 

250 

260 

262 
262 
267 

271 



VI 



CONTEINTS 
SCHEDULE OF EXHIBITS— Continued 



Number and summary of exhibits 



Intro- 
duced 
on page 



28. Bill of lading to Jack Anderson, Spartanburg, S. C, for 145 

cases of liquor, found on Southern Creosoting Co. truck 

29. Photostat of Alabama bill of lading to W. R. Scott, Vernon, 

Ala., dated February 17, 1951 

30. Sheets marked "Tick" and "Mueller," showing serial numbers 

and certain cases of whisky 

31. Picture of truckload of whisky seizure, by William Argo, 

investigator. Alcohol Division, State of Tennessee 

32. Summary of H. R. 137 and S. 22, bills to amend the Internal 

Revenue Code and the Federal Alcohol Administration Act, 
prepared by Mrs. Wolf 

33. Record of incoming calls to 318A Missouri Avenue, East 

St. Louis, III 

34. Check dated December 3, 1949, payable to N. Helwig for 

$16,090, drawn on Southern Maryland Agricultural Associa- 
tion, and signed by T. J. O'Hara 

35. Check dated October 14, 1950, payable to N. Helwig, drawn on 

Southern Maryland Agricultural Association, and signed by 
T. J. O'Hara 

36. Check dated November 27, 1948, payable to H. Norman for 

$5,000, drawn on Southern Maryland Agricultural Associa- 
tion, signed by T. J. O'Hara ("For deposit only, Charles 
Town Jockey "Club") 

37. Check dated December 2, 1950, for $20,105, drawn on South- 

ern Maryland Agricultural Association, signed by T. J. 
O'Hara and deposited in John Moonev special account 

38. Check dated November 27, 1948, for $34,215, payable to John 

Mooney 

39. Photostat of Midwest Illinois News Service Co., Chicago, 111., 

dated March 13, 1948, to Sports Arcade, Des Moines, Iowa_ 

40. Photostat of Iowa retail sales tax permit for Sports Arcade... 

41. Explanation re Lew Farrell's license with Alcohol Tax Unit 

by Stewart Berkshire, former Deputy Commissioner, Alco- 
hol Tax Unit 

42. Arrest record of Frank Cianciola 

43. Gorham Racing Sheets 

44. Bound copies of the resolutions, suggestions, and reports, 

submitted by Attorney General McGrath, resulting from 
his Conference on Organized Crime 

45. Letter dated March 16, 1951, to Hon. Wayne Coy, Chairman 

of Federal Communications Commission, from Senator 
Estes Kefauver 

46. Statement of Morris Kleinman and attached newspaper 

clippings 

47. Card announcing reopening of Beverly Hills Countrv Club, 

Southgate, Ky., April 1, 1951 1 ' 

48. Copy of Bureau of Internal Revenue statement of activities in 

gambling and racketeering areas, submitted March 20 to 
Sulicommittee on Internal Revenue Administration of 
House Ways and Means Committee 

49. List of representative cases referred to on page 9 of exhibit 

No. 48 

50. Memorandum prepared by E. Ernest Goldstein of the com- 

mittee staff re situation of Joe Adonis Automotive Convey- 
ing Co. and Ford Motor Co 

51. Memorandum filed with the committee by Sawyer A. Smith, 

attorney, re James H. Brinks' refusal to testify 

52. Return re John Croft, by United States marshal, northern 

district of Ohio 



271 
286 
286 
290 

312 
342 

367 

368 

369 

369 
370 

423 

428 



448 
459 
459 



504 

562 
632 
635 

655 
656 

699 
725 
749 



1 On file with committee. 
' Returned to witness. 
» Written into record. 



CONTENTS Vn 

SUPPLEMENTAL DATA 

Pago 

1. Statement of Hon. Charles W. Tobey, United States Senator, in re 

letter read into the record bv Senator Tobey on March 26, 1951 

(see p. 432) 767 

2. Statement of Charles Handler, corporation counsel, city of Newark, N. J. 767 

3. Letter and enclosures from Morris Shilensky, attorney for Abner 

Zwillman, Deal, N. J 768 

4. Letter to the chairman, dated March 29, 1951, from the Honorable 

J. Howard McGrath, Attorney General of the United States, and 
enclosed tabulation of 137 cases in which prosecution has been under- 
taken or is under consideration involving gamblers, racketeers, and 
others who received income from illegal sources 771 



inyestictATion of organized ceime in interstate 

commerce 



TUESDAY, JULY 11, 1950 

United States Senate, 
Special Committee To Inv'estigate 
Organized Crime in Interstate Commerce, 

Washington^ D. C. 
executive session 

The committee met, pursuant to call of the chairman, at 2 : 30 p. m., 
in the District of Columbia Committee Room, the Capitol, Washing- 
ton, D. C, Senator Estes Kefauver (chairman) presiding. 

Present : Senators Kefauver, Hunt, and Wiley. 

Also present : George S. Robinson, associate counsel. 

The Chairman. The committee will be in order. 

(Whereupon, the committee heard the testimony of Walter Casey, 
acting lieutenant. New York City Police Department, detective di- 
visionj which is included in pt. 7 of the hearings of the committee.) 

The Chairman. Mr. Goldschein, will you be sworn, please. Do you 
solemnly swear that the testimony you will give to this committee will 
be the truth, the whole truth, and nothing but the truth, so help you 
God? 

Mr. Goldschein. I do. 

TESTIMONY OF M. H. GOLDSCHEIN, SPECIAL ASSISTANT TO THE 
ATTORNEY GENERAL, DEPARTMENT OF JUSTICE, WASHINGTON, 
D. C. 

The Chairman. Mr. Goldschein, you are native of Nashville, Tenn. ? 

Mr. Goldschein. 1 have practiced law in Nashville, Tenn., for about 
20 years. I have been with the Department of Justice since 1942. 

The Chairman. In Nashville you were in the attorney general's 
office I 

Mr. Goldschein. I was assistant attorney general. 

The Chairman. You were assistant State''s attorney general? 

Mr. Goldschein. Yes. 

The Chairman. You have handled many very difficult cases for 
the Department of Justice in Miami, Los Angeles, Denver, Kansas 
City, New York, and other places ? 

Mr. Goldschein. I have. 

The Chairman. I want the record to show that the chairman has 
known Mr. Goldschein many years and when I was chairman of a 
subcommittee of the Judiciary Connnittee to investigate Judge John- 



2 ORGANIZED CRIME KnT INTERSTATE COMMERCE 

son and other judicial rackets in the middle district of Pennsylvania, 
we got Mr. Goldschein on leave for the committee, where he did one 
of the most phenomenal and thorough jobs in uncovering one of the 
worst judicial rackets and scandals that the United States has ever 
known. The chairman considers Mr. Goldschein one of the very top 
and most aggressive and efficient men in this type of business in the 
criminal section of the Department of Justice. 

Mr. Goldschein. Thank you very much. 

The Chairman. Mr. Goldschein, you have prepared a statement for 
the committee. 

Mr. Goldschein. I have. 

The Chairman. The statement will be filed and made a part of the 
record at this point. Then your oral testimony will follow your writ- 
ten statement. 

(The statement follows:) 

Kansas City Guand-Jury Investigation 

Upon orders of the President of ihe United States, tbe Attorney General directed 
me to convene a grand jury in Kansas City, Mo., and make inquiry to determine 
whether the lawlessness that exists in that city, as reported in the public press 
and elsewhere, was the result of violations of the Federal statutes. Toward that 
end the then existing Federal grand jury was recalled by Jui ge Richard M. 
Duncan on the 2Sth day of September 1949. This grand jury is still in existence. 
On June 29, 1950, however, it was recessed to be reconvened on or about August 
15. Since the beginning of the inquiry approximately 275 witnesses have ap- 
peared and testified. Their testimony before this grand jury covers approxi- 
mately 8,500 pages. 

Of the first 180 witnesses that were subpenaed to appear, 90 percent were law 
violators. 

Ninety-five percent of those subsequently subpenaed were people who were 
called upon to give evidence that pertained generally to a violation of the law 
committed by those who were subsequently indicted, or who, we believe, will 
be indicted. To date the grand jury has returned 10 indictments — one for the 
violation of the alcohol-tax laws, one for causing a false statement to be made to 
a Government agency, and eight for violations of the income-tax laws. 

The indictments for income-tax violation were presented generally by John 
Mitchell, a special assistant to tlie Attorney General in the Tax Division of the 
Department of Justice. Other indictments for income-tax violations are exjjected 
to be returned soon. In this invesvigation I had the able and valuable assist- 
ance of Vincent P. Russo, a special assistant to the Attorney General in the 
Criminal Division of the Department of Justice, who had been associated with 
me on previous grand-jury inquiries and trials. I also had the cooperation and 
advice of Mr. Sam M. Wear, an able lawyer and a conscientious United States 
attorney, and I utilized, from time to time, the services of his staff, which he 
so generously tendered. 

From the Treasury Department I had the special agents of the Intelligence 
Unit of Kansas City, Mo., the untiring and ceaseless efforts of the Federal nar- 
cotics agents, the alcohol-tax agents and the internal-revenue agents, and also 
the assistance of an investigator from the Immigration and Naturalization 
Service. 

When we first arrived in Kansas City, in order to get a picture of the local 
situation, we called in the investigators of these various agencies and learned 
from them who the top-flight racketeers in Kansas City were and then issued 
70 subpenas for simultaneous execution for the first day's grand-jury session ; 
approximately 40 were served. All the witnesses and those who were subse- 
quently served were called before the grand jury and questioned. Those who 
gave evidence that was evasive were cited for contempt and tried before the 
Honorable Richard M. Duncan, who is in charge of the grand jury. 

Three such witnesses were tried ; the first two, after being in jail for 36 hours, 
requested permission to reappear before the grand jury and to purge them- 
selves by giving the truthful story on the matter under investigation. The third 
witness who was found guilty of civil contempt by Judge Duncan appealed to 
the Court of Appeal for the Eighth Circuit, who affirmed the conviction, with 
one judge dissenting. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 6 

So thorough are these Treasury investigators in enforcing the laws within 
their respective jurisdictions that it soon became apparent that there was no 
organized attempt to viohite the Federal statutes in that district. To ilhistrate 
this, let me point out that Charles CaroUa, an old-time Kansas City racketeer 
who had served a term in Alcatraz, attempted to recoup his fortune by going into 
the wholesale whisky business after his term of probation expired in 1949. He, 
of course, did not obtain the required Federal wholesaler's liquor tax stamp. 
After being in business and operating for less than 60 days, Carolla and his 
three coconspirators were apprehended upon the execution of a search warrant 
which netted the Alcohol Tax investigators approximately 1,100 cases of tax- 
paid whisky valued at approximately $50,000. This was an excellent job of 
patient investigating. After they had completed their investigation, they came 
into consult with me about the search warrant and then executed it. 

Bootleggers who purchased liquor from Carolla's organization were called 
before the grand jurv and compelled to testify. One, who became offensive and 
refused to testify, was sent to jail and fined $750 for contempt. After being 
confined for the week end he talked. Carolla was indicted and on July 7, 
1950, he was sentenced by Judge Duncan to 2 years in the penitentiary and fined 
$1,000 ; Marcella, one of his coconspirators, was also sentenced to 2 years in the 
penitentiary and fined $1,000. This was one of the many instances in which 
Mr. Sam Wear, United States attorney, who did most of the work on this matter, 
did an excellent job. 

Judge Albert L. Reeves, of the United States District Court for the Western 
District of Missouri, also appeared before the grand jury and testified with 
refereilce to the manner and speed with which criminal cases are handled in 
that district. 

He stated that 35 days from the date of the indictment is the longest time 
it takes for the trial of any case in that district, and that the average time is 
approximately 14 days. 

Kansas City has no red-light district. This, without doubt, is due to the fact 
that the FBI has jurisdiction over the transportation of women for immoral 
purpo.ses from one State to another. But this also speaks well for the Kansas 
City Police Department which will not permit a house of prostitution to get 
started. It is apparent, because of the vigilance of these various agencies and 
the speed with which the courts dispose of matters within the Federal jurisdic- 
tion, that organized racketeers steer as far away from a violation of the Federal 
statutes as they possibly can. 

Until 1942. there was a well-organized group in the narcotic racket in Kansas 
City where the Federal Bureau of Narcotics made some excellent cases and 
apprehended the major violators. The convictions secured against those involved 
broke up this vicious racket. 

To illustrate further how effective this is, all those connected with the nar- 
cotics racket in the Kansas City area were said to be members of the Mafia. In 
1939 and 1940 10 top-flight narcotic distributors and several of the lesser lights 
were convicted in the Federal court there. The investigation of the narcotics 
violations continued and in 1943 five of the real important ringleaders in the 
narcotic trafiie were convicted and sentenced as follows : Joseph DeLuca, 3 
years ; James De Simone, 6 years ; Nicola Impastato, 2 years ; Paul Antinori, 7 
years ; and Joseph Antinori, 5 years. These convictions broke the back of this 
organization and narcotic violations are almost nil in the western district of 
Missouri. 

In order to develop our investigation of Federal crimes it was necessary to 
call each of these racketeers before the grand jury and compel him to disclose 
the nature of his business and the source of his income over the past 15 or 20 
years. 

Through this method of inquiry we learned that there were a number of 
gambling houses operating in and around Kansas City, some of which limited 
themselves to just dice games, some to just horse books, while others included 
dice games, horse books, sports-events books, and blackjack tables. 

The gambling operations in Kansas City seems typical of a good many other 
cities; e. g., Miami, Detroit, Los Angeles, Chicago, Philadelphia, Camden and 
Trenton, N. J., New York City, and the bordering New Jersey cities. 

In this respect they are like Kansas City on a larger or smaller scale depending 
on their relative populations. 

Binaggio and Gargotta (who were murdered recently) and Gizzo, Lococo, and 
Balestrere were generally known throughout the underworld as the Five Iron 
Men of Kansas City. Binaggio was on record as a one-fourth owner of tlie 



4 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Coates House enterprise which, incidentally, in the year 1948 made a net profit 
of $100,000. The other partners in this enterprise were Tony Gizzo and three 
lesser lights: Mel Levitt, Sam Butler, and Joe Danzo. Binaggio also had an 
interest, of record, in the dice games ; for example, the dice game on the Goulding 
property at Southwest Boulevard and the State line. Gargotta had an interest 
in a race horse news information service — the Standard News Distributing 
Co. — and he also had an interest, with Binaggio, in the State line dice games. 
Lococo was on record as a one-fourth owner of the Standard News Distributing 
Co. (which is controlled by the Universal News Service), and he also had an 
interest in the State line gambling operation, as well as an interest in a dice 
game at Ninth and Woodland, and others. Balestrere, the fifth of this quintet, 
has no recent record of being connected with any gambling operation. However, 
since it is known that Binaggio was collecting Balestrere's share of the profits 
in the Green Hills gambling house, Balestrere's interest in the venture was gen- 
erally referred to in the racket as "Balestrere has a piece of Binaggio." 

The Kansas City gambling operators are so organized that no outside group 
is permitted to operate imless the mob is represented. For example, in 1945 
Eeneger and Goulding, two gamblers, were operating a dice game at the rear 
end of a row of buildings owned by the Goulding family in Kansas City, Mo., 
near the State line at the other end of the Last Chance Tavern. A small corner 
of their property is said to cross the State line on the Kansas side. The mob 
or "the greenies," as they are sometimes referred to, demanded an interest in 
this venture, but Reneger, who was operating it, refused even to let them come 
into the place to play. A short time after this demand was made the frambling 
room was blown up by a bomb. It stayed out of operation for some time while 
Reneger opened a temporary dice game farther up the same street. Some time 
thereafter and after the damage had been repaired, Reneger, Goulding, and 
others again opened the dice game at the same site on the Goulding property. 
Shortly after the place was reopened Reneger was found in an automobile with 
four bullet holes in his head. The place stayed closed for a while, but subse- 
quently, it was opened with Binaggio, Lacoco, Gargotta, Klein, Osadchey, Free- 
lander as partners. The "greenies" were in. At the time of their murder 
Binaggio and Gargotta were partners in tlie same gambling house, and the fact 
that each had four bullet holes in his head would at least seem to indicate that 
those who were displeased with Reneger were also displeased and discommoded 
by the activities of Binaggio and Gargotta. 

During this investigation in Kansas City, five witnesses who were subpenaed 
to appear and who appeared before the Federal grand jury have died violent 
deaths: Irene Sarno {an overdose of sleeping pills); Sam Butler, who left 
the grand jury witness room at 12 o'clock noon with instructions to return at 
1 : 30 p. m., didn't return, but was found shot to death in his oflBce with a pistol 
lying beside him : Danny Robinson, who had appeared before the grand jury 
and testified against narcotic distributors, was found dead in a school yard 
with five bullet holes in his head ; and Charles Gargotta and Charles Binaggio, 
who were found shot to death, each with four bullet holes in his head. By 
virtue of the fact that Danny Robinson was not involved in the narcotic case, 
but was called in to testify against others, the FBI was called in to investigate 
the murder of a witness before the grand jury. 

All the agents worked long and diligently on that murder from the standpoint 
of the obstruction of justice, and I know that they worked diligently, as they 
do in all cases, because in tliis particular matter I worked with them (the 
narcotic agents, the FBI, and the city homicide officers of Kansas City). On one 
Sunday we worked from 9 o'clock in the morning until 2 o'clock on the following 
morning, and while we were not able to develop a charge of obstructing justice 
which carries with it a 5-year punishment, the narcotic agents did develop 
a narcotic case against Sam King and Mack King, wlio. all the investigators 
on the case believe, committed the murder. Upon conviction of the narcotic 
violations, they were sentenced to 10 years each. 

The Federal grand jury in Kansas City did not malre an investigation into 
the murder of Charles Binaggio and Charles Gargotta because murder is not 
a Federal crime and .such an investigation would have sidetracked the original 
intent and purpose of this grand jury inquiry. Nothing would iiave suited 
the racketeers in Kansas City better than to have the grand jury diverted for 
any purpose. We intended to finish what we had started, and to leave the 
violation of the State laws, including murder, to the officials of that city and 
State, who are responsible for their enforcement. We believe we know why 
they were killed. The cause of all gang murders everywhere is the fight to 



ORGANIZED CRIME IN INTERSTATE COMMERCE 5 

detei'inine who shall get the money derived from the gambling operations. The 
fight for control in Kansas City among the racketeers is a fight for the profit in 
gambling. Let me illustrate again : Louis Schaett'er and John McBride, suc- 
cessors to "Bud" Tralle who had been operating for approximately 25 years 
and who died ahout a year ago, have been oi>ei*ating the largest numbers or 
policy racket in Kansas City. Schaeffer and McBride together were netting 
about $125,000 a year. On October 1, 1949, John Mangiaracina and Max Jaben 
together "muscled in" for one-half of the net in McBride and Schaeffer's policy 
racket only because INIcBride and Schaefl'er felt that it was better to remain 
alive and get 25 percent each than to be murdered. On the same date that 
Jaben and Mangiaracina "mu.scled in" on McBride and Scliaeffer, Joe and Willie 
Commisano, alias Joe and Willie Cummings, simultaneously "muscled in" on 
two other lucrative numbers racket operations — one oi>erated by Ray Bendel 
and Ernest Duncan, and the other by John Lewis. Just 2 months later, Joe 
Gurera, a local police character, "muscled in" for a half interest in a numbers 
racket that had been operated in Kansas City by Israel Brenner for about 25 
years. These "muscling-in ' tactics illustrate the mob's continuous fight for 
control of the profits derived from unlawful gambling operations. The numbers 
or policy racket in Kansas City appears to be local in character. 

In many cities the investigators are handicapped by the fact that the tele- 
phone companies refuse to cooperate with the authorities and will give them 
no information concerning the use to which telephones are put by the gamblers 
and bookmakers. The telephone companies profess to be fearful that they will 
be sued by the gamblers if they learn that the telephone company gave informa- 
tion to the police authorities concerning the gamblers' business. The telephone 
companies promptly respond to grand jury subpenas. However, this method 
of securing the desired information is not available to the routine investigator. 

The Kansas City racketeers did not confine themselves to Kansas City. In 
1947, the Stork Club was operating in Council Bluffs, Iowa, as a restaurant 
and gambling house. The Stork Club had been operating at that location since 
1942, and was opened up by Dick Mahoney and Bill Hill of that city. It had an 
elaborate gambling casino. In 1945, Mahoney and Hill sold the Stork Club 
to Chicky Berman of Minneapolis, Minn. ; Al Abrams and Si Silver of Omaha, 
Nebr. ; and Max and Einar Baramson for $45,000. The new owners enlarged 
and remodeled the place and spent another $45,000 in modernizing the gambling 
casino which was operated in connection with the dinner service and which, of 
course, was a cover for the gambling operations. 

A short time thereafter Berman and Abramson sold their interest to Silver 
and Max and Einar Abramson, the other three remaining partners. Silver stated 
that in 1947, he and his partners sold this elaborate gambling casino and dining 
room (that cost them $90,000) for $20,000 because he was sick and couldn't 
operate it. Charles Hutter, of Council Bluffs, Iowa, who had been paroled by 
Alabama authorities after serving 4 years of a 10-year sentence imposed upon 
a conviction for an armed robbery committed in that State, came to Kansas City 
and met Klein and Osadchey at the College Inn Bar and told them about the 
Stork Club in Council Bluffs, Iowa, that could be bought for .$20,000. Klein and 
Osadchey agreed to buy for their group. Hutter then went to Omaha and there 
contacted Barnes, one of the former partners, and offered to sell him a half 
interest in the Stork Club for $20,000, to which Barnes, it is said, agreed. Barnes- 
money was used to pay Silver and his associates $20,000 for the Stork Club. 
Silver, of course denies that he signed this conveyance through threats or coer- 
cion, and it is probably natural that he should deny it. About 31/2 years ago, the 
Stork Club was bombed and the front door of the club was blown in. We also 
know that in 1946 a bomb was placed in a gambling house in St. Joseph, Mo. 
The only thing that saved the people that happened to be there was the fact 
that one of the men present seeing a fuze sputtering in an air vent, ran to it, 
grabbed it, and threw it out into a field. When the bomb went off, it broke win- 
dows for blocks around. No one would or could identify the person who placed 
the bomb in the air vent. Accordingly, there was no prosecution. The cause 
of the bombing, of course, is apparent. The racket boys wanted a "piece" of 
this gambling operation, but its owner would not give it. Naturally, this gam- 
bling house has not operated since that time. 

The Kansas City racket boys also (liberated in Colorado Springs, Colo., when 
Max Jaben, Walter Rainey, and Si Davis went to Colorado Springs and opened 
a gambling house there with some Denver gamblers. This gambling house was 
operated from 1946 through 1949. 



6 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Snag Klein, with otlier Kansas City gamblers, was interested with. Mickey 
Cohen in the LaBrea Club, a gambling casino in Los Angeles, Calif. 

In 1945, Kansas City, Mo., was the central distributing point for the race horse 
wire service that came over the Continenal Press Service to Kansas City and 
the western bordering States, through the Mo-Kan Co. The company was suc- 
ceeded by the Harmony News Service that was owned and operated by Simon 
Portnoy. Actually, Portnoy was an employee of the Continental Press Service, 
a trade name used by James Ragen and Arthur (Mickey) McBride, receiving a 
salary of $125 per week. When the Trans-American News Service was organized 
in 1945, Portnoy was "induced" to leave the Continental Press and go with the 
Trans-American News Service at a salary of $200, plus a 15 percent commission 
to service the bookmakers in Kansas City. When the Trans-American News 
Service surrendered its charter (after Ragen was murdered in 1946) its operation 
merged with the Continental Press Service. The Harmony News Service was 
changed to the Standard News Service, which was owned and operated by the 
Universal News Service, the trade name for Edward P. (Eddie Spitz) Osadchey, 
Mori-is (Snag) Klein, Thomas Lococo and Charles Gargotta. They received 
their franchise for the Continental Press Service through the Midwest News 
Service because of their ability to control the bookmakers in Kansas City and 
to operate the wire service with a minimum of resistance from or molestation by 
tlie authorities. The Treasury Department agents estimate that the race-horse 
bookmakers in Kansas City, Mo., do a business of approximately $7,500,000 a 
year, and this figure is based on the available books and records of these operators 
without considering the business of the sidewalk bookmaker (those that do not 
have fixed business oflSces, but go from customer to customer soliciting bets). 

The sports events bookmaker who takes bets on football, baseball, and so forth, 
does not generally rely on the Continental Wire Service for information but 
purchases the Western Union sports events service. The Western Union Co. 
supplies the sports news over a teleprinter which its supplies and for whicli it 
charges about $40 a week. About 80 percent of the teleprinters leased in the 
Kansas City area have been leased by bookmakers. 

The Department of Justice has been making inquiry into the race horse 
wire service for quite some time. In 1948, I began this inquiry for the purpose 
of determining whether tliere were any Federal statutes that made the trans- 
mission of this news used primarily for the violation of State gambling laws 
unlawful. I examined into all phases of it, including the question of whether or 
not the antitrust statutes would apply to the activity of the Continental Press. 
After much consideration and discussion with members of the Antitrust Division 
and other ofiicials of the Department, it was concluded that it would be ridiculous 
for the Federal Government to insist that the Continental Press should break 
up into several smaller companies so that the bookmaker who was operating in 
violation of the State laws could have his choice in selecting which of the several 
companies should aid him in the violation of these State laws. Of course, the 
ultimate conclusion of the Department is evidenced by its recommendation for 
legislation to control this vice. 

Of the four owners of the Universal News Service, Gargotta, Osadchey, and 
Klein have been convicted for the violation of Federal statutes ; Lococo, while 
arrested on innumerable occasions, has not been convicted, but, as the Kansas 
City Federal grand jury said, he should have been. At the present time he is 
under indictment returned by that grand jury for income-tax evasion. Klein 
is in the Federal penitentiary at Leavenworth serving a sentence for a vote- 
fraud violation. Gargotta was in the Federal penitentiary for stealing arms and 
ammunition from an armory. In 1940 he was convicted for assault with intent 
to commit murder, for whicli he served 4 years of a 10-year sentence in the State 
penitentiary, and for other offenses. He was murdered on April 6, 1950, together 
with Binaggio, as a result of his gambling operations. With few exceptions, these 
individuals are typical of the I'ace-horse news distributors throughout the coun- 
try. Portnoy was experienced and operated this wire service. These four owners 
knew nothing about the business, and had nothing to do with it, invested no 
capital in it, and yet were dividing net earnings from this operation of more 
than $20,000 a year. Kansas City is on the Midwest circuit that comes down 
from Chicago. The whole country is covered by the many circuits of the Conti- 
nental Press Service over leased Western Union lines. The bookmakers in every 
hamlet, town and city in the United States are linked together by the wires of 
this service. All, using the same wire reports, know simultaneously the condi- 
tions under which any given race is run ; they deal among themselves in placing 
lay-off bets; and they also act, as has often happened, as contacts to recruit 



ORGANIZED CRIME IN INTERSTATE COMMERCE 7 

others to participate in the commission of other offenses. In substance, the 
Continental Press Service aids and abets practically every bookmaker in the 
United States in violating the gambling laws of their respective States. 

The Chairman. All right, sir, just tell us about it. 

Mr. GoLDSCHEiN. I was directed to convene a grand jury in Kansas 
City, Mo., for the purpose of determining what the criminal situation 
there was with reference to the violation of the Federal statutes. The 
newspapers had been commenting on the matter for quite a long time, 
and other national periodicals were discussing Kansas City. The 
determination was finally made that perhaps some of these operations 
came within the jurisdiction of the Federal Government. I went to 
Kansas City and made a survey in August of 1949. I spent about 10 
days there, and again in September of 1949 and concluded that the 
only way the matter could be determined was through a grand-jury 
inquiry, that it wasn't the type of investigation that you could send 
some investigators out and determine what the situation was. 

On the 25th day of September 1949, at my request. Judge Duncan 
reconvened the then existing grand jury. Let me say for the people 
in the western district of Missouri that grand jury, as typical of the 
people in that community, was very, very much interested in that 
particular issue, so much so that from the time we started on the 28th 
day of September 1949, until the grand jury recessed last week, we 
didn't have one absentee on that grand jury. They were there every 
day the grand jury met. 

We had the assistance there of the special intelligence agents of the 
Treasury, the narcotic agents, ATU, and post-office inspectors who 
were very helpful in getting our people served. The problem that we 
were confronted with there was how to get this investigation started. 
The minute these racket boys would hear that the grand jury was in 
session to investigate rackets, the difficulty would be in finding them. 
They would go to Florida or Los Angeles or Chicago, to the four 
corners of the earth, and there would be nobody to investigate in 
Kansas City. 

So it was a question of getting started. The question was how. 
They had some deputy marshals there, I think about four or five. 
When we started there we called in all these agencies to find out from 
them who, insofar as they were concerned, were the top racketeers in 
Kansas City, Mo. We also got a couple of detectives from the police 
department to see if they could supplement this list. Then we called 
in the newspapermen, that is, called in the newspapermen at a later 
date, to see whether they could give us any additional names. 

The first list that we made comprised about 75 names, and we knew 
that the deputy marshals couldn't serve 75 subpenas without the boys 
hearing after the first or second or third one was subpenaed, and leave. 
I decided that we would use the special-delivery boys of the Post Office 
Department, and we would serve them all by mail special delivery, 
return receipt requested by addressee only. To assure the fact that we 
could get affidavits to the fact that each one of these men was served, 
I got the postal inspectors, we addressed the envelopes, got the sub- 
penas and gave them to the postal inspector, and he put the subpena 
in the envelope and sealed it, and then he delivered it to the special- 
delivery boy who signed for it, and the special-delivery boy delivered 
it to the addressee only, who signed for it. Of course, we put a return 
address on there, Treasury post-office box, some in Kansas City, some 



8 ORGANIZED CRIME IN INTERSTATE COMMERCE 

in Wichita, Kans., some in Oklahoma, and Little Rock, and Memphis, 
so it wouldn't all appear to come from one particular place. 

With that we caught about 40 of them, and they were the top-flight 
racket boys in Kansas City. 

They were called in, and we didn't have very much background on 
them. They don't have a squad in Kansas City like Lieutenant Casey 
has, that keeps tab on who the racketeers are. We know that this one 
is a racketeer and that one is a racketeer and the other, but particularly 
what he is connected with they don't know, as for example, Gargotta, 
Binaggio, Lococo. The police department would all say they are 
gamblers, but where they operate and who operates in what place they 
just didn't know. 

It was a question of calling these fellows in. We began with Binag- 
gio, I believe. We started in by where he lived and how long he lived 
there and where he lived before that, and how long he lived there. We 
took him back that way to the places where he had lived for about 25 
years. We asked him what business interests he had. He told us. 
We wanted to know what else, and what else he went into, until we 
thought we had everything he was in at the present time. "What busi- 
ness were you in before that? What other financial interest did you 
have at that time?" We would take him back before that. We would 
go back about 25 years, as far back as we could . 

In that way we took all these first 40 that we caught and dressed 
them down in that way, just general information. 

Then we got the intelligence-unit investigators and the narcotics 
investigators and had them go over this information that we had re- 
ceived from these racket boys and checked their bank accounts in the 
various banks. Then we called them back on a subsequent occasion 
to check the bank records against what they told us and then ques- 
tioned them along these lines. 

In that way we got to know of the gambling operations that Binag- 
gio was connected with, Lacoco, Gargotta. Balestrere, Snag Klein, 
Osadchey, all those names you have read at one time or another in 
the Washington papers or have heard before some committee here. 

We, of course, weren't interested in gambling as such because we had 
no jurisdiction. Our jurisdiction is Federal statutes, and we have no 
gaming statute among the Federal statutes. So our problem was 
where were the boys racketeering, what was the extent of their opera- 
tions. Of course we followed it through as far as we could possibly 
follow it. We found a number of interstate transactions with refer- 
ence to gambling. There was no Federal statute that touched it. 

I called in before the grand jury the heads of each of the Treasury 
investigative agencies in Kansas City, like the head of the Intelligence, 
the head of the Alcohol Tax, the Narcotics, and the Secret Service, to 
find out from them who they considered were the major law violators 
insofar as the statutes under which they were acting were concerned. 
They gave us names that they suspected, but they knew of no organized 
attempt to violate the statutes over which they had jurisdiction. 

Judge Reeves, who was chief judge of the western district of Mis- 
souri, had about 20 years ago called a Federal grand jury to inquire 
into the violation of Federal statutes there. He is the judge that tried 
the Coplon spy case here in the District. I called him before the grand 
jury. He is a man up in years — I would say about 75 years of age — 
and considered a very able lawyer, I asked about his calling the 



ORGAJSriZED CRIME IN INTERSTATE COMMERCE 9 

grand jury to make an inquisitorial investigation about twenty-some- 
odd-years* ago, and he recalled it and said he did. I asked him why 
he did that. He said generally because the newspapers and the in- 
vestigators and everybody in the community said that lawlessness was 
rampant and he though nobody was doing anything about it, and the 
grand jury should. I asked him if he had in mind calling a grand 
jury since that time for that purpose. He said he did not. I asked 
him why he did not. His answer was that no such condition was called 
to his attention, that he knew of no such condition existing in Kansas 
City with reference to the violation of the Federal statutes. I asked 
him to tell the grand jury how long it took from the time that the 
investigators brought in a case up until the time that the man was 
indicted and tried, and the statement he made was that the longest 
period of time was 60 days and the average 14 days. 

So, the picture in Kansas City as I saw it was that if a man was 
caught violating the Federal statute the certainty of punishment was 
such that he would be afraid to play with it. In other words, one 
thing he didn't want was to go to the penitentiary ; and, being caught 
for a Federal statute violatiqn, going to the Federal penitentiary was 
a certainty. 

Here is how it operates from the practical standpoint. While we 
were there we had Charlie Carolla before the grand jury. Charlie 
Carolla was a successor to Johnny Lazzia, who was the top mobster 
up until 1934 in that area. When Lazzia was murdered in 1934, 
Carolla took his place. He was the bag man who went around and 
collected from all the gambling houses. That is up until 1939. In 
1939 he was indicted and in 1940 he was sent to the penitentiary, 
Leavenworth, He was smuggling whisky and narcotics into Leaven- 
worth, and he was then transferred to Alcatraz. 

In 1937, I believe it was, for good behavior, having served 7 years 
of his time, he was released on probation, and his probation expired 
in 1939. I was satisfied that Carolla knew a great deal of the under- 
world and knew the conditions that existed. I called him before the 
grand jury and started questioning him about what his activities 
were since he got out of the penitentiary and what he knew about the 
general conditions. Of course, Carolla would tell us nothing more 
than he thought we could prove. iVnything he thought we knew, he 
would tell us. 

In checking the gambling houses and the books of these gamblers, 
we found some checks amounting to about $3,000 that were paid to 
one by the name of Arnone who I knew was a son-in-law of Charlie 
Carolla. We already had Arnone before the grand jury at one time, 
and he was a filling-station attendant. He worked in the filling sta- 
tion, getting $35 or $40 a week. Earning $35 or $40 a week clidn't 
gee with a fellow betting or getting $3,500 from a bookmaker; so, 
we called Arnone in and questioned him about it, and he said he didn't 
know anything about it; it wasn't his; he didn't get it, and he knew 
nothing about it. We then called the bookmaker in, Fenelli. He 
came in and we wanted to know who that check was given to. He 
said he gave it to Charlie Carolla. Charlie Carolla wanted to make 
some bets with him and told him to make the bets in the son-in-law's 
name. We called Charlie Carolla in again. Charlie Carolla said 
"Yes"; it was his. 

68958 — 51 — pt. 12 2 



10 ORGANIZED CRIME IN INTERSTATE COMMERCE 

We were interested in it because we thought, if we could make a 
case on Charlie Carolla, Charlie Carolla would tell us about them all. 

The next time I went back to Washington we got his files, his pro- 
bation file, the reports he made to the probation office. If he made 
a false statement to the probation officer and we could prove it, then 
there might be a violation of the Federal statutes. 

I am giving you this detail only insofar as it shows the activity of 
the Federal agents there and why they won't take a chance on violating 
the Federal statute. 

When I got back to Kansas City, the bailiff that I had on the grand- 
jury door came in to see me, and his language was: "I think I have 
got something for you.". I said, "What have you got, Lashbrook?" 

He said, "I have been on Charlie Carolla since you left, and I think 
we have got a case. The boss is coming over to see you tomorrow." 

The next day the head of that agency came over there with the ele- 
ments of a search warrant. We went over the search warrant and 
fixed it up. The boys had been laying on Carolla. When I say 
"laying" I mean that in its literal sense. They had found a look- 
out near Carolla's home where they could get close enough without 
being seen and with a long telescope they were watching the activities 
in the back of his house. They had a short-wave radio there and had 
radio cars on the outside, and every time a car would pull up in front 
of Carolla's place the boys would get his license number and send 
it out by short wave to the boys outside with these cars, and they 
trailed this fellow to find out where he was going and who he was 
for future use. 

Within a matter of 30 minutes after they left my office they executed 
the search warrant and caught 1,100 cases of tax-paid whisky. Then 
it was a question of making a case against Carolla for doing business as 
a wholesaler without obtaining the wholesale whisky dealer's stamp 
and paying the tax. The question was making the sales. We sub- 
penaed all these bootleggers in from Oklahoma, which is a dry State, 
whose license numbers had been taken down by these ATU agents, 
subpenaed them in before the grand jury. It was a question of just 
compelling them to tell what the dealings were they had with Carolla. 
If you have had any experience with bootleggers, you know they 
won't talk unless they have to. One of them got up in the grand- 
jury room and was going to assault Mr, Wear. We stopped that, of 
course ; but it wasn't stopped at that point. He was so obstreperous 
that the judge sent him to jail over the week end and fined him $750, 
which he paid before he got out of jail. 

Carolla hadn't been in business more than 60 days. He started 
in business after he left the grand-jury witness room as a witness. 
He thought he was through. It was then that he went into business 
and was in business for less than 60 days when he was caught again. 
Of course, he got 2 years in the penitentiary. He was sentenced last 
Friday to 2 years in the penitentiary, and he is on his way out. 
Carolla, Marcella, and Carolla's two sons-in-law. One was just a 
dupe and knew nothing about it, and the judge suspended his sentence. 
Carolla got 2 years and a thousand-dollar fine, and Marcella got 2 
years and a thousand-dollar fine. 

They had a large narcotics ring in Kansas City. I believe in 1939 
they indicted about 39 in a conspiracy and convicted a great number 
of them. Then in 1942 they indicted 60 others and convicted 5 of 



ORGANIZED CRIME EN INTERSTATE COMMERCE 11 

those. They were the top mobsters in Kansas City connected with 
narcotics and were part of the Mafia. Mafia in Kansas City was 
pretty well organized to the point where you did what you were 
told or else. In that narcotic investigation in 1942 Caramusa broke 
with the boys and told the investigators what the story was and 
testified. In lOi-i Caranuisa was murdered. In 1948 Mary Bono 
testified in the vote-fraud investigation in Kansas City, and she was 
nmrdered. In our investigation in Kansas City from September 
through the end of May, five died violent deaths. This Sarno woman 
was poisoned; Dandy Robinson, who appeared as a witness before 
the grand jury and testified to narcotic violations, was murdered. He 
was found in a schoolyard with five bullet holes in his head. Sam 
Butler appeared in the witness room, waiting to be called as a witness, 
and the hearing was recessed at 12 o'clock to return at 1 : 30, and at 
1 : 30 he was found in his office with a bullet hole in his head, which was 
said to be suicide. I don't know whether it was or not. Then 
Charlie Gargotta and Charlie Binaggio were both found with four 
bullet holes in their heads. 

From the standpoint of organization of the mob, this is significant : 
In 1945 there was a gambling house that was operating in back of the 
Last Chance Tavern. The Last Chance Tavern is at the end of a row 
of about six buildings, and at the other end of the building, to the rear, 
was a pretty elaborate lean-to built on. It belonged to the Goulding 
family. That was on the State line, pretty near the State line. Gould- 
ing appeared before the grand jury as a witness to tell what he knew 
about these gambling operations. Our investigation of course being 
limited to Federal statutes, we were interested in who were connected 
with these gambling operations, the books and records of these gam- 
bling operations, in order to be able to determine whether or not any of 
these racket boys had failed to pay full income tax on the moneys they 
received. 

It developed that in 1945 there was a gambler there by the name of 
Reneger. Reneger was in partnership w^ith Goulding and several 
others. The racket boys wanted a partnership in it. That is, "the 
greenies," as they called them there, the mob. Reneger didn't like 
"the greenies," and he wouldn't let them come into the place to play. 
He didn't want them around. They persisted, and Reneger ran them 
out. They planted a bomb in the place and blew it up. It stayed idle 
for a while and Reneger moved farther up the street. Things got quiet 
and Reneger decided they would fix up the old place and start over 
again, and he did. He operated there for several months, and one day 
Reneger was found in an automobile with four bullet holes in his head. 
That closed up the Last Chance gambling operation for some time. 

That happened in 1947, the murder of Reneger. It operated again 
later on. 

January 1 of last year "Snag" Ivlein came in to tell Goulding that 
they were opening up again. I asked Goulding why he let them open. 
He said : "You don't argue with those boys," and he told me the story 
of Reneger. The part that struck me was the four bullet holes in his 
head, because when Gargotta and Binaggio were found dead in their 
clubhouse they each had four bullet holes in their head. Obviously, it 
isn't necessary to shoot a man in the head four times to kill him ; so the 
bullet holes seemed to have some particular significance. Some of 



12 ORGANIZED CRIME IN INTERSTATE COMMERCE 

these mobsters have a peculiar sense of humor in conducting their 
business, especially so with some of these killers. It occurred to us 
that "four" in shooting dice is generally referred to as "Little Joe," and 
Reneger was connected with a dice game, and Gargotta and Binaggio 
with the same operation. They were all shot four times in the head. 
It seemed to be like the signature of some mobster. We then started 
making inquiries as to who in that area was known as "Little Joe." 
We checked the police department records and all other records we 
could find. Among them we found the name of Joe Curera. Joe 
Curera in January of 1950 muscled into the numbers racket that was 
run by a brother and took over a half interest. He did no work, paid 
no money, got a half interest. 

In October of 1949 all the numbers operators in Kansas City gave 
up a half interest in their business to the mob. Schaeffer and McBride 
had a numbers or policy racket that netted them $125,000 a year. They 
took over from one by the name of Tralle, who was an uncle of 
Schaeffer. Tralle had operated there individually for 25 years un- 
molested. On October 1, Schaeffer and McBride, Lewis, Badone, and 
all the others were taken over for a half interest. The significance to 
me is that among this group there are five different operators, one hav- 
ing no connection with the other at all; yet, on October 1, 1949, each 
one of them gave up a half interest to five groups. The Commisano 
brothers, both of whom have been in the penitentiary for larceny, 
robbery, and prohibition violations, took over the Badone and Lewis 
operations. Johnny Mangiaracina and Max Jaben took over the Mc- 
Bride and Schaeffer operations. When they took over they each took 
over to the tune of $3,500 a month net, and they were getting that from 
October through February 1950. You can see from that the boys 
have something to fight about. Control of the rackets in Kansas City 
or any other place determines who get that kind of money. 

I have given you a picture there of the gambling, dice games pri- 
maril}^, and the numbei-s racket in Kansas City. But it isn't any 
different from Detroit, Miami, Los Angeles, Philadelphia, Camden, 
Trenton, or the cities in any area bordering New York. I just heard 
the lieutenant of the New York Police Department talk about Duke's 
Tavern. I was in New York at the latter part of 1947 and 1948 just 
making a survey, and the first thing I learned when I got there was 
the operations of Duke's Tavern. While it is in the name of some 
innocuous individual, the owners are said to be Quarino Moretti, and 
Moretti is of course a big stick in that area. Any mobster who came 
to New Jersey had to see Moretti. I think one of your investigators 
who knows as much about that as any one is George White. He went 
in there one time to look for a narcotic violator, and nobody would 
talk to him or tell him anything about his fugitive. He said he heard 
a chair fall, and he thought there was some compartment of the bar 
where somebody might be hiding' out. He picked up a stool and 
threw it through that great big mirror to see if there was anybody in 
back there. It was right after that they soon brought in George 
White's fugitive. I don't think they wanted much business with 
George White. 

Getting back to Kansas City, the race-horse wire service is a busi- 
ness there that is quite lucrative to the racketeers. It is lucrative 
in the sense that he receives a fixed salary, and he doesn't have to do 
anything about it. It is just net income to him. He knows nothing 



ORGANIZED CRIME IN INTERSTATE COMMERCE 13 

about the business; he doesn't operate it, nor does he concern him- 
self with it. The race-horse wire service in Kansas City is operated by 
one Simon Partnoy. Partnoy has been operating it there since James 
Ragen started the Continental Press Service, which was a successor 
to the Nationwide News Service. He first was operating with Con- 
tinental. Then, when the mobsters in Kansas City decided that they 
were going to open an office for the Trans-American News Service, 
Partnoy went with the Trans-American News Service. I believe that 
was in 1945. They operated in Kansas City alone. When Partnoy 
had the Continental Press before, he not only had Kansas City, but 
he had the States on the western border of Kansas. I think he went 
do\yn as far as Oklahoma and the State of Kansas as well. When the 
Trans-American was organized and Partnoy went with them, he had 
Kansas City alone. Then when Ragen was murdered the Continental 
Press took over the Trans- American News Service outlets and Part- 
noy remained in operation of the Kansas City office, servicing those 
bookmakers. 

It isn't a simple proposition to get the evidence on who operates 
these race-hoi*se wire services. To illustrate, the Attorney General 
of Missouri started some injunction proceedings, I believe it was, in 
Kansas City, in a fight to sever the service of this Standard News 
Service that was operated by Partnoy. Judge Cook, if I am not 
mistaken, had under advisement an injunction for a period of 3 
years, whether or not he would or would not grant that injunction. 

The Chairman. What sort of a judge is Judge Cook? 

Mr. GoLDscHEm. He is a county judge; part of the State system. 

The Chairman. Maybe Senator Hunt would like to ask you some 
questions about things he might be interested in right now and then 
we can go back and follow this trend on through. 

Senator Hunt. I do not know of any questions. It has all been 
very, very interesting ; tremendously so. 

(Discussion cff the record.) 

The Chairman. The interim report has been filed as an exhibit to 
Mr. Goldschein's testimony. 

To bring us down to date, what is the situation out there now? 
This is not part of the release. 

Mr. Goldschein. The release is just that statement. 

The Chairman. Yes. 

Wliat is the situation in Kansas City now and can we look for 
and iret at that as within the purview of our resolution? 

( Discussion off the record. ) 

The Chairman. Mr. Goldschein, we surely do appreciate this in- 
formation. 

We will recess until further notice. 

(Whereupon, at 3 : 50 p. m. the committee recessed subject to the 
call of the Chair.) 



INVESTIGATION OF ORGANIZED CRIME IN INTERSTATE 

COMMERCE 



FRIDAY, FEBRUARY 16, 1951 

United States Senate, 
Special Committee To Investigate 
Organized Crime in Interstate Commerce, 

Washington^ D. C. 
The committee met, pursuant to call of the chairman, at 10 : 05 a. m., 
in room 104r-B, Senate Office Building, Senator Charles W. Tobey 
presiding. 

Present: Senators Kefauver (chairman). Hunt, and Tobey. 
Also present : Downey Kice, George S. Kobinson, John L. Burling, 
associate counsel ; and Joseph L. Nellis, assistant counsel. 
Senator Tobey. The committee will come to order. 
All right, Mr. Brookfield. 

Do you solemnly swear the testimony you are about to give will be 
the truth, the whole truth, and nothing but the truth, so help you God ? 
Mr. Brooblfield. I do. 
Senator Tobey, Give your name to the stenographer. 

TESTIMONY OF JOHN W. BROOKFIELD, TEIAL ATTORNEY, FEDERAL 

TRADE COMMISSION 

Mr. Brookfield. John W. Brookfield, trial attorney, Federal Trade 
Commission. 

Senator Tobey. Your address? 

Mr. Brookfield. 6067 Little Street, Alexandria, Va. 

Senator Tobey. What are your duties at the Federal Trade Com- 
mission 'i 

Mr. Brookfield. I am trial attorney; that is, I try — I issue com- 
plaints after investigation is made, and try them before the trial exam- 
iners, brief the cases, and present them. 

Senator Tobey. Are these special cases, cases of a special nature that 
you handle there, or are they general? 

Mr. Brookfield. Well, for the last 10 years, it has been more or less 
special. I have handled the so-called lottery merchandise cases, which 
have been before the Commission. I suppose some 150 of them. 

Senator Tobey. Do you know anything about the punchboard game? 

Mr. Brookfield. What I have picked up. 

Senator Tobey. So-called ? 

Mr. Brookfield. Only what I have picked up in connection with 
my trial and investigations of the lottery merchandise, which includes 

15 



16 ORGANIZED CRIME IN INTERSTATE COMMERCE 

the pimchboard. In fact, the punchboard merchandising is the hirg- 
est part. 

Senator Tobey. I may display my ignorance, but what is a punch- 
board ? 

Mr. Brookfield. A punchboard, sir — I think the best definition is 
that it is a board with holes in it, of laminated cardboard structure, 
with holes in it, which contains tickets with numbers on them. I 
brought down a number of them so that the committee could see them. 

Senator Tobey. Bring out a punchboard. 

I have seen those things on counters in stores. 

Mr. Brookfield. This is the simplest form of punchboard. There 
is no label on it. The person who buys it from the manufacturer, or 
who gets the right to use it, puts his own label on it ; he can give away 
anything, or distribute, rather — give as a prize anything from money 
to any form of merchandise. That is the best-known type of punch- 
board. 

Senator Tobey. That is the way it appears in the stores ? 

Mr. Brookfield. No, sir. The way it appears in the stores — they 
take a board like that, and then if they want to give away cigarettes, 
they will put a label on it, providing for the distribution of cigarettes. 

For instance, here is 1 cent per sale. Somebody goes into a drug 
store, grocery store, cigarette store, tavern, has change, and he will put 
3 or 4 cents down, take a 

Senator Tobey- Where does he put the money, on the counter? 

Mr. Brookfield. He gives it to the proprietor. 

Senator Tobey. Gives him a cent. What does he do then? 

Mr. Brookfield. Then he takes the punch, and punches the board. 

Senator Tobey. The punch comes with it ? 

Mr. Brookfield. A punch comes with it. You will notice it has a 
hole in the back. I think that one — unless I am mistaken, that one 
has a punch, and he will take the cigarette board there, and he will 
take the punch. It contains a small ticket bearing a number. If that 
number that he draws corresponds to one of the numbers appearing 
on the label, then he receives a pack of cigarettes, or two packs of 
cigarettes. 

Senator Tobey. Kind of pinhead stuff ; is it not ? 

Mr. Brookfield. This particular one is the punchboard, the busi- 
ness, as a whole. This is what we call a trade or money board. Here 
he will pay a penny — unfortunately I just happened to bring the 
penny boards. 

(The chairman is now presiding.) 

Senator Tobey. He is talking about punchboards. 

The Chairman. Is he testifying? 

Senator Tobey. Just beginning. 

The Chairman. Good. 

Senator Tobey. Go ahead. 

Mr. Brookfield. This prize here, instead of being cigarettes, as 
they are, as it is there, is cash money. That is what we call it, but, 
however, there is a label showing that it is to be paid in trade. 

Now, the testimony that I have had in a number of my punchboard 
cases, the number of cases which I have tried, show that "in trade" 
is put on the boards so that the local police will permit them to be 
operated in places where they do not let them use direct money — 
straight money boards. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 17 

Here is a money board. You will notice on the money boards the 
chances are 25 cents per punch, and the prizes run up to five and ten 
dollars. 

Senator Tobey. So you punch the hole right through the middle 
of this? 

Mr. Brookfield. You punch it right through here. If you are 
lucky, you get a chance at one of these seals. This is a seal board. 

Senator Tobey. Where do you draw out your number that you 
punch here? 

Mr. Brookfield. This one ? 

Senator Tobey. Wliere did you get that, from the front or the back? 

Mr. Brookfield. You punch from the front. 

Senator Tobey. And it comes out the back ? 

Mr. Brooicfield. It comes out the back ; yes. 

Senator Tobey, What do you get there? 

Mr. Brookfield. That is your ticket that determines whether you 
win anything. 

Senator Tobey. Did you win anything then ? 

Mr. Brookfieij). No, sir. 

Senator Tobey. In other words, they get the money, and the dealer 
of the store gets the benefit of the retail trade, does he, by taking it in 
trade — he makes a sale automatically? 

Mr. Brookfield. Very few are taken in trade. This is a straight 
money board. You would not find this type of board in very many 
retail stores. You would find that in places where they also have 
slot machines and various kinds of amusement devices. 

Senator Tobey. How prevalent are these all over the country? 
How much of this is carried on — a great extent ? 

Mr, Brookfield. Yes, sir. Mr. Lichtenstein who, incidentally, is 
here today as a witness, testified that he estimated that in 1947 the 
sale of punchboards in the United States, just the boards themselves, 
amounted to about $10,000,000. That is divided among, I would say, 
between 30 and 40 manufacturers — the manufacturers. 

Senator Tobey. And the retail business ; if they want to use them in 
their stores, do they buy them from the manufacturer? 

Mr. Brookfield. You can buy them ; some manufacturers sell direct 
to the retail dealers. The usual course of trade in these punchboards 
is from the manufacturers to a punchboard jobber or tobacco jobber 
or candy jobber. 

Senator Tobey. So you have a middleman in between? 

Mr. Brookfield. You have a middleman. Then, some of the boards 
are operated — are put out, rather — by what they call operators. These 
operators buy the boards, and then place them with the retailer on 
commission. 

For instance, the retailer gets 40 percent of the net take. 

Senator Tobey, Who rigs these things so that the fellow will not 
win too often? 

Mr, Brookfield. Well, they are more or less percentage. Senator. 

Senator Tobey. How is the bank take ; what is the proportion ? 

Mr. Brookfield. I have a catalog showing that. Here is a cata- 
log of one of the punchboard manufacturers. It shows that this par- 
ticular board — this is a Charley board, and Charley boards, as a rule 
have more prizes ; they are smaller prizes, but there are more of them, 



18 ORGANIZED CRIME IN INTERSTATE COMMERCE 

to keep the interest up, and this Charley board takes in $120 and pays 
out $79.20. Therefore the average profit to the retailer 

Senator Tobey. In other words, beforehand they know what they 
are going to get? 

Mr. Brookfield. Yes. You can tell by the board. They buy them 
from these catalogs and salesmen. 

Senator Tobey. Well, the Congress has recently passed a law pro- 
liibiting the interstate traffic in slot machines as you know. 

Mr. Brookeield. Yes, sir. 

Senator Tobey. In your judgment and your experience in this busi- 
ness and so forth, would you feel that the principle under which Con- 
gress acts to preclude and prohibit slot machines going into interstate 
commerce, that that ought to apply here equally? 

Mr. Brookfield. I can speak now personally ? 

Senator Tobey. That is all I want you to do. 

Mr. Brookfield. I would say so, because these punchboards are a 
source of gambling, and if the slot machines are going to be barred, 
why, you might say, it is going to open up the field wide to the manu- 
facture of 

Senator Tobey. Does the Government take any tax from the manu- 
facturers of these, as they do in slot machines — the Federal Govern- 
ment ? 

Mr. Brookfield. They at one time did. I do not know — whether 
there was an excise tax, I cannot tell you that right now. 

The Chairman. Mr. Robinson, do you know about that? 

Mr. EoBiNsoN. No; I do not know what the tax situation is. I 
would like, on that general line, Senator, to ask Mr. Brookfield if he 
knows what percentage of boards which are manufactured are used 
for outright gambling, and what percentage are used for what you 
refer to as merchandising. 

Mr. Brookfield. Mr. Robinson, I have had testimony from several 
manufacturers and their testimony varies only less than 5 percent. 
Most of them say that at the present time, money boards represent 
around 90 percent of the volume. One, I think, said that it represented 
97 percent; another one said 95, so that we can safely assume that from 
the volume of the boards, 9 out of 10 that are sold are strictly gambling 
boards ; that is, money boards. 

There is also testimony in several cases, especially the Sax cases, 
that the boards that are actually labeled for merchandising are, in 
fact, used entirely for gambling. For instance, they put out a board 
that provides for distributing as many as and as high as 5,000 ciga- 
rettes. 

The Chairman. Five thousand what? 

Mr. Brookfield. Cigarettes. The testimony in that case was that, 
from one of these Sax representatives, the reason they used 5,000 
was because instead of paying off 5,000 cigarettes, the operator of the 
board actually paid out $50 in cash, and that the cigarettes were a 
subterfuge to get around local laws. 

Mr. Robinson. Well, in other words, the so-called merchandise 
boards are interchangeable in the sense that they can be used for 
straight gambling? 

Mr. Brookfield. Oh, they can take the label off of them, yes, where- 
as the other, I don't think, is quite so true because the merchandise 
boards, as a rule — for instance, this cigarette board, the retail price 



ORGANIZED CRIME IN INTERSTATE COMMERCE 19 

would be about 60 cents; whereas that board would sell for two or 
three dollars. 

Senator Tohey. Which is the most expensive proposition, this one 
here? 

Mr. Brookfield. The money boards, as a rule. 

Mr. KoMNSON. AVhat percentage would you say, on an average, the 
user of the board gets by way of profit? Has there been any general 
average estimated in the event that the whole board is punched out ? 

Mr. Brookfield. The seller, you mean, the retailer or the sucker? 

Mr. Robinson. The person who uses the board, who buys the board 
for use, what is his percentage of the profit on that ? 

Mr. Brookfield. Well, it would vary. As I pointed out in this 
catalog here, some of them — for instance, here is one that takes in — 
the board costs him about $4, 1 think, and that takes in $120, and pays 
out $79.20. 

The ChairmxVN. What is that, now? 

Mr. Brookfield. This particular board takes in $120 and pays out 
$79.20. These are rather high pay-out boards, I might say. 

Here is one that takes in $300 and pays out $224. 

Senator Tobey. Well, on that board that takes in $120 and pays 
out $80, approximately, I am the drugstore who has these, we will 
say. What do I get out of that $40 surplus ? 

'Mr. Brookfield. You are the drugstore ? 

Senator Tobey. Yes. 

Mr. Brookfield. You get that entire profit, less the price of the 
board, which would run maybe $2, $2.50, or $3. 

Senator Tobey. You buy the boards in the first place, and you own 
them then? 

Mr. Brookfield. Yes. There are another class of people who put 
these boards out on commission, as I have said. 

The Chairman. Which are they, and how do they work? 

Mr. Brookfield. They are what you call operators. They buy the 
boards directly from the manufacturers; they are shipped to their 
location; then they either have trucks, station wagons, or cars, and 
they put them out, have a regular route; and put a board out here 
today ; for instance, they will put out this board in a grocery store, 
tavern, or service station, and the tavern owner will get 50 percent 
of the profit punched out, and the so-called operator the other 50 per- 
cent, but that is the only business they have — just putting out these 
boards. 

Senator Tobey. Is the use of these growing in the country ? 

Mr. Brookfield. Well, I would say that probably the use of money 
boards is growing; yes. In other words, the percentage — at one time 
when punchboarcls first came out, which is some 35, 40 

Senator Tobey. What is the Federal Trade Commission doing with 
respect to this matter ? This comes within their purview of lotteries 
and so forth. 

Mr. Brookfield. Yes, sir; but only the merchandise boards. The 
Commission gets its jurisdiction because the courts have held, in a 
long series of cases, beginning with the Keppel cases in the United 
States Supreme Court, that the distribution of merchandise by lottery 
is an unfair^ 

Senator Tobey. Trade practice. 



20 ORGANIZED CRIME EST INTERSTATE COMMERCE 

Mr. Brookfield (continuing) : Trade practice to competitors, and 
contrary to public policy, and therefore unfair to 

Senator Tobey. Then on that decision the Federal Trade's attitude 
is to go and put them out of business. 

Mr. Brookfield. But we proceed against the people who sell the 
deals. By "deal" I mean the board and merchandise. 

Senator Tobey. They do not proceed against the man handling 
them ? 

Mr. Brookfield. We have proceeded against the 

Senator Tobey. Store. 

Mr. Brookfield. We cannot proceed against the local retail store, 
sir, because we do not have — it is not interstate commerce. 

Senator Tobey. Well, if that is so, that is about the only thing they 
do not construe as interstate commerce. 

Mr. Brookfield. So we proceed against the manufacturer. 

Senator Tobey. How much have you proceeded against in the last 
5 years; how many cases have you brought to trial ? 

Mr. Brookfield. 1 would say in the last 5 years, an average of all 
different kinds of lottery merchandise — there are many different 
kinds besides punchboards ; there are the push-card deals which, in my 
opinion, are even more 

The Chairman. Speak a little louder, Mr. Brookfield, so that every- 
body can hear. 

Mr. Brookfield. I am sorry. The push cards which are sent out 
in the mail to children are eve]i worse than the punchboards because the 
punchboard does not appeal to children. 

Senator Tobey. Have you prosecuted and did you get verdicts in 
these cases ? 

Mr. Brookfield. We have — ever case that the Commission has 
issued its cease and desist orders and gone to the courts, with the ex- 
ception of one, the courts have upheld the Commission's orders. 

Senator Tobey. What does the Commission want ? Does it recom- 
mend legislation of some sort? 

Mr. Brookfield. I was not informed as to anything that the Com- 
mission wanted. I was 

Senator Tobey. Put it this way: What are you figuring would be 
the most effective way to stop this gambling? 

Mr. Brookfield. The only way — of course, the only way — to stop 
the interstate distribution of punchboards 

Senator Tobey. Is the same as you did with slot machines. 

Mr. Brookfield. Is by a law prohibiting the transportation in 
commerce. 

Senator Tobey. Well, that will not stop their being manufactured 
in Massachusetts and being used in Massachusetts, would it? 

Mr. Brookfield. I do not see how it would, sir. 

Senator Tobey. No. 

The Chairman. Mr. Brookfield, I understood that in one version 
of the slot-machine bill, punchboards were included, but they were so 
difficult to describe legislatively that it was finally dropped out for 
that reason. 

Do you know anything about that? 

Mr. Brookfield. No, sir; I was not — I had nothing to do with the 
slot-machine bill, which was a pure gambling bill, and the Commission 



ORGANIZED CRIME IN INTERSTATE COMMERCE 21 

has never taken the position that we can prevent gambling, as such, 
but only in connection with the selling of merchandise. 

Senator Tobey. Mr. Kefauver, you are a lawyer. Could not this 
matter be handled by a simple paragraph in the law -which would in- 
clude — we have got slot machines now — but suppose we had it in such 
a way so that it would include slot machines, punchboards, and all 
devices, wdiereby the element of lottery is brought in? You can de- 
scribe it very simply in some good English language, five or six lines ; 
would it not be inclusive enough ? 

The Chairman. I think our good lawyers on our staff could cer- 
tainly get up good language working with Mr. Brookfield and the 
Department of Justice and others, so that is would include these sort 
of gambling operations. 

Your jurisdiction is that it is an unfair trade practice to have them in 
connection with merchandise? 

Mr. Brookfield. Yes; and our jurisdiction — the Commission, 
rather, is taking the attitude — I think it is sound — that we should only 
confine our activities to the use of lotteries in connection with mer- 
chandise, because 

The Chairman. What about if it is a pure money lottery, do you 
have any jurisdiction then? 

Mr. Brookfield. We have never tried to take it, and I do not think 
the courts would uphold it. 

The Chairman. That is about 95 percent of it, as you say, being 
the money part of it ? 

Mr. Brookfield. That is 95 percent of the volume of the punch- 
board business itself, of the punchboard manufacturers themselves. 
The money boards are manufactured by the manufacturers, but there is 
still a substantial business but, as I say, the Commission has had orders 
against approximately 200 different candy and novelty merchandise 
people who have been at one time — before the Commission started its 
prosecution, 85 percent of all the box candy in the United States was 
sold by means of punchboards. 

Senator Tobey. Isn't the real evil to society, if it be such, in this 
game here which, of course, is piddling compared to a lot of other 
things — but does it not lie in the fact that here you come by the intimate 
contacts with children and families coming into a store, and you in- 
culcate or you stimulate an interest in getting something for nothing 
by this little device here, cleverly gotten up, which people, as they grow 
older broadens and deepens their passion for gambling, and so forth, 
and works into the race track and everything else, and it grows in the 
minds of the people and pairt of their lives? Isn't that the real 
danger ? 

Mr. Brookfield. I would say that your question is a little over 
my head. Senator, because I would say that at the present time the 
Commission has stopped the so-called penny pushcard business almost 
altogether. 

When I was a kid, and when most of the men here in this room 
were kids, every corner grocery had some kind of what they called 
a penny draw, where the kids went in and paid a penny. They either 
punched a pushcard or they took a chance on a piece of candy. 

Senator Tobey. AVell, I remember as a child being on a meri*y-go- 
round — I have been on a good many since then — but we got on horses, 
and you paid 5 cents, and you rode around on the horses. 



22 ORGANIZED CRIME IN INTERSTATE COMMERCE 

There was a brass ring, a ring ^Yhic]l dropped down every time you 
went by, and if you got the brass ring you got a free ride. I remem- 
ber the thrill when I got the brass ring. That is the same principle 
as far as that goes. 

Mr. Brookfield. I think it has been my experience, both personal 
and from observation in connection with these cases, that there is a 
natural tendency 

The Chairman. A little louder, please. The rest of the x^eople 
cannot hear you, 

Mr. Brookfield. I think there is a natural tendency among all of 
us to gamble, and it is just a question of how we do it, and to what 
extent. This pushcard here, when the Commission in 1936 really 
started a drive on these candy merchandise, you would find these in 
every store in the United States, to a great extent. I won't say every 
store. 

Now it is hard to find one, but in place of that you would find in 
the taverns, drug stores, places like that, you would find the punch- 
boards, and I think with the passage of the slot-machine law you 
are going to find more and more of them. This is a similar type 
board. That is just the front of it. It goes on the back of any board 
of that size. 

The Chairman. Any other questions. Senator Tobey? 

Senator Tobet. No. 

The Chairman. Mr. Kobinson, you have a number of questions. 

Mr. Robinson. Mr. Brookfield, to go back to your testimony about 
one particular board and the amount of profit that the purchaser of 
the board can obtain from the particular board, I believe you stated 
that it was $120, and the pay-out would be about $80 ; is that correct? 

Mr. Brookfield. I think we had one 

Senator Tobey. $120 to $80 ; yes. 

Mr. Robinson. Now, it is entirely possible, is it not, that that per- 
centage may be greater in the event that the board is not entirely 
punched out, and the winnings do not reach $80 at some particular 
time ? 

Mr, Brookfield. That pay-out, I might say, is the maximum pay- 
out. Lots of times a board may be — for instance, we will take a board, 
this one that has a $30 principal prize. The chances of getting that 
principal prize are much greater than would appear from the board. 

Mr. Robinson. What I am getting at is this, that the board could 
be punched, say, for example, so that the owner of the board or the 
user of the board got $80 or $90 without paying out any more than 
possibly $5 or $10. 

Mr, Brookfield, Yes ; that is true, 

Mr, Robinson, And tear up the board after that? 

Mr, Brookfield, Yes, 

Mr, Robinson. And not finish out the use of the board. Do you 
know whether that is a common practice or not? 

Mr. Brookfield. I don't know whether that is a common practice, 
but I imagine in some places it would certainly appear to the man who 
was operating the boards. 

Mr. Robinson, Now, what are the names of the major manufac- 
turers ? 

Mr, Brookfield. I would say from that that the major manufactur- 
ers of the boards in the United States now 



ORGANIZED CRIME IN INTERSTATE COMMERCE 23 

The Chairman. Give us not only the names of the manufacturers, 
but the names of the operators and officers and the operators of these 
operations. Maybe you want to ask detailed questions about each 
company. 

Mr. EoBiNSON. That is all right. I wanted to go into that, Mr. 
Chairman, first, with the listing of the names of the major manufac- 
turers and their owners and the places of distribution, and so forth, 
and the volume of business, if you have it. 

Mr. Brooktield. Senator, some of them I can give you, the ones I 
have, which, I think, are all the principal ones. 

The Chairman. All right. 

Mr. Brooktield. Not in any specific order, the Globe Cardboard 
Novelty Co., in New York. 

The Chairman. Mr. Robinson, while you are on each one of these, 
do you want to ask specifically about them ? 

Mr. Robinson. All right. Do you know who the owner of that com- 
pany is ? 

Mr. Brooktield. At the present time, Louis Broudo is the principal 
owner. There was a Mr. Morris Aaron, who was in that company, 
but I am told he has sold out to Mr. Broudo. 

Mr. Robinson. Now, they are manufacturers exclusively of punch- 
boards, or do they manufacture any allied products ? 

Mr. Brooktield. They manufacture punchboards and punchcards. 
I don't know of anything else they manufacture. 

Mr, Robinson. Do you know what their volume of business is, 
roughly ? 

Mr. Brookfield. No, but I would say that they are among the six 
biggest anyway. 

Mr. Robinson. I see. 

Do you know where they distribute ? Do they distribute entirely in 
New York State? 

Mr. Brooktield. Oh, no, in every State. 

Mr. Robinson. Or all over the country ? 

Mr. Brooktield. Oh, no. You will find Globe punchboards in prac- 
tically every State of the Union. 

Mr. Robinson. All right. 

The Chairman. You say their volume of business is in six figures 
anyway ? 

Mr. Brooktield. Half a million or 



The Chairman. I mean, do you think it is half a million or a 
million ? 

Mr. Brooktield. Probably at the present time between a half and a 
million. The reason I am not familiar with the present activity of 
this company is because of the case I had against them which was 
some 3, 4, 5 years ago when I took the testimony. 

The Chairman. Who is this Louis Broudo ? 

Mr. Brooktield. He is a resident of Philadelphia. The Globe Card- 
board Novelty Co., which is the Globe Printing Co. also, was formerly 
located in Philadelphia. When the Pennsylvania law against the 
manufacture of punchboards was passed, they moved to New York 
City — ^their manufacturing operations. Broudo is still in Philadel- 
phia. 

Another New York manufacturer, although considerably smaller 
than Globe, is Bork Manufacturing Co. It was formerly operated 



24 ORGANIZED CRIME EST INTERSTATE COMMERCE 

by Alvin Borkin. They manufacture, so far as I know, nothing but 
punchboards. 

The third 

Mr. Robinson. Do you know what their vohnne of business is? 

Mr. Brookfield. That case was settled, Mr. Robinson. I did not 
take any testimony in it, and their voUime of business is probably in 
six figures, but not over $100,000. 

Mr. Robinson. Do they distribute all over the country, too? 

Mr. Brookfield. They distribute pretty well all over the country. 
I have seen their board as far west as Seattle. 

Mr. Robinson. All right. 

Mr. Brookfield. The third New York manufacturer is U. S. Print- 
ing & Novelty Co. 

The Chairman. U. S. what? 

Mr. Brookfield. Printing & Novelty Co. They are located at 195 
Christie Street, and the officers are Benjamin Blush 

The Chairman. Is that New York City ? 

Mr. Brookfield. Yes. Jack Blush, ancl Hyman Abramowitz. They 
operate mostly along the northeast coast, in the North Atlantic States. 
They do not have a general distribution such as the others do. 

The Chairman. As you go along, if you have any boards that these 
different people manufacture, you might show them. 

Mr. Brookfield. It is very hard to tell who manufactures the board 
because they do not want the Commission's investigators to pick them 
up and see the name. It used to be that all of them put their names 
on the back, but you do not see that very much, sir, so it is pretty hard 
to tell unless I happen to have 

The Chairman. You mean they will not even put the name of who 
manufactured them on the back? 

Mr. Brookfield. Some of them, for instance, Harlich Manufactur- 
ing — that is Mr. Lichtenstein's company — he still puts his name on 
the board, but most of them do not. 

I have to find somebody who is familiar with all of these boards, 
or once in a while they put them on the tickets themselves, which 
will have a watermarked name of the owner. I don't think I have 
any of the boards manufactured by any of the three companies, be- 
cause those were uncontested cases, and we didn't have very many 
exhibits. 

Coming down to the east coast, the only other east coast manufac- 
turer is Mrs. Esther Zitserman, who operates the J. M. Howard Co., 
at Trenton, N. J. 

The Chairman. What w^as the name of that company ? 

Mr. Brookfield. J. M. Howard. She and her husband formerly 
operated the same company in Philadelphia, and they also moved out 
A^dien the Pennsylvania law was passed. Her operations are con- 
fined to the east coast, and I would say that she was also in the $100,000 
to $150,000 gross class. I may be exaggerating. 

Then, there is the only company that I know of in the South, which 
is the General Sales Co., which was formerly operated by R. R. Saun- 
ders, in the Presbyterian Building, in Nashville. 

The Chairman. Is that in Tennessee? 

Mr. Brookfield. Yes, sir. 
(Laughter.) 

The Chairman. In the Presbyterian Building ? 



ORGANIZED CRIME EST INTERSTATE COMMERCE 25 

Mr. Brookfield. Yes, sir. That was his address. 

The Chairman. Just for the record let it be known that I am a good 
Baptist. 

(Laughter.) 

Mr. Brookfield. The General Sales Co. is practically out of busi- 
ness due to the fact that the only thing they manufactured was some 
three or four different kinds of money boards, and at one time made a 
few deals. However, Mr. Saunders is 74 years old, and his business 
is practically discontinued, as I say. 

The Chairman. I think, in fairness, we ought to find out about 
this Presbyterian Building. Is that an office building ? 

Mr. Brookfield. Evidently; yes, sir. 

The Chairman. You do not tliink it has any connection with any 
church business ? 

Mr. Brookfield. Unfortunately I have never been to Nashville, so 
I don't know, but that is an office building, and that was his office ad- 
dress. 

The Chairman. Well, have you found any evidence of these boards 
being used in connection with church affairs ? 

Mr. Brookfield. Punchboards, no; pushcards, yes. The pushcards 
are used by American Legions, Legion posts, and some churches and 
various organizations, in connection with fund-raising campaigns. 
They are, however — the prizes in that type of campaign are usually 
merchandise of some kind. 

The Chairman. Go around to get people to give them merchandise, 
and then use the punchboard to dispose of that ; is that the way ? 

Mr. Brookfield. Not so much that as — they usually use a small 
pushcard type where it has, maybe, from 1 to 40 punches, and a con- 
cealed center, and usually each punch has a girl's name on it, and 
there is a concealed name that is punched after all the — the prize of 
the punches may run from 1 to 35 or 1 to 45 cents, and there is one 
particular prize that is punched out, and whatever girl's name is 
under that concealed punch is the winner. That is the usual form 
that is used for fund-raising campaigns. 

The Chairman. The one you have there in your hand has a picture 
of a radio on it. 

Mr. Brookfield. Yes. This one is — I just used that as an illustra- 
tion of the pushcard, sir. That is one that is put out in the mails. 
There are thousands — in fact, there are millions — of those mailed 
every day through the mails, but with an explanation that two prizes 
are given; that is purely for distribution of merchandise. I would 
not say that it is very much any other form of gambling except that. 

The Chairman. Excuse me, Mr. Robinson. 

Mr. Robinson. Do you have other companies? If you do, just 
follow down your list. 

Mr. Brookfield. Yes. In Muncie, Ind. — — 

The Chairman. Muncie ? 

Mr. Brookfield. Muncie — is Gay Games, Inc. The owner of that 
company is Guy Noel. They manufacture punchboards, and they 
probably sell a few jar games. 

The Chairman. What? 

Mr. Brookfield. Jar games. 

The Chairman. What is that ? 

68958— 51— pt. 12 3 



26 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Brooktield. A jar game — they ^\i\\ have a large-mouthed ]ar, 
about so big, and instead of having a punchboard with the numbers 
concealed in it, they will put tickets, sealed tickets, such as this, in 
the jar, and a label at the top telling which numbers are winners, 
and which will win, and you just lift it out of the jar. It is a very 
much cheaper way to gamble, I mean, for the proprietor it is much 
cheaper for him to buy these tickets, and buy a hundred, than it is 
from the punchboard. From the gambling standpoint this is one 
of the competitors of the punchboards. Some few of the companies 
make both ; most of them do not. 

The jar-game people are to some extent a different class of manu- 
facturer and seller than from strictly punchboards. 

The Chairman. What sort of class are they ? 

Mr. Brookfield. I mean they are interested, they sell, some of 
them — for instance, Universal Manufacturing Co. down in Kansas 
City sells jar games, and football pool, various kinds of tickets; in 
effect, they claim to have invented the jar games. 

The Chairman. All these things are sent through the mails? 

Mr. Brookfield. Most of the punchboards are not sent through the 
mails. 

The only thing that really goes through the mails are these little 
pushcards which, by some ruling of the Post Office Department, until 
recently were not considered lottery devices, were not considered to 
come under the lottery ticket law, because at the time they went out 
they did not have to be used as a lottery. 

The Chairman. Are they considered lottery tickets now? 

Mr. Brookfield. The Post Office Department recently issued a 
fraud order against the company. 

The Chairman. That has been just about 2 or 3 months ago ; has it 
not? 

Mr. Brookfield. Yes; that has been enjoined by a court decision. 

The Chairman. Give us the history of that decision. It is rather 
interesting — I mean of that injunction proceeding. 

Mr. Brookfield. That was the Post Office case, and I am not 
familiar with it as I should be. 

The Chairman. All right, sir. 

Mr. Brookfield. The only thing I know is that it was issued, and 
that Judge Holtzoff recently granted them a temporary injunction 
against enforcing it. 

Mr. Robinson. While you were talking about the jar games, you 
mentioned a company in Kansas City. Could you give further infor- 
mation on that company? 

Mr. Brookfield. That is the Universal Manufacturing Co. of 
Kansas City which is, to all intents, owned and operated by the same 
people who operate the Bee Jay Products, Inc., a punchboard manu- 
facturer in Chicago. 

The active officials are Joseph Berkowitz and his son, Reuben Berko- 
witz. Reuben Berkowitz operates the punchboard — is the active head 
of the punchboard company in Chicago, and the Commission investi- 
gation developed that Joseph Berkowitz was the originator of the 
Universal Manufacturing Co. That company makes various kinds of 
jar games and tickets, too, of various kinds for jar games, and various 
others. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 27 

Mr. RoBiN'soisr. They make tickets for football and baseball pools? 

Mr. Brookfield. In fairness, as I have said before, Mr. Robinson, 
I am handicapped because the Commission was only interested in the 
merchandising end of their business, but they did manufacture 

Mr. Robinson. Do you know what Mr. Berkowitz' first name is ? 

Mr. Brookfield. Joseph. 

Mr. Robinson. Joseph? 

Mr. Brookfield. The older one is Joseph, and the son is Reuben. 

Mr. Robinson. Do you know whether Joseph Berkowitz has any 
criminal record or not? 

Mr. Brookfield. Only from the investigation file in the Commis- 
sion's office, which shows that a police officer told the investigator that 
he did, which is pretty far hearsay. The Commission's attorney- 
examiner's report shows that this police officer in Kansas City stated 
that Joseph Berkowitz had been convicted for something in connec- 
tion with lotteries. 

]Mr. Robinson. Was it conspiracy to violate the lottery laws by 
manufacturing counterfeit lottery tickets? 

]VIr. Brookfield. He did not go into that at great length. 

The Chairman. Is that what our records show, Mr. Robinson ? 

Mr. Robinson. I believe that is what the record that I looked at in 
the Federal Trade Commission indicated, that this was some informa- 
tion to that effect, that Joseph Berkowitz had been indicted 

Mr. Brookfield. Convicted in connection with 

Mr. Robinson (continuing). Convicted in connection with the 
manufacture of counterfeit lottery tickets. 

Mr. Brookfield. I think that is what the file shows. 

Mr. Robinson. That is right. 

Now, could you give the names, briefly and quickly, Mr. Brookfield, 
of some of the other larger manufacturers ? 

The Chairman. Let him go down the list and give all, if he has 
tliem all. How many do you have ? 

Mr. Brookfield. I have altogether about less than 20. 

The Chairman. Since we brought out some, I think we ought to 
bring out all we have got. 

Mr. Brookfield. In Chicago, I might say, there is the 

The Chairman. By the way, before you. leave this Universal Manu- 
facturing Co., and the Bee Jay Co. of Chicago, that is one of the very 
large ones ; is it not ? 

Mr. Brookfield. The Bee Jay bought out Brewer, which was one of 
the original large punchboard companies, and you will find their 
boards in every location in the country, so I would say they are doing 
a considerable business. 

The Chairman. Do you have any estimate — I think we have some 
record on that — as to the amount of business they do. 

Mr. Brookfield. No, because the investigator, unfortunately, did 
not get that, and we did not take any testimony because they filed an 
admission answer. 

The Chairman. But it is one of the biggest operations ? 

Mr. Brookfield. At the present time, I would say, yes. 

The Chairman. Bee Jay, and its subsidiary Universal Manuf actur- 
turing Co. of Kansas City. 

Mr. Brookfield. Well, let us say it is an affiliate because they — I 
am not trying to 



28 ORGANIZED CRIME IN INTERSTATE COMMERCE 

The Chairman. They are separate corporations, but they are owned 
by the same people. 

Mr. Brookfield. And the Universal, tliough, is engaged primarily 
in selling jar games and tickets, and Bee Jay is the punchboard, and 
that is the reason I said affiliate rather than subsidiary. 

The Chairman. Yes. 

Mr. Brookfield. In Chicago — the largest companies, I would say, 
are located there. There is Gardner & Co., which is operated by Irwin 
Feitler and his wife, Bernice. 

The Chairman. Spell that. 

Mr. Brookfield. F-e-i-t-1-e-r, and by his wife, Bernice. They claim, 
according to their advertisements, to be the biggest punchboard man- 
ufacturers in the world. They are located at 2222 South Michigan. 
Another of the large ones 

The Chairman. What do they manufacture, just punchboards? 

Mr. Brookfield. They manufacture nothing but punchboards. 
They testified that they have even discontinued to manufacture push- 
cards. 

Mr. Robinson. Do you have any idea of what their volume of 
business is, what their gross sales are annually, approximately? 
Would it run over one or two or three million dollars ? 

Mr. Brookfield. I would say it would certainly run over a million 
dollars. The reason I say that is because Mr. Lichtenstein in 1947 
testified that his sales at that time were running over a million dol- 
lars, whereas, I think at the present time Feitler is doing more 
business than Lichtenstein. 

Being as I mentioned Lichtenstein, I will say the next one in Chi- 
cago is the Harlich; it is operated by the Lichtenstein family. Mr. 
Lichtenstein is here today. They manufacture punchboards, and at 
one time they manufactured other paper products not connected at 
all with gambling, but I don't know whether they still do that or not. 

Mr. Lichtenstein, when he testified in 1947, stated that he thought 
that the volume of the punchboard business in the United States 
was $10,000,000. 

The Chairman. That is the amount of the sales? 

Mr. Brookfield. Yes, of the boards, not the amount of merchandise 
or money that is distributed, but just the sales, the price of these 
boards, which amounts to about $10,000,000. 

The Chairman. Well, you had some boards that cost $3, that 
brought in $200, did you not ? 

Mr. Brookfield. But he was talking about the volume of the sale 
of the boards as items of merchandise; in other words, there were 
$10,000,000 worth of boards. Of course, nobody could figure out 
how much money was actually distributed by them, although it 
could be analyzed to show, perhaps, over $100,000,000. 

His own volume in 1947 was about $1,200,000, and this had de- 
creased from $1,800,000 in 1943. I have not heard anything of that 
company since then except that I know they are still in business. 

The Chairman. He is here? 

Mr. Robinson. Yes; he is here. 

Mr. Brookfield. Mr. Lichtenstein himself is here. 

I guess at the present time, the other one, the other of the larger 
manufacturers, is Superior Products. 
Mr. Robinson. That is located in Chicago ? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 29 

Mr. Brookfield. These are all Chicago, 2153 West Fulton, which 
is one of the Sax companies, operated by ISIr. Max Sax as president; 
Consolidated Manufacturing Co. at 2001 

The Chairman, Give the other officers of Superior Products. It 
is the Sax family, is it not ? 

Mr. Brookfip^ld. Well, Superior, the president and treasurer are 
Max Sax or M. Robert Sax. He operates the company, and the only 
two other corporation officers are an attorney, and his sales manager. 

The Chairman. We have got a memorandum filed here somewhere 
of the Sax operations. 

Mr. Robinson. I do not have it with me. It is back in the office. 

Do you know whether he is a relative of George Sax? 

Mr. Brookfield. Yes ; he is his brother. 

Mr. Robinson. Do you know whether Mr. George Sax has any 
interest in the business at the present time ? Do your records disclose 
that? 

Mr. Brookfield. No, sir. We were unable to establish any interest 
other than by Max Sax at the hearing. The trial examiner threw out 
my evidence to find out who the stockholders were. 

Mr. Robinson. So you have no information as to who is the control- 
ling stock owner of the Superior Products Co. ? 

Mr. Brookfield. No. They are the oldest of the punchboard — the 
Sax punchboard companies. There are four of them. The other one 
in Chicago is Consolidated Manufacturing Co. 

Mr. Robinson. Who is the owner of that? 

Mr. Brookfield. The president and operator is Chester Sax. That 
is, as I say, 2001 South Calumet ; the Sax interests also own the Con- 
tainer Manufacturing Co. in St. Louis ; Max is president, and at the 
time I had my hearing last year, William Stone was vice president. 
He is an employee of the company. Those were the only two officers 
who were apparent in the set-up. 

Mr. Robinson. Do your records show who were the stock owners of 
either of the two latter-mentioned companies ? 

Mr. Brookfield. No. There was objection by the attorney for the 
companies, and it was sustained when I tried to prove the stockholders. 

Mr. Robinson. Incidentally, do you know what the volume of busi- 
ness done by each one of those companies is ? 

Mr. Brookfield. I am not aware in dollar volume, but they are 
among the best-distributed punchboards in the United States. I don't 
think there was a single place that I have had any contact with people 
who used them, who have not bought boards from those three 
companies. 

They are using them and they are sold all over the country, and 
there is a further company. Container Consolidated, which has just 
been organized since my case against these people started, and it is a 
Sax company, because the orders are handled by the same people who 
handled Consolidated Container separately, and the same salesmen are 
employed, but we have had no investigation as to Consolidated Con- 
tainer as yet. 

Mr. Robinson. I see. 

Mr. Brookfield. So that I would say the four Sax companies are, 
probably as a group, the biggest part, biggest individual unit of the 
punchboard industry — probably the four Sax companies. 



30 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. KoBiNSON. A manufacturer exclusively of punchboards, to your 
knowledge ? 

Mr. Brookfield. Those companies do. Then, there is the Sax com- 
pany down in Peoria, 111., called Gam Sales Co. It manufactures jar 
games, football tickets, and baseball tickets, and other fonns of 
gambling devices, of which the Connnission cannot take jurisdiction, 
and we have not gone into that at great length. 

Mr. KoBiNSOX. Do you have any knowledge of who the owners or 
who the officers of that company are ? 

Mr. BrooivField. The information I ha\'e on that company is old, 
Mr. Robinson. That goes back to 1938, and the officers were Morris 
Sax and George Sax. I don't know whether that is the George Sax in 
Chicago or not. I think it is the George Sax 

The Chairman. George Sax, who has the Saxony Hotel in Miami 
Beach? 

Mr. Brookfield. If George Sax, who has the Saxony Hotel in 
Miami Beach, is the Sax in Chicago, and he has the same initials as 
the George Sax who was in Peoria in 1948 

The Chairman. Well, the committee's records show that is the same 
George Sax. 

Mi\ Brookfield. This is the type device that is manufactured by 
Gam, that was manufactured by Gam Sales Co. when we were in- 
vestigating them. It is a baseball ticket book; I don't know how it is 
operated, unfortunately. 

Mr. Robinson. Do you know what the cost of this item is? 

Mr. Brookfield. Those ran about — I think around three fifty. I 
think they were about three fifty a hundred at that time. 

The Chairman. A hundred of these for $3.50 ? 

Mr. Brookfield. For a hundred. I think that was about what it 
was. 

The Chairman. How much could you bet with that amount, any 
amount you wanted, I suppose ? 

Mr. Brookfield. I am not familiar with that form of ticket at all. 
I just picked it out of the files. I do not have the Gam case. 

Mr. Robinson. Do you know Iioav these tickets are distril)uted? 
What I am getting at is who, generally, if you know, purchases that 
type of merchandise ? Is it stores or is it individuals ? 

Mr. Brookfield. I would say it is — some of them are sold by indi- 
viduals, and then the same people who purchase the jar deals — of 
course, these tickets here, from observation, I would say that they are 
probably a straight gambling device, and would be handled by the 
same people who handled the numbers bets. 

Mr. Robinson. All right. 

Mr. Brookfield. But the jar deals, and the other tickets that are 
sold by these other companies I mentioned, are handled by the opera- 
tors of the poolrooms, taverns, and places where people hang out. 

Mr. Robinson. Go right ahead, Mr. Brookfield, with the remainder 
of your list. 

Mr. Brookfield. All right. Another company in Chicago — ■ — 

The Chairman. Are you about to leave the Sax interests? 

Mr. Brookfield. Unless there are some questions on it. 

The Chairman. We have records here to show and indicate that the 
gross sales of Consolidated are in excess of — per year of — a million 
dollars. Would you think that would be correct? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 31 

Mr. Brooktield. I think so; yes, sir. I would say that probably 
all of them run just about the same thing, a million dollars for each 
of tlie four companies. I have to make that 

The Chairman. Then, at the offices of Consolidated Manufactur- 
ing Co. are Chester Sax, president and treasurer; Irvin Sax, vice presi- 
dent ; Arnold J. Sax, assistant vice president. 

Mr. Brookfield. That is more recent information than we had at 
the time we issued the complaints. 

The Chairman. Then there is a report here we have on the Con- 
tainer Manufacturing Co. in St, Louis; their sales in 1047 were some- 
thing over a million dollars, in 1948 about a million dollars, and that 
tlie officers are Max Sax, president ; Jack Morely, vice president ; and 
William Stone. 

Mr. Brookfield. In 1947, that is probably the number of officers; 
yes — they are probably the officers. 

The Chairman. Is that correct? 

Mr. Brookfield. Yes. William Stone and Morely. 

The Chairman. We have the record on these other companies which 
some way or another are not here yet, and we would like to ask you 
about that later on, Mr. Brookfield. 

But you think each of the companies do something over a million 
dollars worth of business? 

Mr. F)RooKriELD. Of those four that I have mentioned, yes, sir. 

The Chairman. All right, go ahead. 

Mr. Brookfield, Then there is Mercury Industries, 5650 North 
Northwest Highway in Chicago. The Commission, so far, has not 
completed any investigation of them, so I know nothing about them 
except that I know that their boards are distributed well over the 
country, as we have had cases against some of their jobbers in Wash- 
ington and Oregon. 

The Empire Press is the manufacturer of money boards; nothing 
but gambling boards. 

The Chairman. Empire Press ? Where is that located ? 

Mr. Brookfield. 637 South Dearborn. They are manufacturers 
of — I think this is the Bee Jay type right there. I had some Empire 
here. That is one of the Sax boards; that is a Harlich board. 

Mr. Robinson, this catalog that I w^as quoting from is the Empire 
catalog. 

Mr. Robinson. Let us see. 

The Chairman. All right, go ahead, Mr. Brookfield, tell us who 
operates the Empire. 

Mr. Brookfield. I know nothing about that one because I have 
not had that — that is another Chicago operator about whom I know 
practical!}' nothing, because they have never come up before the Com- 
mission, or else they are being investigated, and have not gotten to 
me yet, so that the record is still confidential, and that is Black Hawk 
Manufacturing Co. 

Pioneer 

The Chairman. Black Hawk Manufacturing Co. where ? 

Mr. Brookfield. In Chicago. 

The Chairman. What address do you have for it ? 

Mr. Brookfield. 182o West Berteau. They manufacture both 
money boards and some merchandise boards, primarily money boards. 

The Pioneer Manufacturing Co., the address of tliat is 2350 West 
Cermack, I don't have any information as to the operators of that, 



32 ORGANIZED CRIME EST INTERSTATE COMMERCE 

although I probably could have gotten it if I had more time. Gard- 
ner & Co. ; I have covered that, haven't I ? 

The Chairman. Gardner & Co.? 

Mr. Brookfield, Those are the Feitlers, yes. 

Mr. Robinson. I think you did cover that. 

Are there any other companies in Chicago? 

Mr. Brookfield. Of manufacturers? When I was on tlie west 
coast last fall I heard that Jerry Scanlon, who was formerly asso- 
ciated with Black Hawk and branched out for himself, but I have 
never seen any of his boards and we don't have anything on him in the 
Commission. 

Mr. Robinson. Does that cover all in Chicago ? 

Mr. Brookfield. That covers all of the principal manufacturers 
that I know anything about in Chicago. 

The Chicago telephone directory lists a number of small companies, 
but investigation usually finds that they are nothing but jobbers. 

The Chairman. Nothing but what? 

Mr. Brookfield. Jobbers; jobbers of the boards. 

I think I have covered the big companies in Chicago. There are 
the two Sax companies, Harlich, Bee Jay, and Gardner. 

Mr. Robinson. What other companies do you have on 3^our list? 

Mr. Brookfield. Now, I have two pushcard companies, but both 
of them are located in Eau Claire, Wis. They manufacture the little 
pushcarcls that I showed you, and those cards are used for various 
things, including the turkey raffles and merchandise and, of course, 
some of them are used to distribute money. 

The Chairman. Give us their names. 

Mr. Brookfield. W. H. Brady & Co. 

The Chairman. W. H. Brady? 

Mr. Broofield. B-r-a-d-y. 

The Chairman. Where is this located in Wisconsin ? 

Mr. Brookfield. Eau Claire, E-a-u C-1-a-i-r-e. They have been 
manufacturing the pushcards for many years. 

The Chairman. Do you know who operates this company ? 

Mr. Brookfield. The family of Mr. W. H. Brady; the principal 
person concerned at the present time is W. H. Brady, Jr. 

The other manufacturing company 

The Chairman. Do you know anything about the size of their op- 
eration ? 

Mr. Brookfield. They were during the war practically down to 
nothing, but, in fact, they came in and filed an admission answer, but 
evidently business is picking up because they are contesting the com- 
plaint right now very strenuously. At one time they testified that 
their business was down to less than $15,000 a year. 

The Chairman. But you think they have gotten back on their feet 
again ? 

Mr. Brookfield. Well, evidently so, because — in fact, their attorney 
told me that business had picked up to such an extent that they — that 
was the reason that they were contesting it. 

The Chairman. All right. 

Mr. Brookfield. The other one is Ewald Thelacker, who trades as 
Top Manufacturing Co. 

The Chairman. Where is he ? 



ORGANIZED CRIME EST INTERSTATE COMMERCE 33 

Mr. Brookfield. He is also at Eaii Claire, R. F. D. Eau Claire. He 
is a very small operator, and he only has a small printing press. You 
see, the pushcards can be printed by almost any job printer, whereas 
the punchboard requires expensive equipment. 

The Hamilton Manufacturing Co. in Minneapolis is also one of the 
big companies. That was formerly operated by— it is a corporation — 
the former owner of it was Graf Wolf, but he is dead ; and I imagine 
that the company is still being operated for his estate. They are one 
of the original five big punchboard companies. They probably do 
considerable in excess of a million dollars. 

There are one or two very small companies. There is Arthur D. 
AVood in St. Louis. 

The Chairman. Arthur D. Wood in St. Louis? 

Mr. Brookfield. Yes. 

The Chairman. Give us all the names you have, Mr. Broolvfield. 

Mr. Brookfield. Michigan City — or rather Michigan Paper Box 
Co., in Michigan City, Ind. 

The Chairman. Who operates that ? 

Mr. Brookfield. I don't know, sir. The investigation is under 
process, I think, now. I just got the names the same way I am giving 
them to you. 

Then we have Wertz — that is either W-e-r-t-s or W-e-r-t-z Novelty 
Co. in Muncie; they manufacture jar games; they don't manufacture 
punchboards. 

Mr. Robinson. All right, go ahead. 

Mr. Brookfield. They are very small, too. 

The Chairman. I did not understand that last one. 

Mr. Brookfield. W-e-r-t-z ; they are very small. 

The Chairman. Wliere are they? 

Mr. Brookfield. In Muncie, Ind. 

The Chairman. Who operates that, do you know ? 

Mr. Brookfield. I think his name is Samuel Wertz, I am not posi- 
tive of the first name, but the last name is Wertz. 

The Chairman. Mr. Nellis has just suggested that Louis Hodwin 
operates the Paper Box Co. Do you know that name ? 

Mr. Brookfield. No, sir; I just happened to pick up a Michigan 
Paper Box punchboard, and recommended that an investigation be 
made. That is as far as I know anything about it. 

Mr. Robinson. All right. Are there any other companies ? 

Mr. Brookfield. So far as I know, Mr. Robinson, that is all that I 
have had any contact with, the manufacturers. 

Mr. Robinson. Are there any manufacturers on the west coast 
so far as you know ? 

Mr. Brookfield. No manufacturers that I know of. There is a 
company out there that is jobbing boards. I think the Commission 
investigation shows he is only a jobber. 

The Chairman. TAHiat is his name? 

Mr. Brookfield. That is the Sportsmen's Supply Co., Box 887, 
Long Beach. 

The Chairman. Do you know who operates the Sportmen's Sup- 
ply Co.? 

]\Ir. Brookfield. The letter which we have is signed W. E. Lee. 

Mr. Robinson. Mr. Brookfield 

The Chairman. Excuse me. 



34 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Do you have something you wanted to say about it ? 

Mr/ Brookfield. The only thing I wanted to say is that I have 
here a circular from this company which sliows that they are selling 
keyed punchboards, which means that they sell a punchboard and 
they also sell a key showing all the winning numbers. This is the 
first time I have come across that, in the 10 years I have been handling 
punchboard cases. 

Mr. Robinson. Will vou explain what the significance of that is, 
Mr. Brookfield? 

Mr. Brookfield. For instance, they sell a straight punchboard for 
$4.95, and with the key they sell it for $14.98. They furnish a secret 
key which locates, on some of them, all of the winners on the board. 
So that the retailer who buys the board can, as soon as he gets the board, 
punch out all the winners and the entire take will be profit. He won't 
have to pay out any profit at all. 

That is the first one of these I have come across. 

The Chairman. Mr. Burling. 

Mr. Burling. I didn't hear how much extra the key cost. Will you 
bring that out ? 

Mr. Brookfield. On a board that he sells as a straight board — by 
"straight board," I mean a percentage board — $4.98, with the key sells 
at $14.98. Another one, which he sells for $2.85, a smaller board, he 
sells with the key for $9.96. 

Mr. Burling. The key wouldn't cost the manufacturer anything 
significant to produce, would it ? 

Mr. Brookfield. I don't know how much it would cost. 

Mr. Burling. It is just a sheet of paper with numbers on it. It 
wouldn't cost more than a penny to print. 

Mr. Brookfield. Yes. 

We don't know the manufacturer of these boards. 

The Chairman. "W^iat is the take on these boards if you punch them 
all out, how much would it be? 

Mr. Brookfield. Take the one he sells for $4.98. It takes in 25 
cents a punch. There are 1,200 holes. 

The Chairman. Twelve hundred holes. 

Mr. Brookfield. It pays out $197. A profit of $102 if it is run 
legitimately. If it is keyed out, why, he would take in the whole $300. 

Mr. Robinson. Who would know where the winning numbers are 
on the board ? 

Mr. Brookfield. You mean these particular boards I am talking 
about, these keyed boards? 

Mr. Robinson. Any board. 

Mr. Brookfield. The boards that are manufactured by any of the 
large manufacturers nobody would know, because it is done by ma- 
chinery, all the numbers are mixed up and put into these holes by a 
mechanical means. 

Mr. Robinson. Your point is that the manufacturer himself would 
not know where the winning numbers were on a board ? 

Mr. Brookfield. On a straight punchboard ? 

Mr. Robinson. Yes. 

Mr. Brookfield. Oh, yes. That is the honest manufacturer. The 
manufacturer, such as these big companies, that depend for their ex- 
istence on good will with their customers, they would never know. 



ORGANIZED CRIME EST INTERSTATE COMMERCE 35 

As I say, that is done by machinery. I don't know how they arrive at 
the key. 

Mr. Robinson. How would someone find out what the key was to a 
a particular board ? 

Mr. Brookp^ield. That is something I don't know. There must be 
some manufacturers making them that way. Because of the fact that 
it was not a money board, the Commission didn't pursue the subject 
further. 

Mr. Robinson. There is nothing in the circular to indicate who 
the manufacturer is? 

Mr. Brookfield. No. He just called himself "America's fastest 
selling punchboard." This particular circular, handed me by a jobber 
of legitimate boards on the west coast, would lead you to believe that 
he is the manufacturer himself. 

The Chairman. Let's direct an inquiry into that matter. 

Of course, Mr. Brookfield, any of these other boards, you wouldn't 
know whether they had, in some cases, some of them anyway, you 
would not know whether they had some way of letting the operator 
know what the secret numbers were or not, would you ? 

]Mr. Brookfield. No ; except from the testimony of all of the manu- 
facturers and customers and retailers that I have had on the stand 
over the years, as to the way the boards are manufactured. 

The Chairman. The only purpose at all in having a key would be 
to enable the operator, either himself or friends of his, to hit the 
lucky number and gyp everybody else ? 

Mr. Brookfield. That is the purpose of it. This is purely a gyp 
game. 

I am through with this circular, if Mr. Robinson wants it. , 

Mr. Robinson. Yes. 

The Chairman. Any of these that you can let us have as exhibits 
for our records, we will take them. 

Mr. Brookfield. Anything I brought clowm here today is from 
cases that are either closed, before the Commission, or we are through 
with them, and you can have them. 

The Chairman. We appreciate it. 

Let's put this in the record. 

Mr. Robinson. Yes. Brookfield exhibit 1. 

The Chairman. Yes ; exhibit 1. Then let's keep all of these other 
things. 

(The document was marked "Exhibit No. 1" and is on file with the 
committee.) 

The Chairman. Mr. Burling has some questions. 

Mr. Burling. I wanted to get this point clear : Assuming that I am 
a little bit dishonest and run a grocery store, or a novelty store, and 
that I buy this board called the Texas Charley on exhibit 1 that you 
just gave us, and assuming that I then punch out, by means of the 
key, the winning numbers. As I understand it, I have paid out $14.98, 
and I take in $300 ; is that correct? 

Mr. Brookfield. That would be right, if you punch all the winning 
numbers yourself, so that you would have a profit of two-hundred- 
some dollars, instead of a legitimate profit, approximately, of $100. 

Mr. Burling- I want to ask you this, assuming that I am not dis- 
honest, but play this board at a straight percentage. The board costs 
me $4.98, and I take in $300. I pay out $197, and the profit is $102. 



36 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Deducting the $4 that I paid for the board, I make about $95 on a $5 
sale ; is that correct ? 

The Chairman. On a $5 investment. 

Mr. Burling. Yes. 

Mr. Brookfield. Yes ; on a $5 investment- 
Mr. Burling. I think the committee would be interested in getting 
your best guess as to whether that is about the usual ratio of sale on 
the part of manufacturers of punchboard to total amount gambled; 
would you say it is high or low ? 

Mr. Brookfield. I would say that is high. There are more of these 
boards, these cigarette boards, sold. 

The Chairman. What is the percentage of the profit on that ; you 
pay how much for the board ? 

Mr. Brookfield. This board sells for about 60 to 65, 70 cents. The 
cigarette boards, you might say, are the punchboard industry's loss 
leader. 

The Chairman, That is the 1-cent board? 

Mr. Brookfield. Yes. 

Mr. Burling. How many cents are there ? 

Mr. Brookfield. This is a thousand-hole board, takes in $10, pays 
out about two or three cartons, not over three cartons of cigarettes. 

Mr. Burling. If you are trying to get an estimate of the total 
amount gambled on a 60-cent sale, you will estimate that $10 is the 
gamble ; is that right ? 

Mr. Brookfield. $10 is gambled ; yes. 

The Chairman. On these football numbers, they cost almost noth- 
ing, and the amount gambled would be very substantial, wouldn't it? 
Football and baseball and basketball ; is that right ? 

Mr. Brookfield. Yes; they are like number tickets; they don't cost 
very much. 

Mr. Burling. The point I was trying to establish was that since 
we have several manufacturers whose business is in excess of a million 
dollars for the physical board, the estimate would seem justified that 
the volume of money gambled throughout the country runs into hun- 
dreds of millions of dollars. Do you agree with that ? 

Mr. Brookfield. Yes. If Mr. Lichtenstein's estimate of $10,000,- 
000 worth of boards were sold is correct, and you figure that the aver- 
age board would run anywhere — the amount gambled on it — would 
run from a minimum of, say, $10, in this case, up to, some of the 
others, where the take is as high as $300. 

Mr. Burling. So that you would agree that the amount gambled 
on punchboards would almost certainly be somewhere between 100,- 
000,000 and a billion dollars a year? 

The Chairman. You have a $3 board 

Mr. Brookfield. Yes. Between 100,000,000 and a billion. That is 
a right big spread. 

The Chairman. You have a $3 board, that plays $300. That is 100 
times over — 100 times 10,000,000 would be — what, a billion dollars. 

Mr. Brookfield. That would be a billion. 

The Chairman. These baseball and push cards, the jar boards, the 
investment is practically nothing. 

Mr. Brookfield. Then in some States the jar boards are even more 
popular than punchboards because they don't have to have a jar. For 



ORGANIZED CRIME IN INTERSTATE COMMERCE 37 

instance, in Ottumwa, Iowa, in hotels, they were using a cigar box and 
were selling the tickets from a cigar box. 

There is no way you can estimate as to the amount of money gambled 
by these various devices. 

Mr. Robinson. Is there any particular area where punchboards are 
used more than other areas, Mr. Brookfield, to your knowledge? 

Mr. Brookfield. There are certain States where either they are 
legalized or not, there is no very strict enforcement, Montana and 
Idaho, they are legalized out there, you find them in practically every 
retail establishment, in hotels, except chain stores, things like that. 

Mr. Robinson. Are there any other States where they are legalized, 
to your knowledge? 

Mr. Brookfield. The merchandise boards to some extent are legal- 
ized in Seattle, and in eastern Washington, around Spokane — I mean, 
western Washington, around Spokane they are not legal — in Seattle 
they can use all the merchandising boards they want. So that the 
cost per punch won't run over 10 cents. 

Mr. Robinson. How about Nevada ? 

Mr. Brookfield. I have asked three witnesses about the punch- 
board situation in Nevada and got the same answer, that Nevada is a 
very poor punchboard State, because punchboards cannot compete 
with the more exciting forms of gambling. There are a number sold 
there in outlying areas but Nevada is not the punchboard State you 
would think it would be. 

The Chairman. Have you a list of the States where punchboards 
are legal ? 

Mr. Brookfield. No, sir, I don't. I can procure that for you. 

The Chairman. Mr. Robinson, let's get that and put it in the record. 

Mr. Robinson. Do you have such a list among your records? 

Mr. Brookfield. No, sir. I would have to get it through research. 
That is the only way I could get it. 

The Chairman. Let's get that information and put it in the record, 
Mr. Robinson. 

Mr. Robinson. Yes. 

Mr. Brookfield. They are used, Senator, to a large extent in States 
that have laws against them. Pennsylvania has a punchboard law 
but Pennsylvania is also a very good source of sales for punchboards. 
Ohio is a good punchboard State. 

The Chairman. They have a law against it, too? 

Mr. Brookfield. I think so. I know they have local laws. 

The Chairman. I think there are just four or five States where they 
are legal; yet you find them in every State, don't you? 

Mr. Brookfield. Every State that I have ever been in. 

The Chairman. All right. 

Mr. Robinson. Do you know anything about the matter of the al- 
location of paper to the industry? 

Mr. Brookfield. From testimony we have in the record, including 
one of the cases on the west coast, during the war the War Production 
Board allocated 65 percent of the normal usage of the industry to the 
industry. Mr. Lichtenstein testified to that and tliere is also' a War 
Production order to that effect. 

Mr. Robinson. That was during the time when paper was scarce 
and there was allocations being made of that product? 



38 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Brookfield. Yes. They were allocated G5 percent of their 
normal use. 

The Chairman. How about newspapers and magazines, what were 
they allocated ? 

Mr. Brookfield. I couldn't answer that, sir. 

The Chairman. Was that about the same allocation as you have in 
all other business, do you think ? 

Mr. Brookfield. I didn't have anything to do with the War Pro- 
duction Board. I just don't know. The only reason I knew about 
this was because there was testimony. They offered that as testimony 
to show what a legitimate business it was. 

The Chairman. Mr. Robinson, let's get that information and put it 
in the record. 

Mr. Robinson. Yes. 

The Chairman. All right, go ahead. 

Mr. Robinson. In the cases that come up before the Federal Trade 
Commission on trade practices is there some general defense that is 
usually put in by the manufacturers ? 

Mr. Brookfield. Well, the theory of the defense of the punchboard 
manufacturers is that they are just as much entitled to sell punch- 
boards as the playing card people are to sell playing cards. That seems 
to be their defense. It was overruled in the two cases which have gone 
to court, the Brewer case and the Modernistic Candj^ case. 

Mr. Robinson. Do they, essentially, raise the defense that they are 
in the manufacture of gambling equipment rather than merchandising 
equipment ? 

Mr. Brookfield. That has been the defense in the Sax cases specifi- 
cally, that these boards are manufactured and used for gambling, and 
that the distribution of merchandise is secondary, and that the labels 
calling for merchandise distribution are intended as a subterfuge. 
That has been their principal defense. 

The Chairman. Do you have a copy of the reply of the Sax com- 
panies to some of the complaints where that defense is set up ? 

Mr. Brookfield. No ; they didn't set it up in the written defense. 

The Chairman. They set it up in the oral argument? 

Mr. Brookfield. In the testimony and in the examination of wit- 
nesses, and so forth. 

The Chairman. Let's get that clear. There couldn't be a violation 
of the Fair Trade Practices Laws because it had nothing to do with 
merchandise, manufacturing, than for gambling purposes, and that 
wasn't merchandising; is that correct? 

Mr. Brookfield. That has been their theory. 

Mr. Robinson. Mr. Brookfield, in the course of your work have you 
ever run across any evidence to the effect that any of these manufac- 
turing companies were violating the child-labor law ? 

Mr. Brookfield. Only in connection with that police report re- 
ferred to relative to Berkowitz. 

Mr. Robinson. Do you remember what the details of the allegation 
were? 

Mr. Brookfield. According to the report, if I remember, according 
to the report, I have to testify from memory of a written report made 
to the 

The Chairman. Could you get the written report and put it in the 
record ? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 39 

Mr. Brookfield. If the committee requests it of the Commission 
they will furnish it. 

The Chairman. All right. Let's do that. 

And when it is obtained, let's give it to the press, so that they can 
have it also. 

Mr. Robinson. Yes. 

The Chairman. And let's put it in the record. 

Mr. Robinson. One final question, Mr. Brookfield: Is there an 
association of manufacturers of punchboards? 

Mr. Brookfield. There is a loosely knit association. It is very 
informal at the present time, I am informed. Mr. James, I believe, 
is the punchboard representative. I am not sure. Mr. Lichtenstein 
can tell you the set-up on that. 

The Chairman. Do you have his initials? 

Mr. Robinson. Yes. Frank W. James. Is that the correct name? 

Mr. Brookfield. Frank W James, yes. 

Mr. Robinson. Does the association maintain an office? 

Mr. Brookfield. I don't think so, no. 

The Chairman. Where does he live, Mr. Robinson? 

Mr. Robinson. The record indicates that he lived at 944 Drake 
Street, Evanston, 111. 

Mr. Brookfield. I think that is correct. I think I gave you that. 

Mr. Robinson. But to your knowledge the association maintains 
no business office ? 

Mr. Brookfield. I never heard of it. In fact, I think the associa- 
tion is more or less an informal one. During the NRA they had a 
code for the punchboard industry and Mr. James was the Secretary 
of the Code Authority. 

Mr. Robinson. Did he have some trouble with the Federal Trade 
Commission ? 

Mr. Brookfield. I beg your pardon? 

Mr. Robinson. Did Mr. James ever have any difficulty with the 
Federal Trade Commission ? 

Mr. Brookfield. Yes. It was in connection with a brief which he 
filed which was alleged to be scurrilous and he was disbarred from 
practicing before the Commission. However 

Mr. Robinson. He has now been reinstated ? 

Mr. Brookfield. He has been reinstated. 

The Chairman. How was it scurrilous, Mr. Brookfield? 

Mr. Brookfield. It was a more or less attack, in the nature of a 
personal attack. 

The Chairman. This is Senator Hunt, Mr. Brookfield. 

Senator Hunt. Hello, Mr. Brookfield. 

Mr. Brookfield. Yes, sir. 

It was an attack on the personal integrity of the individual mem- 
bers of the Commission. If I remember right there were other facts 
that were alleged in the complaint that were libelous. He sub- 
sequently apologized and has now been reinstated and is in good 
standing as an attorney practicing before the Commission. 

Mr. Robinson. That is all I have, Mr. Chairman. 

The Chairman. Mr. Burling, do you have any other questions? 

Mr. Burling. No: I don't, Mr. Chairman. 

The Chairman. Did you state how long you have been making a 
study of punchboards ? 



40 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Brooktield. I have been trying the lottery merchandise cases, 
of which the pnnchboards are a substantial but not — well, in fact, 
about 85 percent of it are — since 1940, when I took them over from 
Attorney Daniels, now Secretary of the Commission. The question 
of lottery merchandise had been before the Commission, I think one 
of the first docketed cases we had was involving a complaint from a 
manufacturers' association, then selling lottery candy, way back in 
1918. 

The Chairman. I notice, Mr. Brookfield, that these boards are 
usually always brightly colored. Some of them have pictures of cow- 
boys; beautiful girls 

Mr. Brookfield. l^es. 

The Chairman. You have a "piggy bank" board here. 

Mr. Brookfield. Yes. 

The Chairman. Which has an attractive model on it. Here is one 
that is called Take it Easy Jackpot. That has a beautiful model 
on it. 

Do you think these things are highly colored to attract children? 

Mr. Brookfield. I don't think to attract children; no, sir. 

The Chairman. What would be your theory about it, Mr. Brook- 
field? 

Mr. Brookfield. A board doesn't last long. I think Mr. Lichten- 
stein, when he testifies, will tell you that that type of board won't last 
long in a location and by "location" I mean a store where it is being 
used, and they have to change the board to keep up the interest. 

You will find, for instance, they will have this board [indicating], 
and maybe one of these other boards, and when a place starts slowing 
down on one they will withdraw that for a while and put one of the 
other boards in. 

There seems to be the attraction of sight as well as gambling instinct 
to people who play the boards. All of these companies hire a good 
artist to come up with new designs all the time. 

The Chairman. Let's see that other one. 

Mr. Brooktield. Yes [handling] . 

The Chairman. This is called Bonus ]\Iary. From the picture 
apparently Earl Morgan is the artist. 

Mr. Brookfield. Evidently. 

The Chairman. It says "I am out for a good time and a half." 

That is the general system, is it? 

Mr. Brookfield. All of them have to be attractive. For instance, 
the original "Charley" board — the word "Charley" comes from "dol- 
lar" — the reason it is called that is that the board originally had a 
large number of dollar prizes, a better pay-off, because the prizes were 
smaller. 

The Chairman. The one in your hand apparently leads to the belief 
that you might get a gold piece ; is that right ? 

Mr. Brookfield. No. This is what they call a step-up board. I 
wanted to call this board to your attention before I left. That is 
called a book board. 

The Chairman. Turn it around so that everyone can see it. 

Mr. Brookfield. It can be kept under the counter and brought out 
and put back very easily. They are very popular in some places where 
boards are illegal. They don't want them on the counter all the time. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 41 

We had one man who testified he was a regular piinchboard addict, 
that he couldn't pass one by. 

This board, with the original 5-cent punch entitles you to^ first a 
step-up into the first jackpot and then if you punch one of the jackpot 
awards you get into the gold seal, and somewhere among the eight 
gold seals is a $25 prize. 

The Chairman. You were talking about these step-up boards. 
A.ren't there some kind of boards where the main thing you get is the 
privilege of punching the stepped-up board ? 

Mr. Brookfield. This particular board 

The Chairman. Turn it around so everybody can see it. Explain 
how it operates. 

Mr. Brooktield. The price of the punches are six for a quarter. 
There are six 5-cent tickets in each hole. If you punch one of the 
numbers — for instance, the numbers 100, 200, 300, 400 — if you punch 
one of those you get a punch in the blue seal ; and in the blue seal you 
either win $5, $4, $3, or $2, or a chance to advance to the gold seal. 
One of the eight numbers in the gold seal is $25. The other is $7 or $5. 
So that you would have to be three times lucky to get into the gold 
seal. 

The Chairman. It is a sort of lead-on board. 

Mr. Brookfield. Yes. 

This board takes in $50 and the average pay-out is $18 — no, the aver- 
age pay-out is $25 and the maximum profit is $27. The average profit 
is $24. That is a very liberal paying board if the profit was paid out. 
Chances are great against it ever paying out. 

The Chairman. Why are the chances great against it ever paying 
out? 

Mr. Brookfield. AVell, there are 1,200 punches, so your chance — 
1,200 punches of the 5-cent variety — and only one, two, three, four — 
only four out of the 1,200 gives you a chance to get to the blue step-up. 
I would have to tear it down to find out. But there are only eight 
step-ups and only one of these is the principal prize. 

The Chairman. So a fellow may punch himself out on the lower 
ones there and never get to the gold seal, and by the time you get there, 
the operator would simply destroy the board ? 

Mr. Brookfield. Yes. But he could actually take a chance. With 
the percentage board like this, so far as having to pay out $25 is con- 
cerned, the operator is pretty safe. 

The Chairman. Why? 

Mr. Brookfield. From a straight percentage standpoint. 

The Chairman. Of course, there is nothing to prevent the operator 
from pushing out the blue ones there, so as to take away the chances ? 

Mr. Brookfield. Yes, after the board is partially punched out. 

The Chairman. Yes. 

Mr. Brookfield. But then nobody would be inclined to play the 
board if it appeared that it had been unduly punched out. 

The Chairman. All right, sir. 

Mr. Brookfield. Does the committee want these [indicating] ? 

The Chairman. Yes ; we would like them. 

Here is a Superior catalog, rather attractively done in colors. But 
I notice that in the catalog they don't put the name of the president 
or any of the officers of the corporation, do they ? 

68958— 51— pt. 12 A 



42 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Brookfield. No, sir. 

The Chairman. Superior Products, Inc., 2133 West Fulton Street, 
Chicago, 111. 

Wliat is that advertisement you have there ? 

Mr. Brookfield. This is an advertisement for the various jar deals. 

The Chairman. All right, sir. If you will leave all of these exhibits. 

Mr. Brookfield. I purposely picked out the exhibits that the Com- 
mission had finished with so that I could leave them. 

The Chairman. Thank you, Mr. Brookfield. 

Any questions, Senator Hunt? 

Senator Hunt. No questions, only it occurs to me that a bill like 
our slot-machine bill, to prevent interstate shipment, would put a par- 
tial stoppage on this. 

The Chairman. Yes, I think it would, except of course, these things 
are manufactured in many, many States, including Tennessee. 

Senator Hunt. Yes ; I guess they are. 

Mr. Brookfield. Incidentally, this [indicating] is the Tennessee 
board. 

The Chairman. Which one? 

Mr. Brookfield. This one. 

Senator Hunt. For the record, I would like to say that none of these 
are manufactured in Wyoming. 

The Chairman. But they are used very extensively in Wyoming. 

I will at least have to say that the Tennessee fellow gets out a rather 
attractive board. 

Anything else, Mr. Robinson ? 

Mr. Robinson. I have nothing else, Mr. Chairman. 

I do, however, want to suggest that this document be made a part 
of the record, which has information relating to the Superior Products 
Co., which was obtained as the result of an examination of records by 
one of the agent-investigators of the committee staff, Mr. Amis. The 
company records were subpenaed and pursuant thereto Mr. Amis 
examined the company records and made a statistical report as the 
result of examination. 

The Chairman. Is it taken from the records which were subpenaed 
and brought under the control of the committee and which show the 
gross sales ? 

Mr. Robinson. That is right. 

The Chairman, The officers, how much they made, and such other 
information of that kind ? 

Mr. Robinson. That is correct. 

The Chairman. Let it be made a part of the record. 

(The material above referred to is on file with the committee.) 

The Chairman. May we have copies of that? Do we have copies 
that we can give to the gentlemen of the press ? 

Mr. Robinson. No. I believe that is the only copy that I have here 
presently. 

The Chairman. Well, as to the Superior Products Co., the study, 
apparently for the years 1939 to 1946, of their gross receipts and the 
net income, the study shows: For 1939, $892,000 gross receipts; net 
income, in round figures, $147,000; 1946, gross receipts, $2,465,000; 
net income, $364,717. 

G. D. Sax as president. 



ORGANIZED CRIME IN INTERSTATE COIMMERCE 43 

The payments to the officers and owners in 1946, $60,786. Michael 
Bright, $60,786; Rhoda Sax, the same amomit; Esther Bright, the 
amount. 

Then tliere are a number of trusts set up, each one of them $60,786. 
These are all members of the Sax family ; all trust funds for them. 

These are payments, dividend payments, total payments being 
$364,717. 

The trusts are for : Lois Sax, Samuel and Edward Sax. 

In 1915 George J. Sax was added. That is the fourth trust. 

That is in a single year. 

We have also statistical information taken from their books and 
records for the Consolidated Container Corp., St. Louis, Mo. The 
information shows the number of shares of stock in the corporation ; 
it also gives the customers, list of customers, of the Superior Products 
Corp. 

I apologize for not having copies of this. We can let you see it 
now or we can have mimeographed copies made and passed around. 

Let's pass it around now, then. 

Senator Hunt. Mr. Chairman, you have just given a brief summary 
of the take of one manufacturing company. 

I would like to ask the witness how many manufacturing companies 
are there of this particular type of product in the United States. 

Mr. Brookfield. Altogether I am informed there are between 30 
and 40. I liave personal knowledge of some 20 that have been brought 
to my attention. 

Senator Hunt. Do you have any estimate of the total income of 
all of the various 30 or 40 companies that you speak of? 

Mr. Brookfield. Only, sir, to the extent that Mr. Lichtenstein testi- 
fied in 1947, that the gross estimate, gross sale of punchboards, the 
punchboard companies, was $10,000,000 a year. That was in 1947. 
At that time I don't think there were quite as many small companies 
as there are now. 

Senator Hunt. That is all. 

The Chairman. Business has gotten larger as shown by Mr. Sax's 
increase in volume of business, hasn't it? 

Mr. Brookfield. I would say so. I was surprised at those figures 
you just read. 

The Chairman. It was on a graduating scale upward from about 
a million dollars in 1939 to over three million in 1946 in one company. 
That was Superior. 

I might say that we asked Mr. Amis to secure further detailed 
information from the books and records of certain other companies 
that we had under subpena and Mr. Amis has done part of that. 
When that is available we will make it a part of the record in this 
hearing. 

Is there anything else, Senator Hunt? 

Senator Hunt. No. 

The Chairman. You are excused. Thank you very much for your 
cooperation. 

Mr. Brookfield. Yes, sir. 

The Chairman. IVIr. Robinson told Mr. O'Neil that we would try 
to hear him this morning. 

So, Mr. O'Neil. will you come around, please. 

Mr. O'Neil. Here. 



44 ORGANIZED CRIME IN INTERSTATE COMMERCE 

The Chairman. Come right around. 

Do you solemnly swear that the testimony you will give to the 
committee will be the truth, the whole truth, and nothing but the 
truth, so help you ? 

Mr. O'Neil. I do. 

The Chairman. All right, Mr. Robinson, will you proceed. 

TESTIMONY OF CHARLES P. O'NEIL, CHICAGO, ILL. 

Mr. Robinson. Will you state your full name, please ? 

Mr. O'Neil. Charles P. O'Neil. 

Mr. Robinson. Aiid where do you live? 

The Chairman. 0-N-e-i-l? 

Mr. O'Neil. 0-N-e-i-l. 

I do business as E. M, O'Neil & Co. in Chicago, 111. It is a cor- 
poration. 

Mr. Robinson. Wlio are the officers of the — strike that. 

What is the address of the corporation ? 

Mr. O'Neil. 2643 Clybourn Avenue. 

Mr. Robinson. And who are the officers of the corporation ? 

Mr. O'Neil. I am president and I believe my wife is secretary- — 
no, she is treasurer. And the other officers I couldn't say offhand. 

Mr. Robinson. How long has the corporation been in existence? 

Mr. O'Neil. I think my attorney was down and showed you the 
minute books in Chicago, do you recall ? 

Mr, Robinson. I don't recall. Approximately. 

Mr. O'Neil. I can't remember that. I think it is 1936. 

Mr. Robinson. Were you in business individually prior to that? 

Mr. O'Neil. Yes. 

Mr. Robinson. In the same type of business ? 

Mr. O'Neil. Yes ; but it wasn't incorporated. 

Mr. Robinson. What is the type of business that the corporation 
is engaged in ? 

Mr. O'Neil. We manufacture casino equipment. 

Mr. Robinson. How do you describe casino eciuipment ? 

Mr. O'Neil. Dice tables, roulette wheels, dice, poker chips, lay- 
outs. 

Mr. Robinson. "Wliat is a lay-out? 

Mr. O'Neil. A lay-out is a marked cover made of pool cloth, bil- 
liard cloth ; it is used to cover the different tables. 

Mr. Robinson. Like crap tables ? 

Mr. O'Neil. Like the crap tables or the roulette tables. 

Senator Tobey. Do you make layettes also ? 

Mr. O'Neil. Layettes? No, not layettes. 

Mr. Robinson. How large a plant do you have, Mr. O'Neil ? 

Mr. O'Neil. I have a building about 125 by 50, and a couple of 
small outbuildings, and I employ about, at the present time, 15, 16 
people. 

Mr. Robinson. In the manufacturing plant ? 

Mr. O'Neil. That is right. 

Mr. Robinson. What volume of business do you do ? 

Mr. O'Neil. Well 

Mr. Robinson. What are your gross sales, what were they last 
year? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 45 

Mr. O'Neil. I think last year it was within a thousand dollars, one 
way or another, of $120,000. ^ 

Mr. Robinson. And is that a representative figure for the period 
of time that you have been in business ? 

JNIr. O'Neil. Well, more or less. It was a rather poor year last 
year. 

Mr. Robinson. What would an average year be ? 

Mr. O'Neil. Approximately $150,000. 

Mr. Robinson. Can you break that down so far as the items that you 
manufacture are concerned? 

Mr. O'Neil. Yes. I would say that probably 75 percent of that 
business, or 80 percent, perhaps, is dice. 

Mr. Robinson. And where do you distribute, where are your sales 
made? 

Mr. O'Neil. More or less all over the United States. 

Mr. Robinson. Any particular area that you have your largest 
sales in ? 

Mr. O'Neil. Well, I would say that it is where the bidk of the 
gambling would be, Nevada, Mississippi, Louisiana, and, of course, in 
some cases like Puerto Rico. 

Mr. Robinson. Do you have any business on the east coast ? 

ISIr. O'Neil. Very little. 

INIr. Robinson. How about the west coast ? 

Mr. O'Neil. Very little on the west coast. Past Nevada I do very 
little business. 

Mr. Robinson. Do you have a sizable volume of business in Chicago 
proper ? 

Mr. O'Neil. Not at the present time. 

Mv. Robinson. Did you at one time ? 

My. O'Neil. Yes; I did a large business in Chicago at one time. 

Mr. Robinson. Do you do a sizable business in Ohio and Kentucky? 

Mr. O'Neil. Yes ; Kentucky ; some business in Ohio. 

Mr. Robinson. What was the largest amount of business you did 
in the Chicago area ? 

Mr. O'Neil. Well, I couldn't recall, but probably sixty, seventy 
thousand dollars. 

Mr. Robinson. You don't do that amount now ? 

Mr. O'Neil. No ; I do very little business now ; there is very little 
going on in Chicago. 

]\Ir. Robinson. Well, what is the reason for the falling off of the 
business ?, 

Mr. O'Neil. Well, I have no customers. 

Mr. Robinson. Is that something that is recent or has that been a 
trend since your peak year? 

Mr. O'Neil. They convicted Skidmore and Johnson of income-tax 
conspiracy and since then I have had practically no business in Chi- 
cago. That was about 1938, 1 believe, they closed up. 

Mr. Robinson. What relation did the conviction of those two indi- 
viduals have with your business? 

Mr. O'Neil. Well, because when they closed up I had nobody to 
sell to. 

The Chairman. Give the initials of Skidmore and the other man 
and who they are. 

Mr. O'Neil. William Skidmore and William Johnson, 



46 ORGANIZED CRIME IN INTERSTATE COMMERCE 

The Chairman. Wliat were their companies or operations ? 

Mr. O'Neil. Why, they were connected with some casinos there, I 
believe. 

Mr. EoBiNSON. Did Mr. Skidmore and Mr. Johnson purchase di- 
rectly from you ? 

Mr. O'Neil. No, no. I sold to the different owners of casinos. 

Mr. EoBiNsoN. Well, I still don't see why the conviction of Mr. 
Skidmore and Mr. Johnson would have anything to do with the sale 
of dice or gambling equipment to the casinos. 

Mr. O'Neil. Because after they were convicted the casinos were 
closed. 

Mr. Robinson. Did Mr. Johnson and Mr. Skidmore control the 
casinos ? 

Mr. O'Neil. I couldn't say. 

The Chairman. They were convicted of controlling 

Mr. O'Neil. They were convicted of controlling them. 

The Chairman. Which Mr. Johnson is that? 

Mr. O'Neil. William Johnson. I don't now his middle initial. 

The Chairman. Do you know anything else about him ? 

Mr. O'Neil. No; I don't. I did all my business with the people 
that were in charge of the casinos. 

Senator Tobet. Are the dice made of plastic? 

Mr. O'Neil. Celluloid. 

The Chairman. I understand from the members of the staff that it 
is not the same William Johnson that had Sportsmen's Park. 

Mr. O'Neil. No. 

The Chairman. He is another Johnson. 

Mr. O'Neh.. Yes. 

The Chairman. All right. 

Mr. Robinson. Is it true that the volume of your sales in Chicago 
reached its peak at the time Mr. Johnson and Mr. Skidmore controlled 
the gambling in Chicago ? 

Mr. O'Neil. Well, now, I didn't say that they controlled it. After 
their conviction is when my business dropped off in Chicago. I have 
done practically no business in Chicago since then. 

Mr. Robinson. You would put it that after their conviction the 
casinos and the users of dice dropped down considerably so far as 
their purchases of dice from you were concerned. 

Mr. O'Neh.. Yes. 

Mr. Robinson. Were there any particular casinos in Chicago that 
did a sizable volume of business with you ? 

Mr. O'Neil. Yes. There was Mr. Creighton's place at Sixty-third 
Street and Cottage Grove Avenue. 

There was Mr. Flanagan's place, he is now dead, at 4020 Ogden 
Avenue. 

And there was Mr. Summer's place, up at — I don't just recall the 
number — it was on Kedzie Avenue, near Lawrence. 

There was the Harlem Stables, out on Harlem Avenue. 

And there was a place at Dearborn and Division, Mr. Kelley's place. 

Mr. Robinson. Did these people buy only dice or the lay-outs and 
other goods? 

Mr. O'Neil. Thev bought other goods from me; tables. 

Mr. Robinson. Wliich would indicate a sizable operation ? 

Mr. O'Neil. Yes. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 47 

Mr. Robinson. Did you ever sell to Mr. Cawley ? 

Mr. O'Neil. Yes ; Tom Cawley, at one time. I haven't sold liim, I 
don't think, for 8 or 9 years. 

Mr. Robinson. Did you ever sell to Jack Doyle, in Gary, Ind. ? 

Mr. O'Neil. No. 

Mr. Robinson. Do you know him ? 

Mr. O'Neil. Don't know him. 

Mr. Robinson. Did you ever sell anyone in Gary, or in that area? 
The East Chicago area, Hammond, Ind. ? 

Mr. O'Neil. If I did it might have been a small order. I am not 
acquainted there. 

Mr, Robinson. Do you know William Sheets? 

Mr. O'Neil. I have heard of him. 

Mr. Robinson. Or do you know his partner, Mr. Gardner ? 

Mr. O'Neil. No. I have just heard of them. 

Mr. Robinson. Have you ever heard of the Big House ? 

Mr. O'Neil. I never did any business with that casino. 

Mr. Robinson. What was the name of the casino that you did busi- 
ness with out there? 

Mr. O'Neil. I don't know. It was a place out in Indiana. 

Mr. Robinson. Do you know it by reputation as being the Big 
House? 

Mr. O'Neil. I think that was the nickname they used for it, 

Mr. Robinson, Now, before we go further, Mr. O'Neil, I requested 
you in the telegram to bring with you a list of your customers for 
the past couple of years. 

Mr. O'Neil. That is right. 

Mr. Robinson. Is this [indicating] the list? 

Mr. O'Neil. That is a complete list of customers which I gave you 
this morning. 

Mr. Robinson. I would like to introduce this and make it a part 
of the record. 

The Chaieman. It may be filed as exhibit No. 2. 

(The document referred to was marked "Exhibit No. 2," and is on 
file with the committee. ) 

Senator Tobey, Are all dice of standard size? 

]\Ir. O'Neil. No ; t'hey are of different size. 

Senator Tobey. Do they order what they want, with specification? 

Mr. O'Neil. As a rule. 

Senator Tobey. And you make them according to formula? 

Mr. ONeil. Yes. 

Senator Tobey. And if the formula suggests that you make them a 
little heavier on one side or the other, would you take the order? 

Mr. O'Neil. No. We don't make that type of dice. 

Senator Tobey. Are they made? 

]\Ir. O'Neil. I guess they are. 

Senator Tobey. "Who makes those? 

Mr. O'Neil. Well, I believe that one company that made them was 
the Mason Co. They got a write-up in all the papers throughout the 
United States. 

Senator Tobey. Is it a simple matter to load them ? 

The Chairman. Senator Tobey, I think Mr. Robinson can tell you 
the companies that make the magical dice. 

Senator Tobey. All right. 



48 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Robinson. That term "magical dice" is a term used in the trade 
for what is ordinarily known as crooked dice ? 

Mr. O'Neil. Crooked dice, some people call them; they are called 
percentage dice. 

M. Robinson. Has your company ever manufactured that type of 
dice ^ 

Mr. O'Neil. No. 

Mr. Robinson. Do you know how that type of dice is manufactured i 

Mr. O'Neil. Oh, yes. I am familiar with it. 

Mr. Robinson. Would you explain the procedure used in the manu- 
facture of that type of dice ? 

Mr. O'Neil. Well, they call some percentage dice "edge work" and 
then there are others that are short on one side or long on the other ; 
and some are filled. 

The Chairman. Loaded, as it is called ? 

Mr. O'Neil. Yes. 

Senator Tobey. That couldn't be the celluloid dice, because you could 
see through it. 

Mr. O'Neil. I believe they put it behind the spots. 

Senator Tobet. Do they work prettv well ? 

Mr. O'Neil. Well 

Senator Tobey. Can you count on their coming through the way you 
want them to ? 

Mr. O'Neil. I don't know. I have never used that kind. 

Senator Tobey. What proportion of gambling with dice at crap 
tables is honest-to-God dice and what proportion is "percentage" dice ? 

Mr. O'Neil. Well, if you go into the larger casinos I don't think 
you will ever find crooked dice. 

Senator Tobey. Such as the big ones out in Las Vegas ? 

Mr. O'Neil. That is right. 

Senator Tobey. They do change the dice quite often, don't they ? 

Mr. O'Neil. Yes. They will give them to you. You can pick them 
up off the table and take them away. 

Senator Tobey. Aren't they afraid they will wear down? Don't 
they refresh them ? 

Mr. O'Neil. Yes ; they use a good many of them, because if they get 
nicked up, well, it might be a little bit against the house and the players 
might not like it, or something like that. 

The Chairman. But these "sawdust" places, as distinguished from 
the "plush carpet" places, lots of them do have loaded dice ? 

Mr. O'Neil, Well, a "sawdust" place doesn't necessarily mean that 
it is a small place, it can be a large place, but it depends more oi) 
volume, but some of them are quite large and they are still honest. 

The Chairman. Some of the little places do use dishonest dice? 

Mr. O'Neil. Well, I don't keep in contact with those places. 

Mr. Burling. Do you know whether dice is manufactured by any- 
one in such a way that when an electric current is on, underneath the 
table, the dice are crooked and when you turn the current off they 
are true ? 

Mr. O'Neil. Well, I have heard of such things, but I think that is 
very silly; most of that is in the imagination of the players. 

Mr. Robinson. Mr. O'Neill, who are your competitors in Chicago? 

Mr. O'Neh.. Well— Taylor & Co. 

The Chairman. Will you elucidate on Taylor & Co. ? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 49 

Mr. O'Neil. Taylor is my leading competitor. Code & Co. 

The Chairman. Who owns that? 

Mr. O'Neil. I wouldn't know but Mr. Klise runs it. That is 
C-o-d-e. 

The Chairman. Give Mr. Klise's first name. 

Mr. O'Neil. Joseph Klise ; K-1-i-s-e. 

Mr. Robinson. What other companies, Mr. O'Neil ? 

Mv. O'Neil. Well, there are quite a few companies selling dice 
tliere. 

There is Hunt & Co. ; Aladdin Specialty Co. 

Mr. Robinson. Well, those latter two are strictly dice manufactur- 
ers? 

Mr. O'Neil. Beg pardon ? 

Mr. Robinson. Those letter two that you have mentioned are strict- 
ly dice manufacturers ? 

Mr. O'Neil. Yes. 

Mv. Robinson. The others that you have mentioned are manu- 
facturers of what you call casino equipment? 

Mr. O'Neil. That is right; furniture 

Mr. Robinson. Are there any other manufacturers of casine equip- 
ment in Chicago? 

Mr. O'Neil. Evans I believe is still making some equipment. A. C. 
Evans & Co. 

Mr. Robinson. Is that all ? 

Mr. O'Neil. That is all I know of. 

Mv. Robinson. Now, who are the owners of Taylor & Co. ? 

Mr. O'Neil. I wouldn't know. 

Mr. Robinson. Do you have anv business dealings with them at 
all? 

The Chairman. Mr. Robinson, let's bring out the information 
gathered in the Cleveland hearings. 

Mr. Robinson. Do you know Joseph Aiuppa ? 

Mr. O'Neil. No, I don't. 

Mr. Robinson. Do you know Claude Maddox ? 

Mr. O'Neil. That is Mr. Moore? 

Mr. Robinson. That is right. 

Mr. O'Neil. I believe I met him once. 

Mr. Robinson. Do you know what business they are in? 

Mr. O'Neil. No, I don't. 

Mr. Robinson. Don't you know or haven't you heard that those 
two people are the operators or owners of Taylor & Co. ? 

Mr. O'Neil. Well, I have heard rumors that Claude Maddox was 
interested in it ; John Moore. 

INIr. Robinson. Did you at one time sell equipment to Qaude Mad- 
dox? 

Mr. O'Neil. I believe about 18 years ago, 17 years ago, I sold him 
a table. 

Mr. Robinson. Is that the only business you ever had with them? 

Mr. O'Neil. That is the only business I ever had with him. 

Mr. Robinson. Do you know anything about him at all ? 

Mr. O'Neil. No ; I don't. I met him once, one night in a bar and had 
a drink with him. That is all I know. 

Mr. Robinson. Did he state at that time what business he was in? 

Mr. O'Neil. No. That must be about 8, 9 years ago. 



50 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Robinson. When was the Taylor & Co. organized, do you know? 

Mr. O'Neil. I think they have been in business about 8, 9 years. 

Mr. Robinson. And what effect has their business had on yours? 

Mr. O'Neil. Well, it hasn't had any effect other than being an 
added competitor. 

]\Ir. Robinson. Have you lost any customers to that company ? 

Mr. O'Neil. Oh, perhaps; perhaps I might have lost some. You 
see, at one time there was only about five or six manufacturers, but 
since then, since the war, there is quite a few firms have gotten into 
the business, newcomers, and perhaps today there is 20 people in the 
business, 25 people, maybe, and, of course, every new firm that goes 
in business takes some customers, because they don't just go in the 
business cold, they have to go from some company, they originally 
learn the business in one company and start out for themselves, get 
someone interested and start a new firm, and naturally, when they 
leave a firm, some of them take some of the business with them. You 
know how that is when a salesman leaves one firm, there is a certain 
amount of business sticks with them. 

Mr. Robinson. You say you have never heard of Joseph Aiuppa? 

Mr. O'Neil. I have read his name in the papers, that is all ; never 
met him. 

The Chairman. Mr. Robinson, we had his books and records under 
subpena, and an analysis was made of the owners of the Taylor Co., 
and the kind of business and the extent of business they did, isn't that 
right? 

Mr. Robinson. That is right. 

The Chairman. I think that was put in the record in Cleveland, 
wasn't it ? 

Mr. Robinson. That is right. 

A comparable list to this type of list that Mr. O'Neil submitted. 

The Chairman. Could you state from the record, as some of the 
members of the press were not in Cleveland, who the officers are, and 
the extent of the business, do ,you have it there ? 

Mr. Robinson. I can give it pretty much from memory. 

It is that Mr. Aiuppa, Claude Maddox, alias John Screwy O'Brien, 
they were partners and owners of the Taylor Co., Taylor & Co., which 
is a manufacturer of gambling equipment, who distribute and sell 
their products in many of the States throughout the country. 

I assume in the same manner that you do ; is that correct? 

Mr. O'Neil. That is right. 

The Chairman. It is considerably larger than this operation, isn't it ? 

Mr. Robinson. The volume of business was, I believe, considerably 
larger than tlie figure that Mr. O'Neil has stated as being the volume 
of business of his own corporation. 

Mr. O'Neil. I have no salesmen. 

Mr. Robinson. I wanted to ask you about your method of sale and 
distribution. You have no salesmen on the road ? 

Mr. O'Neil. No. 

Mr. Robinson. Do you know whether Taylor & Co. does ? 

Mr. O'Neil. I believe they have some salesmen out. 

Mr. Robinson. How do you get your business ? 

Mr. O'Neil. Well, I get my business because I have been known 
rather widely amongst the fraternity, I make a good product, and 



ORGANIZED CRIME IN INTERSTATE COMMERCE SI, 

most of my business is steady business ; so long as the casinos are op- 
erating I seldom lose the business. 

Senator Tobey. You mean by the "fraternity" the "profession" ? 

Mr. O'Neil. That is right. 

Mr. KoBiNsoN. Did you know Mr. Skidmore and Mr. Johnson quite 
well? 

Mr. O'Neil. Yes, I knew Mr. Johnson quite well. 

Mr. KoBiNsoN. And were they largely instrumental in your getting 
business in the casinos in Chicago ? 

Mr. O'Xeil. No. That was more or less at the discretion of the 
people that operated the casinos. I will tell you, at the time I didn't 
have a whole lot of competition getting the business, and I sold a little 
cheaper, and it wasn't altogether a matter of cutting price, but I kind 
of had a little better machine, and made a better product. 

Mr. KoBiNSON. But the connections you had with them didn't do 
you any harm? 

Mr. O'Neil. That is right. 

Mr. Robinson. Now, how do you get your business ; do you adver- 
tise? 

Mr. O'Neil. No ; no advertising ; word of mouth. 

Mr. Robinson. Are your customers regular, year in and year out? 

Mr. O'Neil. More or less. Sometimes, perhaps, a gambler might 
be closed for a year or 2 years. 

Mr. Robinson. And you go on the road yourself, too ? 

Mr. O'Neil. Occasionally I go and see a customer, or see a few 
people. 

Mr. Robinson. And how occasional is that ? 

Mr. O'Neil. Well, last week I was in Puerto Rico, and the month 
before I was down in New Orleans, and I was over in east Texas 
for about 2 weeks, I guess, that was right after Christmas, I believe ; 
and I went down to New Orleans and east Texas, and I was gone about 
2 weeks. 

Mr. Robinson. Who did you see in Puerto Rico ? 

Mr. O'Neil. Mr. Wangeman. 

Mr. Robinson. What is his business ? 

Mr. O'Neil. He is the manager of the Caribe Hilton Hotel. 

Mr. Robinson. What was your purpose in seeing him ? 

The Chairman. What is his name ? 

Mr. O'Neil. Wangeman. 

The Chairman. AVhat is his first name or initials ? 

Mr. O'Neil. I can't tell you. 

The Chairman. That is the new Hilton Hotel? 

Mr. O'Neil. That is right. 

Mr. Robinson. What was the purpose of your — excuse me, were 
you through, Mr. Chairman? 

The Chairman. Yes. 

Mr. Robinson. What was the purpose of j^our visit to that gentle- 
man ? 

Mr. O'Neil. Well, I thought I would drop in and see them. They 
were a pretty good customer. I thought it wise to keep in touch with 
customers about once a year. I understand that they are building 
some more casinos over there. I also wanted to scout around and make 
some more contacts. 

Mr. Robinson. How do you classify a pretty good customer ? 



52 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. O'Neil. Well, they equipped their casino ; that was a $10,000 
sale. 

Mr. Robinson. Did you visit anyone else in Puerto Rico? 

Mr. O'ISTeil. Yes. I visited two other casinos. There is three of them 
down there. 

Mr. Robinson. Did you get orders from all three for equipment? 

Mr. O'Neil. I got an order from one of the other casinos. 

Mr. Robinson. How much was that order ? 

Mr. O'Neil. Well, it was more or less of a trade, I sold them three 
used wheels and a blackjack table, which amounted to — just the wheels 
would amount to $1,450. 

Mr. Robinson. Now, whom did you visit in New Orleans? 

Mr. O'Neil. Oh, I visited the Club Forest; O'Dyer's 

Mr. Robinson. Let's stay on the Club Forest. Whom did you see 
there ? 

Mr. O'Neil. Well, I saw Frank Tredico. 

Mr. Robinson. Who is he ? 

Mr. O'Neil. He is the one that does the buying. 

Mr. Robinson. Does he own the club ? 

Mr. O'Neil. No, I don't think so. 

Mr. Robinson. Did you get an order from him ? 

Mr. O'Neil. Oh, yes; I get orders continually from them. 

Mr. Robinson. Hoav large a business do you do with the Club 
Poorest during a year ? 

Mr. O'Neil. Well, they may switch; they might buy from me for 
6 months and then they might have a losing streak and then they 
will switch to somebody else, they might deal with them 6, 8 months, 
and then they will come back again. 

Mr. Robinson. Did you say you did get an order from them? 

Mr. O'Neil. Yes. 

Mr. Robinson. Have you completed the order ? 

Mr. O'Neil. Well, you see, those things are not sold exactly like 
equipment. You see, what you do is call on a man and keep in touch 
with him, but he usually calls up every week or every 2 weeks and 
orders dice. 

Mr. Robinson. When was the last time he called up ? 

Mr. O'Neil. Why, I think it was about 2 weeks ago. 

Mr. Robinson. And what did he order at that time ? 

Mr. O'Neil. Dice. 

Mr. Robinson. Do you remember how many or how much? 

Mr. O'Neil. Yes. The order is always the same. It is 200 pair. 

Mr. Robinson. Which would run to what? 

Mr. O'Neil. $268. 

Mr. Robinson. Now, do you know 

The Chairman. I think the record in New Orleans brought out 
fully the ownership of the Club Forest. Mr. Martin, wilfyou give the 
names ? 

Mr. MARnN. Yes. Henry and Arthur Mills; Osmond Litolff; Al 
Schorling has an interest there, too. 

Mr. Robinson. Do you know any of those gentlemen, Mr. O'Neil ? 

Mr. O'Neil. Yes, I know Mr. Schorling. I have met Henry Mills 
but I wouldn't say I knew him. 

Mr. Robinson. Now, when did you last see any of those indi- 
viduals ? Was it on the occasion of your trip to New Orleans ? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 53 

Mr. O'Neii.. In January. 

Mr. Robinson. In January. 

Mr. O'Neil. Yes. 

Mr. Robinson. And have you had any telephone conversation with 
any of them since that time ? 

Mr. O'Neil. Yes. I talked to Tredico on the phone when he gave 
me that last order. 

Mr. Robinson. How about the Mills brothers or Litolff ? 

Mr. O'Neil. I met Mr. Mills about 4 years ago. That is the only 
time I ever met him. 

Mr. Robinson. How about Littolff, Osmond Litolff, did you talk 
to him recently ? 

Mr. O'Neil. I don't know him. 

Mr. Robinson. You don't know anything about their present 
whereabouts, I take it ? 

Mr. O'Neil. I couldn't tell you. 

Mr. Robinson. Wliat other clubs did you visit while in New Or- 
leans? 

Mr. O'Neil. O'Dwyer's. 

Mr. Robinson. What is that? 

Mr. O'Neil. That is a large club similar to the Club Forest. It is a 
large place. 

The Chairman. If I may break in, Senator Tobey has to leave, 
and has a question. 

Senator Tobey. I have only one question. 

Do you sell any of your equipment in Saratoga Springs ? 

Mr. O'Neil. No. I haven't done any business in New York State 
for years. 

Senator Tobey. That is all. 

Any in New Hampshire ? 

Mr. O'Neil. No. 

Senator Tobey. Purer than snow up there. 

The Chairman. Senator Hunt, do you want to ask about Wyo- 
ming ? I will ask about Tennessee. 

]\Ir. O'Neil. Well, I haven't sold any goods in Tennessee of late 
years. 

The Chairman. Late years. 

Senator Hunt. I will withdraw my question. 

The Chairman. All right. 

Mr. Robinson. What was the name of the last club that you men- 
tioned that you visited? 

Mr. O'Neil. O'Dwyer's. 

Mr. Robinson. And they are one of your customers? 

Mr. O'Neil. Yes. I get occasional orders from them. They are 
like those other clubs down around New Orleans, if they have a losing 
streak for a while they switch to another firm. 

The Chairman. Explain that a little bit. Do you mean that if 
the dice they are getting from one place are losing, that they figure it is 
good luck to change their dice ? 

Mr. O'Neil. That is right. They buy from some other firm. 

Mr. Robinson. Did you visit any other clubs ? 

Mr. O'Neil. Luke and Terry's. 

Mr. Robinson. Who is the owner of that ? 

Mr. O'Neil. I presume Mr. Luke is. 



54 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. EoBiNSON. How large an establisliment is that? 

Mr. O'Nfjl. Well, that is a high-class place but it is small. Smaller 
than the first two clubs you mentioned. 

Mr. EoBiisrsoN. Did you get an order from them? 

Mr. O'Neil. Yes. 

Mr. RoBiNsox. How large? 

Mr. O'Neil. About the same ; 200 pair. 

Mr. Robinson. Did you sell any of those clubs any equipment other 
than dice? 

Mr. O'Neil. Well, I sell the Club Forest lay-outs occasionally; 
roulette lay-outs or dice lay-outs. 

The Chairman. Who do you deal with at the Club Forest? 

Mr. O'Neil. Mr. O'Dwyer. 

The Chairman. Did you deal with the Beverly Club ? 

Mr. O'Neil. Yes. 

The Chairman. Did you deal with Phil Kastel? 

Mr. O'Neil. No. I met Mr. Kastel. I can't tell you the name of 
the party that I dealt with at that time. The material was just sent 
to the Beverly Hills Club. They have had several managers there. 

The Chairman. Michael Tannico ? 

Mr. O'Neil. No. I don't know. 

The Chairman. How long has it been since you sold dice to the 
Beverly Club? 

Mr. O'Neil. About 2 years, I think. 

Mr. Robinson. Did vou only sell dice to them ? 

Mr. O'Neil. That is all. 

Mr. Robinson. No lay-out equipment? 

Mr. O'Neil. Yes; I had sold them some lay-outs and I got them 
back. 

Mr. Robinson. Why ? 

Mr, 0'Neii>. Well, they just changed managers and when the lay- 
outs came in — they were sold on open account — when the lay-outs 
came in he said that the colors were too bright and he wanted me to 
take them back. So, as I Avas getting the dice business from them at 
the time, I took them back. 

Mr. Robinson. Who was the new management that came in? 

Mr. O'Neil. Not new management. New manager. 

Mr. Robinson. New manager. Who was the new manager? 

Mr. O'Neil. His name started with "Sch," and I have forgotten it; 
I didn't know him. 

Mr. Robinson. Wlio were the owners of that club ? 

Mr. O'Neil. I couldn't say. 

Mr. Robinson. Did vou say vou met Mr. Kastel ? 

Mr. O'Neil. I met Mr. Kastel. 

Mr. Robinson. When did you meet him ? 

Mr. O'Neil. I met him in the club. 

Mr. Robinson. Do you remember what year? 

Mr. O'Neil. I was having dinner there. 

Mr. Robinson. Do you remember what year ? 

Mr. O'Neil. I imagine that must have been about a year and a half 
ago. 

Mr, Robinson. And what was the conversation ? 

Mr. O'Neil. Well, I believe my wife was talking to him about some 
turn in the show, I was having dinner with my wife, and I was intro- 



ORGANIZED CRIME IN INTERSTATE COMMERCE 55 

duced to him by my brother-in-law, who at that time represe-nted me 
down in New Orleans, we were there, and Mr. Kastel came over and 
had a drink, and my wife was talking to him, I didn't get much chance 
to talk to him, 

JNIr. lioBiNSox. You say your brother-in-law was representing you 
down there? 

Mr. O'Neil. In New Orleans. 

Mr. KoBixsox. What is his full name? 

Mr. O'Neil. Frank C. Newman. 

Mr. Robinson. Was it his job to contact these clubs ? 

Mr. O'Neil. That is right. He was my representative down there. 

Mr. Robinson. Did you meet Frank Costello there at any time? 

Mr. O'Neil. No. I don't know him. 

Ml'. Robinson Now, were there any other clubs that you made con- 
tact with there for business purposes? 

Mr. O'Neil. Oh, yes. 

Mr. Robinson. What were the other clubs? 

Mr. O'Neil. Well 

The Chairman. Are they on this list here? 

Mr. O'Neil. They will all be on there, yes. The 118 Club, which is 
out of existence. 

Mr. Robinson. How about the Foray ? 

Mr. O'Neil. That is a kind of night club. Tliat is out of business 
now. I think a fellow named Perez had it. I couldn't say. A small 
place. I wouldn't know. 

Mr. Robinson. You don't know whether that was one of the Carlos 
Macello operations ? 

Mr. O'Neil. No, I couldn't say. 

The Chairman. Do you know him? 

Mr. O'Neil. No, I don't. 

Mr. Robinson. How about the Old Southport Club? 

Mr. O'Neil. Yes. I did business there. 

Mr. Robinson. Who was the owner of that? 

Mr. O'Neil. I don't know. I don't know anything about those 
clubs down there. The only thing I know is that they were pretty 
well cut up, there is a lot of partners. That is what I have heard, but 
that is just hearsay. 

Mr. Robinson. Do you recall the name of any of the partners that 
you heard? 

Mr. O'Neil. Well, let's see. I think Kerner, I believe, was inter- 
ested, at one time or another; the Chargois brothers. Oh, I guess 
nearly all of the gamblers at one time or another have been interested 
in those places. That is, over a period of years. 

Mr. Robinson. How about the Billionaire Club; you have done 
business with that club? 

Mr. O'Neil. Oh, yes. 

IVIr. Robinson. What amount of business have you done with the 
Billionaire Club? 

Mr. O'Neil. Oh, they might order 100 pair of dice every 2 weeks 
to every 3 weeks, or a month, something like that ; maybe 50 pair a 
month. They might flit around and shop at different places. 

Mr. Robinson. Have you sold them any equipment ? 

Mr. O'Neil. Yes ; I sold them equipment. 

Mr. Robinson. Do you remember how much ? 



56 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. O'Nell. I sold them two roulette wheels and some layouts; 
that is about the jDercent of equipment ; checks I guess I sold them. 

Mr. Robinson. Were you ever in that club ? 

Mr. O'Neil. Oh, yes. 

Mr. Robinson. Do you know where it is located ? 

Mr. O'Neil. It is located over in Gretna. 

Mr. Robinson. And do you laiow who the owner is ^ 

Mr. O'Neil. Fink, I guess. 

Mr. Robinson. Who? 

Mr. O'Neil. Fink ; Herbert Fink. 

Mr. Robinson. Was he the one you dealt with ? 

Mr. O'Neil. No. I dealt with him once, I think; but there have 
been other people interested in that, too, you know. 

Mr. Robinson. Who are the other people ? 

Mr. O'Neil. His son did part of the buying ; his son. 

Mr. Robinson. Who else 'i 

Mr. O'Neil. Well, I don't know. He had some kind of an arrange- 
ment of leasing part of it out, or something. 

Mr. Robinson. That is the club that is across the street from the 
courthouse ? 

Mr. O'Neil. Yes; that is it. Near the ferry there. 

Mr. Robinson. Do you know Victor Trapani ? 

Mr. O'Neil. Yes ; I have met him. 

Mr. Robinson. Who is he ? 

Mr. O'Neil. Well, I don't know. He is connected with one of the 
Southports, I guess. 

Mr. Robinson. What is the 

Mr. O'Neil. Is he connected with one of the Southports ? 

Mr. Robinson. Newport ? 

Mr. O'Neil. Southport. 

Mr. Robinson. New Southport? 

Mr. O'Neil. I don't know. I believe so. 

Mr. Robinson. Do you know whether he has a pai'tnership arrange- 
ment with Marcello ? 

Mr. O'Neil. I couldn't tell you ; I don't know. 

Mr. Robinson. Now, one of your customers was the Golden Nugget 
in Las Vegas ? 

Mr. O'Neil. That is right. 

Mr. Robinson. How much business did you do with them? 

Mr. O'Neil. $5,200 a year, and up. 

Mr. Robinson. What would be the top amount you have done in 
any particular year ? 

Mr. O'Neil. Oh, maybe seven, eight thousand dollars; $10,000 
perhaps. 

Mr. Robinson. That would include equipment as well as dice? 

Mr. O'Neil. No; that would be dice. I never sold them anything 
except dice. That is a large place. 

Mr. Robinson. Now, have 3^ou at any time visited any of your cus- 
tomers at Newport, Ky. ? 

Mr. O'Neil. Oh, yes. 

Mr. Robinson. And what are the places there that you have visited? 

Mr. O'Neil. Well, the Merchants' Club; the Yorkshire 

Mr. Robinson. Who did you deal with in the Merchants' Club? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 57 

Mr. O'Neil. I don't know. I think it was a fellow named Schwartz, 
or somethino-, that used to do the buying. I just sent stuff to the 
Merchants' Club. 

Mr. Robinson. Have you done a considerable amount of business 
with them ? 

Mr. O'Neil. I haven't done any business with them for some years 
now; 2 or 3 years. 

Mr. Robinson. How about the Latin Quarter ? 

Mr. O'Neil. Yes, I did business there. 

Mr. Robinson. With whom did you do business at that club ? 

Mr. O'Neil. With the manager. 

Mr. Robinson. What was his name? 

Mr. O'Neil. Condon. 

Mr. Robinson. Do you know whether or not he is a native there or 
\^as he from some other area ? 

JNIr. O'Neil. I couldn't tell you where he was from. 

Mr. Robinson. What amount of business did you do there? 

Mr. O'Neil. I imagine maybe $4,000 a year, something like that. 

Mr. Robinson. Is that a big establisliment ? 

Mr. O'Neil. Well, it is a night club. 

Mr. Robinson. Now, who is Louis Levinson, in Newport, Ky. ? 

iVIr. O'Neil. He is connected with the 633 Club. 

Mr. Robinson. Is that also known as the Kentucky Club? 

Mr. O'Neil. No. That is a different place. That is in Covington. 

Mr. Robinson. And owned by the same people ? 

Mr. O'Neil. I couldn't say. 

Mr. Robinson. Did Levinson buy for both clubs ? 

Mr. O'Neil. No ; no. 

Mr. Robinson. Just for the Newport Club ? 

Mr. O'Neil. That is right; yes. 

Mr. Robinson. Have you ever been in that place? 

Mr. O'Neil. Yes. 

Mr. Robinson. Is that a sizable establishment ? 

Mr. O'Neil. Yes ; very good size. 

Mr. Robinson. What games do they run there ? 

Mr. O'Neil. I guess they deal the wheel and the horses and craps 
and blackjack. 

Mr. Robinson. Is that true also of the Merchants Club ? 

Mr. O'Neil. Yes, about the same. All those places down there are 
more or less the same. 

Mr. Robinson. Who is Sammy Miller in Miami Beach ? 

Mr. O'Neil. Oh, he is a fellow who lives down in Miami Beach. 

Mr. Robinson. Does he run an establishment tkere ? 

Mr. O'Neil. Yes. 

Mr. Robinson. You do a considerable amount of business with him ? 

Mr. O'Neil. Yes ; I have done some business with him. 

Mr. Robinson. Did you ever deal with a man named R. C. Hill in 
Florida ? 

Mr. O'Neil. I couldn't say. If I did it is not a large account. It 
might have slipped my memory. They are listed alphabetically there 
in that list. 

Mr. Robinson. The name is not on the list. I wondered whether 
you had at some time sold gambling equipment to a man named R. C. 
Hill. 

68958— 51— pt. 12 5 



58 ORGAXIZED CRIME IN INTERSTATE COMMERCE i 

Mr. O'Neil. I can't recall it. 

Mr. Robinson. Either in Miami or Pensacola. 

Mr. O'Neil. I couldn't recall, but I am under the impression that 
at one time I did do business with him, but I don't know. 

Mr. Robinson. What is the New Crescent Club, have you visited 
there? 

Mr. O'Neil. Yes. 

Mr. Robinson. Are they a large account ? 

Mr. O'Neil. I have had very little business from them. 

Mr. Robinson. Have you been at that club ? 

Mr. O'Neil. Yes. 

Mr, Robinson. Is that a large club ? 

Mr. O'Neil. Oh, not in the class of the Club Forest and O'Dwyer's. 
no, it is more or less a small place. 

Mr. Robinson. How about the Lookout House ? 

Mr. O'Neil. That is a night club. 

Mr. Robinson. Where is that located ? 

Mr. O'Neil. At the top of the hill there, across from Cincinnati, 
what do you call that — not Covington 

Mr. Robinson. Newport? 

Mr. O'Neil. No. It is not Newport. 

The Chairman. Madison ville ? 

Mr. O'Neil. No. It is Fort— what is that? Isn't that what it is 2 
Doesn't that come under Fort Thomas ? 

The Chairman. Fort Thomas? 

Mr. O'Neil. Yes. Isn't that located there ? I have been there. 

The Chairman. Foi-t Thomas? 

Mr. O'Neil. Yes. 

Mr. Robinson. How large a business do you do with that concern ? 

Mr. O'Neil. With the Lookout House? I haven't done any busi- 
ness with them for 2 years. Yes, I did. I got a couple of orders from 
them last year for a while. 

Mr. Robinson. Do you remember how large the orders were ? 

Mr. O'Neil. They weren't very large orders; no. Just a regular 
shipment of dice, weekly shipment. 

Mr. Robinson. How about the Beverley Hills Club, Beverley Hills 
Country Club? 

Mr. O'Neil. I haven't done business there for maybe 6 or 7 years. 

Mr. Robinson. Did you at one time do a considerable amount of 
business with them? 

Mr. O'Neil. Yes. 

Mr. Robinson. How large a volume? 

Mr. O'Neil. Oh, probably $125 a week, something like that; $100 
a week. 

Mr. Robinson. How about the 

The Chairman. One hundred dollars a week? 

Mr. O'Neil. Yes. 

Mr. Robinson. Now, Mr. O'Neil— — 

Mr. O'Neil. That doesn't seem like much, but, of course, that is 
$5,000 a year. 

Mr. Robinson. How about the Yorkshire Club ? 

Mr. O'Neil. The Yorkshire ; yes. 

Mr. Robinson. How much business do you do with that club? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 59 

Mr. CNeil. Well, I think my business with them amounted to 
about $200 a week. 

Mr. Robinson. And the Flamingo Club? 

Mr. O'Neil. What town? 

Mr. Robinson. Kentucky. 

Mr. O'Neil. Oh, that was a kind of fade-out, I don't know what 
became of that, 

Mr. Robinson. But you did do business with them at one time ? 

Mr. O'Neil. Yes. 

Mr, Robinson. Of any sizable amount? 

Mr. O'Neil, I wouldn't say so, 

Mr, Robinson, Now, what is the Puerto Rico Industrial Develop- 
ment Co, ? 

Mr. O'Neil. I don't know. They bought some stuff from me. 

Mr. Robinson. You mean some dice ? 

Mr. O'Neil. I will tell you what I think that was. Over there they 
have gambling inspectors. I recall that now. They bought some 
micrometers from me. They are gambling-house inspectors. They 
go around measuring the dice there to see that the customers are 
getting a fair shake. 

The Chairman. Do you make those, too? 

Mr. O'Neil, No; we don't make them. A tool company makes 
them. 

The Chairman. You just job them? 

Mr. O'Neil, Yes, 

Mr, Robinson, You have done business with the River View Club, 
have you ? 

Mr, O'Neil, Yes, 

Mr. Robinson. Is that a large club ? 

Mr. O'Neil, Well, at one time it was quite a place, but that end of 
New Orleans, the gambling kind of died out of it, 

Mr, Robinson. Who is Al Schorling? 

Mr. O'Neil. He was connected with the Club Forest. 

Mr, Robinson, And you have had orders from him ? 

Mr, O'Neil. Yes. Once in a great while. A fellow name Tredico 
did most of the ordering. 

Mr, Robinson, Who is Sliman? 

Mr, O'Neil, Sliman? 

Mr, Robinson, At New Iberia, La, 

Mr, O'Neil, He runs a place over there, 

Mr, Robinson, And 

Mr, O'Neil. Sports Center, I think it is called. 

Mr. Robinson. How large a place is that? 

Mr. O'Neil. I have never been in it, 

Mr. Robinson. Do you have any customers in the Galveston area? 

Mr, O'Neil. Yes. 

Mr. Robinson. "Who are your customers there? 

Mr, O'Neil, The Turf and DeLuxe Club and — oh, what is the 
name of the place where the Bamboo Room is ? 

The Chairman. The Balinese Room? 

Mr. O'Neil. Balinese Room. And two or three others I just can't 
recall at the present time. I can't recall the names. 

Mr. Robinson. Do you know the Massina brothers in Galveston? 

Mr. O'Neil, No : I have heard of them. 



60 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. EoBiNsoN. What have you heard about them ? 

The Chairman. I don't think that is necessary, unless you do know. 

Mr. O'Neil. I don't know, I couldn't give any direct answer, 

Mr. Robinson. What would you say, roughly, was the volume of 
your business in Galveston ? 

Mr. O'Neil. The volume of business down there of my business ? 

Mr. Robinson. Yes. 

Mr. O'Neil, Oh, let's see, I guess I might get 8 percent of my busi- 
ness there — 7 percent ; something like that. 

The Chairman, Seven or eight percent of your entire business in 
Galveston ? 

Mr, O'Neil, Yes; maybe 6 percent, perhaps. 

The Chairman. Six or seven, and that represents six or seven 
places ? 

Mr, O'Neil. Probably, yes ; if you take in the Galveston area. There 
are two places between Houston and Galveston — two or three places. 

Mr, Robinson, Do you have any large customers in Dallas ? 

Mr, O'Neil, No ; not for some years, 

Mr, Robinson, Do you have any large customers or any customers 
at all in the District of Columbia area ? 

Mr, O'Neil, No ; none here. 

Mr, Robinson. Maryland? 

Mr. O'Neil. No; no, I haven't done business around there for 7 
or 8 years. 

Mr. Robinson. Who is the largest customer on the east coast ? 

Mr, O'Neil, I haven't any customers. 

Mr. Robinson. You have none? 

Mr. O'Neil. No. 

The Chairman. You mean this is just not your territory? 

Mr. O'Neil. That is right. 

The Chairman. How about Jimmie La Fontaine ? 

Mr. O'Neil. No ; I never did business with him. 

The Chairman. Snags Lewis ; did you do business with him ? 

Mr. O'Neil. No; I saw his name in the papers this morning. La 
Fontaine, I guess, always did business with Wills. 

Mr, Robinson. Who is Wills ? 

Mr. O'Neil. B. C. Wills & Co., Detroit. 

Mr. Robinson. B. C, Wills? 

Mr, O'Neil, They are the biggest people in the business. That is 
P. C, Wills. ... 

The Chairman. How big is their business, by the way ? 

Mr. O'Neil. That is something I couldn't say but I imagine it is 
about anywhere up to six times mine. 

The Chairman. Six times as big as yours ? 

Mr. O'Neil. Yes. 

The Chairman. Are they the big suppliers for the east coast? 

Mr. O'Neil. Now, I am not familiar with the business ; I couldn't 
say; but they do a large business, they do business over the entire 
country — P. C. Wills. 

Mr. Robinson. When was the last order you got from William 
Spellisy? 

Mr. O'Neil. I think it was around last spring. 

Mr. Robinson. And what club does he operate ? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 61 

Mr. O'Neil. I don't know what club. It is in Morris, 111. 

The Chairman. Where? 

Mr. O'Neil. Morris, 111. 

Mr. Robinson. You have sold Al Wertheimer and Mert Wert- 
lieimer, in Reno, Nev. ? 

Mr. O'Neil. Yes. 

Mr. Robinson. What is the name of that club or casino? 

Mr. O'Neil. One is connected, I believe — what is the new hotel — the 
Mapes Hotel. Tlie other is connected with the Riverside. 

Mr. Robinson. Are they a recent customer or have you been doing 
business with them for several years ? 

Mr. O'Neil. No; they are fairly recent customers. 

Mr. Robinson. Did you do business with them in any other place ? 

Mr. O'Neil. Never. I understand they are Detroit people. 

Mr. Robinson. Now, I don't know whether I asked you this or not, 
Mr. O'Neil : Did you at any time ever manufacture any of this magical 
dice ? 

Mr. O'Neil. No. , 

Mr. Robinson. Never at any time ? 

Mr. O'Neil. No. 

Mr. Robinson. Did you ever manufacture playing cards ? 

Mr. ONeil. No ; we don't manufacture poker chips either. We buy 
them from the United States Playing Card Co. — we did until they 
went out of business. Since then we have had another source of 
supply. 

Mr. Burling. Mr. O'Neil, are you familiar with the manufacturers 
of magical dice ? 

Mr. O'Neil. Yes. 

Mr. Burling. Could you tell from whom we could buy some ? 

Mr. O'Neil. Well, I guess you can buy from Mason & Co. 

Mr. Burling. Do you manufacture roulette wheels yourself? 

Mr. O'Neil. Yes. 

Mr. Burling. Do you manufacture wheels of any kind with a con- 
trol over them ? 

Mr. O'Neil. No. 

Mr. Burling. Do you know in the business where such wheels are 
manufactured ? 

Mr. O'Neil. No. I believe most of that work is done by mechanics 
that go out and do it. There is not as much of that as there used to be. 

Mr. Burling. The trade practice is for the wheels to be sent out 
as honest wheels and then adjusted in the different casinos? 

Mr. O'Neil. Yes, but you don't find the casinos doing that thing. 

Mr. Robinson. Wlio is the largest manufacturer on the west coast? 

Mr. O'Neil. It starts with S. There are two or three people in the 
business but there is one fellow out there who makes furniture — I am 
getting very bad on names — his name started with S and he is in Los 
Angeles. 

Tlie Chairman. Smiley ? 

Mr. O'Neil. No. 

Mr. Robinson. Do you have a large competitor in New York? 

Mr. O'Neil. No — I wouldn't know. There is Edwards down there, 
makes dice. He sells more or less in the South some. 

The Chairman. All right. 



62 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Robinson. Is there any particular reason why you don't manu- 
facture magical dice 'i 

Mr. O'Neil. Well, you have either got to take one or the other. 
You will find that if you have a reputation of making crooked stuft' 
people in good casinos won't buy from you. 

Mr. Robinson. Wliere does most of the trade come from so far as 
the magical dice is concerned, is it over-the-counter trade or is it by 
order, or what ? 

Mr. O'Neil. Oh, our business is all telephone business and tele- 
gram. Occasionally I get a letter. Nearly everything is telephone. 

The Chairman. How" do they pay you, by checks 

Mr. O'Neil. C. o. d. Some of them have open accounts. 

The Chairman. And those that have open accounts pay you by 
check ? 

Mr. O'Neil. That is right. 

The Chairman. Most of your business is c. o. d. ? 

Mr. O'Neil. That is right. 

The Chairman. Do you send it through the mails? 

Mr. O'Neil. Yes; mail, air-mail express. 

The Chairman. Do you send any by express, railroad express? 

Mr. O'Neil. Usually only equipment goes by express. Everything 
else is nearly always sent air mail or air express. 

The Chairman. Do you send out a catalog ? 

Mr. O'Neil. Yes ; we have a catalog. 

The Chairman. Do you have a coi)y here? 

Mr. O'Neil. No; not with me, but I will mail you one. 

The Chairman. Is there anything else? 

By the way, do you have, outside of Nevada and Puerto Rico — 
Nevada, where gambling is legalized and Puerto Rico, where I as- 
sume it is legalized 

Mr. O'Neil. Yes ; it is. 

The Chairman. Do you have any customers that are not in casinos 
or not in gambling operations? 

Mr. O'Neil. No. Occasionally you run across something like a 
country club that will Avant some kind of equipment for bingo or 
something like that. 

The Chairman. But you would say that 98 or *.)!) percent is for 
casinos and gambling operations? 

Mr. O'Neil. That is right. 

The Chairman. In violation of law, outside of Puerto Rico or 
Nevada ? 

Mr. O'Neil. Yes ; that is right. 

The Chairman. All right. 

Mr. Robinson. I believe that is all. 

Mr. O'Neil. What is the address? 

The Chairman. Send it to Mr. Robinson. 

Mr. O'Neil. Where? 

Mr. Robinson. Room 900, HOLC Building, First and Indiana Av- 
enue NW. 

The Chairman. Thank you, Mr. O'Neil. You have been a very 
cooperative wntness. 

Mr. O'Neil. Thank you, sir. Can I go back to Chicago now? 

The Chairman. Yes; you mav go back. 

Mr. O'Neil. Thank you. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 63 

The Chairman. What other witnesses do we have ? 

Mr. KoBiNSON. We have Mr. Lichtenstein, the piinchboard manu- 
facturer. 

The Chairmax. We will recess at this time until 2 : 15 this after- 
noon. 

(Whereupon, at 12:50 p. m., the committee adjourned, to recon- 
vene at 2 : 15 p. m. this same day.) 



( Reportj^r's Note. — At the direction of the chairnuin, the follow- 
in*; is taken out of sequence (occurring on February 17, 1951) and in- 
corporated at this point :) 

The Cjiairiman. Mr. Robinson lias been looking into the K. C. Card 
Co. owned by Harrington E. Drake. I understand he also owns the 
Mason Co., and that one is the selling company and the other is the 
manufacturing company. 

We had written for their catalog and what not, but Mr. Robinson 
finds he has the information, the catalog and other things we wanted; 
and, also, upon examination of their records and examination of Mr. 
Drake, he has certain information with reference to the K. C. Card 
Co. and the Mason Co. 

Mr. Robinson, will you state what you have? 

Mr. Robinson. Mr. Chairman, as a result of the subpena that was 
served on the K. C. Card Co., the records were examined briefly and 
the owner of the company, Mr. Harrington E. Drake, was inter- 
viewed. The salient facts disclosed as the result of the examination 
and the interview were, as you have already stated, that the K. C. Card 
Co. is owned by Mr. Drake and is the manufacturing part of the 
business; and the Mason Co. is also owned by Mr. Drake and acts as 
the selling agency. Both companies were at one time incorporated 
but subsequently dissolved, and the same names were preserved with 
the ownership in Mr. Drake. 

The average business done by the two companies ranges between 
$1!)C),()0() to $230,000 a year. 

The company did at one time manufacture what is known as casino 
equipment, but at the present time specializes in dice and playing cards 
and various ]xiraphernalia that goes with those two items. About one- 
twentieth of the volume of the business of the company is in so-called 
magical dice. At the time the company did manufacture the so-called 
casino furniture, their volume of business ranged from $380,000 to 
$500,000 a year. 

The two documents which I would recommend be placed as exhibits 
in the record are the so-called Blue Book, No. 500, which is the catalog 
of the K. C. Card Co., which lists all the items that the company 
manufactures. 

The Chairman. That will be made an exhibit. No. 3, noting that it 
sets out the so-called magical dice or loaded dice, and also the marked 
cards and various and sundry types of magical equipment, including 
some kind of glasses that you put on — they call them luminous read- 
ers — and can see what the card is from the back ; otherwise, you can't 
tell from looking at the card from the back. That is on page 22 of the 
catalog, and it is very interesting. 

(Blue Book, No. 500, was marked as ''Exhibit No. 3,"' and is on file 
with the committee.) 



64 ORGANIZED CRIME IN INTERSTATE COMMERCE 

The Chairman. Then, you also have one of the advertisements, I 
believe ? 

Mr, Robinson. There is an advertising circular which came to the 
committee, which apparently is a document that is sent out to the 
trade by the K. C. Card Co., something similar to the other documents. 

The Chairman. We will make this exhibit No. 4. 

(The document was marked as "Exhibit No. 4, and is on file with 
the committee.) 

The Chairman. Then, with this catalog we have an order blank 
which we will call exhibit No. 5, which is sent out to the trade. Is that 
correct, Mr. Robinson? 

Mr. Robinson. Yes. 

(The order blank referred to was marked as "Exhibit No. 5," and is 
on file with the committee. ) 

The Chairman. Mr. Robinson, do you have the opinion of the 
Solicitor of the Post Office Department as to the situation about the 
use of the mails for shipping out punchboards and similar types of 
gambling equipment ? 

Mr. Robinson. Mr. Chairman, I believe that came up in connection 
with a question that was asked of Mr. Brookfield in connection with 
the punchboard industry, and that opinion has been given to the chair- 
man by the Acting Solicitor of the Post Office Department, and I 
would like to offer that as an exhibit to the hearings of the committee. 

The Chairman. Will you state, Mr. Robinson, what the opinion 
of the Solicitor is, without reading all of the opinion ? 

Mr. Robinson. The substance of the opinion reads as follows : 

It has been the practice not to exclude punchboards and other chance devices, 
per se, from the mails, such practice being based upon an opinion of the Attorney 
General concerning the application of the postal lottery statute to an advertise- 
ment of a slot machine called the Boomer (22 Op. A. G. 198) . If the chance device 
is shipped on a commission or consignment basis, so that the sender retains an 
interest in the operation of the lottery existent when the device is being played, 
we have held such a mailing to conflict with the law. 

The Chairman. And do you also have the opinion of the Attorney 
General upon which that is based? 

Mr. Robinson. No, Mr. Chairman, we do not have the opinion, but 
it can be found at citation. 

The Chairman. All right. Let this letter from the Solicitor be 
copied into the record at this point. 

(The letter referred to reads in full as follows :) 

Post Office Department, 

Office of the Solicitor, 
Washington 25, D. C, Jamiaru 21,, 1951. 
Hon. Estes Kefauvek, 

United States Senate. 
Dear Senator: This will acknowledge your letter of January 11, 19.51, with 
further reference to the use of the mails by Crosby-Paige Industries, Inc., as well 
as others, for the conduct of certain schemes involving the distribution of 
punchcards. 

The Postal Bulletin notice of February 12, 1948, was supplemental to the one 
of January 27, and was issued for the purpose of clarifying the latter. Although 
it is stated in the January 27 notice that the Postmaster General may "upon evi- 
dence satisfactory to him" instruct postmasters to take the action outlined respect- 
ing the return of mail to senders, yet, after publication, it was seen that this 
notice was misunderstood by certain postmasters to consist of an instruction 
to them to make their own determinations as to the mailability of such matter 
and, upon such independent determination, return tlie mailings with the en- 



ORGANIZED CRIME IN INTERSTATE COMMERCE 65 

dorsement "Fraudulent." Therefore, the supplemental instruction was pub- 
lished so that the postmasters would understand that the punchcard mailings 
were to be returned to sender marked "Fraudulent'' only if an order is issued 
by the Postmaster Geueral against the sender under the provisions of section 
604 of the Postal Laws and Regulations of 1940 (sec. 36.9, P. L. & R., 1948, 39 
U. S. O. 259) . 

You require as to the practice of the Post Office Department with respect to 
the mailing of punchboards and what, in the opinion of this Office, the applicable 
law is. Additionally, you request an expression from this Department as to 
whether the law should be amended to exclude punchboards and similar devices 
from the mails. 

It has been the practice not to exclude punchboards and other chance devices, 
per se, from the mails, such practice being based upon an opinion of the Attorney 
General concerning the application of the postal lottery statute to an advertise- 
ment of a slot machine called the Boomer (22 Op. A. G. 198). If the chance 
device is shipped on a commission or consignment basis so that the sendei" 
retains an interest in the operation of the lottery existent when the device is being 
played, we have held such a mailing to conflict with the law. 

The type of plan engaged in by Crosby-Paige Industries, Inc. has for some years 
been permitted use of the mails without interference by the Department. How- 
ever, upon a reexamination of the law, it was decided to take action against the 
Crosby-Paige scheme, which has now been held by the Postmaster General to be 
a lottery, a scheme for the distribution of personal property by lot or chance. 
As previously noted, the order issued against this corporation is now before 
the court. Until the court has disposed of the case and determined whether or 
not the scheme contravenes the postal lottery laws, this Department does not 
feel that it would be advisable to make any recommendations with respect to an 
amendment of the law to exclude punchcards and similar devices. 
Sincerely yours, 

Roy C. Frank, 
Acting Solicitor. 

The Chairman. While Mr. Robinson is here with us, I asked Mr. 
Robinson to secure such information as he could relative to the nar- 
cotic situation in the Chicago area and, in addition to such other in- 
formation as we wish to have, Mr. Robinson lias a document which I 
think should be made part of the record. 

Will you explain what it is ? 

Mr. Robinson. The document w-as furnished to the committee by 
the legislative committee of the Crime Prevention Bureau in Chicago. 
This legislative committee was set up to study the narcotics problem, 
and the document is a report of the legislative committee on narcotics 
in Chicago, and the recommendations of the committee. 

The Chairman. Let it be made a part of the record as an exhibit. 

(The document referred to was marked as "Exhibit No. 6," and is 
on file with the committee.) 

AFTERNOON SESSION 

(The hearing was resumed in room 457, Senate Office Building, 
Washington, D. C.) 

The Chairman. Mr. Robinson, who is our next witness? 

Mr. Robinson. Mr. Lichtenstein. 

The Chairman. The committee will come to order please. 

Mr. Lichtenstein, will you come around, sir, and hold up your hand. 

Mr. Lichtenstein, do you solemnly swear the testimony you give 
will be the truth, the whole truth, and nothing but the truth, so help 
you God ? 

Mr. Lichtenstein. Yes. 

Mr. Robinson. State your name, please, your fidl name. 



66 ORGANIZED CRIME IN INTERSTATE COMMERCE 

TESTIMONY OF LEO LICHTENSTEIN, PRESIDENT AND TREASURER, 
HARLICH CORP., CHICAGO, ILL. 

Mr. LicHTENSTEiN. Leo Lichtenstein. 

Mr. Robinson. Mr. Lichtenstein, try to keep your voice up as much 
as possible. 

Mr. Lichtenstein. Yes. 

Mr. Robinson. What is your address? 

Mr. Lichtenstein. Home or office? 

Mr. Robinson. Both. 

Mr, Lichtenstein. 3730 Lake Shore Drive. 

Mr. Robinson. That is your home ? 

Mr. Lichtenstein. Home ; and 310 West Polk Street, business. 

Mr. Robinson. What business are you in ? 

Mr. Lichtenstein. I can't hear you, 

Mr. Robinson. Wliat business are you in ? 

Mr, Lichtenstein. Manufacturer of punchboards. 

Mr. Robinson. And the addresses you just gave were Chicago, is 
that correct? 

Mr. Lichtenstein, That is right, 

Mr. Robinson. Are you in business individually or are you con- 
nected with a corporation ? 

Mr. Lichtenstein. A corporation. 

Mr, Robinson, The Harlich Corp. ? 

Mr. Lichtenstein. That is right. 

Mr. Robinson, What is your official position with that 2 

Mr. Lichtenstein. President and treasurer. 

Mr, Robinson, How long has the corporation been in existence ? 

Mr, Lichtenstein, It will be 2 years February 28. 

Mr. Robinson. Prior to that time were you in business as an in- 
dividual ? 

Mr. Lichtenstein, Partnership. 

Mr, Robinson. In the same type of business or same type of punch- 
boards ? 

Mr, Lichtenstein, Right. 

Mr. Robinson, How long have you been in the business of manu- 
facturing punchboards all together ? 

Mr, Lichtenstein, Thirty years, 

Mr, Robinson, Always in Chicago, is that right ? 

Mr, Lichtenstein. That is right. 

Mr. Robinson, Mr, Lichtenstein — is that the way you pronounce 
it, by the way ? 

Mr, Lichtenstein. That is right, 

Mr. Robinson. You were present when Mr, Brookfield testified this 
morning ? 

Mr, Lichtenstein. Yes, 

Mr. Robinson. You know Mr. Brookfield ? 

Mr. Lichtenstein. Very well, 

Mr, Robinson. And he did give certain testimony with respect to 
your company. Is there any correction that you wish to make in that 
connection ? 

Mr, Lichtenstein. Well, all he said is that we were in controversy 
with the Federal Trade Commission, is that right? 

Mr. Robinson. Yes. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 67 

Mr, LicHTENSTEiN. And they issued a cease and desist order, from 
wliich we are appealing. 

Mr. Robinson. What is tlie vohime of your business dollarwise? 

Mr. LiCHTENSTEiN. Well, it is considerably down to about three or 
four hundred thousand dollars. 

Mr. Robinson. Gross sales ? 

Mr. LiCHTENSTEiN. Yes, sir, 

Mr. Robinson. Is that the highest it has ever been ? 

Mr. LiCHTENSTEiN. No, it is the lowest. 

Mr. Robinson. Wliat is the highest it has ever been ? 

Mr. LiCHTENSTEiN, It was well over a million dollars. 

Mr. Robinson. What years was it over that amount ? 

Mr. LiCHTENSTEiN. 1943, 1944, 1945, 1946. 

Mr. Robinson. There has been a gradual decrease in the business ? 

JNIr. LiCHTENSTEiN. No ; shortage of material, shortage of material. 

Mr. Robinson. That is the reason for the decrease ? 

Mv. LiCHTENSTEiN. That is one of the reasons. 

Mr. Robinson. What are the other reasons ? 

Mr. LiCHTENSTEiN. I caii't answer that. 

Mr. Robinson. Solely a shortage of materials is the cause of the 
decrease in the business, no other reason except that ? 

Mr. LiCHTENSTEiN. That is about all. 

Mr, Robinson, Do you manufacture any other equipment or items, 
1 ike punchboards ? 

INIr, LiCHTENSTEiN. Well, we make some munition parts for the 
Government. 

Mr. Robinson. Well, do you manufacture any of the jar numbers 
or baseball or football pool numbers ? 

Mr. LiCHTENSTEiN. No, nothing like that; just strictly punchboards. 

Mr. Robinson. What types do you manufacture ? 

Mr, LiCHTENSTEiN, Well, we make what is known as a money board, 
and then we make boards to sell merchandise. 

Mr, Robinson, What is the comparative proportion of both types 
of boards that you manufacture ? 

Mr, LiCHTENSTEiN, I would say 75-25; 75 percent money boards 
and 25 percent merchandise boards. 

Mr, Robinson. Is that the average since you have been is business? 

Mr. LiCHTENSTEiN, No. 

Mr. Robinson. Has it been higher on the money board side ? 

Mr. LiCHTENSTEiN. No ; it was higher on the merchandise boards. 

Mr. Robinson. And the gambling boards have gradually increased 
over the years ? 

jNIr. LiCHTENSTEiN. That is right. 

Mr. Robinson. And the others have gone down ? 

Mr. LiCHTENSTEiN. That is right. 

Mr. Robinson. How do you account for that? 

Mr, LiCHTENSTEiN, Evo'lutioii of business, 

Mr, Robinson. There is more of a demand for the gambling boards? 

JMr. LiCHTENSTEiN, That is about right. 

Mr. Robinson. Now, who are the officers of the company? You 
gave yourself. Who are the other officers? 

Mr. LiCHTENSTEiN. Leo Lichtenstein, Libbie, and Byron J. Lich- 
tenstein. 



68 ORGAlSriZED CRIME IN INTERSTATE COMMERCE 

The Chairman. I did not understand the names. 

Mr. LicHTENSTEiN. Bjron J. 

The Chairman. Is he a brother or son ? 

Mr. LiCHTENSTEiN. He is a son. 

The Chairman. Who are the others? 

Mr. LicHTENSTEiN. Just One, Libbie, L-i-b-b-i-e. 

The Chairman. Who is that? 

Mr. LicHTENSTEiN. That is my wife. 

The Chairman. Is that your daughter ? 

Mr. LICHTENSTEIN. My wife. 

The Chairman. That is your wife. 

Mr. Robinson. It is a family controlled corporation ? 

Mr. LicHTENSTEiN. Right. 

Mr. Robinson. Where do you distribute your products? 

Mr. LiCHTENSTEiN. Throughout the country. 

Mr. Robinson. Is there any particular area that you distribute in 
more than some other area ? 

Mr. LiCHTENSTEiN. Well, the more populated areas, why, the more 
boards you consume there. 

Mr. Robinson. I mean countrywise rather than citywise. 

Mr. LiCHTENSTEiN. Well, Wyoming would not be so hot; it is a 
very small state ; neither would Tennessee. 

Mr. Robinson. How about the western part of the country ? 

Mr. LiCHTENSTEiN. A Very small part of the country, don't you 
see? 

Mr. Robinson. The distribution is not so great there as it would 
be in the East ? 

Mr. LiCHTENSTEiN. No. The greater the population, the greater the 
usage of the boards. 

Mr. Robinson. How many people do you employ in the company ? 

Mr. LiCHTENSTEiN. Approximately a hundred. 

Mr. Robinson. Are they all in the manufacturing end of it? 

Mr. LiCHTENSTEiN. That is right. 

Mr. Robinson. Mr. Lichtenstein, there were several of the boards 
that were shown to the committee this morning. 

Mr. LiCHTENSTEiN. Yes. 

Mr. Robinson. What I wanted to ask you about is whether or not 
the design of those boards is made by each individual manufacturer. 

Mr. LiCHTENSTEiN. That is right. 

Mr. Robinson. You have an artist who does that work? 

Mr. Lichtenstein. That is right, we have. 

Mr. Robinson. What is the particular purpose of that? Is that a 
selling item ? 

Mr. Lichtenstein. It is just like styling ladies' dresses, design, 
that is all, which is more attractive. 

Mr. Robinson. I believe you heard Mr. Brookfield testify about the 
sale of a key to the board by some party in, I believe it was, Los An- 
geles or California. 

The Chairman. Long Beach. 

Mr. Robinson. Long Beach, Calif. Does the manufacturer know 
when the board is made where the prize-winning numbers are? 

Mr. Lichtenstein. No. 

Mr. Robinson. Will you describe how the board is made ? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 69 

Mr. LicHTENSTEiN. Well, they are printed haphazardly; they are 
not consecutive, and they are mixed in the machinery as they are filled 
but the boards that you refer to, we call them fixed boards. These 
fellows buy these boards 

Mr. Robinson. What do you mean by "these fellows" ? 

Mr. LiCHTENSTEiN. Like — what was the name of the one in Cali- 
fornia ? 

Mr. Robinson. Would you classify them as distributors or 

]Mr. LiCHTENSTEiN. No. They buy the boards. We don't even sell 
them, but they will buy them through a jobber or something, and they 
will take these boards, and Mr. Brookfield was a little wrong in the 
operation of these boards. 

They buy a board, and the}^ punch out all the numbers, that is, they 
pluck them out, through the back. You see, there is a very thin tissue, 
and then they take all the numbers, say, ending in zero zero, and they 
will place them like three rows over and five rows down, and they 
will key these boards, and they will take five big prizes — not all of 
the prizes — there might be five $10 prizes, down there, and the rest 
intermediate prizes, like a dollar or something, and they will sell 
boards to teams. One places the board in a spot, and along comes a 
confederate the next day and he knows where all these winners are, 
don't you see, and he punches them out, but no factories have anything 
to do with it. So the dealer that put the board up, he is the one 
that takes the trimming, but Mr. Brookfield said that he punches those 
numbers out himself. He could not possibly hold his trade if he 
did that, because they would come back and say, "Who won the 
$10's?" Are you listening? 

Mr. Robinson. You say the dealer takes the trimming? 

Mr. LiCHTENSTEiN. That is right. 

Mr. Robinson. It is also possible that the person who punches the 
board will take a trimming, too. 

Mr. LiCHTENSTEiN. Oh, they definitely do; they do, because this 
confederate will punch out, say there were five ^10 winners down 
there, he would punch those out, you see, and somebody else comes in. 
why, of course, the dealer will tell him, "Well, the tens are off the 
board," and the board is no good any more. He probably took a lick- 
ing by giving out $50, and probably taking in $4 or $5, you see. 

Mr. Robinson. How extensive is that practice? 

Mr. LiCHTENSTEiN. Very, very small — very small. It is very 
negligible. 

Mr. Robinson. Is it more prevalent in some States than others? 

Mr. LiCHTENSTEiN. No. Tlie fact is we have not run across it in 
years, but they will sell a board here and there. They get a fabulous 
price for it, something like fourteen and a half dollars, where the 
board is worth only about $2, you see. 

Mr. Robinson. Do you know the individual 

Mr. LiCHTENSTEiN. No, I dou't. 

Mr. Robinson. To whom reference was made ? 

Mr. LiCHTENSTEiN. No, I doil't. 

Mr. Robinson. Are there any others that you know of besides that 
one? 

IVEr. LiCHTENSTEiN. I kiiow of two, this one and Mason & Co. I 
think they are in Chicago and Kansas City ; and everything they sell is 
what we call phonies, marked cards, loaded dice, and things of that, 



70 ORGANIZED CRIME IN INTERSTATE COMMERCE 

although I don't know the man or the firm ; we have had their cata- 
log from time to time. 

Mr. RoBixsox. Do the}^ also v\g these punchboards? 

Mr. LicHTENSTEiN. They do. 

Mr. Robinson. You know that of your own knowledge ? 

Mr. LicHTENSTEiN. Well, we have seen the boards ; yes, from time 
to time. 

The Chairman. Before we go any further, let me make an an- 
nouncement. I make it at the beginning of every hearing or some- 
time during the hearing. We are using names of people, and also of 
companies, and anybody who feels that they have been improperly 
represented or want to make any explanation or come in to make any 
denial of what has taken place, all they need to do is to let the commit- 
tee know, and we will be glad to hear them. 

I say that because you are talking about Mason & Co., and they 
should have an opportunity for being heard in this connection if they 
want to make any explanation or denial of what you have said as to 
the kind of board they made. 

Mr. Lichtenstein. That is probably — they publish that in their 
catalog. 

The Chairman. We wish to give them a chance to be heard. 

Is that in their catalog ? 

Mr. Lichtenstein. That is right, the same as this fellow had it in his 
circular. 

The Chairman. Mr. Robinson, let us write ^Viason & Co. and ask 
them for a catalog, and also advise them of the testimony that has 
been given here so that they will have a chance to present anything 
they want to in connection with it. Excuse me for interrupting. 

Mr. Robinson. How may types of board do you manufacture? 

Mr. Lichtenstein. Innumerable types, maybe a thousand. 

Mr. Robinson. A thousand different types ? 

Mr. Lichtenstein. That is right. 

Mr. Robinson. Would you describe some of the more common 
types 'i 

Mr. Lichtenstein. Well, I would not know what j'ou mean by that. 
You mean in a money board or merchandise board? 

Mr. Robinson. In the money board. 

Mr. Lichtenstein. I think Mr. Brookfield showed a^ou about what 
the average boards run. Cigarette boards or plain boards, what he 
showed you in money boards, everything is a variation of that par- 
ticular board, see, either larger or smaller, or something like that. 

Mr. Robinson. What is the most expensive gambling board that 
you put out ? 

Mr. Lichtenstein. You mean at wholesale cost? 

Mr. Robinson. No ; what I am getting at is 

Mr. Lichtenstein. What it would take in retail? 

Mr. Robinson. What is the board that you put out that you can 
gamble the largest amount of money on? Do you call them a dollar 
board or one that you pay $2 for ? 

Mr. Lichtenstein. No ; there are very few of those. Most of the 
boards are 5 or 10 cents a punch. 

Mr. Robinson. Are there any that run up to a dollar ? 

Mr. Lichtenstein. Very few. 

Mr. Robinson. Do you manufacture those? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 71 

Mr. LiCHTENsi^iN. That is right ; very few, 

Mr. Robinson, Who are the customers for that type of board? 

Mr. LiCHTENSTEiN. I woulcl iiot kiiow especially. 

Mr. Robinson. Any particular class of customers ? 

Mr. LiCHTENSTEiN. No. It might be some fellow that has a store 
that has some well-paying customers that come in and want to punch 
for a dollar; of course, their action is bigger because they can get a 
bigger prize, you see. 

Mr. Burling. Mr. Lichtenstein, you said that the manufacturer 
did not know what numbers were placed in the boards ; is that right ? 

Mr. LiCHTENSTEiN. That is right. 

Mr. Burling. Does the manufacturer know on each board how 
much it would pay out ? 

Mr. LiCHTENSTEiN. Well, we specify that on the headings of the 
board, if they are money boards; but if they are plain boards our 
customers can use it any way they please; they can put candy on it 
or cigarettes or pipes or what-not. 

Mr. Burling, Well, let us take a cigarette board. 

Mr. LiCHTENSTEiN. Yes. 

Mr. Burling. If I want to buy a cigarette board from you, and I 
find out how many cigarettes it will pay out, assuming it is all punched 
out 

Mr. LiCHTENSTEiN. It is all on the legend there. 

Mr. Burling. So that you do have the winning numbers controlled ? 

Mr, LiCHTENSTEiN. That is right. 

Mr. Burling. In the industry, so far as you know, are any boards 
manufactured where the winning numbers are not included on the 
board ? 

Mr, Lichtenstein, No ; not that I know of. 

Mr, Burling. You could not tell me where I could buy a board 
wliich did not have the winning numbers in it at all ? 

Mr. Lichtenstein. I don't think there is anything like that made. 

Mr, Burling, You do not manufacture such ? 

Mr, Lichtenstein. No, sir. 

Mr, Burling. But each individual board has the predetermined 
number of winning numbers, is that right ? 

Mr. Lichtenstein. No. You take a board with a thousand num- 
bers in it. The numbers run from 1 to 1,000, but they are haphazardly 
jumbled up in these different holes, and nobody knows where the exact 
location is, but all the numbers are in there, 

Mr, Burling, This morning I asked Mr. Brookfield what his opin- 
ion was as to the total volume of money gambled on a punchboard 
in the country. You have been in this business 30 years. 

Mr. Lichtenstein. That is right, 

Mr. Burling. Do you have an opinion ? 

Mr, Lichtenstein, Not as to volume, but Mr. Brookfield was a little 
wrong in his explanation of a money board, which came up, and it took 
in $120 and paid out $80. Do you recall it, Mr. Robinson, or you do, 
Senator, don\ you ? It took in $120 and paid out $80. 

Now, that $120 is not a sale, because when a fellow punches a board, 
and he punches $2 and he gets back a $10 prize, when that board is 
finished up the sale is only $40, not $120. 

Mr, Robinson. Well, the profit is $40. 

Mr. Lichtenstein. I know, but that is the sale is $40, not $120, 
because he has given back $80, don't you see ? 



72 ORGANIZED CRIME IN INTERSTATE COMMERCE 

The Chairman. Well, the total take is $120, but this part of it is 

Mr. LicHTENSTEiN. No ; that is not the sale, because if he gave 
him a $10 bill and he handed him back $8, that would not have been 
a $10 sale, because it cost $8 to make that sale. 

The Chairman. By "sale" you mean the net profit? 

Mr. LicHTENSTEiN. That is right. 

The Chairman. We were talking about gross take. You are talking 
about net. 

Mr. LicHTENSTEiN. Well, the gross take is — immediately he is to 
pay that $80 back. For instance, one man unched the board out of 
$120, and you would have to give him $80 back, because that is in the 
board, and then the sale is onlj^ $40. 

Mr. Robinson. Let us put it this way: What is the total amount 
gambled on the board ? 

Mr. LiCHTENSTEiN. Well, this will give you an idea. A board will 
cost you 

Mr. Robinson. What is the total amount gambled on that board ? 
That is $120. 

Mr. LiCHTENSTEiN. Well, I do not agree with you there. I do not 
agree with you there. Just for the sake of argument, I do not agree 
with you. 

The Chairman. I think we all understand one another. The total 
amount that would be given to the fellow who was operating the board 
would be $120. 

Mr. LiCHTENSTEiN. That is right. 

The Chairman. Now, he would pay out the $80, and his take would 
bje — I mean his net take would be — $40, less what he paid for the 
board ; that would be his sale. That is what you call the sale ? 

Mr. LiCHTENSTEiN. That is right; so that would be about 10 to 1, 
you see. 

The Chairman. All right. 

Mr. Burling. Will you tell us what the average return — that is, 
what the average take, not the sale, but the total taken in of your 
boards is, your money boards? 

Mr. LiCHTENSTEiN. Can we go back to this particular board again, 
where Mr. Brookfield slipped up a bit ? When a man punches a punch- 
board he is liable to win in a very few dollars all the main prizes on 
the board, and the dealer would lose money on it. It does not take 
in $120 each time, nor does he make $40 profit each time. 

Mr. Burling. Will you try to follow my questions, and then answer? 

Mr. LiCHTENSTEiN. That answers it, doesn't it? 

Mr. Burling. No. What I am trying to get at is. What is the aver- 
age, how many holes are there in the average board you sell ? Would 
a thousand be the average? 

Mr. LiCHTENSTEiN. That would be about the average ; yes ; because it 
is 

Mr. Burling. How much — what is your average price — for a thou- 
sand-hole board? 

Mr. LiCHTENSTEiN. About three and a half dollars. 

Mr. Burling. Are the most common boards 5 -cent boards or quarter 
boards, or what? 

Mr. LiCHTENSTEiN. The most popular size are the 5-cent boards. 

Mr. Burling. So that the most popular board, money board, is a 
board that, if all the holes are punched, takes in $50? 

Mr. LiCHTENSTEiN. That is right. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 73 

Mr. Burling. How much does the most common board sold pay 
back of those $50? 

Mr. LiCHTENSTEiN. They pay about twenty-seven and a half to $30 
back. It all depends on what the customer wants. If he wants a 
60-percent return or a 50-percent return, it all depends on what he 
wants. 

Mr. Burling. That is, if I wanted to have a board in my cigar 
store I could choose a 40-percent return or a 50-percent return or a 
60-percent return? 

Mr. LiGHTENSTEiN. Or 70-percent return or 85-percent return. 

Mr. Burling. But the most common is around 50 ; is that right? 

Mr. LiCHTENSTEiN. That is right ; that would be about the average. 

Mr. Burling, What is your average price for a board, a thousand- 
hole board? 

Mr. LiCHTENSTEiN. About three and a half dollars on a money 
board. 

Mr. Burling. So that, assuming that the board is all punched out, 
the amount of money played is at least 20 times the price of the board ; 
is that right ? 

Mr. LiCHTENSTEiN. Practically, yes ; about l7 times, 16 times. 

Mr. Burling. In the years when you had a million-dollar gross, 
if the board was all punched out, if every board you sold was all 
punched out, there would be a fair guess something like $20,000,000 
gambled on your boards. 

Mr. LiCHTENSTEiN. But you must discount the holes sold — only 50 
percent are sold out. 

Mr. Burling. You mean the board — the prizes have gone sufficiently 
so that you do not get a board punched out? 

Mr. LiCHTENSTEiN. That is right. 

The Chairman. On the other hand, if most of the holes are punched, 
and the operator sees that none of the prizes have been punched, he 
may just take the board off the stand, may he not ? 

Mr. LiCHTENSTEiN. Oh, yes; because if he has a regular line of 
customers, and the main prizes are gone, he would not ask them to 
punch out a dead board, because he would lose his customers. 

The Chairman. No; what I mean is if the main prizes are not 
gone 

Mr. LiCHTENSTEiN. Ycs. 

The Chairman (continuing). And it is rumored that he may just 
crack the board up and throw it away. 

Mr. LiCHTENSTEiN. No. 

The Chairman. You do not think they do that ? 

Mr. LiCHTENSTEiN. You would not patronize, or I would not patron- 
ize, a customer if I were punching boards and knew there were two 
$10 prizes on there, and 5 minutes later he jerked the board. 

The Chairman. Of course, the customer does not always stay there 
to see what happens. 

Mr. LiCHTENSTEiN. But he has to tell who won the prizes. 

The Chairman. He moves on. 

Mr. LiCHTENSTEiN. He might have a hundred customers punching 
a board, and he would want to know. He may do it once, but he will 
not do it again. 

The Chairman. Some of the boards have grand prizes, 

68958— 51— pt. 12 6 



74 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. LiCHTENSTEiN. These are not grand prizes; these are just open 
numbers ; you may win as you punch them. 

The Chairman. All right. 

Mr. Robinson. Well, along the line of the chairman''s thought, and 
getting back to the $120 and $80 board we were talking about 

Mr. LiCHTENSTEiN. Yes. 

Mr. Robinson (continuing). $40 is a minimum. 

Mr. LiCHTENSTEiN. That would be the maximum he could win, the 
maximum profit he could make. 

Mr. Robinson. No; but at some time during the punching of that 
board, if all the prizes are not punched out 

Mr. LiCHTENSTEiN. He could lose. 

Mr. Robinson (continuing) . He may be ahead $60 or $60, and break 
the board. 

Mr. LiCHSTENSTEiN. No ; it could be just the reverse. If all the big 
])rizes were won right off the bat. 

Mr. Robinson. Let us assume all the big prizes are not won. 

Mr. LiCHTENSTEiN. Then the board might go to the end. Then there 
would be a positive $40 profit. 

Mr. Robinson. He would not have to go to the end, would he, if the 
])rofit was higher at that particular period? 

Mr. LiCHTENSTEiN. Rarely do they ever go to the end. 

The Chairman. I think we understand one another. Let us go on 
to something else. 

Mr. Robinson. Well, you heard, Mr. Lichtenstein, Mr. Brookfield 
testify as to what he thought was a fair estimate of the total amount 
that was played on the punchboard. Does that agree with your 

Mr. LiCHTENSTEiN. Played on punchboards? Do you say played 
on punchboards or the manufacturing? 

Mr. Robinson. No; the total amount that was actually played on 
punchboards. 

Mr. Lichtenstein. I don't think anybody could estimate that. 

Mr. Robinson. I think he gave a figure of something between 100 
million and a billion dollars. 

Mr. Lichtenstein. Oh, no ; there is nothing like that ; no. 

The Chairman. Well, you estimated, I believe, when you testified 
that in 1947 the total gross sales of punchboards amounted to about 
$10,000,000 a year. 

Mr. Lichtenstein. Not the gross sales of the punchboards, the 
punchboard manufacturers' production was $10,000,000 at that time. 

The Chairman. Yes. In other words, that that many punchboards 
were sold by the manufacturers. 

Mr. Lichtenstein. That is right. 

The Chairman. That has gone up by now, has it not ? 

Mr. Lichtenstein. No, down. 

The Chairman. You think it has gone down? Why has it gone 
down? 

Mr. Lichtenstein. Shortage of material, price wars, and so forth. 

The Chairman. You mean the price may have been reduced? 

Mr. LiCHTENSTi^HN. That is right. 

The Chairman. But the number of boards sold has not gone down, 
has it? 

Mr. Lichtenstein. I think they are about the same. 

Mr. Robinson. Do you have any estimate of the total number of 
boards that are actually sold — manufactured and sold — during the 
year, not dollarwise? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 75 

Mr. LiciiTENSTEiN. By us or by everybody ? 

Mr. RoBiisrsoisr. By everybody. 

Mr. LiciiTENSTEiN. I would not have any knowledge of that. 

Mr. Robinson. How many by your company '^ 

Mr. LiCHTENSTEiN. AVell, we })robably make 

Mr. Robinson. All types. 

Mr. LiCHTENSTEiN. A half million boards, you see, but some are 
only 10, 12 cents apiece. 

The Chairman. Right at that point, you make a half million. How 
do you stand in the business? Are you the second or third largest? 

Mr. LiCHTENSTEiN. No, fifth, sixth, or seventh, I think. 

The Chairman. Fifth, sixth, or seventh? 

Mr. LiCHTENSTEiN. Right now. 

The Chairman. What is the largest, the Sax products? 

Mr. LiCHTENSTEiN. I think they are ; that is, I don't know for sure, 
but I just imagine they are. 

The Chairman. Let us get the five or six big ones. How would 
you list them? 

Mr. LiCHTENSTEiN. You mean in their order? 

The Chairman. Yes. 

Mr. LiCHTENSTEiN. Well, I would not know about that. 

The Chairman. Let us have your best guess. 

Mr. LiCHTENSTEiN. Well, I would say Superior would be No. 1, 
but who would be second or third, I would not know. 

The Chairman. Well, then, who are the other big ones? 

Mr. LiCHTENSTEiN. Well, there is Gardner & Co., there is Hamilton 
Manufacturing Co. in Minneapolis, and there is Bee Jay Products 
Co. ; then there is Pioneer Manufacturing Co. ; I think we will come 
in next after them. 

The Chairman, Where does Mason Co. come in? 

Mr. LiCHTENSTEiN. That is a little bit of an outfit. 

The Chairman. That is a little one ? 

Mr. LiCHTENSTEiN. They doirt manufacture; they manufacture 
nothing. 

The Chairjvian. They are fixer jobbers, as you call them? 

]Mr. LiCHTENSTEiN. That is right. 

Mr. Robinson. Mr. Lichtenstein, does your volume of sales vary, 
depending upon the extent or intensity of the activities of law-enforce- 
ment officials in various States asainst gambling devices? 

Mr. LiCHTENSTEiN. I doii't think so; I don't think so. 

INIr. Robinson. You noticed no reflection in your gross sales, de- 
pending upon the intensity of some State's antigambling activities? 

Mr. Lichtenstein. I have not seen it yet ; it might be. I have not 
seen it yet, though. 

The Chairman. How many customers do you have? 

Mr. Lichtensit:in. We have 10,000 customers. 

Mr. Robinson. Do you have any average figure of sales through 
your customers ? 

Mr. Lichtenstein. Well, if you figure on sales, say, 400,000, there 
would be about $40 apiece. 

Mr. Robinson. Forty dollars a customer on the average? 

Mr. Lichtenstein. That is right. 

The Chairman. Mr. Burling, do you have any questions? 

Mr. Burling. No, Mr. Chairman. 

The Chairman. How do you ship your punchboards? 



76 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. LiCHTENSTEiN. By express, freight, and truck. 

The Chairman. You do not send them in the mail any more? 

Mr. LiOHTENSTEiN. Yes ; we do if the zone is all right. 

The Chairman. What? 

Mr. LiCHTENSTEiN. If the costs in the zone area are all right. 

The Chairman. I thought we had a postal regulation just recently 
that you could not ship them in the mails. 

Mr. LiCHTENSTEiN. No ; so long as they are sealed. 

The Chairman. As long as they are what? 

Mr. LiCHTENSTEiN. It is first-class mail, as first-class mail. 

The Chairman. You can ship them as first-class mail? 

Mr. LiCHTENSTEiN. That is right, not parcel post. 

The Chairman. Do you attempt to comply with the laws of the 
States as to whether they are legal or illegal, or do you ship into them 
regardless ? 

Mr. LiCHTENSTEiN. We have nothing to do with that. We sell any- 
body who wants to buy. 

Tlie Chairman. Wliether it is in a legal State or in an illegal State, 
is that correct ? 

Mr. LiCHTENSTEiN. It does not make any difference, that is right. 
It is all local option anyway. 

The Chairman. What ? 

Mr. LiCHTENSTEiN. It is all local option so far as I know through- 
out the country. 

The Chairman. Well, there are only five or six States where the 
punchboards are legal. 

Mr. LiCHTENSTEiN. That is State-wide. 

The Chairman. But do you try to comply with the State laws in 
which they are illegal, and not ship into those States ? 

Mr. LiCHTENSTEiN. No ; we are not law-enforcement people. If any- 
body wants to buy them from us we will sell to them. 

The Chairman. So even though they may be completely outlawed 
in the State if somebody orders one in that State you will ship them ? 

Mr. LiCHTENSTEiN. Ycs ; but we don't know whether they are going 
to be used in that State or not ; we wouldn't know. 

The Chairman. Do you usually sell to jobbers or wholesalers? Do 
you sell directly ? 

Mr. LiCHTENSTEiN. We sell to candy manufacturers, jobbers, to- 
bacco jobbers, wholesale grocery firms, wholesale drug firms, and we 
sell to others known as operators who buy these boards, and they either 
sell them to a dealer or they operate with them on a commission basis. 

The Chairman. And take a percentage of the profit. 

Mr. LiCHTENSTEiN. That is right. 

The Chairman. And the financial transactions, the exchange of 
money and payment for these boards, is that usually by check or do 
you send them out C. O. D. ? 

Mr. LiCHTENSTEiN. Botli ways. We have open accounts and C. O. D., 
and cash in advance, too. 

The Chairman. Do you have an association that sort of protects 
the trading interests of the punchboard manufacturers ? 

Mr. LiCHTENSTEiN. No. Like Mr. Brookfield tells you, we had a 
code authority under the NRA, and after that, why nothing happened. 

The Chairman. You still do have sort of a loose association ? 

Mr. LiCHTENSTEiN. That is right. We meet once in a while to see 
what is the matter with us. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 77 

The Chairman. Do you meet once a year ? 

Mr. LiCHTENSTEiN. We meet oftener than that, maybe two or three 
times a year. 

The Chairman. Wliere do you have your meetings ? 

Mr. LiCHTENSTEiN. In my office or somebody else's office, or may in 
a hotel if the crowd is too big. 

The Chairman. I am talking about national meetings. 

Mr. LiCHTENSTEiN. National meetings ? 

The Chairman. Yes. 

Mr. LiCHTENSTEiN. Not anything like that. 

The Chairman. You are talking about the Chicago meetings ? 

Mr. LiCHTENSTEiN. We will go east and combine pleasure and 
meet a couple of the other fellows there ; we did recently. 

Mr. Robinson. What are the purposes of the meetings? 

Mr. LiCHTENSTEiN. Why, w^e have been having a terrific price war 
for the last 3 years. 

Mr. Robinson. Having what? 

Mr. LiCHTENSTEiN. A terrific price war. 

Mr. Robinson. And are the meetings for the purposes of discussing 
those price wars? 

Mr. LiCHTENSTEiN. That is right. 

Mr. Robinson. Is tliere usually an Tuiderstanding about the price 
war among the members ? 

Mr. LiCHTENSTEiN. A misunderstauding. 

Mr. Robinson. Well, for a period of time anyway. 

Mr. LiCHTENSTEiN. It docs not do any good at all. 

Mr. Robinson. It does not do any good ? 

Mr. LiCHTENSTEiN. No. 

Mr. Robinson. But that is the purpose of the meeting, is it not ? 

Mr. LiCHTENSTEiN. That is right. 

Mr. Robinson. To try to establish the price, have everyone agree 
on it. 

Mr. LiCHTENSTEiN. Not to establish a price, but to stop cutting 
prices. 

Mr. Robinson. Well, that is substantially the same thing. 

Mr. LiCHTENSTEiN. That is about right. 

]Mr, Robinson. Do you discuss at those meetings anything about the 
distribution of the boards in various territories? Is it generally 
understood that one company will have one territory and another 
company will have another territory ? 

Mr. LiCHTENSTEiN. Definitely not. 

Mr. Robinson. Nothing along that line ? 

Mr. LiCHTENSTEiN. Definitely not. 

Mr. Robinson. But it is pretty generally the idea at the meetings 
that they will endeavor to eliminate price competition among the 
manufacturers, isn't that true ? 

Mr. LiCHTENSTEiN. Yes — but nothing like that. We try to elimi- 
nate the price cutting, yes, but so far for 21/2 years we have not suc- 
ceeded yet. 

Mr. Robinson. Well, what are the means that are discussed at the 
meeting as to how the price war shall be eliminated ? 

Mr. LiCHTENSTEiN. Primarily it is our customers that cause us to 
cut prices. In other words, if we had a customer who was buying 
some boards, he would write us in an offer and say, "Well, from 



78 ORGANIZED CRIME IN INTERSTATE COMMERCE 

another manufacturer we can buy this for 30 cents less. You can 
take it or leave it." 

If you don't take it you can shut up your plant, do you know what 
I mean ? That is what we try to eliminate. 

Mr. Robinson. Does Mr. James — is that his name? 

Mr. LlCHTENSTEIN. Yes. 

Mr. Robinson, Does he attend those meetings? 
Mr. LlCHTENSTEIN. Ouce in a while, not all the time. 
Mr. Robinson. Isn't it primarily his job with the association to try 
to keep the price established ? 

Mr. LlCHTENSTEIN. No. 

Mr. Robinson. And eliminate price competition ? 

Mr. LlCHTENSTEIN. No, lie has been around mainly for Federal 
Trade: Federal Trade. 

Mr. Robinson. He does not get into the price business at all? 

Mr. LlCHTENSTEIN. It is not his business. 

Mr. Robinson. But he does discuss with the members of the industry 
how they can maintain the price? 

Mr. LlCHTENSTEIN. If lie could, we would be fine, but he doesn't, 
he can't. 

Mr. Robinson. That is the real purpose of the meeting, is it not? 

Mr. LiCH'i"ENSiTTN. Well, we liave Federal Trade w^ork, lots of it. 
Practically every manufacturer has had a complaint, I have had a 
cease-and-desist order which we are appealing, as I stated before. Mr, 
James right now is filing briefs. 

Mr. Robinson. Who is Mr. Gntterman ? 

Mr. LlCHTENSTEIN. WllO ? 

Mr. Robinson. Mr. Gntterman. 

Mr. LlCHTENSTEIN. Mr, Gntterman was a former salesman of ours, 
that is, he was not such a salesman, but a field man, that would go 
out and help other salesmen sell in different parts of the country. 

Mr. Robinson. Did you have some difficulties with him ? 

Mr. LlCHTENSTEIN. Well, we didn't have any difficulty with him, but 
he had difficulties himself. 

Mr. Robinson. What was that ? 

The Chairman. That is M. F. Gntterman you are talking about? 

Mr. LlCHTENSTEIN. That is right. 

The Chairman. Out in California ? 

Mr. LlCHTENSTEIN. That is right. 

It is public infonnation, everybody knows about it, it is of record. 
Unbeknown to us, his position with us was to go around with our 
salesmen and help them sell. Well, I don't know what kind of a 
mix-up he got into, but after all they were indicted, about four of 
them, and they were acquitted, so I don't think there was much to it, 
according to wdiat the newspapers played up, but we did not care for 
any character like that with our organization. 

Mr, Robinson. You discharged him ? 

Mr. LiCHTENSi'EiN. That is right. 

Mr. Robinson. What was he doing, or what was he charged with 
doing? 

Mr. LlCHTENSTEIN. What was he charged with ? I think the charge 
was conspiracy. 

Mr, Robinson. To do what? 

Mr, LlCHTENSTEIN. Well, conspiracy to bribe officials, I think the 
papers said. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 79 

Mr. KoBiNSON. What was he doing so far as the punchboards were 
concerned ? 

Mr. LicHTj^NSTEix. Pardon? 

Mr. Robinson. What was he doing- with respect to the punchboards? 

Mr. LiciiTENSTEiN. Well, he was helping another fellow sell, accord- 
ing to the newspapers, according to the way he told me it was 

Mr. Robinson. Didn't he put certain brands or seals on particular 
punchboards 

Mr. LiCHTENSTEiN. That was in the papers. 

Mr. Robinson (continuing). That was unmolested by the police, 
that were sold? 

Mr. LicHTENSTEiN. That is right. 

Mr. Robinson. Wasn't that the substance of it? 

Mr. LiCHTENSTEiN. That is right; and they were acquitted on mac 
charge. 

Mr, Robinson. That is all I have. 

The Chairman. So that we can get some idea of the size of your 
business and also showing the decrease in the amount of business you 
did, Mr. Amis, one of the investigators of this conmiittee, has conferred 
with you and examined certain books and records ; is that correct? 

Mr. LicPiTENSTEiN. Right. 

The Chairman. And this memorandum contains a report here that 
in the year 1943, your company grossed $3,013,000, leaving off the 

Mr. LiciiTENSTEiN. That was not in the punchboards. 

The Chairman. In 1943 ? 

Mr. LiCHTENSTEiN. That was not punchboards. 

The Chairman. What Avas that? 

Mr. LiCHTENSTEiN. That was included with leatherette; we manu- 
factured some leatherette articles. 

The Chairman. You manufactured what? 

Mr. LiCHTENSTEiN, We made scrap books and albums and things 
like that for the chain stores. That was included in the sales. 

The Chairman, Well, how much of it was punchlDoards ; do you 
think? 

Mr. LiCHTENSTEiN. I tliiiik the punchboards were about a million 
dollars, or a million two — something like that. 

The Chairman. And the partnership income — you are Leo Licliten- 
stein ? 

Mr. LiCHTENSTEiN. That is right. 

The Chairman. $187,000, and Libbe $157,000, and B. J, $131,000. 

Mr. LiCHTENSTEiN. That is right. 

The Chairman. And in 1948, that seems to be the next complete 
year, you got down to gross sales of $1,337,000. Did that also include 
something else? 

Mr, LiCHTENSTEiN. That included the leatherette. 

The CiiAHjMAN. And the i)artnership income, yours was $55,000, 
and your wife's $47,000, and B. J. $39,000; is that right? 

Mr. LiCHTENSTEiN. Yes. 

The Chairman. I notice that in 1943, where your gross income was 
$3,000,000, that your net income was $1,207,000. Is that from all 
your operations ? 

Mr. LiCHTENSTEiN. That is everything ; yes. 

The Chairman. Your net w\as about 35 percent of your gross — 38 
percent of your gross. Isn't that pretty high ? 



80 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. LiGHTENSTEiN. Well, on the leatherette it was high ; yes. We 
had what is known as some sleeper items. 

Mr. Robinson. Did you have any difficulty getting materials or sup- 
plies for punchboards during the war ? 

Mr. LicHTENSTEiN. During the war we had an allocation of 65 per- 
cent of our 1940 and 1941 usage. 

The Chairman. What are they apt to drop you down to this year, 
the N ational Production Authority i 

Mr. LiCHTENSTETN. Catcli-as-catcli-can. If they give you a hun- 
dred percent, you can't get 10. 

The Chairman. If you what ? 

Mr. LiCHTENSTEiN. If they gave you a hundred percent, you could 
not get 10 percent of materials. They are awfully scarce. All we can 
get material for is Govermnent orders. 

The Chairman. All right; I believe that is all, Mr. Lichtenstein. 
Thank you very much, sir. 

Mr. Lichtenstein. Do you want me to leave? 

The Chairman. Yes, sir; unless you have something else you want 
to say. 

Mr. Lichtenstein. No. Anything you want to ask me, I will tell 
you. 

The Chairman. I believe that is all. 

I might announce for the benefit of the press that the committee is 
considering — no formal action has been taken yet by the committee, 
but we are considering — recommending to whoever has the power of 
allocation of strategic materials, that in the punchboard industry, that 
would be a very good place to drastically cut, if not eliminate, so that 
there will be more paper and other materials available for legitimate — 
more legitimate — operations. 

The committee has not taken any formal action on the matter, but 
it would be my personal recommendation that that be one of the places 
that the NPA or the Allocation Board consider the reduction of the 
use of paper, or, so far as I am concerned, the elimination of the use 
of paper as strategic materials for other uses. 

Mr. Robinson tells me that Jack Doyle of Gary, Ind., has been 
located and will get here tomorrow afternoon, so we will have a brief 
hearing at 2 o'clock tomorrow afternoon to hear Mr. Doyle. 

George May, a witness we have been trying to locate for some time, 
from Chicago, who has a business there, and also at San Francisco, 
Mr. Robinson tells me that subpenas have been put in the hands of 
the United States marshals at San Francisco, Los Angeles, and Chi- 
cago, also in the hands of other people designated by the committee 
to try to locate him. 

His two attorneys have been contacted, and letters through regis- 
tered mail have been sent to his four places of business or residence, 
and I can say also that his name has been given to the Sergeant at 
Arms of the Senate to help us locate him. 

The committee is determined that we will locate and ask Mr. May 
to be brought in, and the press will again carry the fact that we are 
seeking Mr. May's presence before this committee. 

(Following the testimony of George L. Bowers, Miami, Fla., and 
Joseph Friedlander, Miami Beach, Fla., which testimony is included 
in Pt. lA, Florida, of the hearings of the committee, the hearing was 
adjourned, to reconvene at 10 : 30 a. m., on Saturday, February 17, 
1951.) 



INVESTIGATION OF ORGANIZED CEIME IN INTEESTATE 

COMMERCE 



SATURDAY, FEBRUARY 17, 1951 

United States Senate, 
Special Commii^ee To Investigate Organized 

Crime in Interstate Commerce, 

Washington, D. C. 

The committee met, piinisant to recess, at 10 : 35 a. m., in room 457, 
Senate Office Building, Senator Estes Kefauver (chairman), pre- 
siding. 

Present : Senators Kefauver and Tobey. 

Also present : Downey Rice, associate counsel ; George S. Robinson, 
and John L. Burling, assistant counsel. 

The Chairman. The committee will come to order. 

Is Mr. Culbreath from Florida here ? 

(No response.) 

The Chairman. Let the record show that this is a continuation of 
the hearing of yesterday, and that Senator Tobey and the chairman 
are present. 

Mr. Rice, I believe that today, or this morning, the testimony largely 
relates to so-called comeback money in connection with bookie opera- 
tions ; is that coiTect ? 

Mr. Rice. Yes. 

The Chairman. In order that we can all get sort of a broader pic- 
ture and understand what we are driving at, will you make a state- 
ment about just what we mean by "comeback money," and generally 
liow it operates before you put the witnesses on ? 

Mr. Rice. Well, Senator, we hope to get the real story of how come- 
back money operates from the witnesses, but generally comebaclc 
money is a term used for money that is sent from a betting commis- 
sioner or bookies' bookie to an agent who generally' remains outside 
the track, at the last minute to insure his bet or to make a bet. 

The effect at the track seems to be tliat the odds are depressed at the 
hist moment. Lots of people notice at the track that the tote board 
will change at the last moment ; odds will drop on a horse from 20 to 1 
to 8 to 1, something like that, which means that all comeback money 
has just come in. 

It is understood that the function of the comeback money has two 
effects: No. 1, it depresses the odds on a certain horse: and. No. 2, 
it balances the books of the man sending the money in. 
_ It is said that when the money goes in properly,' the betting commis- 
sioner does not care which horse wins ; he can't lose. 

Would it be lieljjful if I made a statement in terms of money, 
Senator ? 

81 



82 ORGANIZED CRIME IN INTERSTATE COMMERCE 

The Chairman. Yes, all right. I think it would be helpful. 

Mr. Rice. For instance, if a big bookie has $20,000 worth of bets 
on one horse, and tlie horse is rated at the moment at 10 to 1, the 
betting commissioner stands to lose $200,000. 

He will immediately then telephone to his agent at the track, who 
is either in the track or nearby, and instruct him to bet about $5,000 
on the horse of th e $20,00( ) that he is holding. 

The odds will drop from maybe 8 to 1 down to '>) to 1, and if that 
particular horse wins, the pay-otf will be $8 instead of $22. 

Now, in addition to the wimiings that the house collects from that 
bet, which will help to pay oil' the $15,000 worth of bets which it held, 
they will have all the other money on the horses, so, in eifect, they 
have insured themselves against taking a bad beating, and have got- 
ten into a position where they couldn't lose. 

Now, the Thoroughbred Racing Protective Bureau, which is an 
organization that handles the protective policies for a number of the 
race tracks throughout the country, which are members of the Thor- 
oughbred Raving Protective xA^ssociation, has furnished a report to 
Senator Kefauver, chairman of the conunittee, and part of that report 
relating to comeback money reads : 

A reffulntioii contained in the RA code of standards — 

that is the thoroughbred racing code of standards — 

concerns comeback money. This is money which is hronsht to the race track 
by an agent for illegal bookmakers. The money is then bet at the track for two 
possible purposes : First, it may represent large bets which illegal bookmakers are 
imable to lay off among themselves, i)ets which no once in the l)ookmaking 
organization desires to hold. The second purpose of sending in comeback money 
is to reduce the odds on the horse involved so that, if it should win, the odds 
which the illegal bookmalver wt)uld have to pay would be considerably less than 
if the comeback mone.v liad not been placed. As a matter of fact, both of these 
elements are jiroliably present in each and every transaction. 

The Thoroughbred Racing Association i-egulations concerning comeback money 
states very specifically that "no member track of the Association shall provide 
or permit to be provided any convenience or facilities for the use of bookmakers, 
lietting commissioners, theii- agents, or their employees. No facilities will be 
provided or permitted for the liandling of comeback money at the track. The 
maintenance of credit accounts, the payment of commissions in any form, tlie 
providing of telephone or other communication services and any (»ther form of 
aid to bookmakers, betting commissioners, their agents or employees, will be 
prohibited." 

This regulation is strictlv enforced by the RA member tracks, assisted bv the 
RPB agents. 

I think at this time, Senator, it would probably be wise to offer 
this report for the record. 

The Chairman. The report of the Thoroughbred Racing Associa- 
tion is a very interesting one, and Mr. Drayton — who is he? 

Mr. Rice. He is the director and secretary of the Thoroughbred 
Racing Association. He is a director of the Thoroughbred Racing 
Protective Bureau and the secretary of the Thoroughbred Racing Asso- 
ciation. 

The Ciiaiuisian. He has been very cooperative with the conunittee 
m helping us with problems relative to the investigation of book- 
making and race tracks, and has submitted a very voluminous report, 
and I think they have been doing a very good job to try to keep 
decency, and prevent certain types of operations at race tracks among 
their members. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 83 

I do not tliiiik we should undertake to have this printed in the 
record; that can be filed as an exhibit and not printed as a part of 
the record, but any parts of it that are pertinent, Mr. Rice, will you 
have those put into the record at the proper time? 

Mr. Rick. Yes. 

The Chairman. AVho is our first witness this morning? 

Mr. Rice. Richard Remer. 

The Chairman. Mr. Remer, will you come around, please, sir ? You 
solennily swear the testimony you give this committee will be the 
truth, tile whole truth, and nothing but the truth, so help you God? 

Mr. Remer. I do. 

The Chairman. All right; sit down, Mr. Remer. 

Mr. Rice. Will you state your name for the record and your address? 

TESTIMONY OF RICHARD REMER, MIAMI BEACH, FLA. 

Mr. Remer. Richard Remer, 956 Euclid Avenue. 

The Chairman. Mr. Remer, you are a gi-eat big man, suppose you 
speak up so that we can hear. 

What is your address, sir? 

Mr. Remer. 956 Euclid Avenue. 

The Chairman. Where ? 

Mr. Remer. 95() Euclid Avenue, Miami Beach, Fla. 

Mr. Rice. All right, sir. You were born in New York City? 

Mr. Remer. That is right. 

Mr. Rice. In 1900^ 

Mr. Remer. Right. 

Mr. Rice. And sometime back you were served with a subpena 
while you were at the race track at Bowie; is that right? 

Mr. Remer. That is right, sir. 

Mr. Rice. Now, will you tell us what you were doing at Bowie at the 
time that Mr. Martin and myself talked with you there? 

Mr. Remer. Well, 1 was just waiting for an order to go to the win- 
dow and make a bet on a horse, whatever the ordei- was for; that is all 
J did was go in and bet on the horse. 

Mr. Rice. You were waiting for an orde]-? 

Mr. Remer. That is right. 

Mr. Rice. Where were you waiting? 

Mr. Remer. Well, at that particular race track 1 was waiting at 
the phone in Mr. Pending's office. 

Mr. Rice. Who is Mr. Pending? 

The (^iiAiRMAN. Let us spell the name so that we can get it right. 

Mr. Remer. P-e-n-d-i-n-g. 

Mr. Rice. P-e-n-d-i-n-g; that is Richard Pending? 

Mr. Remer. That is right. 

The Chairman. Who is he? 

Mr. Remer. I imagine he has got something to do with the race 
track. I really don't know what his official capacity is. 

Mr. Rice. I am sorrv, I can't hear you. What did you say he did ? 

Mr. Remer. I don't know what his official capacity at the race track 
was, but he just had a little office there with a phone that I was using. 

Mr. Rice. Is he the track manager ? 

Mr. Remer. I would not know. 

Mr. Rice. Track superintendent? 



84 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Remer. I really don't know what his position is. 

The Chairman. Is that what he is, Mr. Rice ? 

Mr. Rice. Yes. 

The Chairmx\n, Let us get on. 

Mr. Rice, Did yon make some arrangement with Pending to use 
the telephone there? 

Mr. Remer. Oh, two or three times a day, I might have to use a 
phone to get a call; somebody would call me to make a bet on the 
horse. Well, he said, "So long as you are going to bet it at the window, 
why, it is all right,"' it is all right with him. 

Mr. Rice. Did you make any arrangements to pay for the use of 
that phone '^ 

Mr. Remek. No ; there was no payment. 

Mr. Rice. No payment; just an accommodation? 

Mr. Remer. Just an acommodation. 

Mr. Rice. What phone was that? What was the number; do you 
know ? 

Mr. Remer. No ; I don't remember offhand. 

Mr. Rice. Regular Bowie telephone at the switchboard? 

Mr. Remer. Right at the race track. 

Mr. Rice. Bowie 2171 ? 

Mr. Remer. Yes; that is familiar. 

Mr. Rice. Now, then, you made arrangements to use the phone while 
the meeting was on at Bowie? 

Mr. Remer. That is right. 

Mr. Rice. When you first came to the track in the afternoon, what 
would you do ? 

Mr. Remer. Well, before the first race, I would walk in and see if 
there was a call for me, and if there was no call, why, I would wait 
for the next race, and so on. 

Mr. Rice. If there was a call, what would happen? 

Mr. Remer. Then I would just get an order to make a bet on a certain 
horse in a certain amount, and whatever it was. 

Mr. Rice. Well, now, who w^ould you call or who called you? 

Mr. Remer. Well, it was a call from my office. 

Mr. Rice. Where was that? 

Mr. Remer. In Cincinnati. 

Mr. Rice. In Cincinnati? Who would call you from Cincinnati? 

Mr. Remer. Well, sometimes it would be Mr. Rosenbaum, sometimes 
it would be one of the clerks in the office. 

Mr. Rice. Which Mr. Rosenbaum would that be? 

Mr. Remer. Mr. Louis Rosenbaum. 

Mr. Rice. Mr. Louis? Sometimes it would be who else? 

Mr. Remer. Some other clerk there ; I didn't know his name. 

Mr. Rice. Some other clerk ? 

Mr. Remer. Yes. 

Mr. Rice. Now, then, Louis Rosenbaum would call you before the 
first race, and what would he tell you? 

Mr. Remer. Well, he would tell me different things at different 
tunes. He would tell me to bet a certain amount. 

Mr. Rice. Give us an illustration. 

Mr. Remer. To bet $2,.500 or $1,000, $1,500, or whatever it was. 

Mr. Rice. He would tell you to bet $1,000, $1,500, or $2,500, across 
the board or win, place, and show on a certain horse? 

Mr. Remer. Yes. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 85 

Mr. EiCE. Did he ever tell yo\i to bet more than one horse in the 
race ? 

Mr. Remer. Sometimes two horses. 

Mr. EicE. Would he bet the daily double? 

Mr. Remer. Ver}' seldom ; maybe once in a while. 

Mr. R.ICE. Where did the money come from that was used — I take 
it, then, you woidd follow instructions, go into the betting ring? 

Mr. Remer. That is right. 

Mr. Rice. And do something. Where did you get the money to 
make the bet with ? 

Mr. Remer. Well, it was wired to me. 

Mr. Rice. We wired it to you ? 

Mr. Remer. Yes. 

Mr. Rice. And that came by Western Union ? 

Mr. Remer. Western Union. 

Mr. Rice. Where would it be delivered to you ? 

Mr. Remer. Either at the hotel that I was staying at 

Mr. Rice. Wherever you were staying? 

Mr. Remer. That is right. 

Mr. Rice. That would be a money order by Western Union coming 
directly to you in your name? 

Mr. Remer. That is right. 

Mr. Rice. Who would be the sender ? 

Mr. Remer. Mr. Louis Rosenbaum. 

Mr. Rice. Rosenbaum? 

Senator Tobey. May I ask a question ? Would the telegram sending 
the money just merely say "Pay to Mr. Remer $4,000," nothing else? 

Mr. Remer. That is right ; that is all. 

Senator Tobey. But the instructions for betting came over the tele- 
phone ; the money was sent by Western Union ? 

Mr. Remer. That is right ; that is exactly true. 

Senator Tobey. Excuse me. 

Mr. Rice. Now, you would get instructions to go to the window. 
Would you actually place the money? Would you buy a ticket? 

Mr. Remer. I w^ould always get tickets for it, sure. 

Mr. Rice. At Bowie? 

Mr. Remer. Yes. 

Mr. Rice. You would always get tickets. Would you get money 
for the tickets? 

Mr. Remer. In some cases we would leave money with the cashier, 
so we would not have to go in and out of the race track with that 
money in our pockets, but at the end of the day we would figure it out. 

Mr. Rice. Arrangements were then made either at the beginning or 
at the end of the day, you would leave a substantial amount with the 
cashier of the track, whose name is Copley or something like that? 

Mr. Remer. Yes ; I think that was the name. 

Mr. Rice. And he was the cashier. You would leave how much 
money with him? 

Mr. Remer. Well, it depends on wdiatever I had, whatever I had; 
sometimes four, three thousand dollars. 

Mr. Rice. Four or five thousand dollars ? 

Mr. Remer. Yes. 

Mr. Rice. He was the cashier ; he did not sell tickets ? 

Mr. Remer. No; he did not sell them; he used to just cash. 



86 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Rice, But if you left the money with the cashier, he is down at 
one window, and you would go to another ticket window. What 
would you do, get that ticket? 

Mr. Remer. He would know how much money I had ; he would know 
between races how much money I had on deposit. 

Mr. Rice. You mean there were two clerks; one would sell the 
tickets, and one cashier, and they worked together on it ? 

Mr. Remer. That is right. 

Mr. Rice. Would you give them a slip, would you give them the 
slip, give the selling clerk a slip ? 

Mr. Remer. I w^ould give him a slip and take it back to the cashier, 
and he would either deduct or add to. 

Mr. Rice. What would be on the name of the slip ? 

Mr. Remer. Just the number and the name of the horse. 

Mr. Rice. On the program, the number and amount and your 
initials? 

Mr. Remer. That is right. 

Mr. Rice. At the end of the day, how would you settle up ? 

Mr. Remer. Well, we would check out, and if the amount was right, 
why, then, that is the way we worked 

Mr. Rice. You would clieck with the cashier ? 

Mr. Remer. That is right. 

Mr. Rice. And suppose you had money left over, what would 
you do ? 

Mr. Remer. Well, if it was too much of an amount I would leave it 
in there with him. If it was just a small amount I would take it 
back with me. 

Mr. Rice. You would leave it over for the next day. And if it 
cleaned you up, you would take a small amount, and replenish it the 
next day ? 

Mr. Remer. That is right. 

Mr. Rice. How about at the end of the meeting ? 

Mr. Remer. At the end of the meeting, whatever was left, I took 
it out of there, and used it at the next meeting, wherever I went there. 

Mr. Rice. How long have you been operating? You call yourself 
a come-back man ; is that all right for me to call you that? 

Mr. Remer. Yes; it is all right for you to call me that. 

Mr. Rice. How long have you been a come-back man? 

Mr. Remer. About 2 years. 

Mr. Rice. For 2 years ? Have you w^orked all that time for Rosen- 
baum ? 

Mr. Remer. Yes. 

Mr. Rice. And you have been steadily employed as a come-back 
man ? 

Mr. Remer. I will say about 30 weeks out of the year. 

Mr. Rice. About 30 weeks out of the year. 

Now then, how many tracks have you worked at? What are the 
tracks that you work at in your swing ? 

Mr. Remer. Oh, I imagine about eight, seven or eight of them. 

Mr. Rice. About seven or eight? What are they? 

Mr. Remer. Well, there are all the three Maryland tracks, there is 
Laurel, Pimlico, and Bowie. 

Mr. Rice. Yes. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 87 

Mr. Remer. Then, we had Havre de Grace — that is four Maryland 
tracks ; Atlantic City, Monmouth Park — that is six. That is about all. 
Just those. 
Mr, Rice. Now, then, didn't you go to Charles Town at one time? 
Mr. Remek. No, I didn't go to Charles Town. 

Mr. Rice. Did you start to go there ? 
Mr. Re3ieh. Too cold. 

Mr. Rice. Are you sure it was cold or was it heat ? [Laughter.] 

Mr. Remer. It is a little cold ; it was in December, it was too cold. 

Mr. Rice. It was also right after you were served with a subpena, 
too, was it not ? 

Mr. Remer. That is right. 

Mr. Rice. That you did not go. 

At any of these other tracks that you have mentioned, have you had 
arrangements inside the track enclosure to use a telephone? 

Mr. Remer. Well, the first year at Atlantic City for a couple of 
weeks they allowed it, and then they stoiDped it. 

Mr. Rice. After that you were not permitted to do that? 

Mr. Remer. No. 

Mr. Rice. What did they tell you ? 

Mr. Remer. Well, they just — they didn't give me any reason. 

Mr. Rice. Just that you cannot do it any more? 

Mr. Remer. That is right. 

Mr. Rice. At these other tracks, how do you operate? 

Mr. Remer. We find a phone as close to the race track as we can, 
and use that. 

Mr. Rice. You find a jihone as close to the race track as you can and 
use that. Is it your job to find the phone ? 

Mr. Remer. Yes. 

Mr. Rice. "V^Hiat arrangements do you make on the phone ? Is it in 
a private house or gas station ? 

Mr. Remer. Mostly private homes or gas stations. 

Mr. Rice. Any place you can make arrangements? 

Mr. Remer. The closest one you can find. 

Mr. Rice. Suppose it is a private home ; what arrangements do you 
make with the person ? 

Mr. Remer. Don't make any — just tell them I will give them a little 
present, or something like that, for the use of it. 

Mr. Rice. You will give them a little present, about $10 a day, or 
something like that ? 

Mr. Remer. It runs differently at times. 

Mr. Rice. What is the most? 

Mr. Remer. That is the most we ever pay. 

Mr. Rice. Around $1§ a day ? 

Mr. Remer. Yes. 

Mr. Rice. You pay that, then, out of your bank roll and charge that 
as an expense ? 

Mr. Remer. That is right. 

Mr. Rice. And you are paid a salary ? 

Mr. Remer. Yes, sir. 

Mr. Rice. Weekly? 

Mr. Remer. Yes, sir. 

Mr. Rice. I take it you draw your salary and expenses and settle up 
over the telephone with Rosenbaum ? 

Mr. Remer. That is right. 



88 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. EiCE. You do not receive a check? 

Mr. Remer. No. 

Mr. Rice. How about what they call the deducts, the withholding in 
there, social security and unemployment insurance ? 

Mr. Remer. We have that; I got a copy of mine with me right here. 

Mr. Rice. You have got your deducts with you ? 

Mr. Remer. Yes. 

Mr. Rice. That is your withholding statement ? 

Mr. Remer. Yes ; I just got that. 

Mr. Rice. The witness has produced a withholdmg statement 
for 1950, indicating his address as 737 Jefferson Avenue, Miami 
Beach, Fla. 

Mr. Remer. That is the same thing, only they forgot to change the 
address on it. I have been living there about a year. 

Mr. Rice. It is an old address? 

Mr. Remer. Yes. 

Mr. Rice. And under the heading "Employer" it reads "Louis David 
and Harry Rosenbaum, 5707 Vine Street, Cincinnati 16, Ohio." I will 
offer this 

Mr. Remer. Can I have it back ? 

Mr. Rice. You might need this. 

Mr. Remer. Yes ; I have got to send it in. 

(The document was returned to the witness.) 

Mr. Rice. Now, in going to these various tracks that you make on a 
swing throughout the year, what is your weekly salary ? 

Mr. Remer. It runs about $100 a week. 

Mr. Rice. Runs about $100 a week, more or less ? 

Mr. Remer. Well, when I am away from home, why then, I use that 
up, the difference I use up for expense; I get a little extra for expenses. 

Mr. Rice. You get a little extra for expenses ? Is that a set figure ? 

Mr. Remer. No ; it is different in every other town. 

Mr. Rice. It depends on how much it costs you to live. Do you get 
an allowance for an automobile? 

Mr. Remer. Yes. 

Mr. Rice. You get an allowance for tickets to go into the track ? 

Mr. Remer. Yes. 

Mr. Rice. Programs? 

Mr. Remer. Yes. 

Mr. Rice. Whether you go in or not ? 

Mr. Remer. That is right. 

Mr. Rice. And for your telephone, telegraph, and 

Mr. Remer. That is right. 

Mr. Rice. How about your meals ? 

Mr. Remer. Well, I don't charge for the meals, no; I just charge for 
those other incidental expenses that you just mentioned, those things. 

Mr. Rice. What would you say your average weekly expenses run 
while you were operating in an operation where you are outside of the 
track? 

Mr. Remer. Oh, including the salary and all, you mean? 

Mr. Rice. No ; your expenses, over your salary per week. 

Mr. Remer. I imagine about $150 or $200 a week. 

Mr. Rice. So that over your $100 salary you run from $100 to $200 
a week? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 89 

Mr. Kemer. No; $150 to $200 a week extra. 

Mr. Rice. Yes. 

Now, in your experience as a come-back man have you ever had a 
winning meetino-^ 

Mr. Remer. I don't think so. 

Mr. IvicE. You do not think you have ever had a winning meeting? 

Mr. Remer. No. 

Mr. Rice. So it is a constantly losing proposition, is it? 

Mr. Remer. Let me straighten you out on one thing about this 
dropi)ing of the price of a horse. You realize that every time we bet 
on a horse there is another horse in the same race that the price goes 
up on. You understand that. I mean, the public is getting an increase 
on the other horses, too; I mean, just the one horse doesn't drop, and 
the others stay there. As one horse drops the other horses go up, you 
know. 

I\Ir. Rice. Unless they happen to be holding the tickets on the same 
horse that you have. 

Mr. Remer. That is true, but there is a possibility that they are hold- 
ing a ticket on the other horse that the price goes up on. 

]VIr. Rice. Well, w^e appreciate that. But let us get back to the win- 
ning and losing. What would you say on a 10-day meeting would be 
the loss that Rosenbaum would have? 

Mr. Remer. Well, I never really kept track of it, but I know really 
one thing, all I know is I get money all the time; I never send any 
money back. 

Mr. Rice. You never send any back; it just keeps coming in all the 
time. 

What would you say at a track bigger than Bowie where the handle is 
bigger than Bowie, what would be your average day's play ? 

Mr. Remer. Well, it varied so much; some days we didn't get a bet 
all day long, and other days wo might have four or five bets in one day. 
I really never kept track of it. 

Mr. Rice. What is the biggest bet you ever handled on a single 
race? 

Mr. Remer. Oh, I have bet as much as $2,500 on the race. 

Mr. Rice. As much as $2,500; then did you tell me that you would 
bet more than that on across-the-board race? 

Mr. Remer. Well, we don't bet very seldom across the board ; it is 
just most of the time just to win. 

Mr. Rice. Would you bet as much as $2,500 on a eight-race program, 
on each race ? 

Ml'. Remer. You mean eveiy race ? 

Mr. Rice. Yes. 

Mr. Remer. No; I don't think so. It is very unusual that we bet 
that nuich. The average bet runs between $500 and $1,000 ; sometimes 
$200, it varies. There is c|uite 

Mr. Rice. Now, on an average 10-day meeting, how much money 
would you say that Rosenbaum would have to send you to keep you 
in business? ' 

Mr. Remer. Ten-day meeting? 

Mr. Rice. At a big track. 

Mr. Remer. Oh, iVill say six or seven thousand dollars. 

68958 — 51 — pt. 12 7 



90 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Rice. Six or seven thousand dollars you would lose in 10 days? 

Mr. Remer. Yes. 

Mr. Rice. That was over a 10-day meeting? 

Mr. Remer. Yes ; over a 10-day meeting. That is just approximate. 
I mean, I just don't know for sure. 

Mr. Rice. It would be interesting to know how you got into the 
business. How" were you trained and learned how to do it? 

Mr. Remer. Well, I just was around tlie race track all the time, 
and I 

Mr. Rice. You were just around the race track, you say? 

Mr. Remer. That is right. 

Mr. Rice. What happened then? 

Mr. Re3ier. And then I seen how this thing worked, and talked to 
a fellow who was doing it, and he suggested that I help him, and I 
did, and then I did it on my own, that is all. 

Mr. Rice. Who was that fellow ? 

Mr. Remer. Well, now, you got me. All I know him is by the name 
of Archie ; I don't know his last name. 

Mr. Rice. Did you ever meet a man by the name of Cogan? 

Mr. Remer. Mr. Cogan is in this business here with us, too; he is 
here now, and he taught me; I mean he explained how to do it, and I 
just handled it myself. 

Mr. Rice. Is it Cogan who is here today, is he the fellow you are 
talking about ? 

Mr. Remer. Yes. 

Mr. Rice. And isn't he the man who broke you in a little bit? 

Mr. Remer. No; he didn't break me in, but he was doing it at the 
same time I was at different race tracks. 

Mr. Rice. At different tracks? 

Mr. Remer. Yes ; at different race tracks. 

Mr. Rice. Yes ; but for the same boss. 

Mr. Remer. Yes. 

Senator Tobey. Did you have to take an aptitude test? 

[Laughter.] 

Mr. Remer. I don't know as I did or not. I don't think it requires 
very much for something like that; just follow orders. 

Senator Tobey. These telephone calls that you received, sir, and 
probably the question is not germane, but I ask you, when those who 
are serving the Senate put in calls with respect to anything of impor- 
tance to constituents in matters of legislation, we often have to wait 
for calls, 5, 10, 20 minutes, half an hour, while the operators are getting 
them, but apparently in this business you are in, it is almost instant 
communication with you and the people calling you. 

Mr. Remer. No; sometimes it takes a long time to get through, and 
then sometimes it gets through when it is too late; they get through, 
and the race is over already. 

Senator Tobey. Do they take a wire and put in a call to hold it open 
by arrangement with the operator, so that you have jn-actically a 
continuously open line there? 

Mr. Remer. No ; I don't think it is worked that way. 

Senator Tobey. What? 

Mr. Remer. I don't think it is worked that way. I think it is put 
through the regular channels. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 91 

Senator Tobf.y. Why don't jou hanistrino- yourselves and cut your 
own hearts out by not gettino- the call throu<>;h in time in a particular 
race ? 

Mr. Re3ier. It does happen at times that you get the call too late. 
By the time you get a call the race has already started. 

Senator Tobey. Do you use radio or teletype? 

Mr. Remer. No, sir; nothing at all, just the phone. 

INIr. Rice. How did you get in touch with Rosenbaum originally ? 

Mr. Remek. Through this party who introduced me over the phone. 

Mr. Rice. What party is that? 

Mr. Remer. This fellow- Archie. 

Mr. Rice. What is Archie's name? 

Mr. Remer. I don't know\ Maybe Mr. Rosenbaum will know- it 
wlien you talk to him. 

Mr. Rice. I imagine he does. You do not know ? 

]\Ir. Remer. 1 don't. 

Mr. Rice. Archie introduced you to Rosenbaum over the phone? 

Mr. Remer. That is right. 

Mr. Rice. Where were you calling to then? 

Mr. Remer. Well, when I talked to him, then I went to another 
race track. I met him in New York. It was in New York at the time 
that I met him, and then I went to New Jersey. 

Mr. Rice. Who did you meet in New York? 

Mr. Remer. This fellow Archie. 

Mr. Rice. You met Archie in New York? 

Mr. Remer. Yes. 

Mr. Rice. When did you meet Rosenbaum ? 

Mr. Remer. I just met him through over the phone; he spoke to 
me and told me to go to New Jersey and sent me the money to go 
there. 

Mr, Rice. He sent j'ou money to go to Jersey, and put you in busi- 
ness by hiring you over the telephone? 

Mr. Remer. That is exactly right. 

Mr. Rice. Now, when did you first meet Rosenbaum? 

Mr. Remer. I met him during the winter of last year. 

Mr. Rice. Where Avas that ? 

Mr. Remer. In Miami. 

Mr. Rice. Was that the only time you have seen him? 

Mr. Remer. That is the only time I saw him. 

Mr. Rice. What took place in Miami when you met him? 

Mr. Remer. I was not w-orking in Miann. 

Mr. Rice. You were not what? 

Mr. Remer. I was not working in Miami. 

Mr. Rice. You were not working, you met him, though? 

Mr. Remer. Yes. 

Mr. Rice. What took place? 

Mr. Remer. Nothing. It w-as just — we introduced ourselves, and 
that is all ; then he told me that when they opened up next year that 
I would work for him again next year. 

Mr. Rice. I see. 

Mr. Remer. That is this past year that went by. 

Mr. Rice. Have you ever been to Cincinnati ? 

Mr. Remer. No. 



92 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Rice. Never been in the operation there? 

Mr. Remer. No, sir. 

Mr. Rice. I notice that you were calling from Bowie, you were 
calling an Axtell number in Cincinnati ? 

Mr. Remer. Yes. 

Mr. Rice. Where did you get that number? 

Mr. Remer. Well, during the course of the conversation he would 
tell me what number to call in case I ever needed him if anything 
went wrong, and he did not get on or something like that, to always 
to call back and verifv 

Mr. Rice. Well, the number is Axtell 1485 or 1495, which was it? 

Mr. Remer. 1495. 

Mr. Rice. 1495. 

Do you know where that number is located, and who it is listed to? 

Mr. Remer. No, I don't. I have never been to Cincinnati. 

Mr. Rice. When you make the call you call Axtell 1495, and say 
Cincinnati, Covington, Newport, or what ? 

Mr. Remer. I say Cincinnati. 

Mr. Rice. Cincinnati? It is actually across the river, is it not? 

Mr. Remer. I don't know ; I have never been there. 

Mr. Rice. Don't you tell the operator to 

Mr. Remer. Yes, she gets it through Cincinnati; I always ask for 
Cincinnati, and I get it. 

Mr. Rice. You ask for Cincinnati. 

Now, I have a record here of some of the calls you made one day 
that may be interesting. These are made from Forest 1946 in Balti- 
more. What were you doing there ? 

Mr. Remer. That is for the Pimlico meeting. 

Mr. Rice. That is Pimlico, is it ? Is that in the track ? 

Mr. Remer. Right near the race track. 

Mr. Rice. Right near the track ? What place is that ? 

Mr. Remer. That is a private home. 

Mr. Rice. Right near the track, a private home? Whose home 
is it? 

Mr. Remer. It is Mrs. Knisley. 

Mr. Rice. How do you spell that ? 

Mr. Remer. K-n-i-s-le-y. 

Mr. Rice. What arrangements did you make with Mrs. Knisley? 

Mr. Remer. Well, I was to pay her, you know, give her a gift when 
I got through at the end of the meeting, and give her a little money 
for the use of the phone. 

Mr. Rice. I see. AVhat is her address, do you know, what street? 

Mr. Remer. Yes, I can tell you. I think I have got it here: I don't 
have her address, then. 

Mr. Rice. Do you remember what street it was? 

Mr. Remer. It is the street that faces the race track. 

Mr. Rice. The street that faces the old Pimlico track ? 

Mr. Remer. That faces the old Pimlico Race Track. 

Mr. Rice. Now, I see that you called Axtell 1495 on November 11; 
that is wdien they were running at Pimlico. 

Mr. Remer. Yes. 

Mr. Rice. At 1 : 16 p. m., 1 : 44 p. m., 2 : 12 p. m., 2 : 44 p. m., 3 : 10 
'^. m., 3:40 p. m., 4: 10 p. m., and 4:41 p. m. — eight times. 

Mr. Remer. Well, for every race, once for every race. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 93 

Mr. Rice. Once for each race, and yon make all of yonr telephone 
calls collect? 

]\Ir. Kemer. Yes. 

Mr. Rice. Now then, tell us whether you prefer to work with the 
track management or outside the track on the proposition. 

Mr. Remek. Well, it is better to work as close as you possibly can ; 
if you can get anything in the race track or right in the race track, it 
is preferable, but it is not easy to do that. 

Mr. Rice. Why? 

Mr. Remek. Just to save the time. 

Mr. Rice. Save the time? 

Mr. Remer. Yes. 

Mr. Rice. How about handling the money? Doesn't it help you to 
be able to put the money up with the cashier? 
. Mr. Remer. Yes, because it is 

Senator Tobey. Did you ever slip these men some money on the side 
to get that favor? 

Mr. Remer. Well, I would make them a little gift. 

Senator Tobey. In other words, to get the favor of the special privi- 
lege of doing business you would give them something in cash? 

Mr. Re3ier. Yes. 

Senator Tobey. You bu}^ them, in other words? 

Mr. Remer. Well, it is not a question of that ; it is just for the 
services rendered. 

Senator Tobey. You grease the palms, you grease the wheels, you 
get results by passing out money. 

Mr. Remer. All they do is just hold the money for me. 

Senator Tobey. How much do you pay these fellows for this privi- 
lege? 

Mr. Remer. Well, it varies at times; sometimes $20, $25 for the 
meet. 

Mr. Rice. Well, as a matter of fact, you prefer to keep the money 
there to keep from being highjacked, do you not? 

Mr. Remer. That is the main reason for it. 

Senator Tobey. It is really insurance, is it not ? 

Mr. Remer. It is insurance, but if anybody would try to held me 
up they would not get that much money. 

Senator Tobey. No one would try to hold a man up on the race track, 
would they? 

Mr. Remek. No; but if I had to carry it out of the race track; I 
don't mean in the race track. 

Senator Tobey. Have you ever been held up ? 

Mr. Remer. No, sir. 

Senator Tobey. Do you carry a gun? 

Mr. Remer. No, sir. 

Mr. Rice. When you operate outside of the track, does it become 
necessary sometimes to hii-e another employee to work with you? 

Mr. Remer. Yes, it does. 

Mr. Rice. What is his function ? 

Mr. Remer. Well, just as an assistant, I mean, in order to save time, 
when I get an order in case they might have another order, why, I just 
send him in with the first one. Then if we have another one, then I 
take it in. Sometimes we bet two or three different horses in one race. 



94 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr, Rice. Is it a matter of split-second timiiifi;, your getting it over 
the telephone and sending yonr runner over to the window at the very 
last moment I 

Mr. Remer. Yes. 

Mr. Rice. When you have an employee like that, do you hire him^ 

Mr. Remer. Yes. I just take him on my own to help me. 

Mr. Rice. You take him on your own, and what you pay him you 
charge in as expense, too ? 

Mr, Remer, Yes. 

Mr. Rice. I see, and you telephone your expense in to Rosenbaum 
daily or weekly 'I 

Mr. Remer. That is right. 

Mr. Rice. Well, now, at any other track besides Bowie, have you 
had an arrangement with the cashier or with the track office to use the 
telephone or the cashier's window ? 

Mr. Remer. Well, we did have it for a while, and then later on they 
told us not to. At first they allowed it, and then later on after a short 
period they said it would be best not to leave it with them ; they didn't 
want to bother with it. 

Mr. Rice. So that so far as you know — where was that other track i 

Mr. Remer. Well, practically all race tracks. 

Mr, Rice. Practically all'^ They used to do it and now they have 
all shut down, except Bowie, is that it ''. 

Mr. Remer. Well, I guess Bowie is shut down, too. They held it 
up to the last minute. 

Mr. Rice. 1 am going to show you a photostatic copy of a Western 
Union money order dated November 2'2, 1950, paybale to Dick Remer 
in the amount of $4,000, telegraphed from Cincinnati, Ohio, on No- 
vember 22, 1950, and bearing on the back writing, and I will ask you 
if you recognize that [handing document to witness]. 

Mr. Remer. Yes, it looks like one that was sent to me. 

Mr. Rice. That is your name on the back, the endorsement? 

Mr, Remer. Yes. 

Mr. Rice. And that, then, is one of the money orders that you 
received ? 

Mr. Remer. That is right. 

The Chairman. Let that be exhibit No. 7. 

(The document referred to was marked "Exhibit No, 7," and is on 
tile with the committee.) 

Mr. Rice. I show^ you a second document, dated the same date, No- 
vember 22, 1950, payable to Dick Remer at Bowie, Md., race track; 
name of sender Rosey, and sender's full name Louis Rosenbaum, and 
I ask you if that relates to the same transaction [showing document to 
witness]. 

Mr. Remer. This evidently was sent from Cincinnati; is that right? 

Mr. Rice. Yes. 

Mr. Re:mer. Well, I would not know anything about this, 

Mr. Rice. From this you got $4,000 that day, didn't you? 

I^Ir. Remer. Yes ; that must be the same thing. 

Mr. RrcE. That is the same thing. You called Rosenbaum "Rosey" ? 

Mr. Remer. Yes; for short. 

Mr. Rice. That is Louis you are talking about? 

Mr, Remer, Yes, 

The Chairman, Let the other be exhibit No. 8. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 95 

(The document referred to was iiuirked "Exhibit No. 8," and is on 
file with the committee.) 

The Chairman. Is there anything; else, Mr. Eice? 

Mr. Eice. While you were at Bowie, were you conscious of the activ- 
ities of other contact men there ? Did you know there were other men 
there ? 

Mr. Eemer. Well, 1 suppose there were other ones there. I suppose 
there were. 

Mr. Eice. As a matter of fact, you know ; you know Norman Helwig. 
don't you? 

Mr. Eemer. Yes. 

Mr. Eice. Was he there? 

Mr. Ee:\ier. He was. 

Mr. Eice. Who did he operate for? 

Mr. Ee:mer. W^ell, I really don't know for sure; I would not want 
to say on that. 

Mr. Eice. Wliat is the scuttle butt on that ; what is the rumor on 
that ? 

JNIr. Eemer. AVell, the rumor was that he was working out of St. 
Louis. 

Mr. Eice. St. Louis? 

Mr. Eemer. Yes. 

Mr. Eice. How about the fellow from Kingston? 

Mr. Eemer. He was there, too. 

Mr. Eice. Who was that, Arthur Arnold? 

Mr. Eemer. No, I don't think that was his name. 

Mr. Eice. Who was the fellow working from Kingston ? 

Mr. Eemer. I really don't know his name. I know him Avhen I see 
him ; he is a big stocky fellow, but I don't know his name. 

INIr. Eice. Were they using the same telephone you were using? 

Mr. Eemer. No. 

Mr. Eice. They were using another one in the office there, weren't 
they? 

Mr. Eemer. Not in the same office that I was in. 

Mr. Eice. But it was woi'king off the switchboard, was it not? 

Mr. Eemer. It is possible. 

Mr. Eice. Who is the fellow up in Kingston, is his name Monis or 
something like that ? 

Mr. Eemer. I think so, I am not sure now ; this is all hearsay. 

Mr. Eice. Kingston, N. Y. 

Mr. Eemer, Yes, Kingston, N. Y. 

INIr. Eice. Yes. So that you had some one there from St. Louis. 
Was that the Carroll-Mooney outfit ? 

Mr. Eemer. I imagine so. 

Mr. Eice. And the Monis' outfit from Kingston? 

Mr. Eerier. Yes. 

Mr. Eice. Anybody else? Erickson ? 

Mr. Eemer. I don't know. 

Mr. Eice. Dobkin ? 

Mr. Ee^mer. If they were there, I don't know ; they may have been, 
[ am not sure. 

]Mr. Eice. They could have been ? 

Mr. Eemer. That is right. 

The Chairman, All right. 



96 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. KiCE. Maybe we can straighten out on one tliino;. 

I notice, according- to the information, that the cashier was not 
Copley; that was the seller. The cashier was a fellow by the name 
of Tnfano at Bowie ; is that right, something like that ? 

]\Ir. Remer. I thought he was the cashier, Copley. 

Mr. Rice. Copley was at window 101, the $100 window. 

Mr. Remer. At the $50 window. 

Mr. Rice. $50 window ? 

Mr. Remer. I may be wrong with the names: I am not sure of the 
names. 

Mr. Rice. One or the other? 

Mr. Remer. Yes. 

The Chairman. All right. Senator Tobey ? 

Senator Tobey. You testified that you only met Mr. Rosenbaiun 
once, and that was down in Florida ? 

Mr. Remer. That is right. 

Senator Tobey. And you were not then working for him; is that 
right ? 

Mr. Remek. I worked for him the year previous, the summer 
l)revious, and then I met him that winter. 

Senator Tobey. When you went to work for Mr. Rosenbaum you 
did not know much about him, did you ? 

Mr. Remer. No ; I didn't. 

Senator Tobey. He is a big operator, somebody told 3^ou ? 

Mr. Re3ier. That is right. 

Senator Tobey. Did you look him up in Dun & Bradstreet? 

Mr. Remer. No ; I didn't. 

Senator Tobey. You took it all on faith ? 

Mr. Remer. I did. 

Senator Tobey. I think, Mr. Chairman, 1 may say that this is rather 
a remarkable dissertation on the high ethics of the business. Here 
is a man who deals in large sums of money, employs an agent he met 
but once; no bond is given, but there is that mutual confidence and 
faith which is one of the outstanding cliaracteri sties of American 
business life. 

Sii', have you ever heard of the o{)eration known as the ''scalp" 
in horse racing? 

]Mr. Re3ier. That is a new name for me. 

Senator Tobey. You never heard that? 

Mr. Remer. No; I didn't. 

Senator Tobey. What would it indicate to you, takiug the top off? 

Mr. RE3r?:R. Well, that is the way it would indicate. 

Senator Tobey. Have you ever heard that exi)ression used^ 

Mr. Remer. Scalp? 

Senator Tobey. The '"scalii," yes. 

Mr. Remer. No ; I never did. 

Senator Tobey. That is all ; thank you. 

The Chairman. You did not know whether this Rosenbaum outfit 
is a corporation, or a partnership, or what? 

Mr. Remer. No; I don't. 

The CiiAiR.AiAN. All you know about it is what your withholding 
statement shows? 

JMr. REiMER. That is riaht. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 97 

The Chairman. What do you do in between times when the meet- 
ino;s are not on? 

Mr. Remer. AVell, I am employed practically the biggest part of 
the year, and then I jnst try to do — I stay aronnd the race track 
and try to bet? 

The Chairman. Try to do what ? 

JNIr. Re31er. I try to make a living for a couple of months, you 
know, that I am off of work. 

The Chairman. What do you try to make a living at, what doing? 

Mr. Remer. Pick a horse and bet on it sometimes. 

Senator Tobey. You love horses? 

Mr. Remer. Yes; I do. 

The Chairman. You mean, during the time when no meets are on, 
>()U do what, stay around the race tracks? 

Mr. Remer. Yes. 

The Chairman. Well, there are no horses running, are there? 

Mr. Remer. Well, they are in Miami; yes. That is my home down 
there. 

The Chairman. So the meets are going on somewdiere most all of 
the time? 

Mr. Remer. All of the time. 

The Chairman. And you go from one track to another? 

Mr. Remer. That is right. 

The Chairman. The east coast or the west coast ? 

Mr. Remer. No; I have never been to the w^est coast, just to the 
east coast. 

The Chairman. Just the east coast. You go to the track, do you, 
at New Orleans? 

Mr. Remer. No. 

The Chairman. Just the east coast. 

When you Avere doing this come-back money business, did you make 
bets of your own? 

Mr. Remer. Very, very rarely. 

The Chairman. Very rarely. 

I suppose, Mr. Remer, that every big commissioner has to have a 
come-back man at the tracks ; is that correct ? 

Mr. Remer. Yes; I imagine they would. It is part of their busi- 
ness to have somebody. 

The Chairman. How many do you estimate there are at a good- 
sized track, at a big meet, doing the same thing that you are doing? 

Mr. Re3ier. Well, I don't know for sure. I would say four or five 
anyw^ay. 

The Chairman. Mr. Rosenbaum is the only person you have ever 
worked for at this kind of business; is that correct? 

Mr. Remer. No. The year before that I worked for another man 
out of Miami, but he was just on a very small scale. 

The Chairman. Who was that ? 

Mr. Remer. A fellow by the name of Bennie Kay. 

The Chairman. When you have a confederate, somebody working 
with you, does he take the phone call and then tell you through the 
fence what to do, and then you go make the bet ? 

Mr. Remer. Sometimes we w^ork that way. We try to work it the 
fastest we can. 



98 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Tlie Chairman. Whatever the best system you can work out, that 
is the way you work ^ 

Mr. Remer. That is right. 

The Chairiman. When you work it yourself — that is, when you go 
out to some house outside and then come back in and make a bet — do 
you have to pay a ticket or buy a ticket every time you come and go, 
or do you get a pass in and out ? 

Mr. Remer. No; we always buy a ticket the first time we come in, 
and then use 

The Chairman. Then you have the pass, so that you can go outside. 

Mr. Remer. Yes. 

The Chairman. Don't they get suspicious of your running in and 
out of the track ? 

Mr. Remer. No; I think most of them have an idea what we are 
doing; I don't think it is a question of trying to hide anything. 

The Chairman. Don't you sort of give the attendant at the gate a 
little present, too ? 

Mr. Remer. No. We just buy a ticket and use our pass out. You 
know, we get an O. K. 

Senator Tobey. Senator Kefauver S]:>oke about looking through the 
fence. Is that a knothole in the fence? 

Mr. Remer. Oh, no. 

Senator ToBEY. What does he mean? 

Mr. Remer. It is just like if we have a distance to run, you know, 
we have to get there pretty quick ; I would go half of the way and then 
hand the program to somebody standing inside of the race track. 

The Chairman. Well, sometimes don't you have a signal system so 
that he can signal you about how nuich to bet ? 

Mr. Remer. No : I never worked with any signal system. 

The Chairman. You never worked that way ? All right. Is there 
anything else ? 

Mr. Rice. Yes. When you are talking to Rosenbaum on the phone 
before each race, do you tell him the results of the previous race, or 
track conditions 

Mr. Remer. No. 

Mr. Rice. Changes in jockeys? 

Mr. Remer. I don't call him until about 5 minutes before the race 
is run. By that time they evidently have the results already, long 
before that. 

Mr. Rice. He is not interested in that. How does he get his infor- 
mation about it ? 

Mr. Remer. I really don't know it. 

Mr. Rice. He gets it over the wire? 

Mr. Remer. I don't know. 

Mr. Rice. There is one other thiug that I think probably the public 
would be interested in. When you come-back fellows go up to the 
window don't you find that frequently there are a number of track 
bettors that are trying to get the information from you about what 
number you are going to bet on ? 

Mr. Remer. That is true; yes. They all want to bet on the same 
horses. 

Mr. Rice. They all want to bet on the same horse? 

Mr. Remer. That is right. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 99 

Mr. Rice. They think tliat is goin^ to be smart money? 

Mr. Remer. That is rio:lit. 

INIr. liicE. So that they try to (ret acquainted with you and iind out 
what horse you are bettino; on ? 

Mr. Kemer. Well, they don't try to exactly get acquainted but try 
to hear tlie horse that you are betting on, but it doesn't do them too 
much good. 

Mr. Rice. And you tell them and they run up to the window and bet, 
too, on the same horse? 

Mr. Remer. That is right. 

Mr. Rice. And they don't understand that each and every week that 
you operate you are losing money? 

Mr. Remer. Well, they think that we are making money with these 
horses. 

Mr. Rice. They think you are making money? 

Mr. Remer. Yes. 

Mr. Rice. Well, it might be well to straighten out. [Laughter.] 

The Chairman. Do you encourage them also to bet on the horse 
that you are betting on? 

Mr. Remer. No. Half the people I don't even know who they are, 
I mean. 

The Chairman. You tell them i-ather easily what horse you are 
betting on ? 

Mr. Remer. I try not to even bother telling them, but they try to get 
close to you, you know, when you are making a bet, and watch the 
tickets and everything else. 

The Chairman. But did Mr. Rosenbaum tell you sometimes that 
$2,500 should be bet on No. 8 or $2,000, provided you see some other 
people following your lead getting bets of $500? 

Mr. Remer. No, nothing like that. 

Senator Tobey. Have you ever thought through your race-track 
experience, which has been A-ery general, as you have told us here, that 
such things as fixing horses or fixing jockeys take place? 

Mr. Remer. Well, personally, I really don't think those things hap- 
pen but, of course, you read about a lot of things like that, but I 
really don't think anything like that happens around the race tracks. 

Senator Tobey. Don't they make frequent saliva tests to see if the 
horse has been doped? 

Mr. Remer. Of course, that is, the individual trainer, and if he 
wants to take a chance of doing something like that, he is doing it on 
his own, but I don't think that anybody knows about those things. Of 
course, I really don't know. I would not want to 

The Chairman. All right, that is all, Mr. Remer. Thank you. 

Mr. Rk^e. Mr. Fred Cogan. 

The Chairman. Mr. Cogan, do you solemnly swear the testimony 
you give will be the truth, the whole truth, and nothing but the truth, 
so help you God ? 

Mr. Cogan. Yes, sir. 

The Chairman. Now, we have the general picture, so let us' get 
down to the essential points with this witness, 

Mr. Rice. Your name is Fred Cogan? 



100 ORGANIZED CRIME IN INTERSTATE COMMERCE 

TESTIMONY OF FRED COGAN, NEW ORLEANS, LA. 

Mr, CoGAN. Yes, sir. 

Mr. Rice. Where do you live, Mr. Cogan? 

Mr. Cogan. 1514 Mandolin, New Orleans. 

Mr. Rice. 15U Mandolin Street, New Orleans? 

Mr. Cogan. Yes, sir. 

Mr. Rice. Where were you when yon received a subpena ? 

Mr. CoGAN. At New Orleans. 

Mr. Rice. At the Fair Grounds track? 

Mr. CoGAN. Yes, sir. 

Mr. Rice. What were you doing? 

Mr. CoGAN. I had just made a bet. 

Mr. Rice. You had just made a bet? xlnd you received a subpena 
along with the results; is that it? 

Mr. CoGAN. Yes, sir. 

Mr. Rice. Tell us about your operation as quickly as you can, Mr. 
Cogan ; who you worked for and how you got into the business. 

Mr. CoGAN. What do you mean ? 

Mr. Rice. Who are you working for ? 

Mr. Cogan. I work for Mr. Rosenbaum. 

Mr. Rice. You are working for Louis Rosenbaum? 

Mr. CoGAN. Yes, sir. 

Mr. Rice. How long have you been doing tliat ? 

Mr. CoGAN. About a year and a half. 

Mr. Rice. About a year and a half? What did you do before that? 

Mr. CoGAN. I was in the construction business. 

Mr. Rice. I see. 

Now, then, how did you get into business with Louis Rosenbaum? 

Mr. CoGAN. I went out of business and I met Mr. Rosenbaum so- 
cially, and I asked him if he had a job for me. 

Mr. Rice. Yes. 

Mr. CoGAN. And he said, "Yes." 

Mr. Rice. Yes. What were the arrangements? 

Mr. CoGAN. There Avere no arrangements made. He said that he 
may be able to i)ut me to work. 

Mr. Rice. And he did? 

Mr. Cogan. And about a month later he did. 

Mr. Rice. What were your arrangements as to compensation? 
What were you paid? 

Mr. Cogan. At that time I was paid $100 a week. 

Mr. Rice. $100 a week? 

Mr. Cogan. Yes. 

Mr. Rice. What have you been receiving i-ecently? 

Mr. Cogan. $150. 

Mr. Rice. $150, plus expenses? 

Mr. Cogan. It is according to what you call expenses. 

Mr. Rice. Yes. 

Mr. Cogan. I mean expenses to me mean hotel, food, and everything 
else. 

Mr. Rice. Hotel, food, and everything else? 

Mr. Cogan. But I don't get that. I mean I may get fares from one 
place to another. 

Mr. Rice. Yes. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 101 

Mr. CoGAN. And if something ooes wrong with my car, but that 
would be about it. 

Mr. Rice. You get your transportation. 

You heard Dick Remer testify and I take it your operation is sub- 
stantially the same at tracks for Rosenbaum as Remer's ; is that correct? 

Mr. CoGAN. No; I don't have any telephones inside tracks. 

Mr. Rice. You do not have any tracks where you have a telephone. 

Now^, at the Fair Grounds track, how did you make your arrange- 
ments there for a telephone? 

Mr. CoGAN. I went to two or three different places and asked them 
if I might use the phone during the day to receive tele})hone calls. 

Mr. Rice. Yes; and one of those was John Cefalu? 

Mr. CoGAN. Yes, sir. 

Mr. Rice. At 1719 Du Plain Street? 

Mr. CoGAN. I am not sure about the address. 

Mr. Rice. That street is right across the track, is it not ? 

Mr. CoGAN. I am not sure about the street is wrong. 

Mr. Rice. You think the street is wrong? 

Anyway, it was John Cefalu, was it not? 

Mr. CoGAN. Yes, sir. 

Mr. Rice. And he had a telephone there which was Bywater GOIG? 

Mr. CoGAN. Yes, sir. 

Mr. Rice. Wasn't his house right across from the track? 

Mr. CoGAN. Yes, sir. 

Mr. Rice. Isn't his house right across from the track ? 

Mr. CoGAN. Yes. 

Mr. Rice. How much did you pay him a day for the use of that 
telephone? 

Mr. CociAN. There is no set price. I buy gifts for the kids; I buy 
gifts for his wife, and may give money once in a while, but there is no 
set price. 

Mr. Rice. I have a note here indicating that while I was talking to 
you, you said something about $10 a day. 

Mv. CoGAN. It might amount to it, but there is no set price. 

Mr. Rice. I see. 

Well, now, when you made the arrangements with Cefalu, wasn't 
the telephone changed from an ordinary listing to a nonpublished 
listing at your request ? 

Mr. CoGAN. Yes ; because he was getting a lot of personal calls and 
I asked him to do me a favor and change the phone. 

Mr. Rice. So he switched from a regular phone to a nonpublished, 
at your request, and the bill remained in his name, the listing remained 
in his name? 

Mr. CoGAx. I think so. 

Mr. Rice. Yes. It didn't go over to your name? 

Mr. CoGAN. That is right. 

Mr. Rice. Who pays the telephone bill at the end of the month? 

^Ir. CoGAx. There is no telephone bill except may be three or four 
dollars. 

Mr. Rice. Who pays that? 

Mr. CoGAN. He does. 

Mr. Rice. He does ? 

Mr. CoGAN. Yes, sir. 



102 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr, Rice. And all your calls that you make are collect calls? 

Mr. CoGAN. Yes, sir. 

Mr. Rice. I see. 

Now, then, what telephone number did you o;et in touch with in 
Cincinnati ? 

Mr. CoGAN. Axtell 1499. 

Mr. Rice. 1499? Who were you asking- for on the number? 

Mr. CoGAN. I wouldn't have to ask for anyone. 

Mr. Rice. Whoever answered was the man? 

Mr. CoGAN. The operator would say "Mr. Cogan is calling." 

Mr. Rice. "Mr. Cogan is calling," and then they would accept it? 

Mr. Cogan. Yes. 

Mr. Rice. Then you talked to Louis sometimes? 

Mr. Cogan. Very seldom. 

Mr. Rice. Occasionally? 

Mr. Cogan. Occasionally. 

Mr. Rice. At the Axtell number ? 

Mr. CtxjAN. Yes, sir. 

Mr. Rice. Would you ask for Cincinnati or Covington or Newport? 

Mr. Cogan. Cincinnati. 

Mr. Rice. Cincinnati. As a matter of fact, it was across the river. 

Mr. Cogan. I still asked for Cincinnati. 

Mr. Rice. You still asked for Cincinnati ? 

Mr. Cogan. Yes, sir. 

Mr. Rice. Would you hear the operator saying something about it? 

Mr. Cogan. She Avould say, "Cincinnati," sir. 

Mr. Rice. Wouldn't she say "Newport"? 

Mr. Cogan. No. 

Mr. Rice. Hoav do you i-eceive your money to bet with, Western 
Union ? 

Mr. Cogan. Western Union. 

Mr. Rice. Where would that be sent to you ? 

Mr. Cogan. Whatever address I happened to be at. 

Mr. Rice. Wherever yon lived? 

Mr. Cogan. Yes, sir. 

Mr. Rice. How much would you receive each week ? 

Mr. Cogan. No set amount. 

Mr. Rice. No set amount ? What would they run about, Mr. Cogan ? 

Mr. Cogan. Might run a thousand, two thousand dollars. 

Mr. Rice. A thousand, tw^o thousand a week? 

Mr. Cogan. No, sir ; whenever I might get a check. 

Mr. Rice. Whenever you needed it. 

In your experience as a come-back man have you ever had a winning 
meeting? 

Mr. Cogan. No, sir. 

Mr. Rice. It is a constantly losing ]n'oposition with you, too, or 
with Louis? 

Mr. Cogan. Over the period of the meeting. 

Mr. Rice. Over the period of the meeting you are bound to lose? 

Mr. Cogan. No. I might only lose a dollar sometimes, I mean, but 
I probably lose. 

Mr. Rice. Sometimes you lose less than others? 

Mr. Cogan. That is right. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 103 

Mr. Rice. Did you ever know of a meetiiio; when you won? 

Mr. CoGAN. I don't remember. 

Mr. Rice. I have here a i)rof>ram from the Fair Grounds, ofticial 
program, for Saturday, January i27, 1951. That is the day that you 
were served with a subpena, isn't that right? 

Mr. CoGAN. Yes, sir. 

Mr. Rice. And I think it would be helpful if you would explain for 
the Senators what these notations are on the program. 

This is a program you used that day, isn't that right ? You recog- 
nize it as your figures? 

Mr. CoGAN. Yes; I do. 

Mr. Rice. These, I believe you said, were some personal notations 
you had of your expenses ? 

Mr. CoGAN. That is right. I just said they were personal notations. 

Mr. Rice. Personal notations? 

Mr. CoGAN. That is right. 

Mr. Rice. All right, sir. What are these figures here "1716"? 

Mr. CoGAN. I believe — I am not quite sure now^, but I believe — that 
is i^robably what I might have started off with at the beginning of 
the day. 

Mr. Rice. This is at the top of the first race, the figure "1716" 
appears. What does that mean, your bankroll? 

Air. CoGAN. It might be my bankroll for that day. 

jVIr. Rice. What is it ? You wrote it. 

iNfr. CoGAN. I don't know now. 

Mr. Rice. What was it then? 

Mr. CoGAN. I don't know. It probably was my bankroll at the 
beginning of the day. 

Mr. Rice. It is probably your bankroll, you are pretty sure of that? 
I think that is what you told me it was. 

Mr. CoGAN. Yes. 

Mr. Rice. What is the "555" under that? 

"Slv. CoGAX. The "555" are expenses that occurred for 2 weeks. 

Mr. Rice. So that your 2 weeks' "expenses" were deducted from 
your bankroll, and you started the 27th with $1,161? 

Mr. CoGAN. Yes, sir. 

IVIr. Rice. Now then, you have horse No, 4, Rockwood Lou, circled. 
What does that mean? 

Mr. CoGAN. He won the race that day. 

Mr. Rice. He w^on the race. Then you have got something next to 
him. What does that indicate? 

Mr. CoGAN. That means he ran a dead heat with No. 10. 

Mr. Rice. He ran a dead heat with No. 10? I think I remember 
that race. [Laughter.] 

He ran a dead heat with Fondest Hope. Did you place any bets in 
that race? 

Mr. CoGAN. No, sir. 

Mr. Rice. You merely are indicating winners for your own amaze- 
ment. 

NoAv, at the second race you have got the figure "215" at the top. 

Mr. CoGAN. That is post time. 

INIr. Rice. That is post time? Now then, you have got King Twig, 
the No. 1 horse, circled. 

Mr. CoGAN. He won the race. 



104 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Rice. He is the winner. You have got No. 9, he ran second? 

Mr. CoGAN. That is second. 

Mr. Rice. And No. 2 ran third ? 

Mr. CoGAN. Yes, sir. 

Mr. Rice. Was any bet placed? 

Mr. CoGAN. No, sir. 

Mr. Rice. You have got the third race, there are some notations 
here. These apparently are odds — oh, no, that is paid. 

Mr. CoGAx, I don't know what that is now. It is not 

The Chairman. Speak up, we cannot hear anything that is going 
on. 

Mr. Rice. What does the "241^" indicate? 

Mr. CoGAX. Tliat is the post time for the next race. 

Mr. Rice. And you have got the winner Calm Bay. Any bets? 

Mr. CoGAN. No, sir. 

Mr, Rice. That is post time, no bets? 

Mr. CoGAN. No bets. 

Mr. Rice. Post time, any bets? 

Mr. CoGAN. No bets. 

Mr. Rice. Any bets on the sixth? 

Mr. CoGAN. No, sir. 

Mr. Rice. On the seventh ? 

Mr. CoGAN. No, sir. 

Mr. Rice. On the eighth? 

Mr. CoGAN. I bet a hundred dollars. 

Mr. Rice. A hundred dollars? Was that on instructions from 
Rosenbaum ? 

Mr. CoGAN. Yes, sir. 

Mr. Rice. And was tliat the only bet you made that day? 

Mr. CoGAN. Up to then. 

Mr. Rice. Up to then ? 

Mr. CoGAN. Yes, sir. I don't know 

Mr. Rice. What do you mean you don't know ? 

Mr. CoGAN. So far; there is anotlier page yet. 

Mr. Rice. Yes. The winner was the No. 1 horse; the No. 4 horse 
ran second ; and the No. (i horse i-an third ? 

Mr. CoGAN. That is right. You have that right. 

Mr. Rice. You have got here 1-30-35. 

Mr. CoGAN. In case he would ask me what the horse went off at 
I would be able to tell him; that is why I just marked that. 

Mr. Rice. In case Rosenbaum asked you what horse went off at? 

Mr. CoGAN. That horse there. The horse that I had bet on, 

Mr. Rice. So you bet $100 on the Xo. T liorse ( 

Mr. CoGAN. Yes, sir. 

Mr. Rice. And it went off at 30 to 1 ? 

Now, these are the odds 

Mr. CoGAN. On all the horses. 

Mr. Rice (continuing). On all the horses, and you had one horse 
going off, the winner went off at (5 to 1 then? 

Mr. CoGAN. Yes, sir. 

Mr. Rice. And the second horse went off at 6 to 1, and the third 
at 9 to 

Mr. CoGAN. 41/2 to 1. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 105 

Mr. KicE. 4% to 1 ; and the horse vou put the $100 on went off at 
30tol. Did it win? 

Mr. CoGAN. No, sir. 

Mr. Rice. How about that hist race, the ninth race? 

Mr. CoGAN. The ninth race I bet $2()() across. 

Mr. Rice. How do vou tell that ? 

Mr. CoGAN. 2-2-2. ' 

Mr. Rice. You put $200 ? Where is your $200 i 

Mr, CoGAN. I just put it any way that I know how to read it. In 
this place I marked 2-2-2. 

Mr. Rice. So you bet $200 across the board on No. 3? 

Mr. CoGAN. Yes, sir. 

Mr. Rice. And you still do not know how that made up? 

Mr. CoGAN. No. 

Mr. Rice. We interrupted you 

Senator Tobey. Mr. C'oo-an, this telephone you called so frequently, 
Axtell 1499, that is listed under the name of the Northern Kentucky 
Hospitalization Insurance Agency. Do you know that ? 

Mr. CoGAN. No, sir. 

Senator Tobey. It is almost worth comino; to the meeting just to 
learn that. 

Mr. CoGAN. Yes, sir. 

Senator Tobey. I repeat again. The telephone you called so fre- 
quently, Axtell 1495, was under the Northern Kentucky Hospitaliza- 
tion Insurance Agency at 20 West Fourth Street, Newport, Ky. In 
that place there are five telephones — Axtell 1495-6-7-8-9. 

Now, you have been in Massachusetts, worked at Suffolk Downs, 
Mass., have you not ? 

Mr. CoGAN. Yes, sir. 

Senator Tobey. You were arrested there, were you not? 

Mr. CoGAN. No. 

Senator Tobey. Were you not picked up by the police? 

Mr. CoGAN. No, sir. 

Senator Tobey. Then, what was the story? 

Mr. CoGAx. The State police asked me if I would come in and give 
them some information. 

Senator Tobey. About Mhat ? 

Mr. CoGAN. About the work I was doing. 

Senator Tobey. Did you give they any ? 

Mr. CoGAN. Yes, sir. 

Senator Tobey. What did they say ? 

Mr. CoGAN. They said nothing. 

Senator Tobey. Did they say "Go and sin no more"? 

Mr. CoGAN. They said nothing. 

Senator Tobey. That was all there was to it? 

Mr. CoGAN. Yes, sir; they said it was for the record. 

Senator Tobey. Did you ever go to Rockingham Park in New 
Hampshire? 

Mr. Cog AN. I have been there, 2 years ago. 

Senator Tobey. Did you operate there? 

Mr. Cogan. For a few days. 

Senator Tobey. For whom? 

Mr. (^ogan. Mr. Rosenbaum. 

68958— 51— pt. 12 8 



106 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Senator Tobey. Whose telephone did yon use in New Hampshire? 

Mr. CoGAN. I don't remember the party. It was near the track. 

Senator Tobey. And you paid them something for the use of the 
telephone? 

Mr. C\k;an. The same as 1 would anywhere else. 

Senator Tobey. About how much? 

Mr. CoGAN. At that place, I believe I gave the woman a gift at the 
end of the few days. 

Senator Tobey. In other words, it is necessary to carry on this busi- 
ness to have a kitty, a pool account, that you can drawn on to grease 
the wheels and get access to telephones, and so forth; is that right? 

Mr. CoGAN. I would not put it that way, no. 

Senator Tobey. How would you put it ? 

Mr. CoGAN. I believe if you want a favor done, sometimes you buy 
a ])er.son something, since the ])erson doesn't know you. 

Senator Tobey. Money talks, in other words? 

Mr. CoGAN. I guess it does. 

Senator Tobey. All right, Mr. Chairman. 

The Chairman. Do you also make arrangements with the cashiers, 
whenever you can? 

Mr. CoGAN. Pardon? 

The Chairman. Do you make arrangements with cashiers like Mr. 
Renier so yon will not have to be handling money, whenever you can? 

Mr. CoGAN. No, sir. 

The Chairman. You always keep the money in your pocket? 

Mr. CoGAN. Yes, sir. 

The Chairman. Any other questions? 

Mr. Rice. Yes. 

I have a number of telephone calls which may be interesting, made 
by Cogan from By water 6016, which is the New Orleans number which 
you operated from, to Axtell 1499 at Cincinnati. On December 23, 
1950, calls were made at 1 : 38 p. m., 2 : 06 p. m., 2 : 32 p. m., 3 p. m., 
3 : 31 p. m., 3 : 55 p. m., 4 : 16 p. m., 4 : 23 p. m., and 4 : 53 p. m. That 
is more than a call a race. Wliy would you do that? 

Mr. CoGAN. I wouldn't have any idea. 

The Chairman. Did you not call in to see whether they had a bet; 
and if they had none, they would say "No bet"? 

Mr. CoGAX. That would only amount to the number of races for 
the day. 

Mr. Rice. You are right. It is a nine-race card, instead of an eight- 
race card. There were nine calls, and nine calls again on the 23d. 
You would call each and every race, whether you bet or not ? 

Mr. CoGAN. Yes, sir. 

Senator Tobey. Do you know Michael Rocco, a Boston gambler? 

Mr. CoGAN. I have met him. 

Senator Tobey. Do business with him? 

Mr. Cogan. No, sir. 

Senator Tobey. Where did you meet him ? 

Mr. Cogan. At the race track. 

Senator Tobey. He is generally known as "Mickey, the Wise Guy," 
is he not? 

Mr. Cogan. That is what I read. 

Senator Tobey. What do you know about him and his operation? 

Mr. Cogan. Nothing at all, sir. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 107 

Senator Tobey. Do you know Danny Ricci, of the Patriacca gang 
of ill fame of Providence, R. I. ? 

Mr. CoGAN. I know of him now because I was told about him. 

Senator Tob?:y. When did you meet him and where ? 

Mr. CoGAN. I met him at one of the race tracks, I believe Suffolk 
Downs. 

Senator Tobey. Do you know the history of the Patriacca gang? 

Mr. CoGAN. I have no idea. 

Senator Tobey. You never heard about them ? 

Mr. CoGAN. Never. 

Senator Tobey. All right, Mr. Chairman. 

The Chairman. Thank you very much. 

Mr. Rice. I want to ask him another question. 

While you were at the fairgrounds, were there other come-back men 
working there ? 

Mr. CoGAN. I believe so. 

Mr. Rice. Joe Uvanni was there ? 

Mr, CoGAN. Yes, sir. 

Mr. Rice. Steve Portler — was he there ? 

Mr. CoGAN. No, sir. 

Mr. Rice. Do you know him ? 

Mr. CoGAN. No, sir. 

Mr. Rice. Who was the man from Kingston that was there? 

Mr. CoGAN. I don't know him, either, sir, 

Mr. Rice. Was the Dobkins man there from Chicago? 

Mr. Coo AN. Not that I know of. 

Mr. Rice. Who were some of the other men that were there? 

Mr. (\)GAN. Joe is the only one I know. 

Mr. Rice. Uvanni? 

Mr. (\)C}AN. Yes, sir. 

]\lr. Rice. Where did he operate from ? 

Mr. CociAN. I believe he operates out of St. Louis. 

Mr. Rice. And do von have anv contact with Mitchell Cohen in 
Philadelphia? 

]Mr. CoGAN. I just know hiui. 

Mr. Rice. Just know him? 

Mr. CoGAN. Yes. 

Mr. Rice. What do you know him to be? 

Mr. (>)GAN. A small l)ookmaker, 1 guess. 

Mr. Rice. A small bookmaker. 

And what business do you have with him? 

Mr. CoGAN. None at all. 

Mr. Rice. None at all. Do you take any action for him? 

Mr. CoGAN. No, sir. 

Mr. Rice. How about Jule Fink in Long Island, N. Y. ? 

Mr. CoGAN. He is a personal friend. 

Mr. Rice. What business is he in? 

Mr. CoGAN. I don't know. 1 guess he bets on horses ; that is all. 

Mr. Rice. A bookie? 

Mr. CoGAN. No, sir. 

Mr. Rice. Just bets ? 

Mr. CoGAN. A hoi-se bettor. 

Mr. Rice. Does he call you occasionally? 

Mr. CoGAN. Never. 



108 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Rice. He never calls you ? 

Mr. CoGAN. Never. 

Mr. Rice. Did Frank Erickson or his outfit have a man at tlie fair 
grounds ? 

Mr. CoGAN. Not that I know of. 

Mr. Rice. Now, you have been to Cincinnati, have you not? 

Mr. CoGAN. I have been there; yes, sir. 

Mr. Rice. And you went to the headquarters, the office, on at least 
one occasion, did you not? 

Mr. CoGAN. On one occasion. 

Mr. Rice. Where was it ? 

Mr. CoGAN. In Newport, I believe. 

Ml. Rice. Over in Newport, across the river? 

Mr. CoGAN. Yes, sir. 

Mr. Rice. Do you know the address of the place? 

Mr. CoGAN. No, sir. 

Mr. Rice. What type of buikling was it in? 

Mr. CoGAN. It looks like an office building. 

Mr. Rice. It looks like an office building? 

Mr. CoGAN. Yes. 

Mr. Rice. I thought you said a private house. 

Mr. CoGAN. There were some offices in there. 

Mr. Rice. Some offices in a private house. What type of offices 
are there ? What do they have in there ? 

Mr. CoGAN. I don't know. I believe there is an attorney in there. 

Mr. Rice. What? 

Mr. CoGAN. An attorney, I believe, in the building. 

Mr. Rice. An attorney in the building? 

Mr. CoGAN. I believe so. 

Mr. Rice. What is on the door of Rosenbaum's outfit there? 

Mr. CoGAN. I don't have any idea. 

Mr. Rice. You were there. 

Mr. CoGAN. I was there once. 

Mr. Rice. Was Louis there with you ( 

Mr. Cog AN. Yes. 

Mr. Rice. Who else was there ? 

Mr. CoGAN. That is all. 

Mr. Rice. Just one man ? 

Mr. CoGAN. Yes, sir. 

Mr. Rice. Was there a ticker there ? 

Mr. CoGAN. It was on Sunday. 

Mr. Rice. Any adding machines ? 

Mr. CoGAN. No. 

Mr. Rice. Any ticker? 

Mr. CoGAN. No, sir. 

Mr. Rice. Do you know what a ticker is? 

Mr. CoGAN. I have seen them in Western Union offices or stock 
markets. 

Mr. Rice. What did you see in there ? 

Mr. CoGAN. Tables and chairs. 

Mr. Rice. Tables and chairs. What were you doing over there? 

Mr. CoGAN. I went there for some money. 

Mr. Rice. Money? 

Mr. CoGAN. Yes, sir. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 109 

Mr. Rice. IVliere did the money come from ^ 

Mr. CoGAisr. Mr. Rosenbaiim gave it to me there. 

Mr. Rice. Did he have a safe there? 

Mr. CoGAN. I didn't see the safe; I didn't see the safe. 

Senator Tobey. As a matter of fact, on Rosenbaum's door is there 
not. a sign in italics "Leave hope behind, all ye that enter here"? 

Did you not see that sign ? 

Mr. CoGAN. No. It might be there, but I did not see it. 

Senator Tobey. Now, yon just said, in answer to my question, that 
the Massachusetts State police called you and talked to you and said 
nothing. As a matter of fact, the sequel to that was that you, Cogan, 
and Uvanni and Phelan and Rocco and Ricci were ruled off that track 
for life ; were you not ( 

Mr. CoGAN. That is what the newspapers said. 

Senator Tobey. I am asking if it was not true. 

Did you not receive notice to that effect? 

Mr. CoGAN. No, sir. 

Senator Tobey. Well, we will see that one comes to you then. 

Mr. CoGAN. All right, sir. 

The Chairman. That is all. Call the next witness. 

Mr. Rice. Mr. Louis Rosenbaum. 

The Chairman. Do you swear the testimony you give this committee 
will be the whole truth, so help you God? 

Mr. Rosenbaum. Yes. 

The Chairman. All right, Mr. Rice. 

Senator Tobey. Is this "the Rosenbaum" ? 

Mr. Rice. We will find out. This is Louis Rosenbaum. 

TESTIMONY OF LOUIS ROSENBAUM, CINCINNATI, OHIO 

Your name is Louis Rosenbaum? 
Mr. Rosenbaum. Yes, sir. 
Mr. Rice. How do you spell that ^ 
Mr. Rosenbaum. L-o-u-i-s R-o-s-e-n-b-a-u-m, 
Mr. Rice. Where do you live, Mr. Rosenbaum? 
Mr. Rosenbaum. Cincinnati, Ohio. 
Mr. Rice. Where were you born ? 
JNIr. Rosenbaum. I was born on Sixth Street. 
Mr. Rice. Sixth Street ? 
Mv. Rosenbaum. Yes. 
Mr. Rice. New York ? 
Mr. Rosenbaum. No, Cincinnati. 

Mr. Rice. Cincinnati. Have you lived there all your life? 
Mr. Rosenbaum. Yes. 
Mr. Rice. What business are you in ? 
]Mr. Rosenbaum. Now in horses. 

The Chairman. Si)eak up, Mr. Rosenbaum. We cannot hear you. 
Mr. Rosenbaum. Horses. 
Mr. Rice. What do you mean by that ? 

Mr. Rosenbaum. Well, I buy them, I sell them, I breed them. 
Mr. Rice. Buy, sell, and breed horses. Anything else ? 
Mr. Rosenbaum. And handle commissions. 

Mr. Rice. Handle commissioins. By that would you say that that 
is a refinement of a bet ? 



110 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. RoSENBAUM. Yes, you could say "bet." 

Mr. EicE. Have you ever been in any other business ? 

Mr. RosENBAUM. Yes, sir. 

Mr. Rice. What is that? 

Mr. RosENBAUM. Clothing. 

Mr. Rice. AVas that with your brothei" or your cousin — Mackey ? 

Mr. RosENBAUM. No. 

Mr. Rice. Who was that with ? 

Mr. RosENBAUM. I was with myself. 

Mr. Rice. In business for yourself ? 

Mr. RosENBAUM. Yes. 

Mr. Rice. You are out of that business now? 

Mr. RosENBAUM. Yes. 

Mr. Rice. Where is your office, Mr. Rosenbauni ? 

Mr. RosENBAUM. Now? 

Mr. Rice. Yes. 

Mr. RosENBAUM. Nil. 

Mr. Rice. When did it become nil? 

Mr. RosENBAUM. Well, I haven't had my own office in a long time. 

Mr. Rice. Did we get your home address ? 

Did you give your home address? 

Mr. RosENBAUM. No ; I don't think so. 

Mr. Rice. Where do you live? 

Mr. RosENBAUM. 7216 Ellbrook Avenue, 

Mr. Rice. In 

Mr. RosENBAUM. Cincinnati. 

Mr. Rice. A suburb of Cincinnati ? 

Mr. Rosenbaum. Yes, 

Mr. Rice. That is a private residence ? 

Mr. Rosenbaum. Yes, sir. 

Mr. Rice. Not an apartment? 

Mr. Rosenbaum. It is an apartment. 

Mr. Rice. It is an apartment ? 

Mr. Rosenbaum. Yes. 

Mr. Rice. And who lives there with you ? 

Mr. Rosenbaum. My wife. 

Mr. Rice. Your wife. Anyone else? 

Mr. Rosenbaum. That is all. 

Mr. Rice. All right, sir. 

Mr. Rosenbaum. My wife and baby. 

Mr. Rice. I beg your ])ardon ? 

Mr. Rosenbaum. My wife and baby. 

Mr. Rice. Your wife and baby? 

Mr. Rosenbaum. Yes. 

Mr. Rice. What telephone service do you have there? 

Mr. Rosenbaum. What do vou mean by that? 

Mr. Rice, What do I mean ? 

Mr. Rosenbaum. Yes. 

Mr. Rice. Do you have a telephone? 

Mr. Rosenbaum. Yes, sir. 

Mr. Rice. How many handsets do you have ? 

Mr. Rosenbaum. I got a telephone with an extension. 

Mr. Rice. With an extension? 

Mr. Rosenbaum. Yes. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 111 

Mr. Rice. Don't you have two lines there? 

Mr. RosENBAUM. I got another phone — yes, I have. 

INIr. Rice. Don't you have Ehnhurst 1631 there? 

Mr. RosENBAUM. Yes, sir. 

Mr. Rice. Is that listed in the phone book to you? 

Mr. Rosenbaum, Yes, sir. 

Mr. Rice. How about Ehnhurst 1362? 

Mr. Rosenbaum. That is right. 

INIr. Rice. That is there, too ? 

Mr. Rosenbaum. Yes, sir. 

Mr. Rice. Not a switchboard, just two phones? 

Mr. RosEXBAUM. That is right. 

Mr. Rice. How come you to have two phones? 

Mr. Rosenbaum. One for my wife mostly, and sometimes when I 



talk 

Mr. Rice. Of the two phones which one is yours ? 

Mr. Rosenbaum. 1631. 

Mr. Rice. 1631 is yours? 

Mr. Rosenbaum. Yes. 

Mr. Rice. Those are business phones, are they not? 

Didn't vou contract Avith the telephone comjjanv for business service 
there? 

Mr. Rosenbaum. Well, I use them for either way — anything you 
want. I only use mine — for every purpose, you can say. 

Mr. Rice. Anything. How about the Axtell numbers — 1495- 
6-7-8-9 ? 

Mr. Rosenbaum. What do you mean — about them? 

Mr. Rice. Do you use those telephones ? 

Mr. Rosenbaum. I have. 

Mr. Rice. You have. And did you contract to get those telephones? 

Mr. Rosenbaum. No, sir. 

Mr. Rice. Do you know where they are? 

Mr. Rosenbaum. Now? 

Mr. Rice. Yes. 

Mr. Rosenbaum. No, I don't. 

]Mi-. Rice. Wliere were they last week ? 

Mr. Rosenbaum. Over in New])ort. 

Mr. Rice. Over in Newport. Wliereabouts? 

Mr. Rosenbaum. 20 West Fourth. 

Mr. Rice. 20 West Fourth ? 

Mr. Rosenbaum. Yes. 

Mr. Rice. That was your office last week; wasn't it? 

Mr. Rosenbaum. Well, it wasn't ever mine. 

Mr. Rice. It wasn't ever yours? 

Mr. Rosenbaum. But I rented it. 

Mr. Rice. Whose office was it? 

Mr. Rosenbaum. Well, doggone if I know. 

The Chairman. Speak up, Mr. Rosenbaum. 

Mr. Rice. The records indicate that the 20 West Fourth Street, 
which you know very well 

Mr. Rosenbaum. The man I got it from is Max. 

Mv. Rice. Max Miller? 

Mr. Rosenbaum. Who ? 



112 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Rice. Maurice Miller ? 

Mr. ROSENBAUM. No. 

Mr. Rice. Who is Maurice Miller? 

Mr. RosENBAtTM. Maurice Miller is a brother-in-law of mine. 

Mr. Rice. A brother-in-law of yours. He contracted for the serv- 
ice ; didn't he ? 

Mr. RosENBAUM. I don't know. 

Mr. Rice. You don't know? 

Mr. RosENBAUM. I really don't know. 

Mr. Rice. Whose operation was it? 

Mr. RosENBAUM. Who was at the head of it? 

Mr. Rice. Yes. 

Mr. RosENBAUM. I was. 

Mr. Rice. You were the head of it? 

Mr. RosENBAUM. Yes. 

Mr. Rice. Just tell us about how you came to get in the business 
at 20 West Fourth, and how you set it up ; how long you have been 
there. 

Mr. RosENBAUM. I have been there since about last March or April ; 
about April. 

Mr. Rice. About April of 1950? 

Mr. RosENBAUM. Yes, sir. 

Mr. Rice. And how many people do you employ there or did you 
employ there ? 

Mr. RosENBAUM. At the office? 

Mr. Rice. Yes. 

Mr. RosENBAUM. About three. 

Mr. Rice. How many? 

Mr. RosENBAUM. About three. 

Mr. Rice. Who were they? 

Mr. RosENBAUM. Sometimes four. 

Mr. Rice. Who were they l You had five telephones in there. 

Mr. RosENBAUM. Well, there was uiy lirother-in-law. 

Mr. Rice. What is his name ? 

Mr. RosENBAUM. Maurice Miller. 

Mr. Rice. How about Herlanger? 

Mr. RosENBAUM. AVho? 

Mr. Rice. Ralph Herlanger — H-e-r-1-a-n-g-e-r. 

Mr. RosENBAUM. I don't know him. 

Mr. Rice. You don't know him ? 

Mr. RosENBAUM, No. 

Mr. Rice. There is something wrong. 

Mr. RosENBAUM. Ralph Herlanger? 

Mr. Rice. Yes. 

Mr. RosENBAUM. Don't know him. 

Mr. Rice. And never heard of the Northern Kentucky Hospitaliza- 
tion Insurance Agency? 

Mr. RosENBAUM. Maybe that name is there. I don't know anything 
about it. It isn't my office. 

Mr. Rice. It isn't your office? 

Mr. RosENBAUM. It isn't my office — just like me renting space here. 

Mr. Rice. Tell us how it works. 

Mr. RosENBAUM. There is no working to it; just rent space. 



J 



ORGANIZED CRIME IN INTERSTATE COMMERCE 113 

Senator Tobey. Just a second. Yon took these offices over; you 
say you did ? 

Mr. RosENBAUM. I didn't take them all over. 

Senator Tobey. You hired the offices. Who from? 

Mr. RosEXBAi'iM. From this Max. 

Senator Tobey. And there were five telephones in there when you 
hired it? 

Mr. Rosenbaum. Yes, sir. 

Senator Tobey. When you took the office, the five telephones were 
ill there; is that rio-ht ? 

]\Ir. Rosenbaum. That is right. 

Senator Tobey. Well, the telephone company, when a new tenant 
comes in always makes the new tenant sign a lease in his own name. 
You know that, don't you? 

Mr. Rosenbaum. I don't know. 

Senator Tobey. You don't know that? 

Mr. Rosenbaum. I have nothing to do with that. 

Mr. Rice. There is one thing wrong. Maurice Miller, your brother- 
in-law, is the man who contracted for the telephones in the name 
of the Northern Kentucky Hospitalization Insurance Agency. How 
do you account for that? 

Mr. Rosenbaum. That, I couldn't tell you. 

Senator Tobey. You knew he did, didn't you? 

Mr. Rosenbaum. I don't remember that. 

Senator Tobey. You know the telephones are listed under Northern 
Kentucky Hospitalization Insurance Agency — didn't you? 

Mr. Rosenbaum. I never really read 

Senator Tobey. Didn't you know the telephones are listed under 
that name? 

Mr. Rosenbaum. No; I didn't. 

Senator Tobey. This is the first time you have heard of it? 

Mr. Rosenbaum. The first time I would hear of it, because I do 
not pay the bills. 

Senator Tobey. What we are trying to find out, and going to find 
out, is how one Louis Rosenbaum, now before us as a witness, con- 
ducting gambling on a large scale from Newport, Ky., has five 
telephones that are listed under a charitable hospitalization organi- 
zation and he is doing business as a gambler on the telephones. What 
is the answer? 

Mr. Rosenijaum. I don't know what you mean exactly. I don't 
understand. 

Senator Tobey. I will say it in A-B-C language, and listen care- 
fully so you will not say that again. You are doing a gambling 
o})eration in this place of Newport, aren't you? 

Mr. Rosenbaum. Yes, sir. 

Senator Tobey. Conducting gambling. And you have got five 
telephones there? 

Mr. RosENBAi'M. Yes. 

Senator Toi^ey. And they ai'e listed under the name of the Northern 
Kentucky Hos))italization Insurarice Agency, which is a travesty be- 
cause they are really Rosenbaum's gambling telephones, aren't they, 
used by him in his business? 

Mr. RosENBAi'31. I just lease the place — not lease it 

Senator Tobey. Whom did you lease it from? 



114 ORGANIZED CRIME EST INTERSTATE COMMERCE 

Mr. EosENBAUM. This Max — just a minute, and I Avill tell you his 
last name if I can think of it. Max Slackman, something: like that. 

The Chairman. Let's get that name correct. 

Senator Tobey. Don't you know when any new person comes in an 
office and takes telephone service that the telephones already in there 
have to be released, and somebody has to sign a lease for the telephones 
in some name ? The fact was that the Newport Hospitalization Serv- 
ice was in there in a legitimate business before you came in. Do you 
know ? 

Mr. RosENBAUM. I would think that place was already — I know it 
was there. 

Senator Tobey. You know very well it couldn't happen that Mr. 
Rosenbaum, professional gambler, could absorb the use and utilize the 
five telephones listed under the Hospitalization Service when he is 
conducting gambling operations as a new tenant; don't you? 

Mr. Rosenbaum. I didn't hear that very good. 

Senator Tobey. I will say it once more, and then my ])atience is 
exhausted. Don't you know, as a businessman and a citizen, if you, 
John Smith or Bill Jones, or I come over and take over some offices 
and rent them for my own business, in your case gambling, and there 
were five telephones in there when you come in and they were listed 
under Hospitalization Service, that before you can use those telephones 
at all for a single call the telephone company makes you sign an appli- 
cation under your oavu name or you don't get the telephone service? 

Mr. Rosenbaum. That is right, but here is what I would — I think 
you would be right. 

Senator Tobey. All right. 

Mr. Rosenbaum. But here is the case. Suppose you come in — put 
yourself in my place — and I was talking to you and say, "I want you 
to come over here, come on over," and I would come over to your place 
of business. The telephones are already there. 

Senator Tobey. Oh, yes, but did the Hospitalization Service say 
for you to come over to their place and do business? 

Mr. Rosenbaum. I don't know no hospitalization. 

Senator Tobey. Well, the telephones are listed under the name of 
the Northern Kentucky Hospitalization Insurance Agency. 

Mr. Rosenbaum, They are already there. 

Senator Tobey. Yes; but you know very well you couldn't possibly 
use those telephones by the permission of the telephone company under 
the name of the Northern Kentucky Hospitalization Service and do a 
gambling business, don't you ? 

Mr. Rosenbaum. I don't know. 

Senator Tobey. Well, we will find out from the telephone company 
and let you know, and give you an answer. If you are too dumb to 
know, we will let you know in the next fcAv days. 

Mr. Rice. AVhen did you first go into the address at 20 AYest Fourth 
Street, Newport, Ky. ? 

Mr. Rosenbaum. Around April, I would think. 

Mr. Rice. Around April of 1950? 

Mr. Rosenbaum. Somewhere in that neighborhood. 

Mr. Rice. Were the telephones in there then ? 

Mr. Rosenbaum. When I came in there they were there. 

Mr. Rice. Do you know how they were listed ? 

Mr. Rosenbaum. No. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 115 

Mr. Rice. All right. I have a record here which says^ that on July 
3, 1950, Maurice Miller, your brother-in-law, signed a contract to 
obtain telephones, Axtell 1495-6-7-8 and 9 in the name of the North- 
ern Kentucky Hospitalization Insurance Agency, 20 West Fourth 
Street, Newport. So that if you went in there in May and your 
brother-in-law went in there in July and obtained that service and you 
were in there, you are going to have to explain what the situation is. 

Mr. RosENBAUM. What the situation is. Well, if you would talk 
to this Max, he gets blurred up every once in a while. 

Mr. Rice. We are not interested in talking to Max, we are interested 
in talking to Louis. 

Mr. RosENBAUM. Just a minute, and I will explain that too. He 
will say he don't want this, don't want that, and that is how I said, 
"Well, go on over there and sign your name to it." 

Mr. Rice. So you told your brother-in-law to go on and sign his 
name to it — any name? 

Mr. RosENBAUM. No; his name. 

Mr. Rice. Sign his name, but to take the phones out in any name 
he could think of. 

Mr. RosENBAUM. They were already that way before. That wasn't 
it. 

Senator Tobet. The thing that bothers me, Mr. Chairman, is here 
is a man who, on the testimony of Cogan and Remer, is kingpin in 
the horse gambling game and conducts gambling operations of large 
sums many, many times a day in many cases, and yet he is so dumb 
he can't even answer questions about the telephones. There is some- 
thing wrong with the picture, and you only play a foolish game in 
trying to evade this thing. If your brother-in-law did that thing 
of putting down the hosj^italization agency he is guilty of a crime, 
and I can't understand how you are the head of it and yet don't 
know anything at all. 

Mr. RosENBAUM. Well, I don't. 

Senator Tobey. You make a very inconsistent witness. 

Mr. RosENBAUM. I am not talking to people that I think know 
what it is all about. 

Senator Tobey. I think you do know — from Mr, Cogan's and Mr- 
Remer's testimony, you know what it is all about. 

The Chairman. All right, Mr. Rice. 

Mr. Rice. You have heard both Remer and Cogan say that they 
both reach you on the te]e])hone at the Axtell numbers, and I think 
Cogan said he was there with you in the i^lace. 

Mr. Rosenbaum. Yes, sir. 

Mr. Rice. So that you are definitely established as being in there. 

Mr. RosENBAUM. That is right. 

Mr. Rice. Suppose someone was to get you on the tekphone there 
who knows your name but doesn't know your location, what do you 
tell them ? 

Mr. Rosenbaum. I tell them located at 20 West Fourth. 

Mr. Rice. Twenty West Fourtli, and leave it up to them to find you ? 

Mv. Rosenbaum. To come up, and I am up on the second floor. 

Mr. Rice. Suppose they happen to be in Las Vegas, Nev., and want 
to get a hold of you, and don't know your number, but they know 
your name. 



116 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Ml". RosENBAUM. Yes. 

Mr. Rice. Yes. 

Mr. RosENBAi'M. They don't know my- 



Mr. Rice. They want to get you in the daytime, and they are in 
Las Vegas and want to get a hold of Louis Rosenbauni. 

Mr. RosENBAUM. Yes. 

Mr. Rice. How do they get a hold of you on the telephone ? 

Mr. RosENBAUM. If they don't know my number at the office '? 

Mr. Rice. Yes. 

Mr. RosENBAUM. They would have to call my home, 

Mr. Rice. Is there any arrangement to direct them to your home? 

Mr. RosENBAUM. No. They would call at night. That is the only 
thing they could do. 

Mr. Rice. There is no way you are listed in the telephone book at 
your office? 

Mr. RosENBAUM. No. 

Mr. Rice. You don't have any business name or anything like that t 

Mr. RosENBAUM. No, sir. 

Mr. Rice. I see a call here from Las Vegas on December 22, 1950, 
to Axtell 1495 at 10 : 05 a. m. There was no ansvrer at the Axtell 
number when the party asked for Louis Rosenbaum, and the call 
Avas transferred to Elmhurst 1631, which is the residence of Louis 
Rosenbaum. It was a collect call and you paid $5.50 for it. How 
did you make those arrangements ? 

Mr. Rosenbaum. The man knew my telephone number. 

Mr. Rice. Who did ? 

Mr. Rosenbaum. Whoever called me. I don't know. 

Mr. Rice. This call was transferred from the Axtell number to the 
Elmhurst number. 

Mr. Rosenbaum. Well, what about it? 

Mr. Rice. Who was it ? 

Mr. Rosenbaum. I don't know. I have a lot of calls from Las 
Vegas. 

Mr. Rice. Did you leave instructions with the telephone com])any 
if calls came through and if no answer, to go to the P]lmhurst number? 

Mr. Rosenbaum. No, sir. 

Mr. Rice. Are you sure about that ? 

Mr. Rosenbaum. Positively. 

Mr. Rice. So if this individual who called from Las Vegas knew 
your office number, he got it from you ? 

Mr. Rosenbaum. Yes, sir, 

Mr. Rice. What do you tell them on your office number? Suppose 
they forget the number, how do they look you up !* 

Mr. Rosenbaum. I don't know. How you would look me up if you 
didn't have the number. 

Mr. Rice. If I w^anted to call Louis Rosenbaimi, lawyer, it would be 
listed under lawyers. But what you are, I don't know. 

Mr. Rosenbaum. I am listed in the phone book on p]hnhurst 1631. 

Mr. Rice. How about your office ? 

Mr. Rosenbaum. I have none. 

Mr. Rice. There is no way. It is just a mystery : is that it ( 

Mr, Rosenbaum. That is right. 

Mr. Rice. You don't seem to be so nuich of a mystery to quite a few 
people. I note from the records of the phone company in 1 month's 
time 1,053 long distance telephone calls were charged to your number. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 117 

Mr. KosENBAUM. That could be. 

Mr. Rice. That could be^ 

Mr. EosEXBAUM. 1,053'^ 

i\lr. Rice. 1,()5;3 loiif^ distance teleplione calls charged to 3'our Axtell 
muiibers in one month. 

Mr. RosEXBAFM. That could be. 

Mr. Rk'e. That could be. How much does your telephone bill run 
a month there i' 

Mr. Rice. Three thousand; thirty-five hundred. Doesn't it run 
more than that sometimes ? 

Mr. RosEXBAUM. Sometimes a little more, sometimes a little less. 

Mr. Rice. What business are you transacting there '^ 

Mr. RosEXBAUM. Horses. 

Mr. Rice. Selling any insurance? 

Mr. RosEXBAUM. Horses. 

INIr. Rice. Any hospitalization ? 

Mr. RosEX^BAUM. No, sir. 

Mr. Rice. You are not selling an}- hospitalization. That is a com- 
plete fraud, isn't it ? 

]\Ir. RosEx^BAUM. There is no fraud. If I sold hospitalization, then 
it would be fraud. [Laughter.] 

The Chairmax^. That is a very frank answer. Senator Tobey, I 
believe the witness is coming through. 

Senator Tobey. Yes ; we are making some progress here. 

Mr. RosEX'^BAUM. I am not trying to be smart. 

The Chairmax. Let's get on. 

Senator Tobey. This fellow who called from Las Vegas 

Mr. RosEXBAUM. I was referring to it a little earlier. 

Senator Tobey (continuing) . Was probably sick and needed hospital 
service, didn't he? Is that it? 

Mr. RosEXBAUM. I don't know^ 

Mr. Rice. He needed some insurance, lay-oft', didn't he? 

Mr. RosEXBAUM. Yes. 

Mr. Rice. Yes. Tell us about the lay-offs, how it w'orks. You don't 
take any bets from anybody but bookies, do you ? 

Mr. RosEXBAUM. No. 

Mr. Rice. You don't take any straight bets? 

Mr. RosEXBAUM. Yes, I do. 

Mr. Rice. You do business entirely with bookies. You don't have 
anybody walking in off the street ? 

Mr. RosEx-^BAUM. Oh, no. 

Mr. Rice. How many bookies would you say you had calling in to 
you during the day ? 

Mr. RosEXBAUM. Not many. It all comes from mostly a few. 

Mr. Rice. A few. And do you have some of them in Las Vegas ? 

ISIr. RosEXBAUM. Yes. 

Mr. Rice. And do you have any in Hot Springs, Ark.? 

Mr. RosEXBAUM. No, sir. 

Mr. Rice. What are some of the cities where you get lay-off bets 
from ? 

Mr. RosEXBAUM. Well, I don't know. There is just different cities. 

Mr. Rice. Just different cities. Well, name one. 

Mr. RosEXBAUM. Well, I have got them from St. Louis. 

Mr. Rice. 1,053 calls a month. You must remember one city. 



118 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. RosENBAUM. I have o:ot some from St. Louis. 
Mr. Rice. From St. Louis? 
Mr. RosENBAUM. Yes. 

Mr. Rice. Who do you get them from ? 

Mr. Rosenbaum. And I gave some to St. Louis. 

Mr. Rice. How is that? 

Mr. Rosenbaum. I had both. I gave them and they gave me. 

Mr. Rice. Are you laying off some yourself ? 

Mr. Rosenbaum. Yes, sir. 

Mr. Rice. What determines when you lay off to another bookie or 
when you lay off to the track ? 

Mr. Rosenbaum. Well, sometimes I run out of money at the race 
track and I give it to St. Louis. 

Mr. Rice. You run out of money ? 

Mr. Rosenbaum. That my man runs out of money. 

Mr. Rice. Remer or Cogan, or somebody like that runs out of 
money ? 

Mr. Rosenbaum. That is right. 

Mr. Rice. So you lay it off to another person ? 

Mr. Rosenbaum. That is right. 

Mr. Rice. And who do you lay off to in St. Louis? 

Mr. Rosenbaum. To Mooney. 

Mr. Rice. John JNIooney? 

Mr. Rosenbaum. Yes. 

Mr. Rice. And how about Jamie Carroll? 

Mr. Rosenbaum. I don't know him. 

Mr. Rice. You don't know him? 

Mr. RosENBAuji. No. 

Mr. Rice. Wliere do you get a hold of John Mooney ? 

Mr. Rosenbaum. I just call their office. 

Mr. Rice. Just call their office. Do you remember the number? 

Mr. Rosenbaum. I used to remember. 

Mr. Rice. You used to remember. 

Mr. Rosenbaum. One number is OfiOO, something like that. 

Mr. Rice. That was the Roseclale number, I believe, wasn't it ? 

Mr. Rosenbaum. I don't know. I don't do the calling. I do the 
directing. 

Mr. Rice. Now then, how about in New York? 

Mr. Rosenbaum. In New York? 

Mr. Rice. Yes. 

Mr. Rosenbaum. No, sir. I have calls from there getting infor- 
mation. 

Mr. Rice. Getting information? 

Mr. Rosenbaum. That is right. 

Mr. Rice. What kind of information? 

Mr. Rosenbaum. What's the smart horses. 

Mr. Rice. Do you know what smart horses are? 

Mr. Rosenbaum. Yes. 

Mr. Rice. You do? 

Mr, Rosenbaum. Yes. 

Mr. Rice. How do you tell a smart horse ? 

Mr. Rosenbaum. By looking at him. 

Mr. Rice. You look at him? 

Mr. Rosenbaum, Yes. I can tell in a lot of different ways. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 119 

Mr. Rice. And this horse is running at New Orleans. What do you 
do when you look at this horse 'i What do you look at 'i 

Mr. RosENBAUM. At the animal itself, you mean? 

Mr. Rice. You look at it. I don't know. You said you looked at 
the smart horses. 

Mr. RosENBAUM. Well, that is a smart horse. Tliere is a lot of ways 
of lookino- at smart horses. You can look at one on the racing form. 

Mr. Rice. You look at it on form ? 

Mr. RosENBAUM. You can look at one as an animal. 

Mr. Rice. Well, when these people call you from New York, what 
do you look at ? 

Mr. RosENBAUM. It is what they tell you on the jihone, that they 
got information, and wdiat I think of the animal, and I have my own 
opinion. 

Mr. Rice. Mr. Rosenbaum, I think probably the most interesting 
thing you could do for us, enlightening thing, would be to give us an 
illustration of one race and how you would handle it. 

Possibly if I used a program [showing document to witness]. Now, 
referring to the ninth race at the Fair Grounds on January 27, 1951, 
you would get a certain amount of lay-off money on that particular 
race ? 

Mr. Rosenbaum. We will say w^e did. 

Mr. Rice. We will say we did, yes. 

Mr. Rosenbaum. Yes. 

Mr. Rice. We actually did here, because this is the one that Cogan 
used. Now, approximately what would you get back on all of the 
horses together in a race like that? What w^ould be your total handle 
on a race like that from lay-offs and every place? 

Mr. Rosenbaum. An average, or speaking of this particular race? 

IMr. Rice. Your average race. What Avould you get ? 

Mr. Rosenbaum. Maybe one, maybe two horses. 

Mr. Rice. You would get action on more than one or two horses, 
wouldn't you ? 

Mr. Rosenbaum. Only rooms would be getting that? 

Mr. Rice. Only one ? 

Mr. Rosenbaum. Rooms. The rest is only hearsay. 

Mr. Rice. A rumor ? 

Mr. Rosenbaum. A room, r-o-o-m. This is a room, and you have 
sheets on the wall, right down to dollars 

Mr. Rice. Horse room? 

Mr. Rosenbaum. Yes. 

Mr. Rice. You don't get action on all the horses? 

Mr. Rosenbaum. That is right. 

Mr. Rice. Somebody calls from St. Louis 

Mr. Rosenbaum. That is only conversation. It happens, but it is 
so rare you would say there is no such thing. 

Mr. Rice. Mooney will call you up fi-oni St. Louis and he will give 
you a bet on one horse, then, is that right? 

Mr. Rosenbaum. Yes. 

Mr. Rice. That would be about how much ? 

Mr. Rosenbaum. It depends how much he has got. 

Mr. Rice. Let's use this race. 

Mr. Rosenbaum. Say he got a thousand dollars for a horse to win. 

Mr. Rice. A thousand to win. 



120 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. RosENBAiiM. Just say I got a thousand. 

Mr. Rice. A thousand to win? 

Mr. RosENBAUM. Yes. And if I liked the horse, if I would like 
the horse, I would give him live hundred, and I would go in to another 
fellow and give him three hundred. 

Mr. Rice. So you will lay off around 

Mr. RosENBAUM. Two hundred here ; yes. 

Mr. Rice. All right, now. How do you arrive at a position when 
you decide to call Cogan and tell him to do something? What mental 
operation do you go through? 

Mr. RosENBAUM. Sometimes, in handica[)ping horses my own 
way 

The Chairman. Speak louder, please, Mr. Rosenbaum. 

Mr. RosENBAUM. If 1 like a horse myself aiul I tliink he will be 
hard, and these horses' forms are really bad. 1 wuU take that horse 
there, and if I would have five hundred for it, I would lay off two 
hundred across on him, and think maybe if something does beat him, 
why, you can't put him out of the money. 

Mr. Rice. Can't put him out of the money because you bet him 
across the board? 

Mr. RosENBAUM. Yes ; I bet two across the board. 

Mr. Rice. In other words, you are trying to win on that race? 

Mr. RosENBAUM. Yes ; I try to win on anything, same as you do. 

Mr. Rice. That doesn't seem to tally with the record where it shows 
that you lose at every track you bet at through Cogan and Remer. 

Mr. Rosenbaum. That is right. You don't beat anybody, no 
race tracks. 

Mr. Rice. You don't beat anybody at no race tracks? 

Mr. RosENBAi'M. I say you don't beat no race tracks. 

Mr. Rice. You don't beat no race tracks? 

Mr. Rosenbaum. That is right. 

Mr. Rice. How do you stay in business? 

Mr. Rosenbaum. Well, you lay off some and keep some. You get 
a thousand dollars, you lay off seven hundred and keep thi'ee. 

Mr. Rice. Yes. 

Mr. Rosenbaum. Or two or three, something. 

Mr. Rice. Yes. Well, is it possible to get in a j^osition on a race 
where you can't lose ? 

Mr. Rosenbaum. I don't think so. 

Mr. Rice. You don't think so ? 

Mr. Rosenbaum. It has happened. 

Mr. Rice. It has hap})ened? 

Ml-. Rosenbaum. Yes. 

The Cairman. Tell us how it happened. 

Mr. Rosenbaum. It happens — I don't know. I never have. I don't 
handle that kind of money. It's possible, but I don't think so. I 
never handled it that way. 

Mr. Rice. How would it be possible ? 

Mr. Rosenbaum. Well, just bet on everything in the race except 
the horses that really figure. 

Mr. Rice. Not betting, you mean holding something on everything 
in the race? 

Mr. Rosenbaum. They are betting. 

Mr. Rice. They are betting? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 121 

Mr. RosENBAUM. Yes, on everything in the race except the two 
horses that really figure. 

Mr. Rice. So, for purposes of argument, say they were betting a 
thousand on all 12 horses. So you would be holding $12,000 ? 

Mr. RosENBAUM. Yes. If it would win, I would make money. 

Mr. Rice. If the winner paid 20 to 1, you would make money, 
wouldn't you ? 

Mr. Rosenbaum. Yes. 

Mr. Rice. Don't you occasionally get in that position ? 

Mr. RosENBxiUM. They bet around the favoTite, don't like the 
favorite. 

Br. Rice. Bet around the favorite? 

Mr. RosENBAUM. Yes. 

Mr. Rice. If the favorite wins you are all right. 

Mr. RosENBAUM. The favorite doesn't win when they bet. 

Mr. Rice. When these bettors bet? 

Mr. RosENBAUM. Yes. 

]\Ir. Rice. Damon Runyon probably would like to hear that. He 
said that all horse players die broke, I believe. 

Mr. RosENBAUM. That is right. 

Mr. Rice. Do you subscribe to that ? 

Mr. RosENBAUM. I don't believe it. 

Mr. Rice. You don't believe that ? 

Mr. RosENBAUM. No; I think all bookmakers die broke. [Laugh- 
ter.] You can't show me one that has got any money. The best proof 
is you can't show me one with money. 

Mr. Rice. What business are you in ? 

Mr, RosENBAUM. I am not a bookmaker. Ii am glad you called that. 

The Chaikvian. Could an individual, say, in Newport call you and 
say, "I want to bet $100 on No. 3 in a certain race," and would you 
take the bet? 

Mr. RosENBAUM. If your credit Was good. 

The Chairman. You do have a lot of customers of that sort, don't 
you? 

Mr. RosENBAUM. I haven't ; no. 

The Chairman. I mean this operation, Axtell, whatever it is. 

Mr. RosENBAUM. I would say people have, but I haven't. 

The Chairman. But do you have some on Axtell? Suppose you 
should know me and know my credit was good, and I had done busi- 
ness with you and called you up on Axtell 1495 and said, "I want to 
bet $100 on No. 7 at the Fair Grounds in New Orleans." Would you 
take the bet? 

Mr. RosENBAUM. Yes. 

The Chairman. And you have a lot of people who would call that 
way, don't you ? 

Mr. RosENBAUM. I beg your pardon ? 

The Chairman. A lot of people did call you that way, didn't they? 

Mr. RosENBAUM. No; I have nobody. I have no people like that. 

The Chairman. Did you ever have anybody just call you up, some- 
body that you knew, whose credit was good, and say they wanted to 
bet on a certain horse ? If they did, would you take the bet ? 

Mr. RosENBAUM. Wliat is that ? 

68958— 51— pt. 12 9 



122 ORGANIZED CRIME IN INTERSTATE COMMERCE 

The Chairman. Say Mr. Smith, as an example, whom you knew 
well, would call you from Cincinnati and say, "Louie, I want to bet 
$500 on a certain horse running this afternoon at the Fair Grounds 
in New Orleans," and you knew his credit was good, he would pay 
you, would you take the bet? 

Mr. RosENBAUM. Yes. 

The Chairman. Well, you did that right off then, didn't you? 

Mr. RosENBAUM. I don't deal with private customers. There is a 
few. I have done it. 

The Chairman. There are a few, but most of the people you would 
deal with are 

Mr. RosENBAUM. Professionals. 

The Chairman. Professionals and other commission merchants, 
other commission brokers ; is that it ? 

Mr. RosENBAUM. That is right. 

Mr. Rice. Have you ever been arrested? 

Mr. RosENBAUM. Yes. 

Mr. Rice. What for? 

Mr. RosENBAUM. Oh, for speeding, and got arrested in Miami. 

Mr. Rice. What were you arrested for in Miami ? 

Mr. RosENBAUM. I walked into a place and just sat down like this 
and I got arrested, and they said, they made out where I took $5 on 
a horse, and I never done that in my life. Just one of them things. 
I walked into it. What am I going to do ? 

Mr. Rice. What place did you walk into ? 

Mr. RosENBAUM. I don't know — some place out in the country 
somewhere. I wouldn't even know it if I would see the place now. 
But $5 here and $5 there and $5 here. I don't know what they were 
talking about. It is strictly one of them things I walked into. I 
don't know. 

Mr. Rice. Did you pay a fine for that walk-in ? 

Mr. RosENBAUM. Yes, sir. 

Mr. Rice. How much did you pay ? 

Mr. RosENBAUM. I think — I don't remember exactly — about four 
or five hundred. 

Mr. Rice. You will be a little careful where yon walk into now, 
yon't you ? 

Mr. RosENBAUM. It wouldn't make no difference. You can do it to 
me again. It happens to anybody. 

Mr. Rice. How about the other times you were arrested? 

Mr. RosENBAUM. I was arrested in a room. 

Mr. Rice. In a room? 

Mr. RosENBAUM. Yes. 

Mr. Rice. Where was that ? 

Mr. RosENBAUM. In Chicago. 

Mr. Rice. In whose room 

Mr. RosENBAUM. They just broke the door in. 

Mr. Rice. Broke the door in. 

Mr. RosENBAUM. Yes. 

Mr. Rice. Who is they ? 

Mr. RosENBAUM. Police. 

Mr. Rice. What were you doing in there ? 

Mr. RosENBAUM. An office. 

Mr. Rice. An office ? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 123 

Mr. RosENBAUM. Yes. 

Mr. Rice. What was going on in there ? 

Mr. RosENBAUM. It was last March 15. 

Mr. Rice. 1950? 

Mr. RosENBAUM. That is right. I jnst had my papers made out to 
send to Uncle Sam. 

Mr. Rice. You were doing the same thing you do in Cincinnati, 
weren't you ? 

Mr. RosENBAUM. Yes, sir, 

Mr. Rice. Taking action, lay-oflfs? 

Mr. RosENBAUM. Yes. 

Mr. Rice. What did they do to you as a result of that situation? 

Mr. RosENBAUM. Wliat did they do to me ? 

Mr. Rice. Yes. Did you pay a fine? 

Mr. Rosenbaujm. I don't think so. 

Air. Rice. You don't know ? 

Mr. RosENBAUM. I don't think so. 

Mr, Rice. You ought to move to Chicago. 

Mr. RosENBAUM. I don't think there was any fine. I would have to 
tliink. I don't think so, 

Mr, Rice, What became of that thing? Did you do any time? 

Mr, RosENBAUM, Oil, no. I don't do anything to give me time. 

Mr. Rice. Did they take you down to the station house? 

Mr. RosENBAUM. Yes. 

Mr. Rice. And booked you ? 

Mr, RosENBAUM, Yes, 

Mr, Rice. How did you get out? 

Mr. RosENBAUM, How did I get out? I don't know. Let me see 
how that was. My lawyer took care of that, 

Mr. Rice. Mouthpiece? 

Mr. RosENBAUM. That is right. 

Mr. Rice. Then what happened to the charge? Just tell us. You 
know what happened, 

Mr, RosENBAUM, No, sir; I don't remember exactly. There was 
nothing to it. 

Mr. Rice. Nothing to it? 

Mr. RosENBAUM. I don't think so. I don't remember exactly. 

Mr. Rice. You paid a fine; didn't you? 

Mr. RosENBAUM. I don't recall, to tell you the truth, 

Mr, Rice. As a matter of fact, it was so small it didn't make any 
diiference to you? 

Mr. RosENBAUM. No. I don't know I even remember what it was. 

Mr. Rice. Did you ever go in front of a judge on it ? 

Mr. RosENBAUM. Yes. 

Mr. Rice. What did the judge say ? 

Mr. RosENBAUM. I think it was a dismissed case. 

Mr. Rice. You can't remember; can you? 

Mr. RosENBAUM. I beg you pardon ^ 

Mr. Rice. You can't remember ? 

]\Ir, RosENBAUM, I am nearly sure it was, 

Mr, Rice, You went to Cincinnati anyhow after that; didn't you? 

Mr. RosENBAUM. You had to go some place if you wanted a tele- 
phone. 



124 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Senator Tobey. I think, Mr. Chairman, I wonld add a footnote 
there — good riddance of bad rubbish, 

Mr. Rice. When you got to Cincinnati and set up over there at this ; 
place over in Kentucky, who kept your books ? Who takes care of your 
books and records? 

Mr. ROSENBAUM. Now ? 

Mr. Rice. Now or then. 

Mr. RosENBAUM. Larry Donelly. 

Mr. Rice. Who? 

Mr. Rosenbatjm. Donelly. 

Mr. Rice. Does he still keep your books ? 

Mr. RosENBAUM. No ; he keeps his own. 

Mr. Rice. Keeps his own? 

Mr. RosENBAUM. Yes. 

Mr. Rice. Who keeps yours? 

Mr. RosENBAUM. He is deceased. 

Mr. Rice. And who is your bookkeeper now ? 

Mr. RosENBAUM. Foreman. 

Mr. Rice. What is the name? 

Mr. RosENBAUM. Foreman. 

Mr. Rice. F-o-r-e-m-a-n? 

Mr. RosENBAUM. Yes. 

Mr. Rice. What is his first name? 

Mr. RosENBAUM. Norman. 

Mr. Rice. Where does Norman Foreman have his office ? 

Mr. RosENBAUM. Him and his brother — his brother is in Albu- 
querque, N. Mex. 

Mr. Rice. In Albuquerque, and his brother? 

Mr. RosENBAUM. I mean his brother takes care of my books. There 
is a daily book and a yearly book. 

Mr. Rice. That is what I want, the daily book first. Who keeps 
your daily book ? 

Mr. RosENBAUM. Norman Foreman right now. 

Mr. Rice. Where is Norman Foreman? 

Mr. RosENBAUM. In Cincinnatti. 

Mr. Rice. What does he use for a desk? Where does he work 
out of? 

Mr. RosENBAUM. I don't know. 

Mr. Rice. You don't know? 

Mr. RosENBAUM. He is using a desk right now with me. 

Mr. Rice. Right in this hospitalization place, isn't he? 

Mr. RosENBAUM. Yes, just about a month. 

Mr. Rice. He keeps the daily book? 

Mr. RosENBAUM. Yes, sir. 

Mr. Rice. Now, then, when you settle up at the end of the year for 
tax purposes, who keeps your other books on that? 

Mr. RosENBAUM. He and his brother. 

Mr. Rice. He and his brother, and the brother is in Albuquerciue ? 

Mr. RosENBAUM. Yes. 

Mr. Rice. Wliat is his brother's name? 

Mr. RosENBAUM. Milton. 

Mr. Rice. Milton? 

Mr. RosENBAUM. Yes. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 125 

Mr. Rice, What do you do — send the books out there or does Milton 
come in ? 

Mr. RosENBAUM. Milton comes in. 

Mr. Rice. Do you pay him for that ? 

Mr. RosENBAUM. Yes, sir. He is a certified 

Mr. Rice. What was your income last year ? 

Mr. RosENBAUM. Nothing last year. 

Mr. Rice. How about the year before, 1949, approximately? 

Mr. RosENBAUM. No good. 

Mr. Rice. You don't know? 

Mr. RosENBAUM. It was no good in 1949 and 1950. 

Mr. Rice. No good. Wliat was it in 1949 ? 

Mr. Rosenbaum. I don't know. 

Mr. Rice. You don't what? 

Mr. RosENBAUii. I don't know what it w^as in 1949 and 1948. 

Mr. Rice. Approximately what was it? 

Mr. Rosenbau3i. I don't know. I couldn't tell you. 

Mr. Rice. Can you remember any year what your income was? 
How about a good year ? Did you have a good year ? 

Mr. Rosenbaum. Yes. 

Mr. Rice. What good years did you have ? 

Mr. Rosenbaum. I think 1947 and 1948. 

Mr. Rice. How much did you make in 1947 ? 

Mr. Rosenbaum. I don't know exactly, but it was good. 

Mr. Rice. How much? 

Mr. Rosenbaum. I paid close to two hundred income tax. 

The Chairman. Two hundred what? 

Mr. RosENBAuai. Two hundred thousand. 

The Chairman. Two hundred thousand dollars? 

Mr. Rosenbaum. Yes. 

Mr. Rice. How much was your total net? 

Mr. Rosenbaum. I don't know. 

Mr. Rice. You don't know, but whatever it was you paid $200,000 
income tax? 

Mr. Rosenbaum. In that neighborhood. 

Mr. Rice. What did you pay last year ? 

Mr. Rosenbaum. I don't know. 

Mr. Rice. You don't know ? 

Mr. Rosenbaum. No. I have a bookkeeper. It was no good, I know. 
It might have been very small. 

Mr. Rice. Very small? 

Mr. Rosenbaum. One way or the other. 

Mr. Rice. How small is small? 

Mr. Rosenbaum. I don't know. I don't remember, unless you want 
me to dream one up. 

Mr. Rice. What would be your best guess now what you made last 
year ? 

Mr. Rosenbaum. Wliy guess when I don't know. I would only be 
guessing right or wrong. 

Mr. Rice. You guess on tliese horses sometimes. Guess on your 
income. 

Mr. Rosenbaum. I don't guess on horses. It is a rei^soned guess. 

Mr. Rice. A reasoned guess. You know what they are going to 
do, don't you ? 



126 ORGAJSriZED CRIME EST INTERSTATE COMMERCE 

Mr. RosENBAUM, I beg your pardon ? 

Mr. Rice. You know what they are going to do, don't you? 

Mr. RosENBAUM. Yes ; I know exactly what they are going to do — 
going to eat. 

Mr. Rice. Let us know what your income was last year. 

Mr. RosENBAUM. I don't know. 

Mr. Rice. Was it $100,000? 

Mr. RosENBAUM. Less. 

Mr. Rice. Fifty thousand ? 

Mr. RosENBAUM. I don't know. 

Mr. Rice. Between fifty and a hundred ? 

Mr. RosENBAUM. No ; it was a whole lot less than that. 

Mr. Rice. What? 

Mr. RosENBAUM. It either was a loss or I made a little money, I 
don't know which. It wasn't much of anything either way. 

Mr. Rice. You just finished filing your return on the 15th of Janu- 
ary, didn't you ? 

Mr. RosENBAUM, Yes, sir. 

Mr. Rice. What was your income for 1950, then ? 

Mr. RosENBAUM. I couldn't tell you unless you want me to lie, and 
I ain't going to do that. 

Mr. Rice. Was it more than $20,000? 

Mr. RosENBAUM. I couldn't tell you. I would be lying if I would 
tell you. 

Mr. Rice. Can you come within $10,000 of what it was ? 

Mr. RoSENBAUM. I couldn't come within 10 cents. I wouldn't know. 
I don't look at the books. 

Senator Tobey. What is your net worth? What are you worth 
today, net ? 

Mr. RosENBAUM. A little over a hundred, I guess. 

Senator Tobey. A little over a hundred thousand ? 

Mr. RosENBAUM. Yes. 

Senator Tobey. After paying all your liabilities, and considering 
all your assets, you would only be worth $100,000 ? 

Mr. RosENBAUM. Yes ; a little over a hundred. I don't know exactly. 
I don't know exactly there, either. How much money have I got in 
my pocket ? I don't know. 

Senator Tobey. You keep books, do you ? 

Mr. RosENBAUM. Yes. 

Senator Tobey. Showing all income and outgo ? 

Mr. RosENBAUM. Oh, yes; but my bookkeeper does that; I don't 
look at it. 

Senator Tobey. You trust him entirely, do you? 

Mr. RosENBAUM. Yes. You have your methods of doing business 
with people that you allow anything to. They are proven honest. 
That is the way I do. 

The Chairman. What do you pay this auditor for coming from 
Albuquerque to fix up your income-tax return? How much do you 
pay him per trip ? 

Mr. RosENBAUM. I don't know. About $600, something like that. 

The Chairman. About $600 ? 

Mr. RosENBAUM. Something like that — $600. I don't know exactly. 
My brother takes care of that. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 127 

The Chairman. Your brother takes care of all your books? 

Mr. RosENBAUM. My brother takes care of 

The Chairman. All the payments and details, is that it ? 

Mr. RosENBAUM. Things like that. 

The Chairman. It is your brother-in-law, isn't it? 

Mr. Rosenbaitm. Yes. I got a brother-in-law and a brother — 
Harry, Dave, Meyer. I got five of them. 

The Chairman. Are they all in business with you ? 

Mr. RosENBAUM. No. 

The Chairman. How many are in business with you? 

Mr. RosENBAUM. Harry and Dave. 

The Chairman. Harry and Dave? 

Mr. RosENBAUM. Yes. Stocks, you know. 

The Chairman. How many are in this commission business with 
you? 

Mr. RosENBAUM. The three. 

The Chairman. Harry and Dave and you ? 

Mr. RosENBAUM. That is right. 

The Chairman. Which is the other one ? 

Mr. RosENBAUM. All three. 

The Chairman. What other business do you have, any other 
business ? 

Mr. RosENBAUM. I haven't got any business now outside of breeding, 
buying, selling, and stocks. 

The Chairman. Buying and selling stocks on the exchange, is 
that it ? 

Mr. RosENBAUM. Well, not exactly. Grains. 

The Chairman. What? 

Mr. RosENBAUM. Grains. 

The Chairman. Commodities? 

Mr. RosENBAUM. Yes, sir. 

The Chairman. Cotton and corn ? 

Mr. RosENBAUM. That is right. 

The Chairman. Wheat. Do you come out pretty well on that? 

Mr. RosENBAUM. Well, I have done all right. 

The Chairman. You were in the garment-manufacturing business. 
What did you manufacture? 

Mr. RosENBAUM. I never was in it, never in that business. 

The Chairman. Well, you were in the clothing business? 

Mr. RosENBAUM. Yes. 

The Chairman. What kind of clothing? 

Mr. RosENBAUM. Men's clothing. 

The Chairman. You mean you had a store? 

Mr. RosENBAUM. Yes, sir. 

The Chairman. At Cincinnati ? 

Mr. RosENBAUM. Yes, sir. 

The Chairman. Now you did business in Chicago until you left 
Chicago to come to Newport. Where else did you ever have a com- 
mission office like this? 

Mr. RosENBAUM. In Elmwood. 

The Chairman. Elmwood where — what State? 

Mr. Rosenbaum. That is in Ohio. 

The Chairman. Where else ? 

Mr. Rosenbaum. That is all. 



128 ORGANIZED CRIME IN INTERSTATE COMMERCE 

The Chairman. Just those three places? 

Mr. EosENBAUM. Yes. 

The Chairman. But you have been in this sort of business for quite 
a number of years, haven't you ? 

Mr. RosENBAUM. Yes, sir. 

The Chairman. How many years have you been in it? 

Mr. RosENBAUM. About 20 years. 

The Chairman. About 20 years ? 

Mr. RosENBAUM. Yes. 

The Chairman. How many horses do you own today ? 

Mr. RosENBAUM. Oh, I got, I have about seven or eight. 

The Chairman. You have seven or eight horses today ? 

Mr. RosENBAUM. Yes. 

The Chairman. Where are those horses? 

Mr. RosENBAUM- They are all mares and weanlings and yearlings. 

Senator Tobey. Have you got any stallions? 

Mr. Rosenbaum. No, sir. 

The Chairman. You race your own horses ? 

Mr. Rosenbaum. Beg your pardon ? 

The Chairman. You put your own horses in races, don't you ? 

Mr. Rosenbaum. Do I what? 

The Chairman. Race your own horses. 

Mr. Rosenbaum. No, sir. 

The Chairman. But your brother-in-law has a stable, hasn't he ? 

Mr. Rosenbaum. Yes, sir. 

The Chairman. And how many horses does he have ? 

Mr. Rosenbaum. He hasn't got any now. 

The Chairman. He races horses, cloesn't he ? 

Mr. Rosenbaum. He did. 

The Chairman. I mean he did last season, for instance ? 

Mr. Rosenbaum. Early last year ; yes. 

The Chairman. Yes. And this is the brother who is in business 
with you? 

Mr. Rosenbaum. He has got 

The Chairman. Well, all of you have horses, as a matter of fact, 
don't you ? 

Mr. RosENBAixM. Yes ; we are all together on the horses. 

The Chairman. Which brother has the stable? 

Mr. Rosenbaum. Dave. 

The Chairman. And does he race horses at the Fairgrounds at New 
Orleans ? 

Mr. Rosenbaum. Not no more. 

The Chairman. He races them all around, or used to, didn't he? 

Mr. Rosenbaum. Yes. 

The Chairman. And some of the money you would have Avould be 
bet on these horses sometimes, would it ? 

Mr. Rosenbaum. Have I bet on them ? 

The Chairman. Yes. 

Mr. Rosenbaum. Yes, sir. 

The Chairman. You bet on the horses ? 

Mr. Rosenbaum. Yes. 

The Chairman. And then you would receive bets on the horses, 
would you not, from other commissioners ? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 129 

Mr. EosENBAUM. Sometimes they tried to steal it. 

The Chairman. What? 

Mr. KosENBAUM. They tried to beat you to the punch. 

The Chairman, What do you mean they tried to beat you? 

Mr. RosENBAUM. Well, you get a tip on them buying a piece of prop- 
1 ertv that is going to be all I'ight, and there is always a leak, you know — 
cither somebody's agent. It gets out. 

The CiiAiR]\rAN. You mean sometimes you ha\'e got maybe 

Mr. RosENBAuM. A horse you are going to bet on and somebody takes 
the play. 

The Chairman. Sometimes you laiow what a horse you have is going 
to do and they might get the information and beat you to the punch . 
is that it ? 

Mr. RosENBAUM. That is right. 

The Chairman. Is that the way jou operate ? 

Mr. RosENBAUM. It happens. 

The Chairman. If you are betting on your brother's horses, and all 
of you have horses in these races, you know pretty well what they are 
going to do, don't you ? 

Mr. RosENBAUM. What do you mean by all of us ? 

The Chairman. You say you are all in this horse business together. 
You would have a pretty good idea about what your brother's horses 
are going to be aole to do, wouldn't you ''( 

Mr. RosENBAUM. You think you have. You fall in love with them 
the same as a man falls in love with a dog. 

The Chairman. You know whether they are going to run a good 
race or a bad race ; don't you? 

Mr. RosENBAUM. I am just trying to explain that. You fall in love 
with them and you think they are going to do good but they don't. 

The Chairman. Since your brother owns the horses, you would have 
a better idea of what they were going to do than some fellow who didn't 
know anything about them; would you not? 

Mr. RosENBAUM. No. I have made out well without my brother's 
horse. Iwould be in bad shape. I don't think he has done any good 
in 2 years. 

The Chairman. Now these horses you have, do you breed race horses 
and sell them ? 

Mr. RosENBAUM. Yes, sir. 

The Chairman. To whom do you sell them ? 

Mr. RosENBAUM. Anybody. 

The Chairman. Where is this farm you have — or do you have one ? 

Mr. RosENBAUM. I board them. 

The Chairman. You board them? 

Mr. RosENBAUM. Yes. 

The Chairman. Do you have some valuable horses, mares? 

Mr. RosENBAUM. Yes, sir ; I think they are. 

The Chairman. Where do you board them ? 

Mr. RosENBAUM. Different farms, some in Lexington, some in — ■ 
what is the name of that place? 

The Chairman. Calumet Farms. Do you board any there ? 

Mr. RosENBAUM. No ; they don't board. 

The Chairman. What farms do you board them at ? 

Mr. RosENBAUM. Well, I have at Duntreath. 



130 ORGAJ^IZED CRIME IN INTERSTATE COMMERCE. 

The Chairman. Duntreath? 

Mr. RosENBAUM. Yes. 

Tlie Chaiiuman. Where is that— Lexington? 

Mr. EosENBAUM. Yes, sir. 

The Chaiioian. Where else have you boarded them ? 

Mr. RosENBAUM. Gaines farm. Wliat is the name of that ? 

The Chairman. You ought to be able to remember where you 
boarded your horses. 

Mr. RosENBAUM. I can't remember the names ; I beg your pardon. 

The Chairman. You ought to be able to remember where you 
boarded your horses. 

Mr. RosENBAUM. I just haven't got the head. I can't remember 
everything. Gaines owns it. I will tell you that. 

The Chairman. What^ 

Mr. RosENBAUM. Marvin Gaines owns it, I think. 

The Chairman. Marvin Gaines owns what ? 

Mr. RosENBAUM. The farm where I keep the horses. 

The Chairman. How many people like Mr. Remer and Mr. Cogan 
did you have working for you last year ? 

Mr. RosENBAUM. I don't think of any more. I don't remember 
any offhand. 

The Chairman. Sometimes you have more than two people; don't 
you? 

Mr. RosENBAUM. Yes ; I have had more. 

The Chairman. Anyway, you have somebody at every big track in 
the country ; don't you ? 

Mr. RosENBAUM. I wish I had. What did you say ? 

The Chairman. During a good season you have somebody at every 
big track in the country when they are running 'i 

Mr. RosENBAUM. Yes ; if I can get them there. 

The Chairman. That is right; isn't it? 

Mr. RosENBAUM. Yes. It makes you feel better. You know you 
feel a little stronger that you can protect yourself. 

The Chairman. Feel stronger that you can protect yourself ? 

Mr. RosENBAUM. That is right. 

The Chairman. How do you protect yourself by having a man at 
a track ? 

Mr. RosENBAUM. Well, if somebody just like to beat you to the 
punch, and you are holding out until the last minute — for instance, 
you are holding up an order to bet to the last minute, and somebody 
beats you to the punch, and when you go to move your order, and you 
got a thousand dollars for the horse, instead of moving it, you can't 
move it, because somebody has beat you to the punch. So you use the 
race track where they don't say "no," where the bookmakers would 
say "no." 

The Chairman. In other words, if you think you have got too much 
money on a horse, and you think the horse is going to win, and you 
can't lay off with the bookmaker, you can always call this man and 
let him bet at the track, then ; is that right ? 

Mr. RosENBAUM. Yes, sir. 

The Chairman. Sort of insurance? 

Mr. RosENBAUM. Yes. It doesn't pay, because you can do better 
by eliminating all that expense, and nobody hears of you, and that's 



ORGANIZED CRIME IN INTERSTATE COMMERCE 131 

the people that really wind up with the money in the business. It is 
the expense that eats you up. 

The Chairman. If a horse is your brother's horse, or somebody 
else's, and you have a pretty good idea what the horse is going to do, 
then you would be pretty apt to keep the bet yourself; wouldn't you? 

Mr. RosENBAUM. You don't get that. There has got to be some- 
body out there tipping. You don't get them. Them are only dreams. 

The Chairman. I can't understand why you would go to the trouble 
of spending 10 or 15 thousand dollars a year to pay Cogan and 
Remer 

Mr. RosENBAUM. I didn't pay that. 

The Chairman. I know. I mean their salary and also their ex- 
penses on transportation, and they testify that over a meet they 
never win any money. 

Mr, RosENBAUM. There has been meetings where they might beat 
it for a little bit, but you go to the next track 

The Chairman. Usually they lose money ? 

Mr. RosENBAUM. As a really rule, it is a losing proposition. 

The Chairman. Then you are paying them $10,000, or whatever 
the amount is 

Mr. RosENBAUM. It costs you that or more. 

The Chairman. It does cost you that ; does it ? 

Mr. RosENBAUM. It costs you that or more, with the expenses, and 
somebody always doing you a favor, and it costs you. 

The Chairman. But it costs you at least $10,000 to have them there 
to lose money ? 

Mr. RosENBAUM. It sounds ridiculous. 

The Chairman. Yes. "VVliy would you do that ? 

Mr. RosENBAUM. Well, it is somebody else's money all the time. 
[Laughter.] 

The Chairman. That is a pretty good answer. But I mean, why 
do you feel it is good for your business to have them there? 

Mr. RosENBAUM. It's accommodations. The ego in everybody that 
you want to be somebody, you know. 

The Chairman. That is not a very good answer. You wouldn't 
have $10,000 worth of ego a year. 

Mr. RosENBAUM. Somebody pays for that. 

The Chairman. What is that? 

Mr. RosENBAUM. It is somebody else's money. 

The Chairman. I know, but you are paying these fellows out of 
your pocket. 

Mr. RosENBAUM. Yes, but it has some kind of earning power. 

The Chairman. It has some kind of earning power for you to pay 
$10,000 for them to lose money? 

Mr. RosENBAUM. You know they say certain games are a dead even 
thing, but the fellow that plays, or vice versa, there is a loss. 

The Chairman. The thing is that on certain horses where you 
might stand to have a big loss, you minimize or reduce the possible 
loss you are going to have by getting these fellows to bet money when 
you can't play with the bookmakers? 

Mr. RosENBAUM. You are talking about bookmakers. 

The Chairman. So you keep the good bets yourself. 

Mr. RosENBAUM. There are no more bookmakers. 

The Chairman. What? 



132 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. EosENBAUM. I don't think there are any more bookmakers. 
The Chairman. Not any more bookmakers ? 

Mr. ROSENBAUM. No. 

The Chairman. You don't think there are any more? 

Mr. RoSENBATTM. No. 

The Chairman. Since when? 

Mr. RosENBAUM. Well, I don't think there are any real bookmakers 
in the last 2 years. They step in and out, and they go ont for fresh 
money. You can't call them bookmakers. They don't stay long 
enough in money. 

The Chairman. Let's take a time when there were bookmakers, 
say, 2 or 3 years ago. When would it come to the time when you 
would get in touch with Cogan or Remer to bet $2,000 on a horse? 
What would be the situation that would cause you to call them to bet 
$2,000 on a horse in the pari-mutuels ? 

Mr. Rosenbaum. It would depend on the handle of the race track. 
It wouldn't matter much to a 3 to 1 shot in a place like Monmouth 
or Garden State, New York, or the west coast, where the handle is big. 

The Chairman. But if there is a small handle, then you put a cer- 
tain amount of money on the horse ? 

Mr. Rosenbaum. You would hurt the price. 

The Chairman. But the amount of money on the horse reduces 
the odds quickly ; doesn't it ? 

Mr. Rosenbaum. Yes. 

The Chairman. Why w^ould you want to reduce the odds on a par- 
ticular horse? 

Mr. Rosenbaum. Not from my say-so. It would be somebody else 
would call you up and say, "Here is $2,000, Put in $1,500." Or some- 
thing like that. "Here is a thousand. Put in $800," Something like 
that. 

The Chairman. I know, but why would you want to reduce the 
odds? 

Mr. Rosenbaum. I don't want to reduce it. It is just like the man 
gives you a thousand dollars, and tells you to put it in, A man calls 
you up and says, "Here is a thousand on this horse. Put $800 of it in." 

The Chabjman. Mr. Rice, see if you can get this clear. You know 
more about horses than I do. 

Mr. Rosenbaum. Well, you might as well learn. 

Mr. Rice. Here is the expert out here. 

I think it is a fair statement to say that when you have a substan- 
tial amount on a horse that is going at 30 to 1, that what you call to the 
track wouldn't be the total amount you are holding, but part of that. 
Say you had $10,000 on a horse going a 30 to 1, you would only call 
in a thousand or two; wouldn't you? You wouldn't take your whole 
$10,000 ; would you ? 

Do you want to use your pencil ? 

Mr. Rosenbaum. I want to use a needle, or something. 

Mr, Rice, A needle? 

Mr, Rosenbaum, $10,000 on a 30 to 1 ? 

Mr. Rice. Use that for an illustration. They have laid it off to 
you. You are holding $10,000 on a horse going at 30 to 1. 

Mr. Rosenbaum. Let's make it in reason. 

Mr. Rice. Pick out something reasonable. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 133 

Mr. RosENBAUM. Say a thousand, or $1,500. You are talking too 
big figures for me. 

Mr. Rice. All right. You have a thousand dollars bet with you. 

Mr. RosENBAUM. Yes. 

Mr. Rice. And the horse is going at 30 to 1. 

Mr. RosENBAUM. Yes, sir. 

Mr. Rice. And you are going to call Cogan. 

Mr. RosENBAUM. Yes. 

Mr. Rice. How much will you give Cogan to bet ? How much would 
tell him to bet? 

Mr. RosENBAUM. It depends on the race track. 

Mr. Rice. It depends on the track. Say it is a small track. Say it 
is Fair Grounds. 

Mr. RosENBAUM. Yes. Oh, about — on a 30 to 1 shot ? 

Mr. Rice. Yes. 

Mr. RosENBAUM. Eight hundred. 

Mr. Rice. So you give $800 of your thousand to him on the 30 to 1, 
and that will drop the odds ? 

Mr. RosENBAUM. If I wanted to keep two, 

Mr. Rice. You will keep the $200, and then if the horse wins, you 
have to pay off on the $200 that you kept, but you don't have to pay 
the odds, say, 3 to 1 on the $200 you kept, and Cogan will go up to 
the window and cash tickets? 

Mr. RosENBAUM. That is right. 

Mr. Rice. At 30 to 1 on $800. 

He keeps himself from getting hurt on the $200 he kept. 

The Chairman. I see. 

Mr. Rice. And all the other money he had on other horses, if any, 
he just keeps that. Say he had $1,000 on three other horses; he keeps 
that. So it minimizes his losses. 

The Chairman. Then actually you get the benefit of what the track 
takes out for taxes, and parimutuel expense in the long run. Is that 
what you get? 

Mr. RosENBAUM. Yes. You mean if they take 10 or 15 percent? 

The Chairman. Yes. 

Mr. RosENBAUM. I got that going for me. Is that what you mean ? 

The Chairman. Yes. So you actually make that then yourself ? 

Mr. RosENBAUM. The 15 percent? 

The Chairman. Yes. 

Mr. RosENBAUM. If you would get enough action, it would be all 
right, but you don't get it. 

The Chairman. What is the "scalp"? 

Mr. RosENBAUM. A "scalp"? 

The Chairman. Yes. 

Mr. RosENBAUM. In a scalp, you pay 15 to 1 across to any book- 
maker that would lay off to you, or anybody. That is the price all 
over the country, as a rule. If you put it in at a race track^ — say a 
fellow gives you $200, you say, "I will split it with you." So you 
give him $100. If the horse pays $40, I get the difference between 
$32 and $40 for $100. But there siin't enough of that. 

Mr. Rice. You used to pay what ? Ten and eight ? Now you pay 
$15. So if the horse paid $40 to $1, you would pay anybody betting 
with you $15 ? 

Mr. Rosenbaum. That is right. 



134 ORGANIZED CRIME IN INTERSTATE COMMERCE. 

Mr. Rice. And the difference between the 15 and the 40 is "scalp," 
isn't it? 

Mr. RosENBAUM. No ; there is some places they pay track odds for 
$2. 

Mr. Rice. We are not talking about track odds. Yon are paying 
15 as the most on a winner, aren't you ? 

Mr. RosENBAUM. That is all I would pay. 

Mr. Rice. That is all you pay. 

Mr. RosENBAUM. Yes. 

Mr. Rice. So if you put it into the track, and the track actually 
paid, say 40 to 1, you would get a substantial return over the 15 to 1 
which you would pay someone who played with you. You wouldn't 
pay track odds, but would get track odds ? 
* Mr. Rosenbaum. That is right. 

Mr. Rice. That is the "scalp"? 

Mr. Rosenbaum. Yes. 

Mr. Rice. Why use that term ? Who made that up ? 

Mr. Rosenbaum. You are scalping the difference, see. If you put 
in $200, you have invested nothing, and you get $4,000 back. You only 
pay off $32, You have paid out no investment. You have made no 
chance of winning or losing. You have made $800. The fellow that 
gives you says 50-50. That is what they usually do. So you have made 
$400 apiece. 

Mr, Rice. You have "scalped" somebody ? 

Mr. Rosenbaum. You scalp them. 

Mr. Rice. What we were interested in, too — you take lay-off' money 
coming from, say St. Louis, over the telphone ? 

Mr. Rosenbaum, Yes, 

Mr. Rice. You know the person you are dealing with. 

Mr. Rosenbaum. Yes, sir. 

Mr. Rice, And you know his credit is good. Now, then, at the end 
of the day do you settle up with him, or at the end of the week ? 

Mr, Rosenbaum. No particular time. It varies when you do busi- 
ness with a man every day, and usually the same people, 

Mr. Rice. Suppose you get into a position where he owed you more 
money than you wanted to extend him credit for, and you wanted to 
settle up ? How would you do that ? 

Mr. Rosenbaum, You owe me $15,000 and I think it is more than you 
can pay ? 

Mr, Rice. Yes. 

Mr. Rosenbau3i, Send me a check for ten, 

Mr. Rice. He sends you a check for part ? 

Mr. Rosenbaum. For ten. If you want to, you can send me a check 
for all, I can use the fifteen, 

Mr, Rice, I send yon my check for ten, and I still owe you five, and 
keep on playing ; is that right ? 

Mr, Rosenbaum, That is right, 

Mr, Rice, Do I send that througli the mail to you ? 

Mr, Rosenbaum, Yes, 

Mr, Rice, Where do I mail that to you ? 

Mr, Rosenbaum, Cincinnati, box 35, 

Mr, Rice, Box 35 ? 

Mr, Rosenbaum, Or any place you want it, 

Mr, Rice, To whom do I address that? Any place I want it? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 135 

Mr. RosENBATJM. Yes, yon can send it to Oslikosli. What difference 
does it make. Wherever yonr address is. Yon asked me where I 
wonld send it, and I said box 35. 

Mr. Rice. So I send it to yon at box 35, Cincinnati, Louis Rosen- 
banm ? 

Mr. RosENBAUM. That is right. 

]Mr. Rice. You get my check. What do you do with it? 

Mr. RosENBAUM. Deposit it or cash it. 

Mr. Rice. "W^iere do you deposit it? 

Mr. RosENBAUM. I deposit it at the Peoples Bank. 

Mr. Rice. The Peoples Bank in Cincinnati? 

Mr. Rosenbaum. Yes. 

Mr. Rice. In an account in your name ? 

Mr. Rosenbaum. No. 

Mr. Rice. Wliat is the account name ? 

Mr. Rosenbaum. Maurice Miller. 

Mr. Rice. Your bi-other-in-law ? 

Mr. Rosenbaum. That is right. 

Mr. Rice. If I would draw a check, what do I make it payable to? 

Mr. Rosenbaum. Louis Rosenbaum. 

Mr. Rice. Louis Rosenbaum. Then you get it from box 35 ? 

Mr. Rosenbaum. I don't get it, 

Mr. Rice. Somebody gets it? 

Mr. Rosenbaum. Yes. 

Mr. Rice. And then you rubber-stamp it? 

Mr. Rosenbaum. Yes. 

Mr. Rice. With Louis Rosenbaum, and Maurice Miller endorses it 
and it goes into his account ? 

Mr. Rosenbaum. That is right. 

Mr. Rice. Now, how do you handle that ? It is your money, isn't it ? 

Mr. Rosenbaum. Yes. 

Mr. Rice. Suppose Maurice Miller checks it out. How do you 
control him? 

Mr. Rosenbaum. You just don't leave that much in there. 

Mr. Rice. You just don't leave that much in there? 

Mr, Rosenbaum. You just have to take that chance, 

Mr, Rice. Just take a chance? 

Mr. Rosenbaum. I don't think of them things. 

Mr. Rice. Why don't you have an account in your own name ? 

Mr. Rosenbaum. I have. 

Mr. Rice. Wliy don't you put it in that account ? 

Mr. Rosenbaum. But it is in Chicago, and not very handy. 

Mr, Rice, In Chicago? 

Mr, Rosenbaum, Yes, 

Mr. Rice. Are any banks in Cincinnati opposed to accounts ? 

Mr. Rosenbaum. No. I just always had it there. 

Mr. Rice. What bank in Chicago ? 

Mr. Rosenbaum. La Salle National, 

Mr. Rice. And so the money is transferred from Maurice Miller 
to the La Salle National, isn't it? 

Mr. Rosenbaum. I beg your pardon? 

Mr. Rice. The money that is coming to you from these people 
goes from the Maurice Miller account in Cincinnati to your account 



136 ORGANIZED CRIME IN INTERSTATE COMMERCE 

in La Salle in Chicago ; is that right ? How do yon get your money 
I'rom Manrice Miller ? It is your money. 

Mr. RosENBATJM. It is never there. You take it from — well, there 
is never enough there. 

Mr. Rice. There is never enough there, and these people are paying 
you w^hat they owe? 

Mr. RosENBAUM. How about we paying the fellows? I have to 
send them checks, too. It isn't a one-way proposition. 

Mr. Rice. It is a one-way proposition. You always pay it out, is 
that it? 

Mr. RosENBAUM. I haven't made any money in 2 years. 

Mr. Rice. "Wlien you were making money. 

Mr. RosENBAUM. I got a partner. 

Mr. Rice. I think we understand it. 

Let's put it on the other foot, then. You are losing money so that 
you owe these people some money. How do you straighten up with 
them ? 

Mr. RosENBAUM. By check. 

Mr. Rice. By check? 

Mr. RosENBAUM. Yes. 

Mr. Rice. Now, then, what account? 

Mr. RosENBAUM. Maurice Miller. 

Mr. Rice. Maurice Miller? 

Mr. RosENBAUM. Yes. 

Mr. Rice. So you instruct Maurice Miller to draw a check to 
whom ? 

Mr. RosENBAUM. I beg your pardon ? 

Mr. Rice. Do you have him draw it to cash or an individual ? Sup- 
pose it is Mooney? 

Mr. RosENBAUM. Yes. 

Mr. Rice. Yes, what? Do you tell Maurice Miller to draw a check 
to John Mooney? 

Mr. RosENBAUM. To make out a check to Morris Mooney ? 

Mr. Rice. To John Mooney. To make a check to John Mooney. 

Mr. RosENBAUM. That is right. 

Mr. Rice. What does he do with it? 

Mr. RosENBAUM. Who — John Mooney? 

Mr. Rice. How does it get to Mooney. Do you send a messenger 
out there with it? 

Mr. RosENBAUM. He sends it — wires it. 

Mr. Rice. You wire it? 

Mr. RosENBAUM. Oh, no. I mean just mails it to him, 

Mr. Rice. Mails it to him. Sends it through the mail? 

Mr. RosENBAUM. Yes. 

Mr. Rics. Now how do you know where John Mooney is ? 

Mr. RcsENBAUM. Well, he has an address. 

Mr. RiciL. He has a box number, too, doesn't he ? 

Mr. RosENBAUM. I think so. 

Mr. Rice. What box number is that ? 

Mr. RosENBAUM. I wouldn't know. 

Mr. Rice. Do you have a record of it ? 

Mr. RosENBAUM. I think so. 

Mr. Rice. Do you have a record of the names and addresses of all 
these people you do business with ? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 137 

Mr. HosENBAUM. And addresses? 

Mr. Rice. Yes. 

Mr. RosENBAUM. Yes. 

Mr. Rice. Where is that? 

Mr. Rosenbaum. Of all the people I do business with ? 

Mr. Rice. Yes. 

Mr. Rosenbaum. Either a post-office box or an address ot street. 

Mr. Rice. Where do you keep that record ? 

Mr. Rosenbaum. We know, my God, some of them by memory. 

JSIr. Rice. What one do you know by memory. 

Mr. Rosenbaum. Mooney. 

Mr. Rice. Mooney. What is that? What is his address by 
memory ? 

Mr. Rosenbaum. 822 Pine Street. 

Mr. Rice. 822 Pine Street, St. Louis? 

Mr. Rosenbaum. That is right. 

Mr. Rice. Who else do you know by memory ? 

Mr. Rosenbaum. Dobkin. 

Mr. Rice. What is Dobkin's Erst name ? 

Mr. Rosenbaum. Edward. 

Mr. Rice. Edward Dobkin in Chicago? 

Mr. Rosenbaum. Yes. 

Mr. Rice. What address do you straighten up with him at? 

Mr. Rosenbaum. Box 914. 

Mr. Rice. Box 914 in Chicago ? 

Mr. Rosenbaum. Yes. 

Mr. Rice. Who else ? 

Mr. Rosenbaum. I can't think. 

Mr. Rice. Dobkin and Mooney are the only ones you can remember ? 

Mr. Rosenbaum. I can't think of all the people you do business 
with, you know, unless you look. 

Mr. Rice. Where do you keep the records of all the people you do 
business with? 

Mr. Rosenbaum. In the books. 

JSIr. Rice. Where is the book ? 

Mr. RosENBz\uM. In Cincinnati. 

Mr. Rice. In what office? 

Mr. Rosenbaum. With the bookkeeper. 

Mr. Rice. In the place on West Fourth Street ? 

Mr. Rosenbaum. That is right. 

Mr. Rice. At West Fourth Street do you have a ticker to get race 
results ? 

Mr. Rosenbaum. No. 

Mr. Rice. How do they get the results? 

Mr, Rosenbaum. Service. 

Mr. Rice. Ser\ace? 

Mr. Rosenbaum. Yes. 

Mr. Rice. How do you get it — over the telephone? 

Mr. Rosenbaum. No; speaker. 

Mr. Rice. Speaker. You have an audio right in the place — a 
speaker ? 

Mr. Rosenbaum. Yes. 

68958—51 — pt. 12 10 



138 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Rice. And you get the run-down on the odds as the races come 
up? 

Mr. RosENBAUM. Very little. 

Mr. Rice. How do you know what the odds are? You get them 
over the speaker, don't you ? 

Mr. Rosenbaum. No ; you don't get it. 

Mr. Rice. You don't get it? 

Mr. Rosenbaum. You don't get it — approximate odds. 

Mr. Rice. You heard Remer say he never told you what the prices 
were or what the odds were on the races at Bowie ; you already knew 
that and you w^ere telling him. 

Mr. Rosenbaum. You get service ; that is right. 

Mr. Rice. You get the service? 

Mr. Rosenbaum. Yes. You are talking about Bowie. I am refer- 
ring to that right now. 

Mr. Rice. Where did you get the service ? 

Mr. Rosenbaum. I don't know. 

Mr. Rice. You don't know ? 

Mr. Rosenbaum. I have nothing to do with that. 

Mr. Rice. You have nothing to do with it? 

Mr. Rosenbaum. That is where I don't 

Mr. Rice. That is where you don't what? 

Mr. Rosenbaum. I just pay the rent. 

Mr. Rice. You just pay the rent? 

Mr. Rosenbaum. That is right. 

Mr. Rice. Who arranges for service? 

Mr. Rosenbaum. I have done business with the service direct, but 
I don't do it now. 

Mr. Rice. Wlio did you do business with in the wire service? 

Mr. Rosenbaum. Who? 

Mr. Rice. What company or what man ? 

Mr. Rosenbaum. Now? 

Mr. Rice. Any time. 

Mr. Rosenbaum. In Chicago I do business with a firm — I don't 
remember their names. 

Mr. Rice. Who did you do business with in Chicago? 

Mr. Rosenbaum. I don't remember their names. 

Mr. Rice. TonyAccardo? Jack Guzik? You said you got service 
from someone. Who did you get it from ? 

Mr. Rosenbaum. You didn't mention any names I know of. 

Mr. Rice. You tell me who you got it from. 

Mr. Rosenbaum. Some company. I don't know. 

Mr. Rice. Was it R. & H. ? 

Mr. Rosenbaum. I think H. & R. R., R. & H., something like that. 

Mr. Rice. Trans-America ? 

Mr. Rosenbaum. H. & R., I think it is. 

Mr. Rice. Who did you do business with in H. & R. ? 

Mr. Rosenbaum. I don't know. I told them to put it in and I used 
to send a check. 

Mr. Rice. How about Continental^ Did you do business with 
Continental ? 

Mr. Rosenbaum. No. I don't know them. I don't know the other 
ones either. 

Mr, Rice. Who do you get your service from in Cincinnati? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 139 

Mr. KosENBAUM. Eight witli the office. 

Mr. EiCE. Who ai'i'anges for that ? 

jNIr. RosENBAUM. This Max. 

Mr. Rice. Max? 

Mr. RosENBAUM. Something. 

Mr. Rice. Max something^ 

Mr. RosENBAUM. I called his name before. 

The Chairman. You said Slackman a little while ago. 

Mr. RosENBAUM. That is it, Slackman. 

Mr. Rice. He is on your payroll ? 

Mr. RosENBAUM. No, sir. 

Mr. Rice. Why pays him ? 

jMr. RosENBAUM. I don't know. 

Mr. Rice. Do you get your service from Slackman or does he arrange 
for it? 

Mr. RosENBAUM. The service is already there. 

The Chairman. Do you pay Slackman for your office, too? 

Mr. RosENBAUM. No, I send a check for the rent — is all I pay. 

The Chairman. Who do you send the check to for the rent? 

Mr. RosENBAUM. A man l3y the name of Meyers, some company out 
in Vine Street, realty company. 

The Chairman. The speaker you have, where does the speaker it- 
self — I mean, who is talking in the speaker? 

Mr. RosENBAUM. You see, they get their company, I guess, and they 
know what place to call. I don't know. It is just the service. 

The Chairman. It comes in all the time while the race is going on, 
doesn't it? 

Mr. RosENBAUM. Service, and sometimes a little news. 
The Chairman. A little what? 
Mr. RosENBAUM. A little news. 

The Chairman. You mean when they don't have any race results 
they might tell you a little news, too ? 
Mr. Rosenbaum. Yes. 
The Chairman. All right. 
Mr. Rice. Who do you pay for that? 

Mr. Rosenbaum. I don't pay only — I told you all I pay is the rent. 
Mr. Rice. How much is the rent? 
Mr. Rosenbaum. All other is furnished. 
Mr. Rice. How much is the rent? 
Mr. Rosenbaum. Three a month. 
Mr. Rice. Three what? 
Mr. Rosenbaum. Three hundred a month. 
Mr. Rice. That includes the speaker, too ? 
Mr. Rosenbaum. Of course. 
Mr. Rice. Who do you pay that to ? 
Mr. Rosenbaum. The rent to the realty company. 
Mr. Rice. To the realty company. Do they arrange for the speaker ? 
Mr. Rosenbaum. I don't know. I don't think so. I wouldn't think 
they would have anything to do with it. It is the same thing if you 
would walk in here and hire this place, and when you hire this place, 
I give you this service with it. 
Mr. Rice. Yes. 

Mr. Rosenbaum. I give you a janitor to clean this place up and 
I give you light and heat. 



140 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Rice. Who do you do business with to give you that stuff — 
Slackman? 

Mr. RosENBATJM. That is right. 

Mr. Rice. Is he the one who arranges for the service? 

Mr. RosENBAUM. I don't know who arranges for the service. 

Mr. Rice. Who pays for it? 

Mr. Rosenbaum. I don't; I know that. 

Mr. Rice. What do you pay Slackman ? 

Mr. Rosenbaum. Nothing. 

Mr. Rice. Nothing? 

Mr. Rosenbaum. That is right. He is there for the information, 
I would imagine. 

Mr, Rice. He is what? 

Mr. Rosenbaum. Mostly for information. 

Mr. Rice. He is there for information ? 

Mr. Rosenbaum. Yes. 

Mr. Rice. For who ? 

Mr. Rosenbaum. For himself, I guess. I don't know. 

Mr. Rice. I don't understand that at all. 

The Chairman. Let's get the name of the real-estate company. 

Mr. Rosenbaum. The information would be if you want to bet on a 
horse — is to bet on a horse. 

Mr. Rice. Does he bet with you ? 

Mr. Rosenbaum. He bets for himself. He has got his own customers 
to bet with. 

Mr. Rice. He has a book too, then? 

Mr. Rosenbaum. I don't think so. I think a bettor. 

Mr. Rice. Possibly he is a bookie, isn't he ? 

Mr. Rosenbaum. I don't think so. There ain't no booking, very 
few bookmakers. 

Mr. Rice. Who is the real-estate company? Who is the company 
that rents you the place there ? 

Mr. Rosenbaum. A man — I don't know. The man's name is Meyers. 

Mr, Rice. The man's name is Meyers ? 

Mr. Rosenbaum. Meyers. 

Mr. Rice. M-e-y-e-r-s? 

Mr. Rosenbaum. Yes. 

Mr. Rice. In Cincinnati ? 

Mr. Rosenbaum. Down on Vine Street, some kind of a realty com- 
pany. 

Mr. Rice. What is Meyers' first name ? 

Mr. Rosenbaum. I don't remember exactly. John Meyers or Jim 
Meyers — some kind of a Meyers. 

Tlie Chairman. As a matter of fact, Slackman is really just a front 
man for you, isn't he ? 

Mr. Rosenbaum. For me ? 

The Chairman. Yes. 

Mr. Rosenbaum. You can call him whatever you want. I don't 
know. He is not working for me. 

The Chairman. I mean he makes all the arrangements and every- 
thing in his name. 

Mr. RosENBAUJNi. I wouldn't call him a front man for me. 

The Chairman. Then for your brother-in-law — Miller. 

Mr. Rosenbaum. No, no, no. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 141 

The Chairman. All right. 

Suppose we stand in recess now until 2 : 15. You come back at 2 : 15, 
Mr. Rosenbaum. 

(Whereupon, at 1 : 05 p. m., the committee recessed, to reconvene at 
2 : 15 p. m., this same day.) 

AFTERNOON SESSION 

The Chairman. The committee will come to order. 

Come around, Mr. Rosenbaum. Have a seat. 

The committee chairman designates the Senator from Wyoming, 
Senator Hunt, to act as chairman this afternoon, for at least until 
later this afternoon. This is Mr. Rosenbaum, Senator Hunt. He has 
been sworn. He is just about to finish his testimony. Mr. Rice just 
had one or two more questions to ask him. Senator Hunt will sit as 
a subcommittee of one. 

FURTHER TESTIMONY OF LOUIS ROSENBAUM, CINCINNATI, OHIO 

Mr. Rice. We just had an interesting conversation out in the hall 
with Mr. Rosenbaum that might be enlightening about his philosophy. 
We talked about how he arrived at where he is. He previously testi- 
fied, Senator Hunt, that in 1947, 1 believe, he paid $200,000 in income 
tax. 

Mr. RosENBAUiM. In that neighborhood, in 1948, 1 think. 

Mr. Rice. We were talking about whether you can take it with you 
or not. What is that about green ? 

Mr. Rosenbaum. The long green won't stay with the green long. 

Mr. Rice. The long green won't stay with the green long ? 

Mr. Rosenbaum. That is right. 

Mr. Rice. What do you mean by that ? 

Mr. Rosenbaum. Well, you got money — he knows. 

Mr. Rice. We can't hear you. 

Mr. Rosenbaum. Long green, I mean some people make money but 
they don't hold ; can't hold it. 

Mr. Rice. Greenhorns don't hold the long green, is that it? 

Mr. Rosenbaum. Something like that. Put it any way you want. 
It doesn't strike it. 

Mr. Rice. He is back to his last hundred thousand dollars, Senator 
Hunt. 

Now do you know a man by the name of Ben Cohen, of Miami, 
Miami Beach, a lawyer? 

Mr. Rosenbaum. I don't know him. I have seen him. 

Mr. Rice. You have seen him? 

Mr. Rosenbaum. I don't know him. 

Mr. Rice. You don't know him. Did you ever talk with him when 
you saw him? 

Mr. Rosenbaum. I don't know him. 

Mr. Rice. Did you ever talk with him on the telephone? 

Mr. Rosenbaum. Not that I know of. He could have said he's 
somebody else. 

Mr. Rice. He could have said he is somebody else? 

Mr. Rosenbaum. I don't think so. I wouldn't know. 

Mr. Rice, On January 12, last month, 1951, Ben Cohen, whose tele- 
phone is 580676 in Miami made a collect call to Louis Rosenbaum at 



142 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Elmhurst 1631. That is your number, is it not, at 1 : 09 p. m., talked 
for 6 minutes, paid $3.10 for that. What was that call about? 

Mr. RosENBAUM. Ben Cohen? 

Mr. Rice. Benny Cohen ; yes. 

Mr. liosENBAUM. I'll have to disagree with you. 

Mr. Rice. Do you know any Benny Cohens in Florida? Do you 
know any Cohens down there ? 

Mr. Rosenbaum. I wouldn't say offhand, but I don't know that man 
you are talking about. Benny Cohen? 

Mr. Rice. Yes. You say you saw this Ben Cohen at one time? 

Mr. Rosenbaum. Is he an attorney down in Miami? 

Mr. Rice. Yes. 

Mr. Rosenbaum. Yes ; I've seen him. 

Mr. Rice. Did he ever telephone you when you were in Cincinnati ? 

Mr. Rosenbaum. Not that I know of. I don't remember ever 
speaking to liim. 

Mr. Rice, Is it possible? 

Mr. Rosenbaum. Beg pardon ? 

Mr. Rice. Is it possible? 

Mr. Rosenbaum. I must have been sound asleep and talking in my 
sleep then. 

Mr. Rice. Do you sleep at one o'clock in the afternoon? 

Mr. Rosenbaum. In the afternoon? 

Mr. Rice. Yes. 

Mr. RosENBAUJi. No. 

Mr. Rice. Well, now what is it? Do you want to deny that you 
talked with Benny Cohen on the telephone? 

Mr. Rosenbaum. If I wanted to deny it, I'd say so. I wouldn't have 
to answer it. 

Mr. Rice. What is the story ? 

Mr. Rosenbaum. I don't know. I don't know what you are talking 
about. Benny Cohen called me at one o'clock in the afternoon? 

Mr. Rice. Now is there any Cohen at all that you deal with in 
Miami ? Sam Cohen ? Do you deal with the S. & G. ? 

Mr. Rosenbaum. (Shakes head indicating a negative answer.) 

Mr. Rice. Did you take any lay-offs from Florida? 

Mr. Rosenbaum. Yes; I've taken lay-offs from Florida. 

Mr. Rice. Who do you take it from ? 

Mr. Rosenbaum. One of the fellows in the hotel gives me a bet. 

Mr. Rice. From the hotel ? Who is that ? 

Mr. Rosenbaum. I'll think of his name in a minute. 

Mr. Rice. This is only a month ago now that you talked to this 
gentleman, Januaiy. 

Mr. Rosenbaum. I don't know nol)ody. 

Mr. Rice. Did you take any lay-offs from there last month ? 

Mr. Rosenbaum. I've taken bets over there. 

Mr. Rice. You have taken bets ? 

Mr. Rosenbaum. Yes. 

Mr. Rice. Did you take bets at your house ? 

Mr. Rosenbaum. No. 

Mr. Rice. This call was made to Elmhurst 1631. 

Mr. Rosenbaum. No. That's my number. 

Mr. Rice. Do you want to take the position you do not know any- 
thing about his call at all ? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 143 

Mr. KosENBAUM. I don't know no Ben Cohen that called me. 

Mr. Rice. Do you know who did call you named Cohen ? 

Mr. RosENBAUM. Cohen? 

Mr. Rice. Well, now you paid for this telephone call. You paid 
for calls from people you don't know ? 

Mr. RosENBAUM. Well, I don't think I do, but somebody called me 
but it wasn't last month. 

Mr. Rice. All riglit, what was that call about? 

Mr. RosENBAUM. He says this is the boss talking. He says, "I've got 
a good thing in the fourth race." Who in hell is the boss, who the 
boss is, I don't know. 

Mr. Rice. Did the boss call collect? 

Mr. RosENBAUM. A lot of them call collect. 

Mr. Rice. Do you accept collect calls at your home? 

Mr. RosENBAUM. Yes. 

Mr. Rice. From people who do not identify themselves ? 

Mr. RosENBAUM. Yes. They identify themselves on the phone. 

Mr. Rice. Yes. Well, now who identified himself to you on this 
call? 

Mr. RosENBAUM. On which call ? 

Mr. Rice. On this one from Cohen. 

Mr. RosENBAUM. I don't know. You could have been there. You 
know me, you call me collect and talk to me. 

Mr. Rice. Well, now when this boss called, who is he? 

Mr. RosENBAUM. I don't know who the boss it. I never heard of 
him before in my life. 

Mr. Rice. You paid for it, did you not? 

Mr. RosENBAUM. He just caught me offhand, you know. I might 
have been doing something in a hurry, doing something, you know, in 
the house, straightening up or maybe grabbing a hold of the kid. 

Mr. Rice. Maybe getting the daily double ready, and you are in a 
hurry. 

Mr. RosENBAUM. Well, that ain't bad, either, if you can hit. 

Mr. Rice. Well, now who was this boss that called up ? 

Mr. RosENBAUM. That's what I'm asking you. He give me a good 
thin,g. He says I'll get a good thing. I says I didn't get the name. 
Somebody spoke to me. 

Mr. Rice. You did not get the name ? 

Mr. Rosenbaum. I didn't get it. He said, "the boss." I said, 
"O. K., let him in." 

Mr. Rice. "Let him in" ? 

Mr. Rosenbaum. Did you ever go with the rush, you get in with 
the rush. 

Mr. Rice. On the telephone? 

Mr. Rosenbaum. Somebody called me just when I was doing some- 
thing intermediately. I says, "O. K." I thought somebody was 
kidding me or something on the phone. 

.Mr. Rice. This was not much of a rush. This went on for 6 minutes. 

jNIr. Rosenbaum. It wasn't Benny Cohen that called me. 

Mr. Rice. Who was it that called? 

Mr. Rosenbaum. I don't know. I get a lot of collect calls. 

Mr. Rice. You do not want to say who this boss is that called ? 

Mr. Rosenbaum. I don't know. 

Mr. Rice. What did the boss tell you ? 



144 ORGAJSriZED CRIME EST INTERSTATE COMMERCE 

Mr. RosENBAUM. He wants to give me a good thing in the fourth 
race. I hung him up. 

Mr. Rice. Tou hung him up and took 6 minutes to do that? 

Mr. RosENBAUM. No ; it wasn't no 6 minutes to do that. 

Mr. Rice. That is what you paid for. 

Mr. RosENBAUM. Listen, not that calL 

Mr. Rice. Now I see where you called during 1 month 48 times, or 
you accepted 48 calls from a fellow by the name of Shepherd. 

Mr. RosENBAUM. Yes. 

Mr. Rice. Who is he? 

Mr. RosENBAUM. That's the man I get information from. 

Mr. Rice. You get information from? 

Mr. RosENBAUM. Yes. 

Mr. Rice. What is his name ? 

Mr. RosENBAUM. Shepherd. 

Mr. Rice. What Shepherd? 

Mr. RosENBAUM. I'll tell you his first name in a minute. 

Mr. Rice. Wliat is his business ? 

Mr. RosENBAUM. Information is pretty good. 

Mr. Rice. His information is good. Is he betting with you or 
telling you ? 

Mr. RosENBAUM. Well, he gives me figures. 

Mr. Rice. What kind of figures ? 

Mr. RosENBAUM. Or horses. 

Mr. Rice. What do they say? 

Mr. RosENBAuai. There's figures on them. 

Mr. Rice. Tell us, give us a representative conversation you would 
have with Shepherd. He would call up and he would say, "Hello" and 
you would say "Hello," and then what ? 

Mr. RosENBAUM. He says, "What's going on?" 

Mr. Rice. "What's going on" ? 

Mr. RosENBAUM. Yes. 

Mr. Rice. Then what? 

Mr. RosENBAUM. I say, "W^ell, I ain't heard nothing." 

Mr. Rice. You ain't heard nothing. Then what ? 

Mr. RosENBAUM. Then he says, "So and so likes this horse today, so 
and so likes this horse today." 

Mr. Rice. So and so likes this horse today and so and so likes this 
horse ? 

Mr. RosENBAUM. Yes. "This horse calls for a good figure today." 

Mr. Rice. This horse calls for a good figure ? 

Mr. RosENBAUM. Yes. 

Mr. Rice. Then what? 

Mr. RosENBAUM. Well, then he says, "Take the numbers," and then 
I go and put down the numbers, 8, 6, and 3, you put down 8, 6, and 3, 
12, 4, and 2. 

Mr. Rice. These are the horses' numbers at the various tracks ? 

Mr. RosENBAUM. Yes. 

Mr. Rice. I see. 

Mr. RosENBAUM. He will say 12, 4, and 2, that is in the second 
i-ace at Miami. 

Mr. Rice. What is this fellow, a man w^ith a crystal ball? WTiere 
does he get his information ? 

Mr. RosENBAUM. I don't know. 



ORGAnSTIZED CRIME IN INTERSTATE COMMERCE 145 

Mr. Rice. You don't know ? 

Mr. RosENBAUM. That's ri<;ht. 

Mr. Rice. Do you act on his information ? 

Mr. RosENBAUM. A lot of times. 

Mr. Rice. Well, now I see where he is callino; from a telephone 
Waverly 3-8462 in Newark. 

Mr. RosEXBAUM. I don't know it. 

Mr. Rice. And that is listed to a Mrs. Gussie Siegel at 58 Goldsmith 
Avenue, New York City. All bills for this number are forwarded to 
a Sieo-el at 6 Algonquin Place, Elizabeth. Where does he get his 
from? It looks like he is sitting out here in Newark. 

Mr. RosENBAUM. I don't know. 

Mr. Rice. You don't know ? 

Mr. RosENBAUM. No, sir. That I don't. 

Mr. Rice. How long have you been doing business with Shepherd? 

Mr. RosENBAUM. Seven, eiglit months, six months. 

Mr. Rice. How much did you pay him for the information? 

Mr. RosENBAUM. Nothing. 

Mr. Rice. You do not pay him anything; all you do is take his 
telephone calls? 

Mr. RosENBATJM. That's right. 

Mr. Rice. What is in it for him, then ? 

Mr. RosENBAUM. Some of my information that I can give him. 

Mr. Rice. You give him information back ? 

Mr. RosENBAUM. That's right. 

Mr. Rice. And do you bet with one another ? 

Mr. RosENBAUM. No. 

Mr. Rice. Strictly an information deal ? 

Mr. RosENBAUM. That's right. 

Mr. Rice. Any other business with him ? 

Mr. RosENBAUM. No. 

Mr. Rice. Any money change hands between you two ? 

Mr. RosENBAUM. No. 

Mr. Rice. You are sure about that ? 

Mr. RosENBAUM. That is right. 

Mr. Rice. Have you ever seen the man ? 

Mr. RosENBAUM. Yes. 

Mr. Rice. Wliere did you see him ? 

Mr. RoSENBAUM. About 1936. 

Mr. Rice. Wliere? 

Mr. RosENBAUM. Saratoga, N. Y. 

Mr. Rice. Saratoga. Wliat was he doing up there? 

Mr. RosENBAUM. What was I doing up there? 

Mr. Rice. Wliat was he doing up there? 

Mr. RosENBAUM. He was around the track betting horses. 

Mr. Rice. Betting horses at the track. Now, then, during 1 month 
you had 13 collect calls from somebody named Kimmell. Wlio is he ? 

Mr. RosENBAUM. Another player, information man. 

Mr, Rice. Is he a player or information man ? 

Mr. RosENBAUM. He bets on information, and I give him informa- 
tion. 

Mr. Rice. He is in Hot Springs, Ark., calling from Hot Springs 
6000, which is listed to the Beverly Country Club on Little Rock Road. 
Have you ever been there ? 

Mr. RosENBAUM. No. 



146 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. EiCE. Where did you meet Kimmell ? 

Mr. RosENBAUM. Miami. 

Mr. Rice. What is his first name ? 

Mr. RosENBAUM. Manny. 

Mr. Rice. Manny Kimmell. And he is just a bettor. He is one 
of the ones that lays off to you ? 

Mr. RosENBAUM. Yes; sometimes. 

Mr. Rice. Now, then, when you settle up with Kimmell, how do 
you settle up ? 

Mr. RosENBAUM. Well, checks ; but there hasn't been much between 
us — at least, not in a year or so, anyway. 

Mr. Rice. Where do you mail to Kimmell ? 

Mr. RosENBAUM. Wherever he is located. If he is in Miami 

Mr. Rice. Where is he now ? 

Mr. RosENBAUM. I don't know. The last time I heard he was in 
Hot Springs, and he has been in Las Vegas, he's been in 

Mr. Rice. When is the last time you talked with him ? 

Mr. RosENBAUM. Sometime this month. 

Mr. Rice. When? 

Mr. RosENBAUM. Sometime this month. 

Mr. Rice. Sometime this month ? 

Mr. RosENBAUM. Yes, a number of times. 

Mr. Rice. Where was he then ? 

Mr. RosENBAUM. He was in New York. 

Mr. Rice. In New York. Was he betting you then ? 

Mr. RosENBAUM. Not betting me. He was betting, but not me. 

Mr. Rice. Was he betting in New York then? 

Mr. RosENBAUM. No; he wasn't betting then. 

Mr. Rice. You had eight more calls from Hot Springs from Beck- 
elbaum and Jack Tarr down there. Who is he? 

Mr. RosENBAUM. He is a friend of mine I know. 

Mr. Rice. A friend of yours? 

Mr. RosENBAUM. Yes. 

Mr. Rice. He is calling you collect. What is he calling you about ? 

Mr. RosENBAUM. Just talking how things are. 

Mr. Rice. Just to see how things are ? 

Mr. RosENBAUM. Yes. He called me at night, wasn't it? 

Mr. Rice. I beg your pardon ? 

Mr. RosENBAUM. It was a night call. I am positively sure it wasn't 
a betting proposition. 

Mr. Rice. What business is Beckelbaum in ? 

Mr. RosENBAUM. I don't know. 

Mr. Rice. He is a friend of yours. You accept his calls collect. 

Mr. RosENBAUM. I don't know what business he is in now. 

Mr. Rice. What business was he in anytime so far as you know ? 

Mr. RosENBAUM. He had a bar. 

Mr. Rice. A gambler, too, is he not ? 

Mr. RosENBAUM. A bar. Yes. 

Mr. Rice. Where is his bar? 

Mr. RosENBAUM. He had a bar. I don't know where it is at now. 
I think he is out of it. 

Mr. Rice. What city was it in? 

Mr. RosENBAUM. Evansville, Ind. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 147 

Mr. Rice. Evaiisville, Ind.. was it not. Now where does he operate 
from? 

Mr. RosENBAUM. Cincinnati. 

Mr. Rice. Cincinnati. Is he there with you? 

Mr. Rosen BAUM. Not with me. 

Mr. Rice. Who is Cornwall? 

Mr. RosENBAUM. Cornwall ? 

Mr. Rice. Yes. 

Mr. RosENBAUM. A friend of mine. 

Mr. Rice. What business is he in ? 

Mr. RosENBAUM. Horses, I guess. 

Mr. Rice. Where does he operate from ? 

Mr. RosENBAUM. Miami right now. 

Mr. Rice. He is down at Miami 8-181032, 31 West Thirty-ninth 
Place in Hialeah. He called you up 13 times collect in 1 month. Is 
that lay-off? 

Mr. Rt)SENBAUM. No; information. 

Mr. Rice. Information. Who is this down in Florida laying off 
to you? 

Mr. RosENBAUM. Who is down in Florida laying off to me? 

Mr, Rice, Yes. 

Mr. RosENBAUM, A few private people, 
Mr. Rice, Private people? 

Mr. Rosenbaum. Yes. Wait, I'll tell you their names in a minute. 
Mr. Rice. You mean they do not advertise; is that the idea? 
Mr. Rosenbaum. No, They just play here and there, 
Mr, Rice. Now I see you get a call from a fellow named Collins 
in San Francisco. What was that about? 

Mr. Rosenbaum. It's all in the race-horse business. 
Mr. Rice. In connection with the race-horse business? 
Mr. Rosenbaum. Yes. 

Mr. Rice. A, W. Collins is listed as being in the public- relations 
business, room 502, 400 Montgomery Street, San Francisco, 
Mr, Rosenbaum. I don't know. I've never been there. 
Mr. Rice. He is still in the race-horse business? 
Mr. Rosenbaum. Yes. 

Mr. Rice. We are entitled, then, to say that some of these public- 
relations men around Washington are in the race-horse business? 
Mr. Rosenbaum. What do you mean "public relations'"? 
Mr. Rice. What do you mean ? 

Mr. Rosenbaum. I didn't say anything about public relations. 
Mr. Rice. As far as you are concerned, A. W. Collins is in the 
racing business ? 

Mr. Rosenbaum. That's right. 

Mr. Rice. And if he is in public relations, you do not know anything 
about that? 
Mr. Rosenbaum. No ; I don't know. 
Mr. Rice. Do you know any Gerson up in Cleveland? 
Mr, Rosenbaum. Yes ; I know him. 
Mr. Rice. Who is Gerson ? 
Mr. Rosenbaum. The same line. 
Mr. Rice. All in the same line. Philip Gerson ? 
Mr. Rosenbaum. Yes, sir. 



148 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. KiCE. 3494 — Yellowstone 20953, is that the man? He is one of 
the ones that is laying off to j^on ? 

Mr. KosENBAUM. What is it'? Yes, he lays off. 

Mr. KicE. 20953? 

Mr. RosENBAUM. He lays off to me. 

Mr. Rice. Now, then, I see yon getting a lot of calls from I^as 
Vegas ? 

Mr. RosENBAUM. There is three. I don't know their names, some 
name they 

Mr. Rice. Three names? 

Mr. RosENBATJM. Yes ; three names. 

Mr. Rice. Well, I have got one of them as the Flamingo Commis- 
sioners. 

Mr. RosENBAUM. Yes ; that's it. 

Mr. Rice. Wlio are they ? 

Mr. RosENBAUM. They're three partners. 

Mr. Rice. Three partners. Who are they ? 

Mr. RosENBAUM. George, Cookie — I don't even know their first 
names. 

Mr. Rice. George and Cookie ? 

Mr. RosENBAUM. George and Cookie and another one. 

Mr. Rice. They are at the Flamingo Hotel ? 

Mr. RosENBAUM. Yes. 

Mr. Rice. Do they operate fi'om Bugsy Siegel's place? 

Mr. RosENBAUM. I wouldn't know. I've never been there. 

Mr. Rice. How about down here in Los Angeles, did yon get any 
lay-offs from there? 

Mr. RosENBAUM. Once in a while. 

Mr. Rice. Crestview 6-2251. Who did you take it from down there ? 

Mr. RosENBAuM. Well, some of them fellows on the way to Las 
Vegas. 

Mr. Rice. And moving around. So you get a lot of calls there from 
the Sam Pool Club, 9841 Sunset Boulevard, phone listed to the Beverly 
Hills Travel Club. I guess you are right. They are moving around, 
The}^ travel. 

Mr. RosENBAUM. That is right. I don't know who it is. 

Mr. Rice. Milton M. Golden and Verbona Hebbard, does that mean 
anything to you? 

Mr. RoSENBAUM. Wlio? 

Mr. Rice. Milton M. Golden. Now are you still in business ? 

Mr. RosENBAUM, Am I still in the business? 

Mr, Rice. Yes. 

Mr. RosENBAUM. I'm in the business, now from here on out, I'll 
be at the race track betting, 

Mr, Rice. From here on out you will be at the race track betting? 

Mr, RosENBAUM, I can't bet nowhere else, 

Mr, Rice, Well, now, what are you going to do with your lay-off 
business ? 

Mr. RosENBAUM. That will be my lay-off. 

Mr. Rice, That will be your lay-off. How are you going to operate 
from here on out ? 

Mr. RosENBAUM. That's the way it looks to me. 

Mr. Rice. What is the matter ? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 149 

Mr. EosENBAUM. I can't understand this. I want to ask a question. 

Mr. KiCE. Yes ; go ahead. 

Mr. RosENBAUM. Now, I've never been nothing but an asset to the 
horse business. 

Mr. Rice. You have been an asset to the horse business ? 

Mr. RosENBAU3i. Yes. 

Mr. Rice. Go ahead. 

Mr. Rosenbaum. All I'd ever do is give the States money. I mean 
by going to the race track, they take their percentage. There isn't 
but very few bettors in the United States that put in as much money 
as I do in the race tracks. 

Mr. Rice. You are one of the biggest in the United States, are 
you not? 

Mr. RosENBAuiM. No. There is very few people. I'm not one of 
the biggest. Don't rate me, don't put me up any higher than I am. 
Thei'e ain't no use in me having oO cents in my pocket and you're 
trying to make a millionaire out of me. You just put me where I 
belong. 

Mr. Rice. The green isn't going to stay with you? 

Mr. Rosenbaum. That's right. It hasn't. 

Mr. Rice. Noav, how are you going to operate from here on out? 
We are interested in that. 

Mr. Rosexbau:m. Well, I guess I'll do the best I can betting on the 
race track, that's all. 

Mr. Rice. You are going to try to bet them at the race track, is 
that it? 

Mr. Rosenbaum. Yes. 

Mr. Rice. Are you closing your office ? 

Mr. RosENBx\uM. It's closed. 

INIr. Rice. When did you close it ? 

Mr. Rosenbaum. There's no more phones. 

Mr. Rice. No more phone. When did they take the phone out? 

Mr. Rosenbaum. The next day. 

Mr. Rice. The next day ? 

Mr. Rosenbaum. Yes. 

Mr. Rice. The day before yesterday, was it not? 

Mr. Rosenbaum. Well, I don't know exactly whether it's 2, 3 days 
ago or 4 days ago. 

Mr. Rice. "^Aliere were you when the subpena found you ? 

Mr. Rosenbaum. In bed. 

Mr. Rice. In bed ? 

Mr. Rosenbau]m. Oh, I knew it was coming. 

Mr. Rice. You knew it was coming? 

Mr. Rosenbaum. Yes. 

Mr. Rice. How did you know that ? 

Mr. Rosenbaum. Well, you subpenaed him. 

Mr. Rice. ^Y[\o is him ? ' 

Mr. Rosenbauim. Cogan and Remer. 

Mr. Rice. Somebody called you the night before you got the subpena, 
did they not, about 8 o'clock in the morning? 

Mr. Rosenbaum. I don't know. A lot of people call. I call them at 
3 o'clock. 

Mr. Rice. You call them ? 

Mr. Rosenbaum. Three o'clock. 



150 ORGANIZED CRIME IN INTERSTATE COMMERCE. 

Mr. KiCE. Wlio did you call, Remer? 

Mr. RosEXBAUM. No. I can call somebody at 3 o'clock in the morn- 
ing in Las Vegas, or some place like that, and talk to somebody. 

Mr. Rice. Who called yon the night before you got the subpena? 

Mr, RosENBAUM. Nobody. 

Mr. Rice. Nobody. You are sure about that ? 

Mr. RosENBAUM. That's right. 

Mr. Rice. Think hard now. Did you not get a telephone call from 
somebody ? 

Mr. RosENBAUM. Listen, I get so many calls I'm dizzy. I got tele- 
phonitis now. 

Mr. Rice. You are sure you did not tell the LTnited States marshal 
that somebody called you from Florida at 3 o'clock in the morning, just 
before he served you? You did not tell him that? 

Mr. RosENBAUM. No; because I do that nearly every day. 

Mr. Rice. You do what ? 

Mr. RosENBAUM. Call either Miami or 

Mr. Rice. No; this was a call that was warning you that you were 
going to be served. 

Mr. RosENBAUM. It wouldn't make no difference. I wasn't going to 
duck anyway. I don't remember, to be truthful. 

Mr. Rice. Do you know it is perjury to say you do not remember 
when you do remember ? 

Mr. RosENBAUM. I cannot help that. 

Mr, Rice. You can't help it. You do not want to change your 
answer ? 

Mr. RosENBAUM. No ; I wouldn't change m}^ answer. I don't think 
anybody called me in warning me, 

Mr. Rice. I am not interested in what you think. I want to know 
definitely whether or not you got a call tipping you off that you wxre 
about to be served. 

Mr. Rosenbaum. You want to know definitely? 

Mr. Rice. Yes. 

Mr. Rosenbaum. I'd have to make up one. 

Mr. Rice. No; don't make up anything. 

Mr. Rosenbaum. Well, I wouldn't be able to tell you that, but 
nobody called me anyway in regards to tipping me off, 

Mr. Rice. Nobody called you to tip you off? 

Mr. Rosenbaum. That's right. 

Mr. Rice. That is definite? 

Mr. Rosenbaum. That is definite. 

Mr. Rice. After you got the subpena, did you proceed to close your 
office up ? 

Mr. Rosenbaum. No. 

Mr. Rice. What did you do? You said it is closed. 

Mr, Rosenbaum. It got a little warm over there, 

Mr. Rice. Got a little warm. The heat got on ? 

Mr. Rosenbaum. Yes. 

Mr. Rice. The heat went on ? 

Mr. Rosenbaum. Yes. 

Mr. Rice. What did you do when the heat went on? 

Mr. Rosenbaum. I haven't been to the office. 

Mr, Rice. You have not been to the office since ? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 151 

Mr. RosENBAUM. No; not that day or the day before that. 
Mr. Rice. The lieat Avas ah-eady on? 

Mr. RosEXP.AUM. I don't know. It wasn't on then, bnt I hadn't 
been in the olHce for a couple of days. 

Mr. Rr'e. What heat are you talking about, what kind of heat, local 
heat, P'ederal heat, or Senate heat ? 

Mr. RosENBAUM. After the marshal served me with the subpena 

Mr. Rice. I get the picture now that you have closed down your 
operations, is that right? 
Mr. RosENBAt M. Yes. 

Mr. Rice. Now what caused you to do that? 

Mr. Rosenbaum. Well, because when the marshal served me with 
the subpena, I got all that publicity. 
Mr. Rice. Oh, it was publicity ? 

Mr. Rosenbaum. That didn't bother me anyway. I've never done 
anything wrong anyway. It don't make any difference. They can do 
whatever they want. I don't do nothing wrong. 
Mr. Rice. Is it legal to take lay-otf bets in Ohio? 
JMr. Rosenbaum. Is it legal ? I wouldn't know, 
Mr. Rice. You would not know. How about Kentucky? 
Mr. Rosenbaum. I don't know. 
Mr. Rice. You don't know ? 
Mr. Rosenbaum. No; I don't think so. 
INIr. Rice. Is it possible that that is illegal ? 

Mr. Rosenbaum. I don't know. Y^ou ask some of them race tracks, 
when I went back there they begged for the business. 

Mr. Rice. Let us stay on this now, please. You say you have not 
done anything wrong. Is something illegal wa-ong? 
Mr. Rosenbaum. Yes. 

Mr. Rice. So that you do not know whether it is legal or not, then, 
do you ? Is that the idea ? 

Mr. Rosenbaum. That's right. I don't think it's legal in any place. 
Mr. Rice. You do not think it is legal in any place. How about 
Nevada ? 

Mr. Rosenbaum. Nevada, yes, that's legal. 
Mr. Rice. Why don't you go to Nevada to operate? 
Mr. Rosenbaum. I don't want to go any place. I want to go where 
I want to go. I want to go and do wdiat I want to do. 

Mr. Rice. Y"ou want to do what you want to do, wdiether it is against 
the law or not? 

Mr. Rosenbaum. No, no. I want to go in the race track and bet. 
Mr. Rice. You have decided to close up and go to the race track? 
Mr. Rosenbaum. Yes. 

Mr. Rice. All right. Any questions, Senator? 

Senator Hunt. I want to make an observation. At the beginning 
of your testimony this afternoon, I think either you or the counsel 
made some statement with reference to paying approximately $200,000 
in income tax last year ; is that right ? 
Mr. Rosenbaum. No, sir. 
Senator Hunt. How much income? 
Mr. Rice. 1947. 

Mr. Rosenbaum. 1947 or 1948, I don't know. 

Senator Hunt. What was your gross income in the year when you 
paid approximately $200,000 ? 



152 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. RosENBAUM. I couldn't tell you. 

Senator Hunt. You would not know. I want to make this observa- 
tion. That money had to come from some place, did it not, that you 
paid an income tax on ? 

Mr. RosENBAUM. Yes, sir. 

Senator Hunt. Where do you think it came from? Do you think 
it might possibly have come from people who should have been spend- 
ing that money for shoes and for clothes and for food and for heat, 
for children, instead of allowing you to take it in the way you took it? 

Mr. RosENBAUM. No, sir; I never dealt with them kind of people. 
That's for rumors, maybe. 

Senator Hunt. Those are the bulk of this take from gambling which 
comes from that class of people who can't afford it. That is why the 
Senate Crime Committee is attempting to clean it up. 

Mr. RosENBx\UM. That's true, but I never handle that kind of busi- 
ness. I never took $2 and $5. The only thing that I ever took 

Senator Hunt. Somebody else gathered it and collected it. That 
is all. 

Mr. Rosenbaum. I don't think so. 

Mr. Rice. I have one question. 

There seems to be some question about these race horses that you 
owned and farmed out. Were any of those ever raced? Were any of 
those horses ever raced ? Did they ever run a race ? 

Mr. Rosenbaum. Some. 

Mr. Rice. Some. Now, then, did ever any of them race when you 
owned them ? 

Mr. Rosenbaum. No. 

Mr. Rice. Why is that? 

Mr. Rosenbaum. Why is that ? 

Mr. Rice. Yes. When did you acquire these horses? After they 
finished racing, or did you sell them to race later on, or what? 

Mr. Rosenbaum. Some of them were raced by my brother. 

Mr. Rice. Some of the horses you owned were raced by your 
brother ? 

Mr. Rosenbaum. That I own now. 

Mr. Rice. That you own now ? 

Mr. Rosenbaum. That's right. 

Mr. Rice. Who owned them when your brother raced them ? 

Mr. Rosenbaum. He did. 

Mr. Rice. He did. Did you buy them from your brother? 

Mr. Rosenbaum. No, sir. I bought these horses when he was in 
t he Army. 

Mr. Rice. You bought the horses while he was in the Army ? 

Mr. Rosenbaum. Yes. 

Mr. Rice. This is your brother Dave ? 

Mr. Rosenbaum. Yes; and they were just youngsters when I bought 
them. They were not yearlings. They were weanlings, and those 
who qualified, raced. 

Mr. Rice. Now, those who qualified raced. You still owned them, 
though, did you not ? 

Mr. Rosenbaum. I owned them then. 

Mr. Rice. Yes? 

Mr. Rosenbaum. I gave them to him when he got out of the Army. 
The horses became of age. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 153 

Mr. Rice. Then you gave them to him ? 

Mr. RosENBAUM. That's right. 

Mr. Rice. And he raced them under his name, then. Now, l^efore 
iie got out of the Army, they raced under your name, then, did they 
not? 

Mr. RosENBAUM. I don't recall. 

Mr. Rice. Is it possible ? 

Mr. RosENBAUM. I think they were raced under the name of my 
brother. It could be possible. I have race horses. 

Mr. Rice. As a matter of fact, the arrangement with your brother 
is purely a subterfuge to get around the requirements of the Jockey 
Club, is that i-ight? They do not allow anybody who is a betting 
commissionei' to own race horses, do they? 

Mr. Rosexbaum. I don't know. I don't think so, if you are classed 
as a bookmaker. 

Mr. Rice. That is right. 

Mr. RosENBAUM. If you are classed as a bookmaker, they don't 
permit you. 

Mr. Rice. Well, it seems to me that the withholding-tax statement 
produced by Cogan, that it showed that he was employed by Dave and 
Louie Rosenbaum. 

Mr. Rosenbaum. And Harry. 

Mr. Rice. And Harry, yes; so that they are all a part of the 
gambling operation, are they not, Dave, Harry, and Louis? 

jNIr. Rosenbaum. Of horses, of the business. 

Mr. Rice. Of the business, and one of them is racing horses? 

Mr. Rosenbaum. That's right. 

Mr. Rice. I think that is all. 

Senator Hunt. That is all. You are dismissed. 

I might say to the witness leaving the stand that you are and will 
continue to remain under subjsena to the ccmnnittee. 

(At the direction of the chairman, the testimony of Joseph Uvanni, 
given later as of this date, is being placed in the record at this point.) 

The Chairman. All right, Mr. Uvanni. Mr. Uvanni, do you 
solemnly swear the testimony you give will be the whole truth, so 
help you God ? 

Mr. Uvanni. I do. 

The Chairman. Let the record show Mr. Morris A. Shenker, at- 
torney at law, at St. Louis, Mo., is appearing with Mr. Uvanni. We 
are glad to have you with us, ]Mr. Shenker. 

Mr. Shenker. Thank you. I am glad to be here. 

The Chairman. Off the record. 

(Discussion off the record.) 

The Chairman. Back on the record. Let's get along, Mr. Rice. 

TESTIMONY OF JOSEPH UVANNI, ROME, N. Y. ; ACCOMPANIED BT 
MORRIS A. SHENKER, ATTORNEY AT LAW, ST. LOUIS, MO. 

Mr. Rice. Where do you live? 

Mr. LTvANNi. ()0(; East Bloomfield Street, Rome, N. Y. 

The ChxVirman. Where? 

Mr. Uvanni. (iOG East Bloomfield Street, Rome, N. Y. 

The Chairman. Rome, N. Y, ? 

Mr. Uvanni. Yes, sir. 

68958 — 51— pt. 12 11 



154 ORGANIZED CRIME IN INTERSTATE COMMERCE 

The Chairman. Off the record. Well, let's keep it on the record. 
I didn't know Mr. Shenker represented anybody in New York. When 
did you employ Mr. Shenker ? 

Mr. UvANNi. About 15 days ago. 
The Chairman. Did you know him before ? 
Mr. UvANNi. I had heard of him. 
The Chairman. Where did you hear of him? 

Mr. UvANNi. I read about him in the newspapers, for one thing, 
and he was recommended to me. 

The Chairman. Who recommended him to you ? 
Mr. UvANNi. John Mooney. 

The Chairman. I believe Mr. Shenker represents Mr. Carroll. Are 
you paying Mr. Shenker? 

Mr. UvANNi. Yes, sir ; I am paying him myself. 
The Chairman. All right, excuse me. 
Mr. Rice. You say you are from Rome, N. Y. ? 
Mr. UvANNi. Yes, sir. 

Mr. Rice. And there came a time when you wei'e served with a 
subpena by a representative of this committee ? 
Mr. UvANNi. That is right. 
Mr. Rice. When was that ? 
Mr. UvANNi. January 25. 
Mr. Rice. January 25 ? 
Mr. UvANNi. I believe it was the 26th. 
Mr. Rice. The 27th? 
Mr. UvANNi. The 27th. 
Mr. Rice. Saturday, wasn't it? 
Mr. UvANNi. Yes, it was. 

Mr. Rice. At the Fair Grounds track in New Orleans ? 
Mr. UvANNi. That is right. 
Mr. Rice. What were you doing then ? 
Mr. UvANNi. Betting on horses. 
Mr. Rice. Betting on horses? 
Mr. UvANNi. That is right, 
Mr. Rice. Are you a come-back man ? 

Mr. UvANNi. Well, I represent — I am a private contractor hired 
by John Mooney. 

Mr. Rice. A private contractor hired by John Mooney ? 

Mr. UvANNi. Yes, sir. 

]Mr. Rice. And as a private contractor did you hear the testimony 
of Remer and Cogan today ? 

Mr. UvANNi. Yes, sir ; I did. 

Mr. Rice. As a private contractor, what do you contract to do ? 

Mr. UvANNi. To place bets at the race tracks. 

Mr. Rice. To place bets at the tracks ? 

Mr. UvANNi. That is right. 

Mr. Rice. And do you have a written contract? 

Mr. TJvANNi. No, sir. 

Mr. Rice. When and where did you make that contract? 

Mr. UvANNi. When I first was employed. 

Mr. Rice. Beg your pardon? 

Mr. UvANNi. When I first took the job. 

Mr. Rice. When you first took the job ? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 155 

Mr. UvANNi. What I mean is when I first talked to Mr. Mooney and 
he asked me if I would handle his bets at the race track under con- 
tract for $25 a day. 

Mr. Rice. Yes. Now then, where did that conversation take place? 

Mr, UvANNi. It took place in Boston. 

Mr. Rice. In Boston ? 

Mr. UvANNi. Yes ; over the telephone. 

Mr. Rice. Over the telephone ? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. Now. let's see about this. How did you get into tele- 
phone touch with Mooney up at Boston ? 

Mr. UvANNi. I knew a man who worked for him before. 

Mr. Rice. Who is that? 

Mr. UvANNi. Les Moose. 

Mr. Rice. Les Moose ? 

Mr. UvANNi. Yes, sir. 

Mv. Rice. How do you spell it ? 

Mr. UvANNi. M-o-o-s-e. 

Mr. Rice. Was he working for Mooney ? 

Mr. UvANNi. He was working for him ; yes, sir. 

Mr. Rice. What did Moose tell you? 

Mr. UvANNi, Well, I knew Moose for quite a while, and be asked 
me if I would like to stay around a race track, and I said, '"yes," that 
I would. And I don't believe he worked the same way I did. He 
was working for Mr. Mooney, and we made different arrangements — 
that I would contract to get $25 a clay the days I am available for 
handling his money. 

Mr. Rice. Well now, were you in the contracting business before 
that? 

Mr. UvANNi. No, sir. 

Mr. Rice. And this is your first time ? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. I take it that Moose put you in touch with Mooney over 
the phone ? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. And you never met him ? 

Mr. UvANNi. I have since. 

Mr. Rice. You have since? 

Mr. UvANNi. Yes. 

Mr. Rice. When was that ? 

Mr. UvANNi. It was in 1947. 

Mr. Rice. 1947? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. Now then, since that time have you had any other em- 
ployment ? 

Mr. UvANNi. No, sir. 

Mr. Rice. This is your only employment? 

Mr. UvANNi. Yes, sir ; part time. 

Mr. Rice. Part time ? 

Mr. In'ANNi. When I was available. 

Mr. Rice. Well, since you left school have you had any other em- 
ployment ? 

Mr. UvANNi. Yes, sir ; I worked for the Bethlehem Steel Co. 

Mr. Rice. For whom ? 



156 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. UvANNi. The Bethlehem Steel. 

Mr. Rice. Bethlehem Steel Co. ? 

Mr. UvANNi. Yes; at Sparrows Point. 

Mr. Rice. You got to Boston somehow or other from Sparrows 
Point, which is on the other side of Baltimore? 

Mr. UvANNi. Yes ; I know where it is. 

Mr. Rice. And you got in touch with Mooney ? 

Mr. UvANNi- Yes, sir. 

Mr. Rice. Did you ever have any dealings with Jimmy Carroll ? 

Mr. UvANNi. No, sir. 

Mr. Rice. Do you know who he is ? 

Mr. UvANNi. I have heard of him. 

Mr. Rice, Have you met him ? 

Mr. UvANNi. No, sir. 

Mr. Rice. Have you talked to him on the phone ? 

Mr. UvANNi. No, sir. 

Mr. Rice. Who is he? 

Mr. UvANNi. I saw his name in the paper as a betting commissioner 
making price on the world series. 

Mr. Rice. Is that all you know about him ? 

Mr. UvANNi. I have heard quite a few stories about him, but I 
can't say that I know him. 

Mr. Rice. Did you hear Mooney talk about him ? 

Mr. UvANNi. No, sir. 

Mr. Rice. All right, sir. Your arrangements under this contract 
was not a written contract, you say ? 

Mr. UvANNi. That is right. 

Mr. Rice. You were getting $25 a day? 

Mr. UvANNi. When I was available. 

Mr. Rice. Any time you are not available you don't get it ? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. When is that? 

Mr. UvANNi. Quite a few times. 

Mr. Rice. What do you do when you are unavailable? 

Mr. UvANNi. Don't do anything. 

Mr. Rice. What determines when you are available and when you 
are unavailable? 

Mr. UvANNi. Sometimes I might not be near a race track; I might 
be up home in New York. 

Mr. Rice. I see. 

Mr. UvANNi. I am not available then. 

Mr. Rice. Not available? 

Mr. UvANNi. That is right. 

Mr. Rice. Did you go to Western Maryland ? 

Mr. UvANNi, Yes, sir. 

Mr. Rice. Did you graduate? 

Mr. UvANNi. No, sir. 

Mr. Rice. How many years did you go ? 

Mr. UvANNi. Three years. 

Mr. Rice. When you are available — which is about how many 
days a year, would you say ? 

Mr. UvANNi. It all depends. Some years it might be, say, about 
180 days ; some years it might be more ; some years it might be less. 



0RGA3SriZED CRIME IN INTERSTATE COMMERCE 157 

Mr. Rice. Now then, when you pay your taxes — ^you pay taxes, 
do you not ? 

Mr, UvANNi. Yes, sir. 

Mr. Rice. To the Government? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. And what do you put down there as your occupation? 

Mr, UvANNi. Private contractor. 

Mr. Rice. Are you sure about that ? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. On your tax? 

Mr. UvANNi. Yes. 

Mr. Rice. You put your occupation as private contractor? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. Is that all you say ? 

Mr. UvANNi. That is all. 

Mr. Rice. That is all? 

Mr. UvANNi. Yes. 

Mr. Rice. And where do you say your office is ? 

Mr. UvANNi. Don't have an office. 

Mr. Rice. Where is your headquarters ? 

Mr. UvANNi. I move from race track to race track. 

Mr. Rice. You move from track to track? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. And do you operate in the tracks? 

Mr. UvANNi. No, sir. 

Mr. Rice. Outside of the track ? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. So your office is wherever you can find outside of the 
track; is that right? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. Now then, coming down to New Orleans, where was your 
office down there? 

Mr. UvANNi. Gentilly Boulevard. 

Mr. Rice. AVliereabouts on Gentilly Boulevard ? 

Mr. UvANNi. I am not sure of the address. I believe it is 1648. 

Mr. Rice. Is that Mrs. LeBIanc's place ? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. A tavern right across from the track on Gentilly ? 

Mr. UvANNi. That is right. 

Mr. Rice. What telephone did you use, Mr. Uvanni ? 

Mr. Uvanni. Well, there was a pay station there, and once in a 
while I used a phone in the back — a private phone. 

Mr. Rice. Once in a while you used the phone in the back ? 

Mr Uvanni. Yes, private phone. 

Mr. Rice. Who is that listed to? 

Mr. Uvanni. I really don't know. 

Mr. Rice. Did you arrange for it ? 

Mr. Uvanni. No, sir. 

Mr. Rice. Is that on Barracks Street, too ? 

Mr. Uvanni. Barracks ? No, sir. 

Mr. Rice. It is the corner, isn't it ? 

Mr. Uvanni. Yes ; on the corner. 

Mr. Rice. Wliat arrangements did you make about the DhonA im 
the back ? 



158 ORGANIZED CRIME IN INTERSTATE COMMERCE. 

Mr. UvANNi. Well, I used the pay phone whenever I could, and if 
it was busy I asked the lady if I could use the one in the back. 

Mr. KiCE. Wliatlady? 

Mr. UvANNi. Mrs. LeBlanc. 

Mr. Rice. You asked Mrs. LeBlanc ? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. And she said all right? 

Mr. UvANNi. Yes. 

Mr. Rice. Did you pay her anything for the use of that phone? 

Mr. UvANNi. Yes, sir. Once in a while I gave her a gift. 

Mr. Rice. You gave her a gift like what — a few dollars? 

Mr. UvANNi. A few dollars; yes, sir. There was no set price, or 
anything like that. 

Mr. Rice. Once in a while she gave you a gift, too, didn't she, like a 
key to the back door ? 

Mr. UvANNi. . Yes, sir. 

Mr. Rice. Now, on those gifts that you gave her, did you charge 
those as expenses ?_ 

Mr. UvANNi. Yes, sir. 

Mr. Rice. And to whom did you charge those? 

Mr. UvANNi. I took it off my bank roll. 

Mr. Rice. Out of your bank roll ? 

Mr. TJvANNi. Yes, sir. 

Mr. Rice. Where did you get your bank roll ? 

Mr. UvANNi. Well, I got it different ways. 

Mr. Rice. Different ways? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. What would be one good way ? 

Mr. UvANNi. Western Union. 

Mr. Rice. Where would that come from? 

Mr. UvANNi. St. Louis. 

Mr. Rice. St. Louis. From wdiom? 

Mr. UvANNi. John Mooney. 

Mr. Rice. Mooney? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. i\.nybody else? 

Mr. UvANNi. No, sir. 

Mr. Rice. How else would you get your bank roll replenished? 

Mr. UvANNi. Cashier's checks. 

Mr. Rice. Cashier's checks? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. Where would they come from? 

Mr. ITvANNi. St. Louis. 

Mr. Rice. From Mooney? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. Do you know what bank? 

Mr. UvANNi. No, I don't. 

Mr. Rice. When you got a cashier's check, how Avould you cash it ? 

Mr. UvANNi. Well, at the race track. 

Mr. Rice. At the track? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. Right inside the track? 

Mr. UvANNi. Yes, sir; at the information window. 

Mr. Rice. Did you do that at all tracks ? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 159 

Mr. UvANNi. Well, most of the time I got either Western Union 
money order or cash. Yon never gave me a chance to tell you I got 
some by cash. 

Mr. Rice. How did yon get that? 

Mr. UvANNi. Registered mail. 

Mr. Rice. Right through the mail? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. Right to the place where yon were staying? 

Mr. UvANNi. I would have to go and pick it up. I would get a 
slip and go down and sign for it and pick it up. 

Mr. Rice. From where — the post office? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. And it would tell you there was a package there for 
you? 

Mr. UvANNi. That is right. 

jSIr. Rice. And you would go down and pick it up. How much 
would be in those packages? 

Mr. UvANNi. Well, sometimes $2,000. sometimes three. 

Mr. Rice. Two or three thousand dollars ? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. What would be the return address on that? 

Mr. UvANNi. 822 Pine Street. 

Mr. Rice. That is Mooney's address in St. Louis? 

Mr. UvANNi. Yes, sir. 

The CHAnRMAN. Or East St. Louis ? 

Mr. UvANNi. St. Louis. 

Mr. Rice. St. Louis or East St. Louis? 

Mr. UvANNi. St. Louis. 

Mr. Rice. Sometimesyou got these checks, you say ? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. And where would you cash the checks? You got cash 
now, and money orders, but you would get checks sometimes, and at 
all these tracks yon worked at you didn't go inside the track and 
cash them. Where did you cash them ? 

Mr. IvANNi. Banks. 

Mr. Rice. What bank? 

Mr. UvANNi. It all depends on where I was. 

Mr. Rice. You would just go into any bank ? 

Mr. UvANNi. No; I woukl have to go into a bank where I was 
known. 

Mr. Rice. How would you get to be known? Did you have an 
account there ? 

Mr. UvANNi. No. 

Mr. Rice. How did you establish jonv identity? 

Mr. UvAXNi. Well, I would find somebody that knew me and get 
them to identify me. 

Mr. Rice. And then as an accommodation you would get your 
check cashed ? 

Mr. UvANNi. Yes. 

Mr. Rice. Can you remember an 3^ of those banks? 

Mr. UvANNi. No, I can't offhand ; no, sir. 

Mr, Rice. What tracks have you operated at in the last 3 years? 
You go around the circuit during the year? 

Mr. UvANNi. Not exactly. 



160 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Rice. Say, the wintertime at the Fair Grounds, and that runs 
until March. Then where do you go ? 

Mr. UvANNi. I usually went to Suffolk Downs. 

Mr. Rice. Suffolk Downs ? 

Mr. UvANNi. Yes. 

Mr. Rice. Until they ran you off there ? 

Mr. UvANNi, Well, they told me not to come back. 

Mr. Rice. AVhere would you ^o from Suffolk Downs ? 

Mr. UvANNi. I went to Detroit. 

Mr. Rice. Wliat track there? 

Mr. UvANNi. It is a new race track. 

Mr. Rice. A new track? 

Mr. UvANNi. Yes. 

Mr. Rice. At any of these tracks you mentioned — Suffolk Downs 
or the Detroit track — did they let you in the enclosure to take telephone 
calls? 

Mr. UvANNi. No, sir. 

Mr. Rice. You had to operate from outside ? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. Where would you go from Detroit? 

Mr. UvANNi. I went from Detroit to Omaha. 

Mr. Rice. Omaha. What track there? 

Mr. UvANNi. The name of the track is Akserben. 

Mr. Rice. That is Nebraska spelled backwards ? 

Mr. UvANNi. That is right. 

Mr. Rice. Where would you go from Omaha? 

Mr. UvANNi. From Omaha I went to New Jersey. 

Mr. Rice. Which track? 

Mr. UvANNi. I didn't work at any track, I just went there to Avork, 
and they wouldn't let anybody bet in there in large amounts. 

Mr. Rice. Are you talking about Garden State? 

Mr. UvANNi. I am talking nbout Monmouth. 

Mr. Rice. Wouldn't let anybody bet large amounts? 

Mr. UvANNi. That is right. 

Mr. Rice. Why? 

Mr. UvANNi. Well, I really don't know. 

Mr. Rice. What did they tell you ? 

Mr. UvANNi. Just said they didn't want any large bets. 

Mr. Rice. Who told you that? 

Mr. UvANNi. I was told that by the general manager, Mr. Brennan. 

Mr. Rice. When did they start telling you that ? 

Mr. UvANNi. As soon as the meeting opened. 

Mr. Rice. July of this year? 

Mr. ITvANNi. I don't know the date. 

Mr. Rice. How about the year before that? 

]Mr. UvANNi. The year before that I wasn't there. 

Mr. Rice. Did you ever operate at Monmouth at all before they told 
you that? 

Mr. UvANNi. I was at Monmouth, I believe, 2 years ago. 

Mr. Rice. And you operated all right then ? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. Going from New Jersey, where did you go? 

Mr. UvANNi. From Jersey I went to Denver. 

Mr. Rice. Denver? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 161 

Mr. UvANNi. That is right. 

Mr. Rice. What track at Denver? 

Mr. UvANNi. Centennial Park. 

Mr. EiCE. What park? 

Mr. UvANxi. Centennial Park. 

Mr. Rice. Did they let you -work in the enclosure there? 

Mr. UvANNi. No, sir. 

Mr. Rice, Yon operated outside of the track? 

]\Ir. UvANNi. I never worked anywhere inside of a track. 

Mr. Rice. At any of these tracks have you ever worked with the 
cashier or the ticket seller where they let you put the money up? 

Mr. UvANNi. No, sir ; I always bet with cash. 

Mr. Rice. Do you pay cash for the tickets ? 

Mr. UvANNi. Pay cash and cash them for cash. 

Mr. Rice. Are you sure about that now ? 

Mr. UvANNi. Yes, sir. 

ISIr. Rice. Have you ever made arrangements to leave your money 
with the ticket seller? 

Mr. UvANNi. I have tried to but never could. 

Mr. Rice. You were never able to accomplish that? 

Mr. UvANNi. That is right. 

Mr. Rice. From Denver where did you go ? 

Mr. UvANNi. From Denver I went to Louisville. 

:Mr. Rice. Churchill Downs ? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. From Churchill Downs where did you go ? 

Mr. UvANNi. The fairgrounds. 

Mr. Rice. Back to New Orleans, and that is the circuit ? 

Mr. UvANNi. Yes, sir. 

The Chairman. Don't you get clown to Florida ? 

Mr. UvANNi. No, sir ; I have never been to Florida. 

The Chairman. That is not your territory ? 

Mr. UvANNi. I have never been there. 

Mr. Burling. Is the track at Detroit, which you call the new track, 
is that Hazel Park? 

Mr. UvANNi. No ; that is M-I-R, I think they call it, or something. 
I only stayed there 1 day. I didn't work there. I just stayed there. 

Mr. Rice. I show you Western Union money order dated November 
22, 1950, in the amount of $5,000 payable to Joe Uvanni— "Will call at 
tlie main office, New Orleans, La." — and ask you if you got that amount, 
if you know? 

Mr. T'lVANNi. That is right. 

Mr. Rice. That is apparently an office record. Who did that money 
come from? 

jNIr. UvANNi. John Mooney. 

Mr. Rice. It came from John Mooney ? 

]Mr. UvANNi. That is right. 

The Chairman. Let that be filed as exhibit No. 9. 

(The document was marked "Exhibit No. 9," and is on file with the 
committee.) 

Mr. Rice. I show you a record of a money order on January 25, 
1951, for $10,000, payable to Joseph Uvanni, care of Western Union, 
New Orh^Tns, will call, from John Mooney, in amount of $10,000 
[showing document to witness]. 



162 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. UvANNi. That is right. 

Mr. Rice. And I show you further record of that transaction, dated 
January 27, for $10,000, Western Union money order, bearing a signa- 
ture on the reverse. Is that yours ? 

Mr, UvANNi. Yes, sir ; that is. That is the same one. 

Mr, Rice. Yes; that is the same one. What did you do with 
that 

The Chairman. Tlie other two will be filed as exhibits 10 and 11. 

(The documents were marked "Exhibits 10 and 11," and are on file 
with the committee.) 

Mr. Rice. What did you do with that when received ? 

Mr. UvANNi. What did I do with it ? I kept it. 

Mr. Rice. You kept it? 

Mr. UvANNi. And 

Mr. Rice. I am not talking about the money. You got notifica- 
tion somehow or other that the money order was on the way, didn't 
you? How did you get that — by telephone? 

Mr, UvANNi. Western Union. 

Mr. Rice. Western Union, where ? It says "Will call" on there. 

Mr. UvANNi. Yes. 

Mr. Rice. You dropped by the Western Union office ? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. Did you drop by there every day, or how did you know ? 

Mr. UvANNi. Mooney told me. 

Mr. Rice. He told you over the telephone it would be there and 
you went down? 

Mr. UvANNi. That is right. 

Mr. Rice. Then you got the draft ? 

Mr. UvANNi. That is right. 

Mr. Rice. Then where did you take it ? 

Mr. UvANNi. Took it to the race track. 

Mr. Rice. What did you do with it there ? 

Mr. UvANNi. Cashed it. 

Mr. Rice. Right in the track? 

Mr. UvANNi. That is right. 

Mr. Rice. At the information window. 

Mr. UvANNi. Anybody can cash a check there, so long as they are 
known. 

Mr, Rice, Right in the Fair Grounds track? 

Mr, UvANNi, That is right, 

Mr, Rice, They knew you there, then? 

Mr, UvANNi, That is right. 

Mr. Rice. Then you had $10,000 in cash. 

Mr. UvANNi. That is right. 

Mr. Rice, What did you do with that ? 

Mr, UvANNi, Well, I took it and had it changed into cashier's 
checks. 

Mr. Rice. Wliere did you do that ? 

Mr. UvANNi. In New Orleans. 

Mr. Rice. Where? 

Mr. UvANNi, The Progressive Bank, 

Mr. Rice. How large did you have these cashier's checks made? 

Mr, UvANNi, $1,000, $500, $600, and $300. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 163 

Mr. Rice. And did you carry those with you ? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. Then when you go to the window to make your bet- 



Mr. UvANNi. When I go to the race track during the day I cash 
my checks for how much I thought I would need. 

Mr. Rice. You would cash a smaller check ? 

Mr. UvANNi. And if I needed more I could cash more checks. 

Mr. Rice. I see. 

I have another one to offer for $5,000. This is the actual draft. 

The Chaieman. That will be exhibit No. 12. 

(The document was marked ''Exhibit No, 12," and is on file with the 
committee. ) 

Mr. Rice. What would be your way of operating? What would 
you get over the telephone from Mooney ? 

Mr. TJvANNi. Well, he would tell me the horse he wanted to bet and 
how much. 

Mr. Rice. What would he say? \Vhat was the actual wording? 

Mr. UvANNi. Well, he would give me the name of the horse, and 
naturally I would know what race it was in, having the program, 
and tell me how much. 

Mr. Rice. Yes ? 

]Mr. UvAXNi. Like he might say, "200 across, 300 across, 400 across, 
200 to win, 100 to show." or however he wanted to bet. 

Mr. Rice. And you would go into the track and place that bet? 

Mr. UvANNi. That is right. 

Mr. Rice. And you would settle up with him at the end of the day 
over tlie telephone ? 

Mr. UvANNi. The next day. 

Mr. Rice. The next day ? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. How about your salary and expenses? How would you 
draw that? 

Mr. UvANNi. I would take it off the bank roll. 

Mr. Rice. Take it off the bank roll ? 

Mr. XJvANNi. Yes, sir. 

Mr. Rice. And settle over the telephone? 

Mr. UvANxi. Yes, sir. 

Mr. Rice. Now then, where would you — you made collect calls, didn't 
you? 

Mr. UvANisri. Yes, sir. That is right. 

Mr. Rice. Where would you call Mooney ? 

Mr. UvANNi. Several different numbers. 

Mr. Rice. What are some of them ? Rosedale 7780, is that a num- 
ber for Mooney ? 

Mr. UvANNi. I believe it is. I am not sure. I believe so. 

Mr. Rice. That is the Park Plaza Hotel. Is that a direct line there ? 

Mr. UvANNi. I really couldn't tell you. 

Mr. Rice. Where would you get the number? He would give it 
to you ? 

Mr. UvAxxi. He would call me and give me the number to call 
that day. 

Mr. Rice. And tell you what number to use that day? 

Mr, XJvANNi, Yes, sir. 



164 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Rice. Would that change every day or once a week ? 

Mr. UvANNi. Some days it did and some days it didn't. 

Mr. Rice. Switching around from time to time ? 

Mr. UvANNi. Yes, sir. 

Mr. Shenker. Rosedale 7780 is not a Park Plaza number. I hap- 
pen to know that number. It may be a private number. 

Mr. Rice. It is registered for John Mooney, a direct line. 

Mr. Shenker. It may be a private line. 

The Chairman. That is right — John Mooney, Park Plaza Hotel, 
St. Louis. 

Mr. Shenker. Probably a direct line. 

The Chairman. Yes. 

Mr. Rice. I have a paper with R. Rose, 1620 Bay Road, Miami, 
telephone 5393. Who is R. Rose ? 

Mr. UvANNi. A boy that roomed with me in New Orleans. 

Mr. Rice. What Avas his business ? 

Mr. UvANNi. I really don't know. We just roomed together. I 
never asked him his business. 

Mr. Rice. What became of of him ? 

Mr. UvANNi. He went to Florida to see his uncle. That is his 
uncle's address there. 

Mr. Rice. Is he a come-back man ? 

Mr. UvANNi. I really don't know. 

Mr. Rice. He could be ? 

Mr. UvANNi. He could be. I never asked and he never told me. 

Mr. Rice. Was he doing the same thing you were at the track? 

Mr. UvANNi. He was betting. 

Mr. Rice. He was betting from time to time ? 

Mr. UvANNi. Yes. 

Mr. Rice. What is his first name? 

Mr. UvANNi. Ronald. 

Mr. Rice. If he could be a come-back man, who could he be a come- 
back man for ? 

Mr. UvANNi. I really don't know. 

Mr. Rice. Does he work out of Kingston, N. Y. ? 

Mr. UvANNi. Honestly, I couldn't tell you. 

Mr. Rice. It is possible? 

Mr. UvANNi. Possible, but I wouldn't want to say because I don't 
know. 

Mr. Rice. You had several other numbers. Republic 4603. Do 
you remember what that was for? What city is that, do you know ? 

Mr. UvANNi. Yes, sir ; St. Louis. 

Mr. Rice. St. Louis ? 

Mr. UvANNi. Yes. 

Mr. Rice. What was that number. Republic 4603, used for? 

Mr. UvANNi. That was a number I called. 

Mr. Rice. The same thing ? 

Mr, UvANNi. Yes, sir. 

Mr. Rice. Did you always talk to Mooney when you called these 
numbers ? 

Mr. UvANNi. No, sir. 

Mr. Rice. Who else would you talk to? 

Mr. UvANNi. There was different fellows. 

Mr. Rice. Who would they be? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 165 

Mr. UvANNi. I couldn't tell you. I can tell you their nicknames, but 
couldn't really tell you their names. 

Mr. Rice. What are some nicknames ? 

Mr. UvANNi. Smitty. Mack. 

Mr. Rice. Smitty and Mack? 

Mr. UvANNi. Yes. Kenny. 

Mr. Rice. Kenny? 

Mr. UvANNi. Yes. 

Mr. Rice. How about Upton 45526? Where was that? 

Mr. UvANNi. East St. Louis. 

Mr. Rice. Is that the same thing? 

Mr. UvANNi. No, sir, 

Mr. Rice. What was that number for ? 

Mr. UvANNi. That was a friend of mine ; just a friend. 

Mr. Rice. Just a friend. Man or woman? 

Mr. UvANNi. Man. 

Mr. Rice. A man ? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. What is his name ? 

Mr. UvANNi. His name was Steve. 

Mr. Rice. Steve? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. Steve Portler? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. What business is Steve Portler in? 

Mr. UvANNi. I don't know what he is doing now. 

Mr. Rice. Who did he work for — the Kingston outfit or Dobkin ? 

Mr. UvANNi. I really don't know. 

Mr. Rice. You know you do. He is a good friend of yours. 

Mr. UvANNi. He didn't work for either one of them. 

Mr. Rice. He was a come-back man, wasn't he? 

Mr. UvANNi. He was at one time. 

Mr. Rice. Wlien he was a come-back man, who did he work for? 

Mr, UvANNi. John Mooney. 

Mr. Rice. So he worked different tracks, or did he work together 
with you? 

Mr. UvANNi. I never worked with anyone. 

Mr. Rice. Do you know where Portler is now ? 

Mr. UvANNi. No, sir; I don't. 

Mr. Rice. For a while, just before the 27tli of January, you were 
away from New Orleans. Where were you ? 

Mr. UvANNi. Gulfport, Miss. 

Mr. Rice. What were you doing over there ? 

Mr. UvANNi. Resting. 

Mr. Rice. Resting? 

Mr. UvANNi, Yes, sir, 

Mr, Rice. Now, how long did you rest in Gulfport ? 

Mr. UvANNi. About 3 or 4 days. 

Mr. Rice. Three or four days? 

Mr, UvANNi, That is right. 

Mr. Rice. Did that happen to be the 3 or 4 days that the Kef auver 
committee was in town? 

Mr. UvANNi. No, sir. 

Mr. Rice, Are you sure about that ? 



166 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. UvANNi. The committee was supposed to be there, I believe, 
2 days, if I am not mistaken. 

Mr. EicE. Yes. 

Mr. UvANNi. I was there one of the days when the committee was 
there. 

Mr. KiCE. Yon were the last day ? 

Mr. UvANNi. That is right. 

Mr. KiCE. You got back in town and started operating the follow- 
ing day. The committee finished the hearings on the 26th and you 
returned and started operating on the 27th ; isn't that right ?^ 

Mr. UvANNi. I was there the 27th, yes, but I didn't do anything. 

Mr. Rice. You weren't doing anything? 

Mr. UvANNi. No, sir. 

Mr. Rice. You weren't making any bets ? 

Mr. TJvANNi. I didn't make any bets that day. 

Mr. Rice. You didn't make any bets that day ? 

Mr. UvANNi. No, sir. 

Mr. Rice. Are you sure about that? 

Mr. UvANNi. Positive. 

Mr. Rice. What were you doing at the ticket window? 

Mr. UvANNi. Talking to the man. 

Mr. Rice. Didn't you have some tickets with you ? 

Mr. UvANNi. No, sir ; I didn't have a ticket. 

Mr. Rice. You were just cashing a money order, I take it? 

]\Ir. UvANNi. That is right ; I cashed the money order. 

Mr. Rice. I see where you talked to John Mooney several times on 
that day. What was that about? 

Mr. UvANNi. What was it about? 

Mr. Rice. Yes. 

Mr. UvANNi. It could have been about horses. I don't know for 
sure. 

Mr. Rice. It is possible it was about horses. 

Now, then, you had a telephone number Rosedale 3542, St. Louis. 
Do you know what that is for? 

Mr. UvANNi. No ; I don't. 

Mr. Rice. Wasn't that one of the numbers you used? 
. Mr. UvANNi. No, sir ; I never used the number. 

Mr. Rice. What were you doing with the notation ? 

Mr. UvANNi. Notation? 

Mr. Rice. Why do you have the notation ? 

Mr. UvANNi. i didn't know I had one. 

Mr. Rice. You didn't know you had that? 

Mr. UvANNi. No, sir. I had so many numbers on that paper I 
didn't know what I had. 

Mr. Rice. They were all numbers you used for come-back, weren't 
they? 

Mr. UvANNi. No, sir. Some of the numbers I never used at all. 

Mr. Rice. Maybe it would help you if I tell you that this number 
is now listed to be Basket Advertising Co. in the Kingsway Hotel in 
St. Louis. 

Mr. UvANNi. I can honestly say I never called that number. 

Mr. Rice. You never used that number ? 

Mr. UvANNi. That is right. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 167 

Mr. KiCE. That nmiiber was just about to get active, I think, about 
the time you became inactive. 

The Chairman. Was that a number given to you to call if you 
wanted to? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. Now, then, you have Forrest 5433? Wliat was that? 

Mr. UvANNi. I never called that number. 

Mr. Rice. That was a new number, too, wasn't it? 

Mr. UvANNi. That is right. 

Mr. Rice. Forrest 2213. Another new number? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. So these are current numbers operating there, as far as 
you know ? 

Mr. UvANNi. I don't think any numbers are operating there now. 
In fact, I know they are not. 

Mr. Rice. How do you know that ? 

Mr. UvANNi. Because I haven't been active, as you say, since the 
10th of February. 

Mr. Rice. You stopped ? 

Mr. UvANNi. I haven't been available. 

Mr. Rice. You are out of the contracting business now since the 10th ? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. You haven't been available? 

Mr. UvANNi. That is right. 

Mr. Rice. '\'\'liat have you been doing? 

Mr. UvANNi. Resting. 

Mr. Rice. Do you know a woman named Mary Forrestal? Did 
you ever talk to her? 

Mr. UvANNi. I believe I know her. 

Mr. Rice. Who is she? 

Mr. UvANNi. A girl from St. Louis. 

Mr. Rice. Yes. What does she do there ? 

Mr. tJvANNi. I really couldn't tell you. 

Mr. Rice. She works in the office there, doesn't she? 

The Chairman. She testified before the committee when we were 
in executive session in St. Louis. 

Mr. Rice. Would it be fair, Mr. Shenker, to say that we have a 
record that Mary Forrestal said about $16,000 a day or something like 
that was bet at a track in Chicago ? 

Mr. Shenker. I think the testimony contains something of that 
nature. I don't recall the amount. 

The Chair^ian. Mr. Shenker was there during that part. 

Mr. Shenker. That is right. 

The Chairman. And questions and answers that are relevant I 
think we can put in. 

Mr. Shenker. That is perfectly all right. I have no objections 
to it. 

Mr. Rice. They were talking about Miss Forrestal being an em- 
ployee of Mooney, is that right? 

Mr. Shenker. I believe she identified herself as his secretary, if I 
recall correctly. 

Mr. Rice. Yes; she said she worked — she was asked what was the 
technical name of the place, and she said, "John Mooney; oh, the 
Maryland Book Shop." 



168 ORGANIZED CRIME IN INTERSTATE COMMERCE 

And in talking about what was going on, she was asked: "Could 
you give us the best estimate of the amount of money that would be 
bet per day on an average day?"' And she said, "I think maybe six- 
teen thousand would be closer probably. I am awfully poor on that, 
though." 

Also in talking about telephoning bets back and forth, she said: 

We have people at the race tracks that take bets. They are our own men paid 
by us. We have a man at the track, for instance, at Chicago, and we lay off 
money. 

Were you one of the men ? 

Mr. UvANNi. I have never been to Chicago. 

Mr. KiCE. Never been to Chicago ? 

Mr. UvANNi. I have been through Chicago but never was working 
there. 

Mr. Rice. She says, for instance, at Chicago. She said, "they are our 
men." 

The Chairman. He wasn't at Chicago. Somebody else was there. 

Mr. Rice. That office was at 3181/2 Missouri Avenue, East St. Louis. 
Right shortly after the committee went to St. Louis in July, I believe 
that office was closed down. Did you get some instructions after that 
where to call at another place ? 

Mr, UvANNi. I mentioned before that I called different numbers 
on different days. 

Mr. Rice. You called different numbers on different days according 
to instructions from Mooney? 

Mr. UvANNi. Yes, sir. 

Mr. Shenker. He doesn't mean he had a specific day for each 
number. 

Mr. UvANNi. What I mean — he would tell me what number to call 
for that day. 

Mr. Rice. I have a record which indicates you received or you made 
some collect calls in January from Bywater 6841 in New Orleans. 
Do you know where that was ? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. Wliere was that? 

Mr. UvANNi. Mrs. LeBlanc's private phone. 

Mr. Rice. Mrs. LeBlanc's private phone? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. And that is the phone you used to call Mooney? 

Mr. UvANNi. Yes, when the other phone was busy, that is right. 

Mr. Rice. Would it surprise you to know that Mrs. LeBlanc's 
private phone is listed Munez Collection Agency? 

Mr. UvANNi. I didn't know that. 

Mr. Rice. Is she running a collection agency there? 

Mr. UvANNi. As far as I know, I really couldn't tell you. 

Mr. Rice. It is a private home, isn't it? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. Was there a ticker in there ? 

Mr. UvANNi. I never saw one. 

Mr. Rice. Was there a ticker in there? 

Mr. UvANNi. Not that I know of. 

Mr. Rice. How about a wigwag man? Did a wigwag man work 
there? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 169 

Mr. UvANNi. I don't understand what you mean. 

]\Ir. Rice. At the window on the top floor? 

Mr. UvANNi. I was never upstairs in the house. 

Mr. Rice. How about the wigwag man ? Did you know they were 
there ? 

Mr. UvANNi. I still don't understand what you mean. 

Mr. Rice. You don't know what I mean by wigwag man ? 

Mr. UvANNi. No, sir. 

Mr. Rice. A man up on the top floor of Mrs. LeBlanc's place who 
would run a telescope out the window and look at the tote board. You 
don't know anything about that? 

Mr. UvANNi. No, sir. I have never seen it. 

Mr. Rice. You have never seen it ? 

Mr. IJvANNi. No, sir. 

Mr. Rice. You made some telephone calls from Audubon 0873 New 
Orleans ? 

INIr. UvANNi. That is right. 

Mr. Rice. Who is that? 

Mr. UvANNi. A private home ; a friend of mine. 

]\Ir. Rice. A private home, a friend of yours? 

Mr. UvANNi. Yes, sir. 

Mr. Rice. A girl friend? 

Mr. UvANisri. Yes, sir. 

Mr. Rice. And you would just happen to drop there and make some 
phone calls to Mooney? 

Mr. UvANNi. No, I didn't happen to drop by there. I usually went 
over there every day. 

Mr. Rice. You used that to operate from ? 

Mr. UvANNi. No, sir; I would just call from there. 

Mr. Rice. Call Mooney? 

Mr. UvANNi. Yes. 

Mr. Rice. What would you talk to him about from there ? 

Mr. UvANNi. He could have told me where to call for the day or that 
afternoon. 

JMr, Rice. Would you make a call in the evening there ? 

Mr. UvANNi. Sometimes ; sometimes during the day and sometimes 
in the evening. 

Mr. Rice. Who else works for Mooney that 3'ou know of as a come- 
back man ? Do you know Davey Weinstein ? 

Mr. UvANNi. I have heard of him. 

Mr. Rice. Have you ever run into him ? 

Mr. UvANNi. I have seen him. 

Mr. Rice. You have met him? 

Mr. UvANNi. Yes. 

Mr. Rice. Do you talk shop with him ? 

Mr. UvANNi. No, sir. 

]Mr. Rice. As far as you know, does he work for Mooney ? 

Mr. UvANNi. I really couldn't tell you. 

Mr. Rice. Does he work the Florida tracks ? 

Mr. UvANNi. I believe he does, but I couldn't say for sure. 

Mr. Rice. What other men does he have ? 

Mr. UvANNi. I think — I knew Steve Portler. 

G895S— 51— pt. 12 12 



170 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Rice. Portler switched to the Kingston outfit ; didn't he ? 

Mr. UvANNi. No, sir. 

Mr. Rice. He is still with Mooney? 

Mr. UvANNi. I really don't know whether he is or not. I don't think 
he is working at all now. 

Mr. Rice. What track did he work? 

Mr. UvANNi. He used to work Fairgrounds. 

The Chairman. You seem to be paid better than these other fel- 
lows who were in here. They got $100 a week and you get $25 a day. 

Mr. UvANNi. I don't get any expenses. 

The Chairmax. You pay your own expenses ? 

Mr. Uvanni. Yes, sir 

The Chairman. So generally all of you are paid about the same? 

Mr. Uvanni. Practically; yes, sir. 

The Chairman. Were several other come-back men using the same 
phones in Mrs. LeBlanc's house? 

Mr. Uvanni. No ; I was the only one there. 

The Chair3ian. I think it is true that was a Avigwag place, but you 
didn't see any wigwag? 

Mr. Uvanni. No, sir ; I never went past the first floor. 

The Chairman. Did you operate with a confederate? Did you 
have somebody to help you, assist you? 

Mr. Uvanni. No, sir. 

The Chairman. You always did your own? 

Mr. Uvanni. Yes, sir 

The Chairman. Mooney wouldnn't call you, j^ou would call him? 

]Mr. Uvanni. No ; sometimes he would call me. 

Mr. Shenker. Not that place. 

Tlie Chairman. At the track ? 

Mr. ITvANNi. Not inside the track; no, sir. Across the street. 

The CHAIR3IAN. He knew where he could reach you at any time ? 

Mr. Uvanni. Yes ; that is right. 

The Chairman. All right. 

Mr. Shenker, do you want to ask anything ? 

Mr. Shenker. I want to ask one question. I believe in all fairness 
we ought to straighten this out. This number that Mr. Rice men- 
tioned, the Audubon number — you said that was your girl friend's 
number ? 

Mr. Uvanni. That is right. 

Mr. Shenker. You didn't call there in order to get instructions ? 

Mr. Uvanni. No. If anybody ever wanted me, they could always 
get me at that number. 

Mr. Shenker. She is just a girl friend of yours and you did not pay 
her for it ? 

Mr. Uvanni. No. 

Mr. Rice. I notice Rosedale 7780, listed as John Mooney, Park 
Plaza, received several calls from that phone and he paid for them. 

Mr. Uvanni. That phone, Audubon 0873, is not used for any kind of 
business. 

The Chairman. We will let the record show this is just a friend of 
yours and didn't have anything to do with business. 

Mr. Uvanni. In fact, she doesn't even know what I do for a living. 

The Chairman. That is fair enough. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 171 

Mr. Shenker. Thank you. 

Senator Hunt. Mr. Doyle. 

Mr. Doyle, do you solemnly swear the testimony you are about to 
give is the truth, the whole truth, and nothing but the truth, so help 
you God? 

Mr. Doyle. I do. 

TESTIMONY OF JOHN DOYLE, GARY, IND. 

Mr. Robinson. Will you give your f 14I name, please, Mr. Doyle ? 

]\Ir. Doyle. My Christian name is John Doyle. I am known by Jack 
Doyle. 

Mr. Robinson. And where do you live, Mr. Doyle? 

Mr. Doyle. 717 Carolina, Gary, Ind. 

]Mr. Robinson. For how long have you lived in Gary ? 

Mr. Doyle. Approximately 18, 19 years. 

Mr. Robinson. Try and keep your voice up, please. 

Mr. Doyle. Eighteen or nineteen years. 

Mr. Robinson. And where were you before you came to Gary ? 

Mr. Doyle. Oh, part of the time Chicago. I was born in Chicago. 

Mr. Robinson. Were you in business in Chicago at an3^time? 

Mr. Doyle. No, sir. 

^Ir. Robinson. What were the circumstances under which you went 
to Gary ? 

Mr. Doyle. Well, I really don't know. Just one of those things. 
My dad died, and I was kind of roaming around, liked Gary and 
stayed there. 

Mr. Robinson. Did j^ou know a person by the name of Larry Fin- 
erty ? 

Mr. Doyle. Yes, sir. 

Mr. Robinson. He is from Gary ? 

Mr. Doyle. No, sir, he was not from Gary. He w^as in Gary when 
he was a very young boy, but he lived in Highland, Ind. That is about 
12 miles from Gary. 

Mr. Robinson. Was he instrumental at all in your going to Gary ? 

Mr. Dotle. No, sir, no. 

Mr. Robinson. What business were you in, if any, when you first 
went to Gary ? 

jNIr. Doyle. When I first w^ent to Gary ? 

Mr. Robinson. That is right. 

Mr. Doyle. I was not in any business. 

Mr. Robinson. Did you enter a business in Gary at any time ? 

Mr. Doyle. Afterwards ; yes, sir. 

Mr. Robinson. What business did you first engage in in Gary? 

Mr. Doyle. I believe I worked for Wholesale Beer Co., then. 

Mr. Robinson. Who was your employer? 

Mr. Doyle. Lawrence Finerty and Leroy Jacobs. 

Mr. Robinson. And how long did you stay in that business? 

Mr. Doyle. Probably 3 years. 

Mr. Robinson. Then what did you do? 

Mr. Doyle. You mean after I left the beer business ? 

Mr. Robinson. That is right. 

Mr. Doyle. Well, I would have to refuse to answer that on the 
ground it would probably tend to incriminate me, for the time being. 



172 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Afterward, I opened up a restaurant. In between times, I would not 
answer. 

Mr. Robinson. What was the answer to the other question ? You say 
you refuse to answer ? 

Mr. DoTLE. I refuse to answer ; yes, sir. 

Mr. Robinson, On the grounds it would tend to incriminate you ? 

Mr. DoYLiE, Yes, sir. 

Mr. Robinson. What was the last phrase you added ? 

Mr. DoYi.E. That I opened up a restaurant. 

Mr. Robinson. Did you sa}^"for the time being"'? 

Mr. Doyle. As of now ; yes, sir. 

Mr. Robinson. And under what law would it tend to incriminate 
you? 

Mr. Doyle. Well, I don't know, sir. 

Mr. Robinson. State law or Federal law ? 

Mr. Doyle. There is a State law. I don't know if there is a Fed- 
eral law. Is there? 

Mr. Robinson. I am asking you. 

Mr. Doyle. Well, I don't know. I am not a lawyer, sir. 

Mr. Robinson. What is the basis upon which you are refusing to 
answer? On the grounds that it would tend to incriminate you, so 
far as a State violation is concerned ? 

Mr. Doyle. Maybe both. 

Mr. Robinson. It may be both? You are guessing now, is that 
right ? 

Mr. Doyle. I know what the State law is. I don't know what the 
Federal law is. 

Mr. Robinson. You are guessing at it ? 

Mr. Doyle. Could be. 

Mr. Robinson. I suggest to the chairman that he direct the witness 
to answer the question. 

Senator Hunt. The Chair directs the witness to answer the ques- 
tion of counsel. 

Mr. Doyle. I still refuse to answer, Mr. Chairman. I am sorry. 

Mr. Robinson. Now, what was the year that you left the beer 
business ? 

Mr. Doyle. In 1943, 1 believe, sir. 

Mr. Robinson. And do you remember was it before 1943 or during 
the year 1943 ? 

Mr. Doyle. I am not sure. It could have been the latter part of 
1942 or the early part of 1943. 

Mr. Robinson. Were you in a business during the year 1943 in 
which you got commissions? 

Mr. Doyle. Commissions? 

Mr. Robinson. Yes. 

Mr. Doyle. I refuse to answer that for the same reason. 

Mr. Robinson. I request the chairman to direct the witness to 
answer the question. 

Senator Hunt. The chairman directs the witness to answer the 
question. 

Mr. Doyle. I refuse to answer. Chairman. 

Mr. Robinson. Do you recall what the amoimt of income was that 
you got in 1943 ? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 173 

Mr. Doyle. No, sir ; I don't. You have my records on that. I gave 
you all my books for every month in Chicago at the time. 

Mr. Robinson. Would your recollection be it was somewhere around 
$8,000? 

Mr. Doyle. I imagine it would probably be around that. 

Mr. Robinson. Would you state that that was commissions ? 

Mr. Doyle. Well, I have already refused to answer that question, 
sir. 

Mr. Robinson. Very well. What business are you in at present? 

Mr. Doyle. Restaurant business. 

Mr. Robinson. What is the name of the restaurant ? 

Mr. Doyle. Jackson's Restaurant. 

Mr. Robinson. Where is that located? 

Mr. Doyle. 5101 East Dunes Highway, in Gary. 

Mr. Robinson. How large a restaurant is that? 

Mr. Doyle. Well, our main dining room seats 175. Then we have a 
lunch I'oom on the other side that seats approximately 25. 

Mr. Robinson. That is a very sizeable restaurant, is it not ? 

Mr. Doyle. Yes, sir. 

Mr. Robinson. And a very profitable one ? 

Mr. Doyle. Well, I think it will be. 

Mr. Robinson. What other businesses are you in, Mr. Doyle ? 

Mr. Doyle. Other than the restaurant business ? 

Mr. Robinson. That is right. 

Mr. Doyle. I refuse to answer for the same reason. 

Mr. Robinson. What is the basis for your refusal to answer that 
cjuestion ? 

Mr. Doyle. On the grounds it would tend to incriminate me. 

Mr. Robinson. Federal or State offense ? 

Mr. Doyle. It could be either one. I am not sure of that Federal 
offense, Mr. Robinson. You keep asking me about that. Maybe you 
should enlighten me on it. 

Mr. Robinson. I think I can enlighten you to this extent : That you 
have no right to refuse to answer a question on the grounds it would 
tend to incriminate you so far as a Federal offense is concerned. 

Mr. Doyle. And how about the State ? 

Mr. Robinson. Is that the grounds upon which you are refusing to 
answer ? 

Mr. Doyle. I am not answering that ; no. 

Mr. Robinson. Have you gotten advice of counsel ? 

Mr. Doyle. No. I am refusing to answer it on the grounds it would 
tend to incriminate me. 

Mr. Robinson. And you have no real basis for that? You are just 
assuming that it might? 

Mr. Doyle. Just assuming that it might ; that is right. 

Mr. Robinson. I suggest to the chairman that the witness be di- 
rected to answer the question. 

Senator Hunt. Mr. Doyle, it seems to the chairman that you are 
placing yourself in a rather precarious situation by refusing to an- 
swer questions which you just think may jeopardize yourself. The 
Chair directs you to answer that question. 

Mr. Doyle. Mr. Chairman, my own personal feeling is I do not 
want to answer them. Maybe I am right, and maybe I am wrong. 



174 ORGANIZED CRIME IN INTERSTATE COMMERCE 

I know my own personal problems probably a lot better than you 
gentlemen do up there. 

Senator Hunt. The Chair directs you to answer the question. 

Mr. Doyle. Well, I am sorry, I refuse to answer, sir. 

Mr. Robinson. Well, Mr. Doyle, did you bring any records with 
you? 

Mr. DoTLE. No, sir ; I did not. I didn't have time. I could not get 
a plane out of Gary last night. I had to rush to get a 5 : 30 train, 
and the fact that my records were in your possession in Chicago for 
over a month, I did not think it was that necessary, either. 

You subpenaed me and my records over a month ago when you 
were in Chicago, and I left them there a month, and you returned them 
on your own volition. 

Mr. EoBiNSON. That is right. 

Mr. Doyle. Is that right ? 

Mr. Robinson. That is correct. I did want to have you produce 
some of your records so that I could refer to them. 

Mr. Doyle. I know, but I only had 24-hour notice to be in Wash- 
ington. 

Mr. Robinson. I understand that. Well, your records show, Mr. 
Doyle, that you have an interest in a company called the Calumet 
News Co. Will you state where that company is located ? 

Mr. Doyle. I refuse to answer, sir, on the same grounds, and same 
reason. 

Mr. Robinson. Well 

Senator Hunt. Mr. Doyle, to conserve our time, shall we have an 
understanding that on all questions which you refuse to answer, you 
understand that the Chair is directing you to answer? 

Mr. Doyle. Yes, sir ; I understand. 

Senator Hunt. Instead of putting the situation before you each 
individual time ? 

Mr. Doyle. Yes, sir. 

Mr. Robinson. You understand that, Mr. Doyle. 

Mr. Doyle. Yes, sir. 

Mr. Robinson. The record of the Calumet News Co. shows that it 
pays $250 a week for wire service. Is that correct? 

Mr. Doyle. I refuse to answer, sir. 

Mr. Robinson. You do not deny that that record is of the Calumet 
News Co., which you produced in response to the subpena? 

Mr. Doyle. I refuse to answer. 

Mr. Robinson. Do you understand my question ? 

Mr. Doyle. You are asking me to deny it. I am not denying it. I 
am refusing to answer it, Mr. Robinson. 

Mr. Robinson. But you did produce those books as your books of 
the Calumet News Co., in response to the subpena ? 

Mr. Doyle. You asked for books and records. Did you ask for the 
Calumet News in your subpena ? 

Mr. Robinson. I think we asked for all books and records that 
showed payment for wire service. 

Mr. Doyle. Anything that T received a payment out of, I believe. 

Mr. Robinson. Well ; I do not think the subpena specified particu- 
larly the Calumet News Co., but we did ask for all your books and 
records on any business that you were engaged in, and you produced 
the books and records of the Calumet News Co. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 175 

Mr. DoTLE. Yes, sir. 

Mr. Robinson. Wliicli I assume were your books. 

Mr. DoTLE. That is riglit. 

Mr. Robinson. And were books of a company in which you had an 
interest. Otherwise, I can't see any particular purpose for your pro- 
ducing tlie books. 

Mr. Doyle. That is right. 

Mr. EoBiNSON. And those booI<;s showed that you paid, or the Calu- 
met NeM's Co. pays, $250 a week for wire service. You do not deny that 
that statement exists in the books that you produced ? 

Mr. Doyle. No, sir, I don't. 

Mr. Robinson. To whom was that $250 paid ? 

Mr. Doyle. I refuse to answer, for the same reason. 

Mr. Robinson. Mr. Doyle, what is the Calumet Novelty Co. ? 

Mr. DoY'LE. I refuse to answer that also. 

Mr. Robinson. Do you have an interest in the Calumet Novelty Co. ? 

Mr. Doyle. Yes, sir. 

Mr. Robinson. What was your answer ? 

Mr. Doyle. Yes ; I answered the question. 

Mr. Robinson. I did not hear it. 

Mr. Doyle. I said "Yes, sir." 

Mr. Robinson. You do have an interest in it ? 

Mr. Doyle. Yes, sir. 

Mr. Robinson. And what is your interest in that company? 

Mr. Doyle, I refuse to answer that. I admit for the record that 
I have something to do with Calumet News and Calumet Novelty Co., 
yes, sir. 

Mr. Robinson. You do have something to do with it ? 

Mr. Doyle. I did have, yes, sir. 

Mr. Robinson. Do you presently have anything to do with it? 

Mr. Doyle. That I would refuse to answer. 

Mr. Robinson. But you did have at one time. 

Mr. Doyle. Well, let's just leave it there. I answered your ques- 
tion there. 

Mr. Robinson. But you did have an interest in it at one time? 

Mr. Doyle. Yes, sir. 

Mr. Robinson, What was the extent of your interest at that time ? 

Mr. Doyle. I refuse to answer, sir. 

Mr. Robinson. Were you in partnership with somebody else? 

Mr. Doyle. I would refuse to answer that also. 

Mr. Robinson. What type of business was it ? 

Mr. Doyle. I would refuse to answer that also, sir. 

Mr, Robinson. Was it a slot-machine business? 

Mr. Doyle. I would refuse to answer. 

Mr. Robinson. Do you own any slot machines ? 

Mr. Doyle. I would refuse to answer. 

Mr. Robinson. Well, your records show that you do own slot ma- 
chines. Do you deny that your records show that? 

Mr. Doyle. The records that I produced to you ? 

Mr. Robinson. That is right. 

Mr. Doyle. I am not admitting that I own slot machines, sir. I 
would refuse to answer the question. 

Mr. Robinson. Are your records wrong, then ? 



176 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Doyle, I did. not say they were wrong ; no, sir. I am refusing 
to admit that I own slot machines. 

Mr. E.0BINS0N. The records show you own 129 slot machines. Do 
you deny that? 

Mr. Doyle. I won't deny it or admit it. 

Mr. Robinson. Where is the Calumet News Co. located ? 

Mr. Doyle. Where is the Calumet News Co. located? 

Mr. Robinson. That is right. 

Mr. Doyle. 21 West Tenth, I believe. 

Mr. Robinson. And was the name of that company always the 
Calumet Novelty Co.? 

Mr. Doyle. Are you speaking of the Calumet News or Novelty Co. ? 

Mr. Robinson. Calumet Novelty Co., first. 

Mr. Doyle. As far as I know 

Mr. Robinson. Was the name of the Calumet News Co. always that 
name ? 

Mr. Doyle. As far as I know. 

Mr. Robinson. Wliat is the Commercial News Co. ? 

Mr. Doyle. Never heard of it. 

Mr. Robinson. Wliat type of building is located at 21 West Tenth 
Avenue ? 

Mr. Doyle. Stores, hotel above it. 

Mr. Robinson. Is there a Commercial News Co. located at that 
address ? 

Mr. Doyle. Not to my knowledge. 

Mr. Robinson. Do you know a person by the name of Joe Elias? 

Mr. Doyle. Yes, sir. 

Mr. Robinson. And do you know a person by the name of Broad- 
way Bill Brown? 

Mr. Doyle. Yes, sir. 

Mr. Robinson. Who are they ? 

Mr. Doyle. I would refuse to answer. 

Mr. Robinson. Were you ever in business with them ? 

Mr. Doyle. With them ? 

Mr. Robinson. That is right. 

Mr. Doyle. No, sir. 

Mr. Robinson. Do you not know that they operate or did operate 
at one time the Commercial News Co. ? 

Mr. Doyle. No, sir ; never heard of that. 

Mr. Robinson. Were they associated with the Calumet Novelty Co. ? 

Mr. Doyle. Calumet Novelty Co. ? 

Mr. Robinson. That is right. 

Mr. Doyle. No, sir. 

Mr. Robinson. Are they associated with the Calumet News Co. ? 

Mr. Doyle. They could have been ; yes, sir. 

Mr. Robinson. What was that? 

Mr. Doyle. They could have been. 

Mr. Robinson. Well, are they ? 

Mr. Doyle. I believe they were. 

Mr. Robinson. Are they still ? 

Mr. Doyle. To my knowledge ; no. 

Mr. Robinson. Were you associated with them at one time ? 

Mr. Doyle. I would refuse to answer that, sir. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 177 

Mr. Robinson. Mr. Doyle, did you ever have any dealings with the 
Automatic Coin Machine & Supply Co. ? 

Mr. Doyle. I ^Yould refuse to answer, sir. 

Mr. Robinson. You know of the company? You know of the com- 
pany, do you not? 

Mr. Doyle. Yes, sir ; very well. 

Mr. Robinson. And where are they located ? 

Mr. Doyle. In Chicago, somewhere. 

Mr. Robinson. And did you ever make payments to that company? 

Mr. Doyle. I would refuse to answer, sir. 

Mr. Robinson. Wliat is the company ? What do they deal in ? Do 
you know that? 

Mr. Doyle. Yes, sir. 

Mr. Robinson. Well, what do they sell? 

Mr. Doyle. Slot machines. 

Mr. Robinson. What other items? 

Mr. Doyle. I don't know. 

Mr. Robinson. Do they sell parts? 

Mr. Doyle. I imagine they do. 

INIr. Robinson. And you do not deny the fact, do you, that the 
books and records which you produced in response to the committee's 
subpena showed the payment by you, check signed by you, payable 
to the xiutomatic Coin Machine & Supply Co. for a period from 
January 1948 to March 1949, totaling approximately $24,000? 

Mr. Doyle. You are asking me now to admit that? 

Mr. Robinson. Well, you have made payments by check to that 
company, have you not? 

Mr. Doyle. That is right. 

Mr. Robinson. In approximately that amount ? 

Mr. Doyle. Yes, sir. 

IVIr. Robinson. And what would those payments be for ? 

Mr. DoY^LE. Well, I would refuse to answer that, sir. 

Mr. Robinson. It is for slot machines, is it not? 

Mr. Doyle. I don't know. I would not say. I would refuse to 
answer it. 

Mr. Robinson. Mr. Chairman, I would like to introduce in evidence 
a document showing the sums paid by Mr. Doyle to the Automatic 
Coin Machine & Supply Co. for the period from January 21, 1948, 
to March 3, 1949, in the sum of $24,025.03, which was taken from the 
books and records produced by Mr. Doyle pursuant to his subpena 
issued by this committee. 

Senator Hunt. The exhibit will be received in the record, and will 
be designated "Exhibit No. 13." 

(The document referred to was marked "Exhibit No. 13," and is on 
file with the committee.) 

Mr. Robinson. Do you know Ed Vogel, Mr. Doyle? 

Mr. Doyle. No, sir ; I don't. 

Mr. Robinson. Have you ever heard of him? 

Mr. DoYi.E. I believe I read about him in the paper. I don't know 
him, though. 

Mr. Robinson. Did you ever have any dealings with him ? 

Mr. Doyle. No, sir. 

Mr. Robinson. Mr. Doyle, what is the arrangement that you have 
^vhen you place slot machines in Gary, so far as the splitting of profits 
is concerned? 



178 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. DoTLE. I would refuse to answer that, sir. 

Mr. Robinson. Is it true that your records show that the split is on 
a 60-40 percent basis ? 

Mr. Doyle. I would refuse to answer. 

Mr. Robinson. Does the Calumet News Co. sell news to bookies in 
Gary? 

Mr. DoTLE. I would refuse to answer, sir. 

Mr. Robinson. Is it true that the Calumet News Co. books show that 
the customers to whom it sells news, splits their profits with the Calu- 
met News Co. on a 50-50 basis ? 

Mr. Doyle. I would refuse to answer, sir. 

Mr. Robinson. Mr. Doyle, who is Mr. Crawford, William H. Craw- 
ford? 

Mr. Doyle. What do you mean by "who is he" ? 

Mr. Robinson. Let me rephrase it. Do you know a William H. 
Crawford ? 

Mr. Doyle. Yes, sir. 

Mr. Robinson. And where does he live ? 

Mr. Doyle. Right now, I could not tell you. I haven't seen him- 
in a year. 

Mr. Robinson. What business was he in, if you know ? 

Mr. Doyle. At what time? 

Mr. Robinson. Well, let us say 1949. 

Mr. Doyle. I would refuse to answer, sir. 

Mr. Robinson. He was in partnership with you in 1949, was he not? 

Mr. Doyle. I would refuse to answer. 

Mr. Robinson. And has been in partnership with you since 1946? 

Mr. Doyle. I would refuse to answer, sir. 

Mr. Robinson. Who is Mr. Kirsch ? 

Mr. Doyle. What do you mean, Mr. Robinson, who he is? 

Mr. Robinson. Do you know a Mr. Kirsch ? 

Mr. Doyle. Yes, sir. He is dead. 

Mr. Robinson. When did he die ? 

Mr. Doyle. Oh, I imagine, I believe last September, something like 
that. 

Mr. Robinson. And what business was he in ? 

Mr. Doyle. I would refuse to answer, sir. 

Mr. Robinson. You were in partnership with him also, were you 
not ? 

Mr. Doyle. I would refuse to answer. 

Mr. Robinson. In the Calumet News Co. ? 

Mr. Doyle. I would refuse to answer. 

Mr. Robinson. Now, who is John A. Elias? 

Mr. Doyle. You keep asking me; who is he. Do you mean do I 
know John A. Elias ? 

Mr. RoEiNsoN. Do you know him? 

Mr. Doyle. Yes, sir; I know him. 

Mr. Robinson. And are you in business with him ? 

Mr. Doyle. No, sir. 

Mr. Robinson. Have 3^011 ever been in business with him ? 

Mr. Doyle. I would refuse to answer, sir. 

Mr. Robinson. Do you know Paul and Donald M. Dacey ? 

Mr. Doyle. Yes, sir. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 179 

Mr. Robinson. iVnd have you been in business with them? 

Mr. Doyle. I would refuse to answer. 

Mr. Robinson. What is the 442 Club? 

Mr. Doyle. What do you mean by "what is the 442 Club"? 

Mr. Robinson. Do you know of a 442 Club? 

JNIr. Doyle. At the present time, you mean ? 

Mr. Robinson. Yes. 

Mr. Doyle. No, sir. 

Mr. Robinson. Did you know of it ? 

Mr. Doyle. Yes, sir. 

Mr. Robinson. And did you have an interest in it? 

Mr. Doyle. I would refuse to answer. 

Mr. Robinson. What sort of club is it ? 

Mr. Doyle. I would refuse to answer also. 

Mr. Robinson. What is the Paradise Recreation Co.? Do you 
know of such a company ? 

Mr. Doyle. Oh, that was a bowling alley. 

Mr. Robinson. Do you have an interest in that? 

Mr. Doyle. I did; yes, sir. 

Mr. Robinson, Do you still have an interest in it ? 

JVIr. Doyle. No. 

Mr. Robinson. Who were your partners in that? 

Mr. Doyle. William Crowe and Robert Rice. 

Mr. Robinson. Do you know a man by the name of Sonny Sheetz? 

Mr. Doyle. Yes, sir. 

Mr. Robinson. Do you know a man by the name of Warren Gardner, 
known as Pete Gardner ? 

Mr. Doyle. Are you sure you have the name right, the first name ? 

Mr. Robinson. It is Warren or William. 

Mr. Doyle. I believe it is William. 

Mr. Robinson. He is kno^vn as Pete Gardner; is that right? 

Mr. Doyle. Yes, sir. 

Mr. Robinson. How long have you known them ? 

Mr. Doyle. Gardner not so long. Sheetz probably — I don't know — 
12, 15 years. 

Mr. Robinson. And what business are they in ? 

Mr. Doyle. Well, that wouldn't be for me to answer what business 
anyone is in. 

Mr. Robinson. Well, do you know? 

Mr. Doyle. I w^ould refuse to answer, sir. 

Mr. Robinson. You refuse to answer as to what business they 
are in ? 

Mr. Doyle. That isn't my place to tell you what business someone 
else is in, Mr. Robinson. 

Mr. Robinson. Well, do you know ? 

Mr. Doyle. No. I will say I don't know what business they are in. 

Mr. Robinson. You say you do not know what business they are in? 

Mr. Doyle. That is right. I heard of rumors what business a 
lot of people were supposed to be in; but for me to say for a fact 
that I know what business you or anyone would be in, I would be lying 
to say that. 

Mr. Robinson. Tell me what you have heard as to what business 
they were in. 



180 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Doyle. No, sir ; I would not. I would refuse to. 

Mr. Robinson, You refuse to tell what you have heard ? 

Mr. DoTLE. That is right. 

Mr. Robinson. On the grounds it would tend to incriminate you ? 

Mr. Doyle. No. I don't think it is good judgment for me to tell 
somebody else what somebody else's business is. 

Mr. Robinson. I ask the chairman to direct you to answer the ques- 
tion as to what you have heard as to what business Sheetz is in. 

Mr. Doyle. I would refuse to answer, sir. 

Senator Hunt. I understand, Mr. Doyle, that you are refusing 
to answer a question that could in no way incriminate yourself. 

Mr. Doyle. Well, I don't think it's fair, Mr. Chairman, for Mr. 
Robinson to put me on the spot my making me say that I know 
another man's business when what I hear is rumors. 

I couldn't go in and testify that I know what that man's busi- 
ness is. 

Senator Hunt. We are not interested in your observations, Mr. 
Doyle. You stand on refusing to answer the question ? 

Mr. Doyle. That is right ; yes, sir. 

Mr. Robinson. Let me put it another way, Mr. Doyle. Have you 
not heard that both of those individuals operated a place called the 
Big House ? 

Mr. Doyle. No ; I will refuse to answer that. 

Mr. Robinson. You have never heard that ? 

Mr. Doyle. I did not say I never heard of it. I am just refusing 
to answer it. 

Mr. Robinson. Have you ever been in a place called the Big House ? 

Mr. Doyle. No, sir ; I never have. 

Mr. Robinson. It is true, is it not, that both those individuals run 
the Big House ? 

Mr. Doyle. I don't know, sir. 

Mr. Robinson. And it is true, is it not, that that is one of the 
largest gambling establishments in the East Chicago area, Gary and 
Hammond area ; is that not true ? 

Mr. Doyle. I do not know. I have never been in there. 

Mr. Robinson. And is it not also true that the returns from that 
house approximate $1,000,000 a year? 

Mr. Doyle. I repeat, I have never been in the Big House, Mr. 
Robinson. 

Mr. Robinson. Have you ever telephoned to that place ? 

Mr. Doyle. No, sir ; I never have. 

Mr. Robinson. Have you ever received any calls from that place? 

Mr. Doyle. No, sir ; to my knowledge, no. 

Mr. Robinson. ]Mr. Doyle, who was Larry Finerty ? I assume you 
knew him ? 

Mr. Doyle. Yes, sir. 

Mr. Robinson. And knew him for a number of years ? 

Mr. Doyle. Yes, sir. 

Mr. Robinson. How well did you know him ? 

Mr. Doyle. Quite well. 

Mr. Robinson. Were you ever in business with him ? 

Mr. Doyle. I worked for him. 

Mr. Robinson. And in what type of business was he engaged ? 

Mr. Doyle. He had a wholesale beer company at that time. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 181 

Mr. Robinson. And did you work for him after you left the whole- 
sale beer company ? 

Mr. Doyle. No, sir. 

Mr. Robinson. What business did he go into after the wholesale 
beer company ? 

Mr. Doyle. Well, he had an oil and supply company over in Indiana 
Harbor. 

Mr. Robinson. Wliat other business? 

Mr. Doyle. That is all ; to my knowledge. 

]\Ir. Robinson. To your knowledge, what business did he try to 
go into ? 

]Mr. Doyle. None that I know of. 

Mr. Robinson. Do you know that he attempted to go into the wire- 
service business? 

Mr. Doyle. No, sir ; not to my knowledge. 

Mr. Robinson. Do you know that he attempted to get wireless 
service ? 

Mr. Doyle. Not to my knowledge ; no, sir. 

Mr. Robinson. Is he still living ? 

Mr. Doyle. No, sir ; he isn't. 

Mr. Robinson. What happened to him? 

Mr. Doyle. He was killed. 

Mr. Robinson. When was he killed? 

Mr. Doyle. I believe in 1945. 

Mr. Robinson. And was the murder ever solved ? 

Mr. Doyle. No, sir. 

Mr. Robinson. Do you know at the time that he was killed that he 
was attempting to get wire service? 

Mr. Doyle. No, sir; I do not. 

JMr. Robinson. You heard that? 

Mv. Doyle. I believe you are the one that told me it the first time. 

Mr. Robinson. You never heard that from any other source except 
myself? 

Mr. Doyle. No, sir. 

Mr. Robinson. Did you also ever hear that he had paid a week's 
advance for the wire service to the Midwest News Co. ? 

Mr. Doyle. No, sir ; I did not. 

Mr. Robinson. Just prior to the time he was shot? 

Mr. Doyle. No, sir. 

Mr. Robinson. Were you ever in any gambling business with Larry 
Finerty ? 

Mr. Doyle. No, sir. 

Mr. Robinson. Did you ever w^ork as a miss-out man ? 

Mr. DoYLE. No, sir. 

Mr. Robinson. Did you know Larry Finerty's brother, Joseph 
Finerty ? 

Mr. DoYLE. Yes, sir. 

Mr. Robinson. How well did you know him ? 

Mr. Doyle. Oh, I knew him fairly well. 

Mr. Robinson. And was he not the mayor of Gary for some period 
of years ? 

Mr. Doyle. Yes, sir. I wonder if I could get a glass of water. My 
throat is giving out here. 



182 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Robinson. Did you know a Harry Hyams ? 

Mr. Doyle. No, sir ; I do not. 

Mr. EoBiNSON. Have you ever heard of him? 

Mr. Doyle. Yes ; I have heard of him. 

Mr. Robinson. Did you ever hear of him in connection with Sheetz 
and Gardner? 

Mr. Doyle. I refuse to answer. I have heard of him. 

Mr. Robinson. Is it not true that he was a partner of Sheetz and 
Gardner ? 

Mr, Doyle. I couldn't answer that. 

Mr. Robinson. And you never have heard of that partnership which 
operated the Bi^ House ? You never had heard that ? 

Mr. Doyle. That 

Mr. Robinson. That those three individuals operated the Big House. 

Mr. Doyle. Yes; I probably have heard it; but to me that is just 
rumors. I couldn't say that they did or have or anything like that. 

Mr. Robinson. And had you ever heard any rumors of what busi- 
ness the Big House was ? 

Mr. Doyle. Yes, sir. 

Mr. Robinson. And what were those rumors ? 

Mr. Doyle. That they gambled there. 

Mr. Robinson. That they ran a book there? 

Mr, Doyle. Yes, sir. 

Mv. Robinson. And ran roulette? 

Mr. Doyle. I have never been in there, Mr. Robinson. 

Mr. Robinson, I mean, have you heard that? 

Mr, Doyle, You hear a lot of things ; certainly. 

INIr. Robinson. It was pretty general knowledge, was it not ? Would 
you say it was general knowledge ? 

Mr. Doyle. Yes; that the Big House was operating, you mean? 

Mr. Robinson. That is right, 

Mr, Doyle. Yes. 

Mr. Robinson. Did you ever hear of the Big House having any 
trouble so far as being raided by the law-enforcement oflicials? 

Mr, Doyle, I don't live in Indiana Harbor, Mr, Robinson, I don't 
hear a lot of things that happened in Indiana Harbor. 

Mr. Robinson. Have you ever been arrested, INIr. Doyle ? 

Mr. Doyle. About 20 years ago, probably, one minor little affair. 

Mr. Robinson, You have never been arrested while you were 
in Gary? 

Mr. Doyle. No, sir. 

Mr. Robinson. Who is the chief of police there ? 

Mr. Doyle. Millard Mattarena. 

Mr. Robinson. Have you known him a long time ? 

Mr, Doyle, Quite long; 10 years probably, 

Mr. Robinson. Have you been quite friendly with him? 

Mr. Doyle. No; I couldn't say. You mean friendly how? That 
we would go out together, things like that? 

Mr. Robinson. That is right. 

Mr. Doyle, No, sir ; no, 

Mr. Robinson, Now, who is Virginia Finerty? 

Mr, Doyle. That was Larry Finerty's wife. 

Mr, Robinson, And she was on your payroll ? 

Mr, Doyle, I will refuse to answer that, sir. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 183 

Mr. KoBiNSON, Did you not pay her $500 a month for a period 
of time ? 

Mr. Doyle. How far back? Is this before Mr. Finerty's death 
or afterward? 

]Mr. Robinson. I believe it was after Mr. Finerty's death. 

Mr. DoTLE. Well, I will refuse to answer. 

Mr. Robinson. Would you deny that your records show payments 
to ISIrs. Finerty by checks signed by you ? 

Mr. Doyle. No. I wouldirt deny it. I think the money would be 
mine, I could do what I wanted with it, couldn't I? 

Mr. Robinson. I am merely inquiring as to why you would be 
paying Larry Finerty's widow. Was she working for you ? 

Air. Doyle. No, sir. 

Mr. Robinson. Performing some job for you? 

Mr. Doyle. No, sir. 

Mr. Robinson. What would be the purpose of paying her? 

Mr. DovLE. Good friends. 

Mr. Robinson. Some obligation you felt to her husband? 

Mr. Doyle. No, sir. 

Mr. Robinson. Or was it just sort of a friendly, charitable gesture 
on your part ? 

Mr. Doyle. That is right. 

Mr. Robinson. Well, for how long a period of time did you pay her, 
approximately ? 

Mr. Doyle. Oh, I gave her money off and on, maybe over a period 
of 3 years or so. 

Mr. Robinson. Did you ever hear of the R. & H. Publishing Co. 

Mr. Doyle. R. & H. Publishing Co. ? 

Mr. Robinson. Yes. 

Mr. Doyle. I believe I read it in the paper. 

Mr. Robinson. Have you ever done business with them ? 

Mr. Doyle. No, sir. 

Mr. Robinson. Have you ever heard of the Midwest News Co. ? 

Mr. Doyle. Yes, sir. , 

Mr. Robinson. Have you ever done business with them ? 

Mr. Doyle. No, sir. 

Mr. Robinson. Have you ever heard of the General News Co. ? 

Mr. Doyle. General News? 

Mr. Robinson. Yes. 

Mr. Doyle. I don't think so. 

Mr. Robinson. Have you ever heard of Trans-American Publish- 
ing Co. ? 

Mr. Doyle. I have heard of that ; yes. 

Mr. Robinson. Did you ever do business with them ? 

Mr. Doyle. No, sir. 

Mr. Robinson, Let me put it another way. Do you know how the 
Gary area ? 

Mr. Doyle. Well, I will refuse to answer that, sir. 

Mr. Robinson. Let me put it another way. Do you know how the 
bookmaking establishments in Gary obtain their wire service news? 

Mr, Doyle. I would also refuse to answer that. 

Mr. Robinson. Now, as to Virginia Finerty, was there anything else 
besides this charitable feeling on your part ? 

Mr. Doyle. None whatever. 



184 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Robinson. That was the basis for your paying ? 

Mr. Doyle. None whatever. 

Mr. Robinson. Did it have anything to do with the death of her 
husband ? 

Mr. Doyle. Did I? 

Mr. Robinson. I say, did the payments have anything to do with 
the death of her husband ? 

Mr. Doyle. No, sir; absolutely none. 

Mr. Robinson. Did I ask you — I don't remember — what was the 
date of his death? Do you remember? 

Mr. Doyle. It was in 1945. The date I can't recall, 

Mr. Robinson. And you heard, of course, of the death of James 
Ragen ? 

Mr. Doyle. Yes, sir. 

Mr. Robinson. Did you ever connect the two up in your own mind 
in any way ? 

Mr. Doyle. No, sir. 

Mr, Robinson. Now, Mr. Doyle, do you know Blaz A. Lucas? 

Mr. Doyle. Yes, sir. 

Mr. Robinson. And who is he? 

Mr. DoYi.E, He w^as deputy prosecutor in the city of Gary, 

Mr. Robinson. He was what? 

Mr. Doyle. Deputy prosecutor in the city of Gary. 

Mr. Robinson. And how long did you know him ? 

Mr. Doyle. Oh, probably 7, 8 years, I imagine. 

Mr. Robinson. And you knew him quite well ? 

Mr. Doyle. Oh, I knew him well enough to say hello to him ; things 
like that ; yes. 

Mr. Robinson. And did you support him in his political campaigns ? 

Mr. Doyle, Well, Mr. Lucas never ran for office. 

Mr. Robinson. Did you support his candidates ? 

Mr. Doyle. Well, I will refuse to answer that. 

Mr. Robinson. Did you ever make any political contributions to 
Mr. Lucas ?^ 

Mr. Doyle. No, sir. 

Mr. Robinson. Or anyone else's candidacy? 

Mr. Doyle. No, sir. 

Mr. Robinson. You have been quite interested in politics in Gary 
itself ; is that right? 

Mr. Doyle. Well, that is a rather hard question to answer. No, 
sir, I will just leave it no comment. 

Mr. Robinson. Well, it is a very simple question. 

Mr. Doyle. I know it is. It is too simple to answer. 

Mr. Robinson. Have you been interested in politics in Gary? 

Mr. Doyle. To an extent, at times. 

Mr, Robinson, You have been interested in the person who gets the 
office of prosecuting attorney and the office of the chief investigator, 
have you not? 

Mr. Doyle. Not particularly ; no. 

Mr. Robinson. What do you mean by "not particularly" ? 

Mr. DoYi^E. Well, I could be interested in politics. You are bring- 
ing out one office. When you say, "Are you interested in politics," do 
you mean in just one particular office? 

Mr. Robinson. Well, what about the other offices? Include the 
other ones, too. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 185 

Mr, Doyle. I could be interested in politics if I like somebody. It 
wouldn't have to be a prosecutor necessarily; would it? 

Mr. Robinson. Mr. Doyle, I am asking you. 

Mr. Doyle. Well, I am trying to explain it the best way I know how. 

Mr. Robinson. Have you been interested in who occupies the posi- 
tion of sheriff? 

Mr. Doyle. Not particularly ; no. 

Mr. Robinson. Have you ever made contributions to candidates for 
that office? 

Mr. Doyle. No, sir. 

Mr. Robinson. Have you ever been solicited for contributions? 

Mr. Doyle. No. 

Mr. Robinson. Have you ever made any political contributions? 

Mr. Doyle. Well, do you mean by that did I ever spend any money 
in politics? 

Mr. Robinson. Well, let us approach it that way. Have you? 

Mr. Doyle. Yes; I have. 

Mr. Robinson. And was it in connection with the prosecutor's 
office ? 

Mr. Doyle. It was in connection with general elections. 

Mr. Robinson. Do you know a man by the name of Schwartz ? 

Mr. Doyle. Schwartz? 

Mr. Robinson. Yes. 

Mr. Doyle. Yes, sir. 

Mr. Robinson. What is his first name ? 

Mr. Doyle. Ben. 

Mr. Robinson. Ben Schwartz? 

Mr. Doyle. That is right. 

Mr. Robinson. And what position does he occupy? 

Mr. Doyle. He was prosecutor of Lake County. 

Mr. Robinson. And how long have you known him? 

Mr. Doyle. Oh, 10 years, probably. 

Mr. Robinson. Have you known him quite well ? 

Mr. Doyle. Yes; I have known him quite well. 

Mr. Robinson. And you helped him out in all the campaigns that 
he has been engaged in ? 

Mr. Doyle. Well, there is only two times that he ever ran for office. 
One time he was elected. The other time he was defeated. 

Mr. Robinson. But yoii helped him in his campaign? 

Mr. Doyle. Well, I helped, you might say, a general cause, not him 
in particular. 

Mr. Robinson. Do you know anything about the record he had while 
in office, so far as putting down gambling is concerned? 

Mr. Doyle. I didn't quite understand that, Mr. Robinson. 

Mr. Robinson. Do you know anything about the record he had while 
in office so far as putting down gambling is concerned? 

Mr. Doyle. Well, I don't think that is for me to answer that. 

Mr. Robinson. Well, you either know or you do not know. Did he 
have a good record, so far as you know ? 

Mr. Doyle. I think he had a fairly good record ; yes. 

Mr. Robinson. Were you ever arrested by him? 

Mr. Doyle. By him ? 

Mr. Robinson. Yes. 

68958— 51— pt. 12 13 



186 ORGANIZED CRIME IN INTERSTATE COMMERCE^ 

Mr. DoTLE. No, sir. The prosecutor is not in the habit of making 
arrests at any time. 

Mr. Robinson. Were you ever prosecuted by him ? 

Mr. Doyle. No, sir. 

Mr. Robinson. Were you ever arrested by or investigated by his 
deputy, Lucas '^ Or anyone in his oilice ? 

Mr. Doyle. No, sir. 

Mr. Robinson. In connection ^Yith gambling? 

Mr. Doyle. No, sir. 

Mr. Robinson. Never? 

Mr. Doyle. No. 

Mr. Robinson. Do you know Francis Curry ? 

Mr. Doyle. No, I don't. 

Mr. Robinson. You never heard of him ? 

Mr. Doyle. No ; I don't think I have. 

Mr. Robinson. You know Paul Jackson. He is your partner in the 
restaurant business; is that right? 

Mr. Doyle. That is right ; yes. 

Mr. Robinson. Is he partner with you in any other enterprises ? 

Mr. Doyle. No, sir, he isn't. The restaurant and the real-estate 
account that we have. 

Mr. Robinson. Now, from an examination of your record, Mr. 
Doyle, your ledger book No. 1 on page 8 shows an item showing 40 
jjercent house and 60 percent to the new partnership. Could you ex- 
plain that ? 

Mr. Doyle. No ; I don't understand what you mean. 

Mr. Robinson. That does not refresh your recollection? 

Mr. Doyle. Not at all. 

Mr. Robinson. In another one of your books which you produced, 
there is an item called "Ben Sub Book, 4509 Broadway, 40 percent 
to Ben, 60 percent to us." That is in your ledger 1 at page 40. Does 
that mean anything to you? 

Mr. Doyle. Well, I will refuse to answ^er that, sir. 

Mr. Robinson. Now, who is Joe Elias? Do you know him? 

Mr. Doyle. Yes, sir. You asked me that before. 

Mr. Robinson. Was he the same one? 

Mr. Doyle. That is right. 

Mr. Robinson. I thought it was a different first name. 

Mr. Doyle. No, sir. 

Mr. Robinson. Joe Elias. 

Mr. Doyle. The same one. 

Mr. Robinson. Does he have a business at the Roosevelt Hotel ? 

Mr. Doyle. No, sir ; not that I know of. 

Mr. Robinson. Is he a customer of yours ? 

Mr. Doyle. A customer of mine? 

Mr. Robinson. Yes. 

Mr. Doyle. No, sir. 

Mr. Robinson. Do you have a customer named F'atrick Lahaie? 

Mr. Doyle. What do you mean by "customer," Mr. Robinson? 

Mr. Robinson. A person that you deal with or sell something to. 

Mr. Doyle. What was the name, Patrick what? 

Mr. Robinson. L-a-h-a-i-e. 

Mr. Doyle. What is the date on that ledger? 

Mr. Robinson. It is ledger 1, page 47. 



ORGANIZED CRIME IN INTERSTATE COMMERCOE 187 

Mr. Doyle. Well, I will just refuse to answer it. 

Mr, Robinson, Have you ever heard of the Gary Crime Commis- 
sion? 

Mr, Doyle, Yes, sir. 

Mr. Robinson. Has that organization been interested in any of 
your activities? 

Mr. Doyle. Interested in my activities? 

Mr. Robinson, Yes. 

Mr. Doyle. How do you mean, Mr, Robinson ? 

Mr. Robinson. Well, have you ever been interviewed by them? 

Mr. Doyle. No, sir, 

Mr, Robinson. You never have? 

Mr. Doyle. No. 

Mv. Robinson. You are, of course, familiar with the fact that that 
organization had a wive recording in the office of Mr, Lucas, are you 
not ? 

Mr, Doyle. I read the booklet on it; yes, sir. 

jMr. Robinson. Is this the booklet ? 

Mr. Doyle. Yes, sir ; that is it. 

Mr, Robinson. And what would you say about the booklet? The 
booklet is entitled "The Microphone Speaks, Transcription of record- 
ings of certain conversations in the office of Blaz A, Lucas, chief Gary 
deputy of the Lake County prosecuting attorney, in which matters of 
public interest are concerned," 

Have you read that pamphlet? 

INIr, Doyle. Yes, sir ; I have, 

Mr. Robinson. Do you wish to make any observations about it? 

Mr. Doyle, No, sir. It is not my place to make the observations. 

Mr, Robinson. Do you care to make any observations on this tran- 
script of the recording in which Mr, Lucas made this statement : 

And here is something else — now, if you fellows had told me you wanted some 
machines, loaned some, I could have gotten you one from Jack Doyle. 

Mr. Doyle. Does it say "Jack Doyle" ? 

Mr. Robinson, That is right, "because Steve Sohacki has got no busi- 
ness putting anything in the city of Gary," 

Mr, Doyle, t thought it just said "Jack," Maybe I'm mistaken. 
It's been quite a while since I have read it, 

INIr. Robinson. Is it true that the machines could have been gotten 
from you? 

JMr. Doyle. Well, I will refuse to answer that, sir. 

Mr. Robinson. Did Mr. Lucas ever ask you for any money for any 
political campaign? 

Mr. Doyle. No, sir. 

Mr. Robinson, Did he ever send anybody or anyone to you solicit- 
ing money? 

Mr. Doyle, No. 

Mr. Robinson, Or soliciting your support ? ** 

Mr. Doyle. No, sir. 

Mr. Robinson. Who is this chap that I just mentioned, Mr, Doyle, 
Lahiae ? Is it somebody that you have known for some time ? 

Mr, Doyle. Yes ; I know him ; yes, sir. 

Mr. Robinson, Do you know what business he is in? 

Mr, Doyle. He is in the dry-cleaning business. 



188 ORGANIZED CRIME IN INTERSTATE COMMERCE. 

INIr, Robinson. Is he in any other business? 

Mr. Doyle. No, sir. 

Mr. Robinson. Why would he appear on the books ? 

Mr. Doyle. Well, that is why I asked how old the book was that 
you took it out of. 

Mr. Robinson. Well, it was your ledger No. 1 ; I don't know what 
year it was. 

Mr. Doyle. I don't know, either. 

Mr. Robinson. With whom did you deal in the Automatic Coin 
Machine Co.? 

Mr. Doyle. You mean individual names? 

Mr. Robinson. Yes. 

Mr. Doyle. Irving Ovitz, I believe it is — 0-v-i-t-z ; I am not sure if 
it is the correct spelling on that. 

Mr. Robinson. Did you deal personally with him? 

Mr. Doyle. Well, I will refuse 

Mr. Robinson. For machines ? 

Mr. Doyle. I will refuse to answer that. 

Mr. Robinson. Who is L. B. Clayton? Do you know anybody by 
that name ? 

Mr. Doyle. Yes, sir. 

Mr. Robinson. Is he still sheriff of the county ? 

Mr. Doyle. No, sir ; he is not. 

Mr. Robinson. When was he sheriff? 

Mr. Doyle. He was sheriff 4 years, up until he went out of office this 
January 1 of 1951. 

Mr. Robinson. How long did you know him? 

Mr. Doyle. Well, he is the ex-mayor of Gary also. 

Mr. Robinson. Do you know him quite well ? 

Mr. Doyle. Yes, sir. 

Mr. Robinson. Did he ever father you in any of your operations 
while he was sheriff? 

Mr. Doyle. My operations? 

Mr. Robinson. Yes ; in any of your operations. 

Mr. Doyle. I will refuse to answer that. 

Mr. Robinson. Did you ever hear of Harry Hines being in the wire 
service business ? 

Mr. Doyle. No, sir ; I never have. 

Mr. Robinson. Did vou ever hear of his being associated with Frank 
Nitti? 

Mr. Doyle. I don't know Frank Nitti, sir, and I don't know Harry 
Hines. 

Mr. Robinson. You have heard of Frank Nitti? 

Mr. Doyle. Yes ; I have. 

Senator Hunt. The witness is excused. The hearing will stand in 
recess for 5 minutes. 

(Short recess.) 

(After a short recess, the committee heard the testimony of Hugh 
L. Culbreath, sheriff of Hillsborough County, Fla., which is included 
in Part lA, Florida, of the hearings of the committee. The hearing 
was adjourned at 7 p. m., to reconvene at 10 a. m., Monday, February 
19, 1951.) 



INYESTirTATION OF OECtANJZED CEIME IN INTEESTATE 

COMMEECE 



TUESDAY, FEBRUARY 20, 1951 

United States Senate, 
Special Committee To Investigate 
Organized Crime in Interstate Commerce, 

Washington, D. C. 

The committee met, pursuant to adjournment, at 2 p. m., in room 
G-16, United States Capitol Building, Senator Estes Kefauver (chair- 
man) presiding. 

Present: Senators Kefauver and Tobey. 

Also present: Downey Rice, associate counsel; John L. Burling, 
associate counsel ; and Joseph L. Nellis, assistant counsel. 

The Chairman. Will the hearing please come to order. 

IsMr. O'Harahere? 

Mr. O'Hara. Yes, sir ; present. 

The Chairman. Will you come around, Mr. O'Hara ? Please raise 
your right hand and be sworn. 

Do you solemnly swear the testimony you are about to give this 
committee will be the truth, the wdiole truth, and nothing but the 
truth, so help you God ? 

Mr. O'Hara. I do. 

The Chairman. Let the record show, of course, the date this is being 
taken, but let it follow the inquiry we had the other day with refer- 
ence to certain race-track operations. 

Mr. Rice. That was on Saturday, the 17th. 

The Chairman. Yes; Saturday, the I7th; so that we can have con- 
tinuity in the record. 

All right, Mr. Rice. 

TESTIMONY OF LAWRENCE EDMUND O'HARA, BALTIMORE, MD. ; 
ACCOMPANIED BY GEORGE HARLAN, ATTORNEY, BALTIMORE, 
MD. 

Mr. Rice. Will you state your name for the record, please. 
Mr. O'Hara. L. E. O'Hara. 
Mr. Rice. Is that L. Edmund O'Hara? 
Mr O'Hara Lawrence Edmund O'Hara. 
Mr. Rice. And what is your address, please ? 

Mr. O'Hara. 509 East Thirty-ninth Street, Baltimore, Md., zone 18. 
Mr. Rice. What is your business, Mr. O'Hara ? 
Mr. O'Hara. My business has been since 1921 connected with the 
race tracks. 

189 



190 ORGANIZED CRIME EST INTERSTATE COMMERCE 

Mr. Rice. I see. And what is your position at Bowie ? 

Mr. O'Hara. At present it is general manager. 

Mr. Rice. General manager? 

Mr. O'Hara. Yes, sir. 

Mr. Rice. Are you also an officer and stockholder ? 

Mr. O'Hara. Yes ; I am a director and a stockholder, owning two 
shares to qualify me to be a director. 

Mr. Rice. Do you hold any office there ? 

Mr. O'Hara. Just what do you mean by that? 

Mr. Rice. Are you an officer, the president or the treasurer ? 

Mr. O'Hara. Vice president. 

Mr. Rice. Vice president? 

Mr. O'Hara. Yes, sir. 

Mr. Rice. Who are the officers, Mr. O'Hara ? 

Mr. O'Hara. Well, there is John W. Farrell, Howard Pierce, Jose- 
phine M. O'Hara, Ed Farrell, Sr., Ed Farrell, Jr., Mary L. Conroy 

Mr. Rice. Are they all officers. 

Mr. O'Hara. They are directors. 

Mr. Rice. Who are the officers ? 

Mr. O'Hara. John W. Farrell was president, and he has been re- 
moved from the presidency. 

Mr. Rice. I see. 

Mr. O'Hara. Howard L. Pierce was secretary and treasurer, but he 
has been removed from his office. 

Mr. Rice. Yes. Now, then, you are really not quite sure who 

Mr. O'Hara. Well, there have been so many changes around there, 
that I am not really up to date on it. 

Mr. Rice. As general manager, what are your duties at the track ? 

Mr. O'Hara. Well, I have tried myself very hard to have that de- 
fined to me, because certain duties that I thought were mine have 
been usurped or taken over by the president. 

Mr. Rice. I see. 

Mr. O'Hara. In other words, I am general manager at Marlboro, 
too, and I discharged a man at Marlboro, and the president put him 
back to work, so I am in a quandary myself to know just what my 
duties are. 

Mr. Rice. Do you have any contract as general manager ? Do you 
work under a contract? 

Mr. O'Hara. No, sir ; I have no contract ; it is just year to year. 

Mr. Rice. Who actually makes the arrangements for your retention 
as general manager? 

Mr. O'Hara. Well, the directors appoint the manager. 

Mr. Rice. The directors do appoint the manager? 

Mr. O'Hara. Yes. 

Mr. Rice. I take it, then, that you get your instructions from the 
directors ? 

Mr. O'Hara. Well, we have a board of directors, and we also have 
an executive board. Anything that involves any kind of money at all, 
for instange, in an amount of $500 or over, that is taken up with the 
executive board. 

Mr. Rice. Anybody that has a what? 

Mr. O'Hara. If we have finances involving as much as $500 or 
more — in other words, I can spend up to $500 without asking anyone's 
opinion 



0RGA3SriZED CRIME IN INTERSTATE COMMERCE 191 

Mr. Rice. Oh, if you have an expenditure in excess of $500, then 
what do you have to do ? 

Mr. O'Hara. I have to take it up with the board of directors or 
the executive board. 

Mr. Rice. And they authorized it? 

Mr. O'Hara. Well, they either authorize it or they discount it. 

Mr. Rice. Now, then, with respect to the mutuel department, do 
you have any jurisdiction over that? 

Mr. O'Hara. Yes, I do, quite a bit. 

Mr. Rice. What is that? 

Mr. O'Hara. Well, as a matter of fact, I have jurisdiction over 
everything- pertaining to the races. 

In other words, the general manager, in my opinion, is in charge 
of racing, when the meeting is in the course of being run, and the 
mutuel department comes under my jurisdiction, the same as the 
track superintendent, or anything pertaining to racing or to the 
race meeting. 

Mr. Rice. Would it be fair to say that you, then, are the boss of 
the track ? 

Mr. O'Hara. Not exactly. Quite so, but not exactly, because during 
a race meeting, if you read the rules of racing in Maryland and most 
States, I believe you will find that the supreme judge of the conduct 
of racing when the track is in operation is the State steward. 

Mr. Rice. Is the State steward? 

Mr. O'Hara. Yes; he is over me, the president and all the stock- 
holders. He is the supreme judge, and he is Joseph Flannigan, ap- 
pointed by the racing commission in Maryland. 

Mr. Rice. In other words, he is the judge over any violation of the 
racing rules ? 

Mr. O'Hara. That is right, anything that comes up on the race track, 
while racing is being conducted during a meeting, that is all under 
Ms jurisdiction. 

Mr. Rice. But he would not tell you who to hire and fire, would he ? 

Mr. O'Hara. No, no, but we have to, by the rules of the racing com- 
mission, send to them a list of all our employees, our officers, and 
even our mutuel employees, to be passed upon by the racing commis- 
sion in Maryland 15 days prior to the meeting. 

Mr. Rice! Well 

Mr. O'Hara. That is for their approval or disapproval. 

Mr. Rice. Would it be fair to say that the track policy is made by 
the directors and the manager, and if there are any policies that are 
offensive to Mr. Flannigan he will take some appropriate steps, but 
up until that time, if everything is going all right, he takes no action. 
Is that about the story ? 

Mr. O'Hara. That is correct. 

Mr. Rice. All right, sir. 

Now, we have had several questions come up apparently concerning 
track policy. Would you say that you are in a position of establish- 
ing track policy or putting it into action? 

Mr. O'Hara. No ; I think the policy of the corporation is conducted 
by the president. 

Mr. Rice. Yes. 

Mr. O'Hara. I just carry out the president's orders, or the board 
of directors' orders. 

Mr. Rice. All rieht. 



192 ORGAXIZED CRIME IN INTERSTATE COMMERCE 

Mr. O'Hara. The policy is done by the president. 

Mr. Rice. You may have read or heard that there was some testi- 
mony here Saturday of one man who said he called himself a come- 
back man. 

Mr. O'Hara. Yes, sir. 

Mr. Rice. And that he had, through the cooperation of the track, 
specifically a man by the name of Pending. I understand he is track 
superintendent. 

Mr. O'Hara. Is the track su]:)erintendent ; yes. 

Mr. Rice. That he had made arrangements for the use of a tele- 
phone within the enclosure of the track. I think he named the tele- 
phone as being Bowie 2171. 

Mr. O'Hara. That is right. 

Mr. Rice. Isn't that the switchboard of the track? 

Mr. O'Hara. That is right. 

Mr. Rice. And it has something like four trunks in it? 

Mr. O'Hara. Well, I don't know how many trunks there are in 
there, but there is a PX line, which goes to the switchboard, 2171 is 
the track number. 

Mr. Rice. What do you have to say about that arrangement, when 
the come-back men use the telephone in the track? 

Mr. O'Hara. Well, I don't know just what you mean by what I 
have to say about it. 

Mr. Rice. Is that acceptable to the management level? 

Mr. O'Hara. Yes; it is acceptable to me, I know. 

Mr. Rice. It is acceptable to you ? 

Mr. O'Hara. Sure, and it is acceptable to the president, too. As a 
matter of fact, it was a phone in the president's office, John W. Farrell. 

Mr. Rice. There is a phone in his office? 

Mr. O'Hara. Yes, sir. 

Mr. Rice. What telephone was that? 

Mr. O'Hara. It worked olf the switchboard. I think his number 
was No. 5, I am not positive of that, but it was a phone used in the 
president's office, John W. Farrell. 

Mr. Rice. Was that a phone used by the come-back men ? 

Mr. O'Hara. Yes, sir. 

Mr. Rice. Do you know which one it was? 

Mr. O'Hara. Norman Helwig. 

Mr. Rice. Norman Helwig used that phone? 

Mr. O'Hara. Yes. 

Mr. Rice. Have you seen Norman Helwig use that phone himself ? 

Mr. O'Hara. I have seen him in there. I was there very rarely. I 
don't think I have ever been in the president's office more than twice 
during the meeting. 

Mr. Rice. Well, how can you say, then, that Helwig was using the 
phone ? 

Mr. O'Hara. Well, I know Norman Helwig. 

Mr. Rice. Did he tell you that he was using the phone ? 

Mr. O'Hara. I know that he was using the phone, because I put 
him in there. 

Mr. RiOE. You put him in there? 

Mr. O'Hara. Yes, sir. 

Mr. Rice. Who is he connected with ? 

Mr. O'Hara. Carroll-Mooney from St. Louis. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 19S 

]Mr. Rice. Yes, who are they ^ 

Mr. O'Hara. So far as I know, they are commissioners, come-back 
men, or whatever you want to call them. You name them. 

Mr. Rice. Well, 1 will name them as bookies. Would that definition 
be all right ? 

Mr. O Hara. Any way you name them is all right with me. 

Mr. Rick. What is your definition of a counnissioner ^ 

Mr. 0"Hara. a commissioner is a lay-off man, a person like, for 
instance, you take an insurance company. You see a lot of this 
crime investigation. I don't know much about them. I don't know 
too much about anything, as a matter of fact. Bat you take, for in- 
stance, you have a million-dollar policy that is let to some insurance 
company. Do they hold it all i Xo, they place it in other companies. 
In other words, they are protecting their losses, they break it up. 

Mr. Rice. Who are they takin.g the action from? 

Mr. O'Hara. I don't know who they take it from. 

Mr. Rice. Well, what policy are you talking about? 

Mr. O'Hara. Insurance policies, insurance policies. At Bowie, we 
have fire insurance and wind and storm insurance. 

Mr. Rice. Well, you are not trying to indicate that Carrol-Mooney 
is in the insurance business? 

Mr. O'Hara. No, sir. 

Mr. Rice. They are in the gambling business? 

Mr. O'Hara. So far as they are, I know. 1 am telling you about a 
commission man. The insurance comi)anies are the same thing. They 
take a certain policy, or a certain premium for insurance, they don't 
carry the whole policy, they let their policies out, maybe in $10,0()() 
packages. 

Mr. Rice. Well, we have Norman Helwig in the president's office, 
is that right? 

Mr. O'Hara. Yes, sir. 

Mr. Rice. Who else do you know as a come-back man ? 

Mr. O'Hara. This is a fellow named Paul Eckert, 

Mr. Rice. Paul Eckert? 

Mr. O'Hara. Yes. 

Mr. Rice. Is he a come-back man ? 

Mr. O'Hara. So far as I know, he is. 

Mr. Rice. How do you spell that name? 

Mr. O'Hara. E-c-k-e-r-t. 

Mr. Rice. Who does he represent ? 

Mr. O'Hara. I don't know. His check was made out, he put up a 
deposit, and his check was made out to K. & K. I do not know who they 
are. 

Mr. Rice. When you say he put up a deposit, what do you mean? 

Mr. O'Hara. Well, he came to the track the first day of the race, 
and he came to see me, as a matter of fact — he spoke to me before that — 
but he came to see me. I don't know, mavbe he would be carrying 
$5,000 or $10,000 with him 

Mr. Rice. Yes. 

Mr. O'Hara (continuing). And he would put that on deposit at the 
track. 

Mr. Rice. Who did you say he was? 

Mr. O'Hara. Paul Eckert." 



194 ORGANIZED CRIME IN INTERSTATE COMMERCE 

INIr. Rice. And what do you know him to be? 

Mr. O'Hara. Just Paul Eckert. 

Mr. Rice. What business do you know him to be in ? 

Mr. O'Hara. I don't know his business. I think he Is a come-back 
man. 

Mr. Rice. You think he is a come-back man ? 

Mr. O'Hara. Yes, sir. 

Mr. Rice. He comes to you ■ 

Mr. O'Hara. Yes ; lie comes to me, and he tells me, ''I would like to 
have a phone." 

You see, he would want to put up a deposit because he doesn't want 
to walk around with $10,000 or $15,000 in his pocket. 

Mr. Rice. Yes. 

Mr. O'Hara. I would give that courtesy to any patron attending the 
race track. 

Mr. Rice. So you accepted that deposit? 

Mr. O'Hara. Yes. 

Mr. Rice. Where did you i)ut it ? 

Mr. O'Hara. In the money room. 

Mr. Rice. In what account ? 

Mr. O'Hara. Not in any account, in the monej' room. 

Mr. Rice. Yes. 

Mr. O'Hara. He just starts credit in the mutnel department. 

Mr. Rice. Who did he make arrangements with in the monev room 
for that? 

Mr. O'Hara. Nobody. 

Mr. Rice. Who is the manager ? 

Mr. O'Hara. Thomas J. O'Hara, my brother. 

Mr. Rice. Did you make any arrangements with him for it? 

Mr. O'Hara. Yes. 

Mr. Rice. Did Helwig put up a deposit, too ? 

Mr. O'Hara. Yes. 

Mr. Rice. And Eckert represents Eckert, so far as you know? 

Mr. O'Hara. So far as I know, it is Eckert, although the check was 
made out to K & K, whoever that is, I don't know. 

Mr. Rice. Did he tell you who K & K was ? 

Mr. O'Hara. No, I don't know. I never asked him. 

Mr. Rice, When you have a come-back man, it is part of the defi- 
nition of a come-back man that he represents someone else, isn't that 
correct ? 

Mr. O'Hara. Ordinarily speaking. I would have to say this, yes, 
they are an employee of someone else, generally speaking, I would 
say so, at least that is my thinking. 

Mr. Rice, But you have not bothered to find out who Eckert rep- 
resented ? 

Mr, O'ILyra, No. 

Mr, Rice, Go ahead. 

Mr. O'Hara. I don't know any big bookmakers myself personally. 
I know no bookmakers personally, but I know clerks of theirs and 
employees of theirs, that is all. 

Mr. Rice. At this time let the record indicate that Senator Tobey 
is present. 

The Chairman. Senator, this is Mr, O'Hara, our witness, 

Mr. O'Hara, How do you do ? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 195 

Mr. KiCE. Senator, Mr. O'Hara is general manager out at the Bowie 
race track. 

Mr. O'Hara. Yes ; and at Marlboro, too. 

Mr. EiCE. He has just begun to testify about the arrangements made 
by the come-back men at tiie track. He said that they come to him 
and he makes arrangements for them to get telephones, and they de- 
posit money with the track, and he also testified that Norman Helwig 
was there representing tlie Carroll-Mooney organization in St. Louis, 
and Paul Eckert was there representing the outfit known as the 
K & K. 

Mr. O'Hara. So far as I know, that is right. 

Mr. Rice. All right, Mr. O'Hara. Now, we have those two. Who 
else was there ? 

Mr. O'Hara. Well, you had this man Remer in here. 

Mr, Rice. Where did K. & K. have their room, what phone did they 
use? 

Mr. O'Hara. What we used to call the rumpus room. It used to be 
the old press box, but this year we decided to do without the entertain- 
ing room, and they put the phones in there. 

Mr. Rice. Didn't they have a special phone put in there? 

Mr. O'Hara. I think there have been some statements on that, but 
it has been very misleading. 

Mr. Rice. What is the story? 

Mr. O'Hara. There is nothing but a regular phone. In other 
words, it has been stated in the paper that there is a direct wire to 
St. Louis. That is not true. 

Mr, Rice. At Bowie ? 

Mr. O'Hara. At Bowie, that there was a direct wire to St. Louis. 
That is not true. 

Mr. Rice. Wasn't there a phone installed on November 17, 1950, and 
discontinued on December 5, Bowie 5241, in the rumpus room? 

Mr. O'Hara. Not to my knowledge. 

The Chairman. Mr. Rice, do the telephone company records so 
show? 

Mr. Rice. Yes, they do. 

The Chairman. All right. 

Mr. O'Hara. Well, if they show it, they show it. But that is not 
to my knowledge. 

Mr. Rice. Well, the record shows that the phone was installed — I 
can't say that I know it was installed in what they call the rumpus 
room — but it was installed. 

Mr. O'Hara. That is where it would be, if it was there at all. 

Mr. Rice. What was the date of the meeting? 

Mr. O'Hara. November 18 to December 2. 

Mr. Rice. And wasn't there a split season there ? 

Mr. O'Hara. Yes. 

Mr. Rice. What were the other dates? 

Mr. O'Hara. Our first half of the season was September 30 to 
October 14. 

Mr. Rice. So that this preceded 1 day before the last meeting 
started, and it was there 1 day after the meeting was over, this phone? 

Senator Tobet. Do I understand from what you said that this testi- 
mony is that these fellows keep a suspension account, or a sum of 
money which they draw against to cover these things ? 

Mr. O'Hara. Yes, sir. 



196 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Senator Tobey. How much does that run? 

Mr. O'Hara. It depends on how much the pLay averages. Helwig 
bet as high as $23,000 in 1 day. 

Senator Tobey. He probably had more than that on deposit, then ? 

Mr. O'Hara. Yes : some of that woukl be winning bets, a fellow like 
R?mer, I don't think he ever had over $-4,000 or $5,000. 

Senator Tobey. But this felloAv who had the $23,000, what is his 
syndicate ? 

Ml-. O'Hara. I think, I am quite sure, but I have never met these 
people, I don't know Carroll and I don't know Mooney, but I am quite 
sure that he represents Carroll-Mooney, of St. Louis. 

Senator Tobey. Are Carroll and Mooney tied together? 

Mr. O'Hara. So far as I know. 

Senator Tobey. A joint account? 

Mr. O'Hara. So far as I know, they are together. 

Senator Tobey. That is all. Thank you. 

Mr. Rice. Going back to this phone, do you know Mr. Wallman in 
the telephone-company office? 

Mr. O'Hara. No, sir. 

Mr. Rice. Did you ever get in touch with Wallman and arrange for 
the establishment of a phone there? 

Mr. O'Hara. No, sir. I told Mr. Pending, our track superintendent, 
to arrange for the phone. 

Mr. Rice. You told Pending to get in touch with them? 

Mr. O'Hara. I do not know who he got in touch with. 

Mr. Rice. That was a special line, it was not the regular telephone? 

Mr. O'Hara. Yes; it was. They all went through the switchboard. 

Mr. Rice. Well, you had Bowie 2l7l on your switchboard. Did the 
other line with the other number go through your switchboard? 

Mr. O'Hara. I don't know anything about that. 

Mr. Rtce. What did you tell Pending to do? 

Mr. O'Hara. I told him that they should be placed in the rumpus 
room, or it should be placed in the rumpus room. 

Mr. Rice. You had in mind a hand set ? 

Mr. O'Hara. That is right. Yes, sir; so far as my knowledsre car- 
ries me, it went through the exchange board, all phones, all calls. 

Mr. Rtce. Well, I think 

Mr. O'Hara. There were no special phones, to my knowledge. 

Mr. Rice. As a matter of fact, there was this number 5241, which 
went in there, and also a hand set which was an extension from that. 
But that is not important. 

Ml-. O'Hara. I clon't know about it. I don't know about it if there 
was. 

Senator Tobey. You said that the entertainment room was called 
the rumpus room? 

Mr. O'Hara. That is right, you know, we did entertaining there. 

Senator Tobey. Is anything synonymous between rumpus and enter- 
tainment ? 

Mr. O'Hara. I think so. 

Senator Tobey. You mean a good time was had by all? 

Mr. O'Hara. Right. 

Senator Tobey. In fact, a regular roughhouse? 

Mr. O'Hara. Oh, I wouldn't call it a roughhouse. 

Mr. Rice. Was there a bar there ? 



ORGAXIZED CRIME IN INTERSTATE COMMERCE 197 

Mr. O'Hara. Yes, and theie was an atleiulaiit there, and we enter- 
tained special guests. 'J'hey have it at most tracks, if that is any news 
to you. They have one out at Laurel. 

Mr. Ru'E. From this rumpus room 

Mr. O'Hara. You can call it an entertainment room. Rumpus 
might sound a little rough to the Judge here. 

Mr. Rice. Can you see the track from the rumpus room? 

Mr. O'Hara. Yes. 

Mr. Rice. And can you see the tote board? 

Mr. O'Hara. Yes; you can. 

Mr. Rice. Well, we have Eckert, we have Helwig, and w^e have 
Remer. Renier was located in Pending's ofKce. 

Mr. O'Hara. In Mr. Pending's office. 

Mr. Rice. Were there any other come-back men there? 

Mr. O'Hara. Not to my knowledge. 

Mr. Rice. Who represented the Kingston outfit ? 

Mr. O'Hara. Kingston ? 

Mr. Rice. Yes. 

Mr. O'Hara. I don't know anvrhing about Kingston. I never 
heard of them before. Who is Kingston? Where are they from? 

The Chairman. That is Kingston, X. Y. 

Mr. Rice. On November 29, there was a call just before each race 
through Bowie 2171 to Kingston, N. Y., No. 5629, which is listed to 
J. Snyder at 48 Lucas Avenue. Kingston, N. Y. 

Mr. O'Hara. I don't know him. 

Mr. Rice. You don't know anything about that ? 

Mr. O'Hara. No, sir. 

Mr. Rice. I think Remer testified that there was come-back man 
fiom Kingston who was operating there. 

Mr. O'Hara. There could liave been. 

The Chairman. Mr. Rice, so that the record will bg clear, does that 
show that calls to this Kingston number were just like the other calls, 
after every race, and all during the season? 

Mr. Rice. Yes, they were spread before each race, yes, it is our 
understanding that a man by the name of Monis has an outfit there, 
ill Kingston. 

You never heard of that name? 

Mr. O'Hara. No. 

The Chairman. Will you spell it, please? 

Mr. Rice. M-o-n-i-s, so far as I know. 

Mr. O'Hara. Monis, I never heard of him. 

The Chairman. It is jNIonis. 

Mr. Rice. Yes. 

The Chairman. All right. 

Mr. Rice. How about Arthur Arnold, did he operate at Bowie? 

Mr. O'LLara. I don't know him. 

Mr. Rice. How about Frank Erickson's organization? Did he have 
any come-back men there? 

^Ir. O'Hara. They have been there years ago. 

Mr. Rice. Who was there years ago ? 

Mr. O'Hara. We had Erickson, 0} penheimcr, v\'e liad dozens of 
them years ago. As a matter or fact, up until about 1939 or 1940 we 
had a phone right in the betting ring. 

Mr. Rice. You did ? 

Mr. O'Hara. Yes. 



198 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Rice. Yes. Well, now, what was the most recent year that 
Erickson had a come-back man there ? 

Mr. O'Hara. I am just guessing. I am not very good on dates. 

Mr. Rice. Well, give us your best estimate. 

Mr, O'Hara. I would say maybe 8 or 10 years ago. I don't know. 
I am just guessing. 

Mr. Rice. How about Dobkin ? 

Mr. O'Hara. I remember Dobkin. I remember the name. He has 
been in there. 

Mr. Rice. How recently? 

Mr. O'Hara. I don't know. 

Mr. Rice. Who is Dobkin? 

Mr. O'Hara. I don't know. 

Mr. Rice. Isn't he from Chicago? 

Mr. O'Hara. I think so, either Chicago or Omaha, I am not sure. 

Mr. Rice. You say you think he is either from Chicago or Omaha ? 

Mr. O'Hara. Yes. 

Mr. Rice. Do you know who his come-back men were ? 

Mr. O'Hara. No. 

Mr. Rice. Weren't they there the last meeting ? 

Mr. O'Hara. No, not to my knowledge, no. I do know that name, 
that they weren't there. 

Mr. Rice. Now, Helwig was using the president's office; is that 
right? 

Mr. O'Hara. That is right. 

Mr. Rice. Is it possible that he had a direct line in there that did 
not go through the switchboard ? 

Mr. O'Hara. No, sir; it went through the switchboard. 

Mr. Rice. It went through the switchboard ? 

Mr. O'Hara. Absolutely. He is working today right out of Santai 
Anita Park in California. 

Mr. Rice. That is the office right next to the dining room ? 

Mr. O'Hara. That is right. Santa Anita is the L. A. track. 

Mr. Rice. Now, then, when these people arrived at the track at the 
beginning of the meeting, it is my understanding now that they would 
make a deposit with you or 

Mr. O'Hara. Yes, they would make deposits, maybe two deposits or 
three deposits. Will you excuse me a minute, please, until I get my 
records ? 

Mr. Rice. Yes, sure. 

Mr. O'Hara. I have a record here of the recap of the business we 
did at Bowie at the fall meeting, and the only three I have registered 
here, and the amounts of money they wagered through the machinefi 
is : Eckert, $36,500. 

Mr. Rice. Will you fix the date of that? 

Mr. O'Hara. This is the whole meeting, sir. Each day I would 
not know. 

Mr. Rice. For the last half of this fall? 

Mr. O'Hara. Yes ; this is the fall meeting. 

Mr. Rice. This is the fall meeting? 

Mr. O'Hara. The last half. 

Mr. Rice. To what are you referring, ]\Ir. O'Hara ? 

Mr. O'Hara. I am referring to the amount of money wagered 
through the mutuel machines by the come-back men. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 199 

Mr. Rice. Who prepared the statement ? 

Mr. O'Hara, This was prepared by the money-room man. 

Mr. Rice. By whom ? 

Mr. O'Hara. By the money-room man. 

The Chairman. Is that from November 18 to December 2? 

Mr. O'Hara. That is right. 

Mr. Rice. All rioht. 

Mr. O'Hara. The amount of money wagered by Eckert was $36,500. 

The amount of money watered by Helwig was $143,690. 

Reiner bet $61,485. 

That was a total of $241,675. 

The CiiAiRJiAN. How much was Remer? 

Mr. Rice. $61,485. 

Mr. O'Hara. That is correct. 

Senator Tobey. What is a good day's take? 

Mr. Rice. What is the total ? " 

Mr. O'Hara. $241,675. In other Avords, we handled through the 
come-back phone at both meetings, roughly speaking, a half million 
dollars. We are just one of the small tracks to handle come-back 
money in the State of Maryland. For what reason I cannot explain, 
but Pimlico, Laurel, and HaA^i-e de Grace, handle much more than 
we do. I would say roughly there is bet more than $2,000,000, there 
is more than $2,000,00.) money handled over the phone that the State 
does not receive, they should receive 4 percent, and the stockholders 
6 percent. 

Senator Tobey. You have become a vested interest, haven't you, or 
racing has? 

Mr. O'Hara. Definitely so. I am an employee. I am not a stock- 
holder. I own two shares of stock to qualify me as a director, that is 
nil. I am just an employee trying to do the best I know how^ for the 
stockholders and the State of Maryland. 

Senator Tobey. How widespread is the distribution of capital stock 
of Bowie? 

Mr. O'Hara. It is very closely held, sir. I guess there is probably, 
let me see, there is at least 75 percent held by three people, and the 
other 25 percent is spread rather thinly. 

We don't have 50 stockholders. Some hold 2, some hold 4, some hold 
10, some hold 400, and souie hold 500; but the control is held among 
three people, the Farrells, the O'Haras, of which I unfortunately don't 
liappen to be one, and the Pierces. 

Mr. Rice. Who are the top three? 

Mr. O'Hara. The Farrells, the O'Haras, and the Pierces. The Con- 
roys are small. They are in the voting trust. 

Mr. Rice. Now, sir, you mentioned about other tracks. Are there 
any other tracks that you know of that accept come-back money in 
the mutuel department? 

Mr. O'Hara. Yes; all of them. 

Mr. Rice. All of them ? 

Mr. O'Hara. Every one of the major tracks in the United States 
accept come-back money. 

Mr. Rice. I am talking about those that will permit the come-back 
men to make a deposit. 

Mr. O'Hara. Well, they do it in different manners. They have done 
it all along until a year or. so ago; for some unknown reason — I mean. 



200 ORGAXIZED CRIME IN INTERSTATE COMMERCE 

T have done things up and abovebaard, but the rest have not — I was 
broiiglit in to the commission here, maybe a month ago, to malve a 
:tatement. I made a Rtatemen.t truthfully, and the rest of them lied, 
in my opinion. 

They all do the same thing. In Laurel, for instance, they work out 
of the veterans' office, Vshich is a half minute's ride to the race track. 
iliere is ;i })oliceman there who 

Mr. lii'-K. Whnt did you sav about the veterans? 

Mr. O'Hara. Yes. 

Mr. Rice. Wbat do you mean by the "veterans"? 

Mr. 0'Har.\. Well, the Veterans of I^oreign Wars, they have a 

M •. Kt''e. Is it a tavern? 

Mv. O IIara. Well, a ttivei n oi- a clubroom, whatever you call it, you 
know what I mean. 

Mr. Rk'e. Yes. 

Ml'. () II RA. I'hey hnve one along witliin a half minute's ride of 
the Laurel rac^ track. There is a space hold for Norman Helwig antl 
other come-ba k men that i- noliced l)y a policeman to see that he gets 
into the spot without any delay. 

Senator Tobey. You mean with his car to park? 

Mr. OTL\R\. Yes, sir The space is held open for him, so that he 
can get in and out speedily. 

Bowie is out in the countr3% as you all well realize. We don't have 
the accommodations or facilities that the other tracks have. 

At Havre de Grace they work out of a gas station on the road; the 
same thing, the same operation at Pimlico, where at Pimlico they 
wor'v out of Love's drug store across the street. 

They all have their space reserved for them. They have it reserved 
so that they can drive in readily and be waited on. They have paid 
a policeman to guard the spot, to see that the man has a place to park 
an 1 no one else takes his place. 

The Chairman. AVho pays the jioliceman? 

T^Ir. O'Hara. The track. 

The Chmrman. The track does? 

Mr. O'Hara. Certainly. 

Mr. Rice. You say they have a policeman? 

Mr. O'Hara. Yes. 

Mr. Rice. Is he a county or a State policeman ? 

Mr. OTIara. No, one of their own police. 

Mr. Rice. A private policeman ? 

Mr. O'Hara. That is right. 

Mr. Rice. How about Cxarden State Park? 

Mr. ^)'Hara. They have it, too. 

]\[r. Rice. Plow did they arrange it there? 

Mr. O'Hara. AVell, I don't know too much about Garden State. I 
have not been there last year. They do have it. I think Mr. Remer 
stated that he worked out of there. 

They work out of Atlantic City, Arlington Park, Washington Park, 
any place you Avant to mention. 

Mr. Rice. Do you know of any major track which is a member of the 
Thoroughbred Racing Protective Bureau, or not, which permits the 
use of phones inside the track enclosure? 

Mr. O'Hara. I could make a statement 

Ml- Rice. All right. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 201 

Mr. O'Hara (contiiuiing) . Although I cannot prove it. That is the 
tougli part about everytliino:. I cannot prove a statement I make. 

I have been told by these men ; as a matter of fact, there are two 
men, and I can mention their names if you wish me to. 

Mr. KiCE. Go ahead. 

Mr. O'Hara. Well, Paul Eckert is one, and Harry Selzer is another, 
who have told me that they use a phone out of Pimlico to call in bets, 
right in the clubhouse. 

Mr. Rice. They use the phone in the clubhouse? 

Mr. O'Hara. The track phone, with the O. K. of the Pimlico people. 

I have been told that they have a phone at Atlantic City, and at 
Arlington Park, and Washington Park in Chicago. 

I have been told liy these men themselves that that is so. I cannot 
prove it, however, sir. 

The CiiAiRM \N. Well, I think in fairness to you we should tell you 
that the ones who have testified before us have said that Bowie was the 
only place where they actually had phones inside, as I remember. 

Mr. O'Hara. Were they under oath when they made the statements ? 

The Cir AIRMAN. Yes. 

Mr. Rice. Yes. 

The Chairman. Of course, we did not have some of these people. 
We did not have Selzer before us. 

Mr. O'Hara. Well, I would like to see some of them here. I would 
like to be brought in with a joint committee. 

The Chairman. The only one that we had at Bowie was Remer, and 
that is what he said. 

Mr. O'Hara. Well, Remer is a newcomer, actually, quite a 
newcomer. 

The Cii\iR]MAN. He has not been in the game very long? 

Mr. O'Hara. Not too long, just a couple of years. 

The Chair:man. How about Marlboro; how do you operate there? 

Mr. O'Hara. Well, none of the half-mile tracks, with the possible 
exception of Sportsman's Park, in Chicago, which is a half-mile track, 
but none of the half-mile tracks in Maryland have them. The busi- 
ness is not sufficient to warrant come-back men coming there, so no 
half-mile tracks have come-back phones in them. 

Senator Tore v. Did you ever see Reiner's boss? 

Mr. O'Hara. No. 

Senator Tobey. Well, you know who he is? 

Mr. O'Hara. Do you mean Rosenbaum? 

Senator Tobey. Louis Rosenbaum. 

Mr. O'Hara. I would not know him. 

Senator Tobey. He is quite a Rosenbaum. You ought to see him. 

Mr. O'Hara. Maybe I should not, either. I mean, that is what gets 
me a little bit upset. Why does the Commission call us in, they call 
in Bowie to make a statement, and they give us a bad time, and they 
give me a bad time. Then they call the other three tracks in, which 
are closely affiliated, Havre de Grace, Laurel, and Pimlico, which are 
now one, you might say, and they called them in as a group and gave 
them clean bill of health. Why? Why is the commission so naive as 
to believe that ; why shouldn't they question everybody? Why didn't 
they question the half-mile ti-acks to see if they had come-back men 
or not ? You asked the question. I am glad you asked it. 

68958—51 — pt. 12 14 



202 ORGANIZED CRIME IN INTERSTATE COMMERCE 

The Chairman. Who is this commission you are talking about? 

Mr. O'Hara. The Maryhmd Racing Commission. 

The Chairmax. Well, that is not exactly a congressional matter, 
so I would not know M'hy they did it. 

Mr. O'Hara. Well, you ask me questions, and I can ask you one, 
then, can't I? 

The Chairman. Well, there is no harm. 

Senator Tobey. We are just neophytes in the business, but as we 
go along day by clay, the question that has bothered me. and I have 
no real answer yet, I am not referring to your track, but in some of 
these tracks they have a telephone, and in one of these Rosenbaum's 
outfit had five telephones registered under a hospital company, but they 
were gambling telephones. 

The question is, how the gambling fraternity utilize a telephone to 
get prompt treatment, when in all civilian service, even in the Sen- 
ator's office, it is very difficult to get a toll call through. 

Mr. O'Hara. Well, if I knew the answer to that, I would be in the 
bookmaking business myself. 

Senator Tobf.y. How do you think they can get prompt attention 
and get through in a hurry, almost like a direct line? Do you have 
any opinion on that at all ? 

Mr. O'Hara. No. You have read the papers, I know. 

Senator Tobey. Yes. 

Mr. O'Hara. And you see in Florida that the racing commission 
barred the newsmen from sending out information until 20 or 22 min- 
utes after the races were finished, or the race was finished. 

Senator Tobey. That was just recently. 

Mr. O'Hara. Recently, yes. They insulted all the racing w^riters, 
so the racing writers said, but the fact is that they have not cut it 
out. I brought this up a few years ago, and I said, "How about put- 
ting a wire in ? We can get $200 a clay, $5,000 a year, and we need 
the money." Farrell says, "We don't like it." I says, "If you can cut 
it out, cut it out." I don't know how you can cut it out. You show 
me. It has been going on for 35 oi- 40 years, and Eckert told me himself 
that he spends more than that doing it in a sneaky manner, and that 
he would rather be on the legit and pay the association $200 a day for 
a good legitimate reason. 

Now, that is a recognized racing paper. That is no fly-by-night 
thing. It is no tip sheet. It is a recognized newspaper. So he is 
paying that much to newsmen or somebody else, telegraphers, and so 
on, to get the same information, which they are still doing in Florida 
today with all of these rulings. 

The Chairman. Well, following up Senator Tobey's question, do 
you think there is some special arrangement with the telephone com- 
pany so that they get quick service on their calls ? 

Mr. O'Hara. Well, I am not going to start guessing. I don't know. 
I am not going to make any statements about anything that I don't 
Imow. 

The Chairman. They have got to get through immediately, evi- 
dently. 

Mr. O'Hara. I know the racing business good. As to telegi-aphs 
and telephones, I don't know. 

The Chairman. But they have to get through immediately or it is 
no good? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 203 

Mr. O'Hara. No; they don't liave to get through immediately. 
Tliey can have a lU-minute or 12-minute delay. Do you go to the 
races, yourself, sir ? 

The Chairman. I have been out there, yes. 

]Mi\ O'Hara. Well, have you ever left any race track — I have done 
this often, not when we were racing at our own meeting, of course, I 
don't do it there, because I am in the office, and I stay around, but in 
the off-season at another track, I invariably go out to the track and I 
will bet on maybe the last race, and I will then get in my car to avoid 
the traffic and leave the traffic. 

Then I turn on my radio in the car, and within 5 minutes I have the 
results and pay-offs and everything else. 

Now, how does that get out ^ You tell me. 

The Chairman. AVell, from your track the newsman can put it 
right out. 

Mr. O'HaRx^. At all tracks, it comes out, half-milers and otherwise, 
you can go to any track and find that. 

Senator Tobey. Well, if you have been lucky and won, do you turn 
around and collect your money? 

Mr. O'Hara. No, sir. I get it the next day. 

The Chairman. Don't they have a ticker service? 

Mr. O'Hara. They have a teletype in the press box, and they had 
the Western Union in there. They can wig-wag it. They have been 
caught doing that. You cannot prevent it. 

I think that Florida has given you the best answer. This fellow 
in Florida, McBride, was it ? He said if you wanted to do away with 
gambling or bookmakers, to do away Avith race tracks. He gave you 
the best answer you could possibly get. 

The Chairman. That is Mickey McBride from Cleveland, isn't it ? 

Mr. O'Hara. That is correct. 

Mr. RiGE. Now, sir, you mentioned that at the beginning of a meet- 
ing these various come-back men would come and make deposits, and 
I believe I asked you what form they would take, or rather, I don't 
believe I asked you that. Are they checks or cash ? 

ISIr. O'Hara. Cash or certified checks. 

Mr. Rice. Cash or certified checks ? 

Mr. O'Hara. Or it could be a Western Union money order. 

Mr. Rice. That is then put into the mutuel department ? 

Mr. O'Hara. That is right. 

Mr. Rice. Is that kept in a separate account ? 

Mr. O'Hara. No ; it is thrown right in with that money there. 

Mr. Rice. It is put into the common fund ? 

Mr. O'Hara. Yes. We have a change account. At the first meet- 
ing we used $400,000 in the change account, or bankroll, and at the 
second meeting we cut it down to $300,000. 

Mr. Rice. And from day to day you keep a record of the number 
of bets they place? 

Mr. O'Hara. Yes, and whether they won or lost; that is right. 

Mr. Rice. Now, suppose there comes a time when their funds are 
exhausted and need to be replenished. Then what happens? 

Mr. O'Hara. Well, they can't bet any more until they get some more 
money down. There is no credit. 

Mr. Rice. Who notifies them? 



204 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. O'Hara. The money man tells them. They know if they are 
clown that they cannot bet. 

You know, you cannot walk into a bank and draw out a thousand 
dollars when you only have $10 on deposit. 

Mr. Rice. At the end of the meeting how do you settle it? 

Mr. O'Hara. Well, if they want cash they can have that, and if 
they want a check they can have a check. 

Mr. Rice. If they want a check, whose checks are given? 

Mr. O'Hara. They are drawn on the special account, it is a special 
account check, to facilitate matters. 

Mr. Rice. It is a special account check? You do have a special 
account ? 

Mr. O'Hara. Yes, sir. We have four different bank accounts. 

Mr. Rice. Yes? 

Mr. O'Hara. We have the general fund, we have the PM account, 
or else standing accounts, the special account, and the horsemen's 
account. 

Mr. Rice. How does the money get into the special account, to be 
drawn out? 

Mr. O'Hara. Well, for instance, say at the end of a meeting I have 
$20,000 coming, and I go to the niutuel window and I want $20,000, 
I can have a check made out for $20,000. 

Mr. Rice. You can draw the check to anybody in the world ; can't 
3'ou? 

Mr. O'Hara. Yes. He doesn't care who it is drawn to. 

Mr. Rice. It could be to Bugsy Siegel or anybody? 

Mr. O'Hara. That is right, or Joe Murphy. 

Senator Tobey. Bugsy couldn't cash it, however? 

Mr. O'Hara. Not today. 

Mr. Rice. Now, then, if you have to draw a check you will then 
make a deposit from your money room ? 

Mr. O'Hara. You see, it is a wash account; say you draw a check 
for $20,000, you make a deposit for $20,000, and at the end of the 
meeting that account is washed out. 

Mr. Rice. It is merely a vehicle to take care of that? 

Mr. O'Hara. That is right, just to expedite it. 

Mr. Rice. All right. Somewhere along the line I have heard about 
commissions being paid to come-back men, or for come-back money. 
What is that? 

Mr. O'Hara. Well, so far as I know, the only person I could state — 
and I don't know" if he is still living or dead up in Canada — but his 
name was Bennie Greenberg, and the tracks used to pay him 11/2 per- 
cent to get his business. 

Mr. Rice. Yes? 

Mr. O'Hara. So far as I know, there has never been any money 
paid to anybody on the association for this business. In other words, 
it was in the reverse, the association used to pay the come-back men 
for his business, 1, I14 percent, and as high as 2 percent. 

Mr. Rice. They do not do that any more at Bowie or any other 
track you are connected with, do they ? 

Mr. O'Hara. No. 

Mr. Rice. You mentioned about the procedure of depositing money 
by these come-back men and settling up at the end of the season, or 
at any time there was any settling to be done ? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 205 

Mr. O'Hara. Yes, sir. 

Mr. Rice. Do you know of any other major track that does that 
for the benefit of the come-back men? 

Mr. O'Hara. Well, I think they all do. There are so many things 
I know that I cannot prove. 

Mr. Rice. Yes? 

^Ir. O'Hara. At Laurel, I know for a fact that they have this same 
special account. The special account actually was set up for out- 
standing tickets. For instance, you go to the track today, and you 
happen to have a wanning ticket, and you don't remain to cash that 
ticket, you want to go home with a friend, or for some reason or other 
you left the track 

Mr. Rice. I understand. 

Mr. O'Hara (continuing). Then you just send the ticket in, we 
cash the ticket with the cashier tlii'ough the mutuels. we get the cash 
deposited in the special fund and draw a check against the special 
fund. That is what it was primarily set up for. We use it for other 
jnirposes also. For instance, say a clerk worked all week and the last 
day he does not appear. He cannot sign the pay roll and he has got 
$40, $50, or $60 coming, so we draw^ him a check, wdiich is receipt 
enough. 

It is used for a lot of purposes. 

Mr. Rice. We have a statement that Bowie is the only track where 
facilities of the mutuel department are permitted to be used by the 
come-back men. Do you dispute that ? 

Mr. O'Hara. Yes ; I will. You are going to force me to make state- 
ments that I cannot prove, however. 

Mr. Rice. What other tracks? 

Mr. O'Hara. I know that at Pimlico, Laurel, and Habana 

The Chairman. Well, suppose you just limit your statements to 
what you know about it of your oavu knowledge, sir. 

Mr. O'Hara. I know this, that the come-back men for the last few 
years, instead of giving the money to the money room or the mutuel 
department, have give the money to one of the clerks. I can name 
a few of the clerks, if you wish. 

The Chairman. That is a private arrangement that they make, you 
think? 

Mr. O'Hara. With the clerk, so the clerk holds the $20,000 in his 
]wcket, and a man come in and makes a bet, and instead of the cus- 
tomer or the patron walking around with that $20,000 in his pocket, 
it is in safekeepincf. 

So he bets $1,000 or $500, or $2,000, so the clerk takes the money 
out of his pocket and sells the ticket to him, and at the end of the 
day he takes the money that is left, gives it to the money room man, 
he sticks it in the trunk, and it goes down by Brinks to the bank. 

Mr. Rice. Do you know of any tracks which don't — well, let's put 
it around the other way — you say that you know of a track that does, 
XoM\ do you know of a track that would not permit the mutuel depart- 
ment to be used in that way ? 

Mr. O'Hara. No ; I don't. You see, I have not been in the mutuels 
for 5 years. I worked 25 years in mutuels, and I have been on the 
race track 30 years. 

Mr. Rice. These tracks you are speaking about where they use the 
clerk, is it fair to assume that where they use a clerk that the manage- 
ment does not permit the cooperation of the track ? 



206 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mrs O'Hara. Well, I think for a positive fact that the mutuel 
inaiiager has to know about it. 

Mr. EicE. He has to know about it ? 

Mr. O'Hara. I would think so. At least, the mutuel manager, and 
in order to arrange these parking spaces, the general manager or 
treasurer, or whoever is connected with it, has to know about it. 

Mr. RrOfi. Do you know what the TEPB code saj^s about that ? 

Mn O'Hara. They do not permit them to handle come-back money, 
but 1 know three, and that I can't prove again, that do. 

Mr. EiCE. Why is it that they don't permit that ? 

Mr. O'Hara. "Well, I don't know. Mr. Spencer Drayton is the 
biggest paid policeman in the world. I think he gets $60,000 a year. 
I would like to have his job. 

Mr. RiCe. For what reason ? 

Mr. O'Hara. What does he do? We had him in at Bowie, and our 
first assessment at Bowie was $15,000, and the second year we get a 
letter that our assessment will be $22,.500 at Bowie, and $7,500 at Marl- 
boro. We said, "To hell with it, what are you doing for us." 

I said to the heads. "What are you doing with that guyT' They 
said, "None of your business, we want to keep racing clean." 

Mr, Rt'CE. Could it be that those tracks that do not do it, do not 
condone off- track betting, would tliat be one reason? 

Mr. O'Hara. I don't know whether they condone it or not. I think 
it is foolish, but I am only speaking for myself. 

Mr. Rice. Do you think off-track betting is foolish ? 

Mr. O'Hara. Well, it m ill happen whether you like it or not. We 
have brought into Maryland, and I will bet on this, this last year 
there was at least $2,000,000 or $2,500,000 bet in the State of Mary- 
land that the Government would not have received any revenue from 
if we did not have an arrangement for the come-back men. The 
money came in from Chicago, it came in from all over the country, it 
is out-of-State money, and the State gets 4 percent on it, and the 
track gets 6 percent. 

Mr. Rice. Then you feel these should be an encouragement of the 
out-of-State money? 

Mr. O'Hara. Well, it is good for the State and it is good for the 
track. 

Mr. Rice. It is good for the track ? 

Mr. O'Hara. Yes. 

Mr. Rice. Well, suppose I point out to you that at Garden State 
in the fall meeting, which ran during the time when a special Federal 
grand jury was investigating conditions in Philadelphia, and the 
staff of the Senate Crime Committee was there, and also at Tropical 
Park the last meeting, immediately following a number of investi- 
gations, w^hen betting in both Philadelphia and in Florida and in areas 
surrounding the track was at probably the lowest ebb in many years, 
the handle, the total handle at both tracks was increased considerably 
over any other meeting they ever had. 

Mr. O'Hara. What year was that, this present time? 

Mr. Rice. In the fall of 1950, at both Tropical and Garden State. 

Mr. O'Hara. Well, for one reason they had the cooperation of the 
city government there, or the city municipalities there to close up 
bookmakers, which is all right. 

Mr. Rice. Yes. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 207 

Mr. O'Hara. It is good. I would like to see it here. But we don't 
have that cooperation here. All you see Mr. Emerson do in Balti- 
more is arrest some poor guy on Pennsylvania Avenue for taking a 
$3 or $4 bet, when I can take you places downtown where they have 
300 or 400 people every day, and it is known by everybody. 

Mr. KiCE. It is fair to say that if the law enforcement was on its 
toes in the immediate area of the tracks, that the handle would be up, 
is it not ? 

Mr. O'Hara. Absolutely. 

Mr. Rice. Well, wouldn't that be just as good an answer to the 
come-back situation as any? 

Mr. O'Hara. No; that money comes from far away. 

Mr. Rice. That money comes from far away ? 

Mr. O'Hara. Sure. Then again you take into consideration the in- 
crease in Florida today, you must take into consideration also nine 
races in place of eight. Give that a little thought. 

Mr. Rice. How do you account for your statement that the money 
comes from far away like Louis Rosenbaum in Cincinnati. Do you 
know where his money comes from? 

Mr. O'Hara. No ; but I wouldn't think it came from Baltimore. 

]Mr. Rice. It is possible, though, isn't it ? 

Mr. O'Hara. It is possible. 

Mr. Rice. As a matter of fact, he testified that he was in touch with 
some people in this area, that he was taking lay-off money. 

Mr. O'Hara. That is possible. 

Mr. Rice. This is local money. 

Mr. O'Hara. "Well, there could be some local money, but the ma- 
jority of it Avould be out-of-State money, in my opinion. 

The Chairman. Let's go on. 

Mr. Rice. Now. I show you a check dated December 2, 1950, of the 
Maryland Agricultural Association. Is that the track account? 

Mr. O'Hara. That is right, that is closing day. 

Mr. Rice. Special account, over the signature of, it looks like T. F. 
O'Hara. 

Mr. O'Hara. That is T. J. O'Hara. 

]\Ir. Rice. That is your brother, manager of the mutual depart- 
ment ? 

Mr. O'Hara. That is right. 

Mr. Rice. On the Union Trust Co., of Maryland, drawn to John 
Mooney. 

Mr. "O'Hara. That is right. 

Mr. Rice. In the amount of $20,105. This check was deposited at 
the First National Bank in East St. Louis, 111., to the John Mooney — 
John Moonev special account. 

Mr. O'Hara. That is right. 

Mr. Rice. I will ask you if you know what that is. 

Mr. O'Hara. I know all about this. I think I have already ex- 
plained it. This is the amount of money he had left on deposit, and 
when the meeting was over, instead of taking cash, he asked for a 
check. 

Mr. Rice. Wlio is he ? 

Mr. O'Hara. He? 

Mr. Rice. Yes. 



208 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. O'Hara. Norman Helwig is his name, that is who this is too. 

Mr. Rice. And Helwig tokl you to draw the check ? 

Mr. O'Hara. He told my brother Tom. 

Mr. Rice. To draw the check t.o John Mooney, the St. Louis 
gambler ? 

Mr. CHara. That is right. He would draw it to you, if he was 
told to. 

Mr. Rice. Now I show you this one, Helwig, December 2, 1950, 
for $20,105, and it has the name of Helwig on it, and then down at 
the bottom that looks like Kohlky. 

Mr. O'Hara. That is Kohlky, that is a nephew of mine. He runs 
the money room. 

Mr. Rice. He runs the money room ? 

Mr. O'Hara. He is head cashier. That is a receipt, I suppose. 

Mr. Rice. What is that? 

Mr. O'Hara. That is a receipt. He gave this receipt. In other 
words, he checked the balance with Norman Helwig, and it shows 
up there balances were in agreement. 

Mr. Rice. Yes. 

Mr. O'Hara. He w^ould send the slip to my brother, who has the 
authority to draw the check. 

The Chairman. The check will be exhibit No, 14, and the receipt 
will be exhibit No. 15. 

(The documents referred to above were marked for identification 
as "Exhibit No. 14" and "Exhibit No. 15," and are on file with the 
committee.) 

Mr. Rice. That is the original record in the books from which the 
check is drawn ? 

Mr. O'Hara. That is right. 

Mr. Rice. Now, then, I show you a check dated November 27, 
1948, on the same account, to E. M. Dobkin for $19,220. 

Mr. O'Hara. That is the same deal. 

Mr. Rice. That was deposited in the First National Bank of Chi- 
cago, Edward M. Dobkin, special account. I ask you what that is. 

Mr. O'Hara. Now that is the same thing. 

Mr. Rice. Settling up at the end of the meeting? 

Mr. O'Hara. That is right. 

The Chairman. That check will be marked as "Exhibit No. 16." 

(The document referred to above w^as marked for identification as 
"Exhibit No. 16," and is on file with the committee.) 

Mr. Rice. Do you know who represented Dobkin in that con- 
nection ? 

Mr. O'Hara. No; I am sorry. I cannot tell you who recommended 
Dobkin. I really don't know. 

Mr. Rice. Now, sir, here is a check dated October 14, 1950, drawn 
to Helwig in the round amount of $10,000, and it is endorsed by N. 
Helwig, and it looks 

Mr. O'Hara. That would be the same thing. 

Mr. Rice. Well, you would not settle up in a round amount, would 
you? 

Mr. O'Hara. No; but for instance, maybe he won a bet, so they 
didn't want to keep maybe over $20,000 on deposit, they didn't think 
they would need more than $20,000 — I don't know what the figure 
would be — but, for instance, if he wanted to keep a bank roll or work- 



ORGANIZED CRIME IN INTERSTATE COMMERCE 209 

ing amount of $20,000, suppose he won a bet of $10,000, so then he 
requested the money room or the mutuel department to give him a 
check for the $10,000. 

Mr. Rice. Well, we apparently are under some misapprehension 
about winning bets. Everyone testifying here testifies that at each 
and every meeting they attended that it was a losing meeting. 

Mr, O'Hara. Generally speaking, that is true. I have run money 
rooms myself, and I kept these accounts myself for years, but, gen- 
erally speaking, that is true. However, there is a time when they 
may win a bet. He might have, during the course of this meeting, 
gone overboard, and he had too nuich on deposit, as he thought, and 
he might have requevSted a check for $10,000 which he received. 

It is quite likely that after that he would maybe come back with 
$15,000 or $20,000, and put it back in again. 

Mr. Rice. Have you ever known any of them to have a winning 
meeting? 
Mr. O'Hara. Yes. 
Mr. Rice. When was that? 

Mr. O'Hara. I don't know. I cannot tell you the date. 
Mr. Rice. It is hard to remember that? 
Mr. O'Hara. They don't have too many. 
Mr. Rice. Well, they say they have none. 

Mr. O'Hara. Oh, yes; they have the odd meeting; yes, they have. 
Whoever was talking the other day, Remer, I think, made a state- 
ment that they only bet on long shots. That is not true. 

Mr. Rice. All right, sir. Now, then, I have something here made 
out to Kagen, in the amount of $1,500 on October 10, 1950. That is 
made out on that account, and it is marked "Cash" and endorsed by 
Bernard Kagen, for deposit Old Town Furniture Co. 

Mr. O'Hara. Well, he might have won a big bet and wanted a check 
instead of cash. 

Mr. Rice. You think he is a bettor ? 
Mr. O'Hara. I think so. 
Mr. Rice. And not a come-back man? 

Mr. O'Hara. Not to my knowledge. I cannot identify this man. 
Mr. Rice. Suppose I hand you this sheaf of checks here, and you run 
through them. 

Mr. O'Hara. I will see if I can recognize any names. 
Mr. Rice. Tell us briefly who the man is and what the check is for. 
Mr. O'Hara. Well, here is one for $800. 
Mr. Rice. What was that, sir? 

Mr. O'Hara. Here is one to an auto-service company in the amount 
of $1,406.50. 

Mr. Rice. But what was the check for $800 ? 
Mr. O'Hara. I don't know. 

The Chairman. All right. Suppose while you are going through 
those and thinking about who they are that we'take a 5-minute recess, 
and you stay here and look them over. 
(Brief intermission.) 

The Chairman. All right, please come to order. 
Mr. Rice. Have you anything to tell us on those? 
Mr. O'Hara. Well, there is not too many I know here, sir. You 
first have to understand that this is not my department. I supervise 
it, but I am not in there all the time, so a lot of these things that 



210 ORGANIZED CRIME IN INTERSTATE COMMERCE 

would be drawn I would not have to be consulted about, because it is 
a wash account. Now, this one here on this $800 I don't know any- 
thing about that. 

The Chairman. Suppose you tell us about the ones you know to be 
come-back money. 

Mr. O'Hara. Then there is this auto service, I don't know what it 
is, $1,406.50. 

Mr. Rice. That is Tom's Auto Service. 

Mr. O'Hara. Oh, Tom's Auto Service? I know what that is. I 
asked for the check myself. I bought a car last year in Washington 
at Tom's Auto Service, and I gave the money room this much cash, 
and they gave me a check, and I gave it to the salesman. I had a 
check drawn to him. That was my own deal. 

Now, Helwig, so far as I know, works for Carroll & Mooney, 
$16,000. 

Western Union, I don't know; I think this would be a come-back 
man. I think it was a come-back man who, like I said in the case of 
the $10,000 deal, had a little too much on deposit and needed cash 
and asked the money room to give him $2,500 off his account, which 
they made payable to the Western Union. 

Mr. Rice. Which he cashed when he got to the Western Union office 
in some other city ? 

Mr. O'Hara. Yes. 

Then this one for Helwig, $10,150, the same thing. 

Then a receij^t for $4,850 to Eckert by the head cashier, which 
would be certified to the amount on balance to warrant the issuing 
of this check. 

Mr. Rice. Is Eckert known to you as Coney Island Whitey? 

Mr. O'Hara. Yes, sir. 

Mr. Rice. Why did they call him that? 

Mr. O'Hara. I don't know. He has had the name for a long time. 
I have known him less than a year, only 6 or 8 months at most, but 
he has that name. 

As a matter of fact, I know Mr. Paul Eckert, and in talking with 
Dick Pending at the track, the track superintendent, he says, "What 
is Whitey doing around here?" I said, "Who in the hell is Whitey?" 
He says, "Paul Eckert.'' That is the first time that I knew he was 
called Coney Island Whitey. 

The Chairman. Let's go on. 

Mr. O'Hara. Now, here is one to the Western Union for $3,000. 
It has got a notation on there, "Carl Berman." 

Mr. Rice. Well, is the runner for Dick Remer of the Rosenbaum 
outfit. 

Mr. O'Hara. That could be the same thing. These are all the same 
things. 

Mr. Rice. Yes? 

Mr. O'Hara. They are just repetitious. Harvey Strauss. I don't 
know, $17,000. 

Mr. Rice. How much ? 

Mr. O'Hara. $17,000. 

Mr. Rice. But you don't know Harvey Strauss ? 

Mr. O'Hara. No, sir, I do not. 

Mr. Rice. Wasn't there a Strauss connected with the Tote Co. ? 

Mr. 0'Har^\. Yes, there was, but that was Henry Strauss. 



ORGANIZED CRIME m INTERSTATE COMMERCE 211 

Mr. Rice. He was no relation to Harvey Stranss ? 

Mr. O'Hara. Not to my'knowledge. 

Mr. Rice. He and Dobkin, I tliink, had a book ? 

Mr. O'Hara. Personally I don't know. 

Now here is one for Panl Eckert, $9,020. I know Paul Eckert. 
That was his balance on Octol)er 14; that was the closing date of the 
first meeting. 

The Chairman. All right ; let's get on. 

Mr. O'Hara. Then there is one here for $34,215. This is back in 
1948, at the end of the meeting, November 27, and that was the balance 
that was due him. 

Paul Eckert again for $5,000 on October 9. That was during the 
progress of the meeting. 

Then there is one for $1,740, to Liebauer, R. S. I don't know him. 
He could be a person or a patron who possibly won that kind of money 
and wanted a check for it. 

H. Norman, I don't know. I don't know whether you know it or not, 
but they have been known to use different names. 

Mr. Rice. Who, the come-back men ? 

Mr. O'Hara. Yes. 

Mr. Rice. I notice H. Norman, and Norman Helwig. Look at the 
endorsement on the back. 

Mr. O'Hara. H. Norman, it could be Norman Helwig. It is en- 
dorsed by him, so evidently it might be. He took the check from 
Bowie and went to Charles Town and did the same thing. H. Norman, 
I do not know. 

Then there is another one from Liebauer for $1,750. 

Lou Rosenbaum, $18,325. I guess he is that person that you had in 
here before this committee. 

Mr. Rice. Yes. 

IVIr. O'Hara. Lou Rosenbaum, Advertising News Agency, it is en- 
dorsed. 

The Chairman. Advertising News Agency? 

Mr. O'Hara. That is the way it is endorsed. 

Mr. Rice. While we are on that check, that is drawn to Lou Rosen- 
baum, the Lou Rosenbaum Advertising Agency, Senator, I have talked 
with Rosenbaum since he testified, and he said that was one of the 
cover names that was used by his outfit in Cincinnai, similar to that 
Northern Kentucky Hospitalization Insurance Agency, but at the 
time the check was drawn they were using the name of Advertising 
News Agency. 

The Chairman. Lou Rosenbaum Advertising News Agency? 

Mr. Rice. Yes. 

Mr. O'Hara. Herbert C. Kenny. I don't know; $970. 

Bill Jones, $5,000. I don't know him. Chicago. 

Here is one with a notation by my good friend Mr. Pierce, "Give 
bearer cash, $11,780." 

The Chairman, All right. Let the checks be made a part of the 
record, but, Mr. Rice, only the ones that prove the point to show this 
come-back situation. 

Mr. Rice. There is one to Dobkin there, some place. There is a 
Dobkin check there, 

Mr. O'Hara. You talk about remuneration for these checks, Mr, 
John W. Farrell, our president, was given two cases of whisky last 



212 ORGANIZED CRIME IN INTERSTATE COMMERCE 

fall. One case I received about 3 weeks after it was given to liim. I 
will never forget it because it was tlie lousiest Scotch I ever drank. 

The CiiAiRJUAN. Well, there seems to be some personal grievance 
between you and Mr. Farrell. 

Mr. O'Hara. Definitely. 

The Chairman. And I want you to say what you want to in ex- 
planation of anything. I do not' know Mr. Farrell and I am not pro- 
tecting Mr. Ferrell. 

Mr. O'Hara. Well, you asked me a question earlier in the hearing. 

The Chairman. Mr. Farrell is not here. 

Mr. O'Hara. You asked me a question earlier in the hearing, was 
there any remuneration for these things, and I said "No." 

We have received, like we receive for instance 

The Chairman. I suppose you receive various presents? 

Mr. O'Hara. That is correct. 

The Chairman. You have and he has too ? 

Mr. O'Hara. Yes, sir ; but no cash. 

A3 a matter of fact, I have got a little clip in my pocket which I 
would like to show you. I received that from Xorman Helwig. Do 
you want to pass it on to the gentlemen ? I think it came from Mooney. 
I still doirt know Mooney no more than you could be Mr. Mooney, as 
far as I am concerned. 

The Chairman. The witness is exhibiting a horseshoe money clip 
with six diamonds in it. They don't seem to be very large. Yes, six 
diamonds or seven diamonds. Have you had this valued, sir? 

Mr. O'Hara. No, sir. 

The Chairman. It seems to be 

Mr. O'Hara. That shows how much he knows me. My name is 
Lawrence Edmund, and you will see that it is made out to Edward 
J. O'Hara, so that is how much Mooney knows me. 

The Chairman. Well, it seems to be a gold — what is it, 15 or 10 
carat ? 

Mr. O'Hara. It is a pretty nice-looking clip. 

The Chairman. It is a nice clip. Do you get something like that 
every season? 

Mr. O'Hara. No. 

Senator Tobey. Do you have one of these for each of us ? 

Mr. O'Hara. No, sir ; not today. I will get you one, maybe. I will 
speak to Mr, Mooney. 

The Chairman. All right ; let's go on. 

Mr. Rice. Now, sir, you mentioned that Paul Eckert was known as 
Coney Island Whitey, and that Eckert did business as K. & K. Service. 

Mr. O'Hara. I didn't know that until Mr. Pierce brought that out 
at the hearing with the racing commission. That is the first I knew 
the check was drawn in K. & K.'s name. 

Mr. Rice. All right. Somewhere along the line he asked for a check 
in the name of K. & K. ; is that the idea ? 

Mr. O'Hara. Evidently. 

Mr. Rice. I have here a check dated October 9, 1950, to Paul Eckert 
in the amount of $5,000 on the special account, which bears on the 
back Eckert's endorsement, and then it says : 

Pay to the First National Bank of Chicago, Edward M. Dobkin, special account. 

How do you account for that ? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 213 

Mr. O'Hara, I don't have to account for it. I accounted for the 
$5,000 that Eckert had on deposit, to Paul Eckert. What he does 
with it after I give it to him, I have no control over. 

Mr. Rice. Do you have any idea what business he would have w-ith 
Dobkin ? 

Mr. O'Hara. I think Dobkin is also in the same business. 

Mr. Rice. As what ? 

Mr. O'Hara. A come-back man. You also have a check made pay- 
able from the special account dated a year or so back. 

Mr. Rice. You mean he is a betting commissioner? 

Mr. O'Hara. That is right. 

Mr. Rice. Tell us about the arrangements for the wire service at 
Bowie. 

Mr. O'Hara. Now, by wire service you mean come-back phones or 
wire service ? 

Mr. Rice. Not the come-back phones, the wire service that gives 
the racing news, Howard Sports. 

Mr. O'Hara. Well, we arranged with Paul Eckert for that the 
first meeting only. 

Mr. Rice. How about last year? 

Mr. O'Hara. No. 

Mr. Rice. No arrangements at all ? 

Mr. O'Hara. None at all. 

Mr. Rice. How would they get the racing news? 

Mr. O'Hara. How did they get them in Florida? If you can an- 
swer that question, you will be a millionaire. 

Mr. Rice. Well, tliey are wigwagging or by radiotelephone. 

Mr. O'Hara. That is right. 

Mr. Rice. Is that the way they did it at Bowie? 

Mr. O'Hara. The first meeting at Bowie this year, September 30 
to October 14, we permitted Mr. Eckert to have a phone or wire in the 
track for $200 a day. 

Mr. Rice. Now, who paid the $200 to who? 

Mr. O'Hara. Paul Eckert paid $2,000 to the association. 

Mr. Rice. Paul Eckert did ? 

Mr. O'Hara. Right. 

Mr. Rice. Who does he represent? 

Mr. O'Hara. I don't know who he represents. 

Mr. Rice. Well, we have him representing K. & K., and there is 
some indication that he is connected with Dobkin. 

Mr. O'Hara. All I know about him is that he is Paul Eckert. 

Mr. Rice. What was the deal? 

Mr. O'Hara. For news service. He gave the last line and the pay- 
off and results. 

Mr. Rice. As a result of that did they put a Western Union wire 
in, a ticker ? 

Mr. O'Hara. Yes. 

Mr. Rice. A regular transmitter? 

Mr. O'Hara. A regular ticker. 

Mr. Rice. Was that Morse or the keyboard type ? 

Mr. O'Hara. It is a ticker. 

Mr. Rice. Of the keyboard type? 

Mr. O'Hara. A keyboard ticker. 



214 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. KicE. IVhere did the other end of that wire end up; do you 
know? 

Mr. O'Hara. No; I don't. We just gave them permission to put 
it in for $200 a day. 

Mr. Rice. And that was the first fall meeting ? 

Mr. O'Hara. That is right. 

Mr. Rice. Did you receive that many from Eckert ? 

Mr. O'Hara. We asked for a check, and I asked Mr. Pierce about 
it, and I asked Mr. Farrell about it. 

Mr. Rice. Wliat kind of a check did you get? 

Mr. O'Hara. I asked Mr. Pierce how he wanted it handled. 

Mr. Rice. Who is Mr. Pierce? 

Mr. O'Hara. He is the secretary-treasurer, how he wanted to handle 
it. He said, "Get a check in your name or my name." 

So I went to Mr. Eckert and got a check for $2,400 made payable 
to Howard Pierce. 

Mr. Rice. That was for 12 days ? 

Mr. O'Hara. That is right. After Mr. Pierce got the check, he 
says, "I don't want this ; take it back and get cash." 

So I took it back to Mr. Eckert, and Mr. Eckert did not have the 
cash. After the meeting was over, he came to the office and gave us 
cash. That cash I put in the safe in the office. 

Mr. John W. Farrell took the cash out of the office, he and Mr. 
Pierce, because they did not want it detected. 

Mr. Rice. They did not want it what ? 

Mr. O'Hara. They did not want it detected. I don't know what 
they wanted to do with it, but they didn't want it to go through he 
books. 

So they took the $2,-100 down and put it in the Safe Deposit & Trust 
Co. We have a box where we keep bonds, and there have to oe two 
officers go to the bank, so John Farrell and Howard Pierce, the secre- 
tary and treasurer, went clown and put $2,400 in the Safe Deposit & 
Trust Co. box. 

After a week or so they decided that that was too hot or something, 
so John W. Farrell and Edward Farrell, his cousin, went down and 
took it out, and John kept it in his own personal safe in the same 
building we are in on the second floor. 

I asked him a dozen times to put the money in the association, and 
he said, "After I find out how to handle it, we will put it in." 

I spoke to Tom Miller, the certified public accountant, and he said 
it should go through the books as a concession, which I recommended 
to our president. He refused to do that. 

On January 5 he come rushing down to Eckert with a certified check 
on our association ; they drew a check against the comjjany for $2,400 
and paid it back to Howard News Service. 

Mr. Rice. Could it have been Howard Sports Daily ? 

Mr. O'Hara. That could be it. 

Mr. Rice. Harry Bilson's outfit in Baltimore? 

Mr. O'Hara. That could be it, Howard Sports Daily or Howard 
News Service, whichever you want to call it. 

He said, "I gave you my own personal check, and I want it made out 
to me." 

So January 5 that was he made the check out against the associa- 
tion. He had not made a deposit to the association. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 215 

About January 11 or 12 he finally made a deposit of the $2,400 to 
cover the check. 

The Chairman. I don't believe you have ever gotten paid then, 
have you? You got $2,400, and he gave a check to Howard News 
Service. 

Mr. O'Haka. No ; we have not been paid actually. 

The Chairman. How are you going to get the $2,400 back? 

Mr. O'Hara. We will have to get Mr. Farrell in a corner, I guess. 

Mr. Harlan. I thirJi: I can explain that. 

The Chairman. Just a moment, sir. Who are you? 

Mr. Harlan. My name is Josepli Harlan. I am counsel for Mr. 
O'Hara. 

The Chairman. Oh, I did not know you were here. You could 
have been down there with your client. 

Mr. Harlan. Well, he can say anything he wants to say. He will 
not tell you anything that is not true. 

The Chairman. Then supposing you tell us about it. 

Mr. Harlan. The certified check drawn by Farrell and Pierce 
to the Howard News Service was returned by Paul Eckert and is now 
in the hands of the association. 

The Chairman. How does that explain it ? 

Mr. Rice. Where did Eckert get it? 

Mr. O'Hara. From John W. Farrell and Howard Pierce. 

Mr. Harlan. They drew it on the association funds. 

The Chairman. Well, here is the check for $2,400 to the Howard 
Sports Daily. 

Mr. Harlan. That is right. 

Mr. O'Hara. Why don't you get Mr. Eckert to come over here and 
tell you about it? 

The Chairman. Wait a minute, Mr. O'Hara ; just a minute. 

Mr. Rice. Just a minute, Mr. O'Hara. 

The Chairman. This is signed by Farrell and Pierce. 

IVIr. Harlan. That is right. 

The Chairman. And Mr. Eckert took this check to the Howard 
Sports Daily. 

Mr. Harlan. No. 

The Chairman. He mailed it to him ? 

Mr. Harlan. No. Mr. Eckert returned that check to Mr. O'Hara, 
and I — and we in turn returned it to the association so the associa- 
tion has that check, that certified check, and I assume they will have it 
canceled. 

The Chairman. Canceled or cashed? 

Mr. Harlan. Canceled. 

The Chairman. Then they got some money from it? 

Mr. Harlan. This is the $2,400 that these two fellows drew out 
of the association to pay back when they had not even paid the money 
into the association until subsequently. 

The Chairman. You mean going through Howard Sports Daily 
does not mean anything at all ? 

Mr. Harlan. That check was given to Eckert. Eckert says there, 
"I dont' want it." He gave it back to the association. The associa- 
tion now has it. They will cancel it. 

The Chairman. The association still has $2,400 ? 



216 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. O'Hara. Which they eventually got 6 days after that check 
was drawn. 

Mr. Rice. As a matter of fact, wasn't there a check at one tnne 
delivered to Howard Sports Daily ? 

Mr. O'Hara. It was delivered to Eckert. 

Mr. Harlan. No ; what happened was this : John W. Farrell and 
Howard Pierce called Eckert up to the office and said, "Look here, 
we want to pay you this money back." He says, "I don't want it." 

So they had clrawn this check, and there is a copy of it. In the 
meantime the money still had not been returned to the association by 
them, and they were still giving this check out. Subsequently the 
check was picked up and returned back to the association, and subse- 
quently they paid in the $2,400. 

Mr. O'HAiiA. Oh, let me interrupt you. Do you have the letter that 
they wrote? 

Mr. Harlan. You mean 

Mr. O'Hara. Well, Mr. Pierce or Mr. Farrell wrote a letter to Mr. 
Eckert. 

Mr. Harlan. Yes ; Mr. Pierce or Mr. Farrell wrote a letter to Mr. 
Eckert. 

Mr. O'Hara. It was just brought to his attention that the manager 
had acted without his autliority or without their authority and ac- 
cepted this $2,-100. It could not be brought to their attention by the 
auditor because it had never been in the books yet. 

Mr. Harlan. One other point I might bring out. There is a bill 
now pending in the circuit court in Baltimore to remove these two 
gentlemen as officers, alleging in addition to this $2,400 business the 
embezzlement of approximately $4,000, so that there is more to this 
thing than meets the eye in regard to the internal management. 

Mr. Rice. Yes ; I will go along with that. 

Now, let us recap this. There was a contract made for $200 a day, 
wliich was made partly by Mr. O'Hara and Eckert, under which the 
wire would be permitted to be put in the track. They were to pay the 
track $200 a day. Somewhere along the line $2,400 was delivered to 
somebody. 

Mr. O'Hara. Right. 

Mr. Rice. By Eckert. 

Mr. O'Hara. That is right. 

Mr. Rice. Then there came a time when some question about the 
$2,400 was raised, and it was decided to return the $2,400; is that 
right ? 

Mr. O'Hara. Mr. Farrell himself decided that. 

Mr. Rice. Mr. Farrell decided to return it. 

Mr. O'Hara. Three months after the meeting was over. 

Mr. Rice. After the meeting was over 'i 

Mr. O'Hara. Three months. 

Mr. Rice. Three months after. 

Mr. O'Hara. Yes. 

Mr. Rice. Because the thing was a little too hot to handle? 

Mr. O'Hara. October 14 the meeting closed. We were paid, and 
lie turned the money back January 5. 

Mr. Rice. Well, he decided to turn the money back. As a matter of 
fact, wasn't there an effort made to deliver "the money to Howard 
Sports Daily? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 217 

]Mr. O'Hara. He drew the check on Howard Sports. 

Mr. Rice. He did more than that ; he went to Howard Sports, didn't 
he? 

Mr. O'Hara. He called Mr. Eckert up, and Mr. Eckert came to our 
office, and in turn he was called down to John W. Farrell's office on 
the second floor. 

M!r. Rice. Where does Bilson come in ? 

Mr. O'Hara. I don't know Bilson. 

Mr. Rice. Well, he mi<;ht help yon to know that Mr. Bilson told 
me today that the officials from the Bowie track attempted to give the 
money to them. There was a letter directed to Howard Sports Daily, 
Munsey Buildino-. Baltimore; and this letter was oyer the signature 
of Farrell, of the Southern ^Maryland Agricultural Association; and 
they tendered a check in the amount of $2,400. 

Bilson told them that he had no contractual relationship, that 
Eckert was doing the dealing, and they subsequently left. Eckert 
evidently took the transaction up from there. 

Mr. O'Hara, Well, as you say, there was that letter which was not 
me, it was Howard Pierce and John W. Farrell, and after trying to 
make this attempt to repay Howard Sports Daily, and they unsuccess- 
fully could not do it, so they got hold of Eckert, and Eckert came to 
their office and received the check in a letter, in an enyelo])e. He didn't 
even bother to look at it until after he got home; and, when he looked 
at it and saw that it was made out to Howard Sports Daily, that is how 
it happened. That is his story. 

The Chairman. Let us put the letter in the record. 

(Letter is identified as exhibit No. IT, and appears in the appendix 
on p. 759.) 

Mr. Harlax. Is that the same copy of the letter I have here, dated 
in January? 

Mr. Rice. January 5, 1951. 

Mr. Harlan. In that letter I would like to point out to you that he 
states: 

As president of the Southern Maryland Agricultural Association, it has recently 
come to my attention following an audit of our books — 

et cetera. That is dated January 5, but the money was actually re- 
turned by them on the 11th. So it is rather difficult to understand 
how it was called to their attention. 

The Chairman. It looked like somebody had some hot money. 

Mr. Rice. Nobody wanted it. 

The Chairman. Do you have anything else, ]Mr. Rice? 

Mr. O'Hara. I wish you would ctill the rest of the tracks in and have 
them explain like you have called me in. 

The Chairman. Let me ask you a question or two : 

AA^iat if you stopped this come-back money business, would it make 
it more difficult for the commission men to operate? 

Mr. O'Hara. Well, they are going to operate anyhow. 

The Chairman. I know. 

Mr. O'Hara. They operate in Florida at Hialeah Park. They are 
operating all over the country. 

The Chairman. But they cannot call from East St. Louis, Cincin- 
nati, and Kingston, and get reassurance like they do now, as you call it. 
That would stop that, would it not? 

68958 — 51 — pt. 12 15 



218 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. O'Hara. It has never stopped. 

The Chairman. I mean, I am not saying- 



Mr. O'Hara. It has not stopped in 35 years, to my knowledge. 

The Chairman. I mean, assuming that we could stop this come- 
back money operation, would that put a substantial crimp in the 
operation of the big-time commission men? 

Mr. O'Hara. Sure. 

The Chairman. You say it would? 

Mr. O'Hara. Yes, and it would also put a substantial crimp in the 
income of the State and of the association. 

The Chairman. Well, I am not talking about that. We disagree 
with you about that. 

Would it put the big-time commission men out of operation? 

Mr. O'Hara. No, not in my opinion. 

The Chairman. But it would considerably hurt his operation, 
wouldn't it? 

Mr. O'Hara. It would retard it some. 

The Chairman. Because then if he got a tremendous amount on 
some horse that he did not want, and was not very sure of, he would 
not have any method of getting reassurance on it? 

Mr. O'Hara. They will always find a method. 

The Chairman. I mean, assuming that you can stop it. 

Mr. O'Hara. I don't think you can stop it. You asked for my 
opinion, didn't you ? 

The Chairman. I am not asking you whether we can or not. 

Mr. O'Hara. Well, you asked for my opinion, and that is my 
opinion. 

The Chairman. I asked you, assuming you could stop it, would that 
substantially put a crimp in the operation of the big-time commission 
broker or bookie. 

Mr. O'Hara. I think you are assuming too much. 

The Chairman. I am not asking you to decide whether I am assum- 
ing too much or not. 

Mr. O'Hara. I cannot answer it, then. 

The Chairman. I am asking you to assume that we could stop it, 
then would that hurt the operation of fellows like Carroll and Mooney, 
and Rosenbaum. 

Mr. O'Hara. I would think so. If you could really stop it. 

The Chairman, Why is it that they don't usually make any money 
out of a season, because the money comes on horses they are not very 
sure of? 

Mr. O'Hara, Oh, they like to lose, if that is any news to you. 

The Chairman. They like to lose? 

Mr. O'Hara. Sure. 

The Chairman, Why? 

Mr, O'Hara. Well, if they take $10,000, they may lay off $5,000 
or $3,000 or $4,000, or something, and they are holding part of it, and 
the more they lose the more they win at the track. 

The Chairman. Well, that sounds peculiar. 

Mr. O'Hara. That may sound a little silly, but that is the fact, 
just the same ; they prefer to lose. 

The Chairman. What you mean is if Mooney has $20,000 on a horse 
and bets $2,000 — that is, if he has $20,000 against the horse and he 



ORGANIZED CRIME IN INTERSTATE COMMERCE 219 

bets $2,000 for the horse, he would rather lose his $2,000 at the track, 
is that what you mean ? 

Mr. O'Hara. That is correct. 

The Chairman. So he is taking out reassurance ? 

Mr. O'Hara. That is correct. 

The Chairman. You think if it could be stopped it would consider- 
ably obstruct their operation? 

Mr. O'Hara. Yes; I do. 

But I might have my doubts about it being stopped. 

The Chairman. All right. 

Mr. Rice. As a matter of interest, Mr. O'Hara, it might be of inter- 
est to you in connection with your argument that the money comes 
from a long ways away, that we checked your telephone toll calls out 
at Bowie one day during your meeting, and noticed a substantial 
number of telephone calls coming from what might be called obvious 
bookie locations in Baltimore and Washington. 

For instance, the telephone number of National 1969, which was 
listed to Alaska Travel Service, 1525 I Street NW., was called several 
times. 

There was also a number, or two numbers. Sterling 8566 and Ster- 
ling 8085, which were listed under the name of Thomas Tours, 1525 I 
Street, and both of these are right across from the Veterans' Admin- 
istration in Washington. Both of these numbers were disconnected 
January 8, 1951. 

It is interesting to know that that place went out of operation at 
almost exactly the same time that the Maryland State police made a 
raid on the betting outfit there at Laurel aud it was evident that that 
outfit at Laurel was in touch with this number here. 

So I say to you that I think it would be well for you to consider 
in your argument as to whether this come-back money is something 
to be condoned because it comes from out of State, to consider whether 
it is not actually money that is coming from bookie operations in the 
immediate area of the track. 

Mr. O'Hara. Well, those people in Washington, Baltimore, St. 
Louis, or Pittsburgh are not at the track. 

The Chairman. But if they could not do it by telephone they might 
be at the track. 

Mr. O'Hara. And they might not, too. 

The Chairman. Well, you can see that off-the-track betting bookie 
operations hurts the track, I think all the evidence shows that is 
true. That is correct, isn't it? 

Mr. O'Hara. I don't know. 

The Chairman. All right, thank you, Mr. O'Hara. 

Mr. O'Hara. You are welcome. 

Mr. Harlan. May I ask a couple of questions? 

The Chairman. Yes, if you will make it brief. We have another 
witness who is waiting here. 

Mr. Harlan. I want to ask one or two pertinent questions: If I 
should go to the track and bet $20,000 and request a check — say I 
should win, and I should request a check rather than cash, would you 
give me a check ? 

Mr. O'Hara. Yes, I would. 

Mr. Harlan. And on what account would you give it to me? 

Mr. O'Hara. On the special account. 



220 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Harlan. On the special account? 

Mr. O'Hara. Yes, sir. 

Mr. Harlan. Then there is one other thing I wanted to ask and I 
will be very brief about it and that is with regard to compensation 
to you in any form or to anyone from any of these alleged come-back 
men: 

What compensation, if any, do you receive? 

Mr. O'Hara. Nothing in cash. As I say, I showed you this money 
clip, I received that, and last year I got a case of whisky. That is all 
I have received. 

A few years back I got one from a fellow named Joe Harley, who 
used to work for Frank Erickson, his name is something like yours. 
I don't know Frank Erickson either, but Joe Harley was his clerk, the 
same as Norman Helwig is for the others. 

The Chairman. I assume whoever helps them receives presents, too. 

Mr. O'Hara. Well, I get presents from others, I get a couple of ties 
from one place and I get a dozen handkerchief from the Lincoln 
Cleaning Co., and I get a deck of cards from the camera company. 

The Chairman. Thank you very much, Mr. O'Hara. Thank you, 
sir. 

Mr. O'Hara. You are very welcome. 

(Witness excused.) 

(Following the testimony of George Richardson, assistant super- 
intendent of police in charge of detectives, Philadelphia, Pa., which 
is included in part 11 of the hearings of the commitee, the hearing 
was adjourned at 4 : 35 p. m.) 



INVESTIGATION OF ORGANIZED CEIME IN INTERSTATE 

COMMERCE 



FRIDAY, MARCH 9, 1951 

United States Senate, 
Special Committee To Investigate Organized 

Crime in Interstate Commerce, 

Washington, D. C. 

The committee met, pursuant to call of the chairman, at 10 : 30 a. m., 
in room 155, Senate Office Building, Senator Estes Kefauver (chair- 
man) presiding. 

Present : Senators Kefauver and Tobey. 

Also present : John L. Burling and Downey Rice, associate counsel ; 
E. Ernest Goldstein, assistant counsel; and Agnes S. Wolf, investi- 
gator. 

The Chairman. The committee will come to order. 

The chairman designates Senator Tobey and himself as a subcom- 
mittee to conduct this hearing on this subject. 

Since shortly after our committee started functioning last May, 
one of the problems that we have been confronted with has been the in- 
filtration of some racketeers into some parts of the liquor business. 

We sent our questionnaires to distillers, to wholesalers, and to prac- 
tically all segments of the liquor industry, to ascertain facts, and we 
have compiled quite a file on the subject, which will be released before 
we get through, and will be included — the findings will be included — 
in our final report. 

Also on November 8, 1950, we had an executive meeting, at which 
time w^e had present representatives of, I believe, all of the distillers, 
major distillers, in the country, and Mr. Avis, the Assistant Deputy 
Commissioner of the Alcohol Tax Unit, and many other officials. 
Federal and State. 

At that time also we had present Clarence Evans, wdio is the com- 
missioner of finance and taxation in the State of Tennessee, and who 
is an old and good friend of the chairman of this committee. 

Mr. Evans, acting as an unofficial chairman or friend of the com- 
mittee, has been in contact, as the connnittee has, with other commis- 
sioners of finance and taxation in the dry States in an effort to work 
out some system for the prevention of the shipment of untaxed liquor 
into the dry States or into the dry parts of the States, into counties 
that are dry. 

At the time of our meeting in November 1950 the representatives 
of the distillers stated or indicated that if the matter were left to them 
that they would take action to try to see that their wholesalers dis- 
continued this practice. 

We have with us today, Mr. Evans, from the State of Tennessee, 
the commissioner of finance and taxation ; Mr. Hewitt — I do not know 

221 



222 ORGANIZED CRIME IN INTERSTATE COMMERCE. 

the exact title that he has — supervisor of the liquor control of the 
State of Missouri ; Mr. Saunders, ^Yho occupies a similar position for 
the State of Virginia ; Mr. Winston, head of the department in North 
Carolina ; and Mr. Redwine, of the State of Georgia. 

Senator Tobey. Redwine? 

The Chairman. Not Burgundy, Redwine. [Laughter.] 

Mr. Neil Evans, of the Alcohol Tax Unit, Federal Alcohol Tax Unit, 
stationed in the State of Kentucky, has been very helpful; and Mr, 
Avis, the Administrator of the x\lcohol Tax Unit, who has been 
working with us on this problem, is also present, and will be a witness 
later. 

Our first witness will be Clarence Evans, the commissioner of finance 
and taxation in the State of Tennessee. 

Mr. Evans, our rule is that all witness have to be sworn. 

Do you solemnly swear that the testimony you give this committee 
will be the whole truth, and nothing but the truth, so help you God ? 

Mr. Evans. I do. 

TESTIMONY OF JAMES C. EVANS, COMMISSIONER, DEPARTMENT 
OF FINANCE AND TAXATION, STATE OF TENNESSEE 

The Chairman. You are Clarence Evans, commissioner of finance 
and taxation of the State of Tennessee, and you have been com- 
missioner for the past 

]\Ir. Evans. Two years ; slightly over that, sir. 

The CiiAiRiMAN. And, as commissioner, you have charge of the 
alcohol control matters for the State of Tennessee; is that correct? 

Mr. Evans. Tax matters and control matters as to licensees. 

The Chairman. I know something about Mr. Evans' position be- 
cause for 3 months in the early part of 1949 the chairman had the 
privilege of serving as commissioner of finance and taxation for the 
State of Tennessee. 

In that position was the first I had with either finance or taxation, 
and I did not find out anything about the financial part of it that has 
been of any use to me in my personal finances since that time. 

Mr, Evans, will you tell us about the problem, and about what you 
are doing, or, Mr. Burling, you question the witness. 

Mr. Burling. I think, Mr. Chairman, that Mr. Evans can tell us 
the story without any particular leading questions from me. 

I think, Mr. Evans, you should assume that we want to have a 
complete picture of the export problem, that is, the interstate shipment 
of liquor into States or counties where the sale is unlawful. 

I think, Mr. Chairman, we might, in order to simplify the problem, 
ask Mr. Evans to omit the local bootlegging, that is, moonshining, the 
manufacturing in small quantities of liquor in intrastate distribution, 
and ask him to tell us the story of the interstate distribution of liquor, 
as he sees it. 

Will you proceed, sir ? 

Mr. Evans. As I understand the matter, the purpose of this is to 
get into the interstate aspect of tlie illegal liquor traffic, and so we will 
not touch at all upon the moonshine industry. 

The problem that we have to deal with here is the movement into 
the Southeastern States of bonded, what is known in the trade as red 
whiskies, produced in regularly licensed distilleries, but destined to 



ORGANIZED CRIME IN INTERSTATE COMMERCE' 223 

dry areas of local-option States in the Southeast or in some instances 
to wet areas of those States where there is sufficient tax incentive or 
economic incentive because of the tax, to make the traffic worth while. 

The Chaieman. Before you start, Mr. Evans, let the record show 
that the wholesale companies at Cairo about whom you will testify, 
and about whom, I understand, your testimony will be largely con- 
cerned with, have been notified of this hearing, and asked to have 
representatives here to bring- their records, and with an offer, of 
course, to pay their expenses. 

We have had messages back that they are not able to be here at 
this time because, frankly, of the short notice, only 2 or 3 days' notice, 
but they will be given an opportunity, a fuller opportunity, of coming 
in and making any explanation of testimony that you and the other 
commissioners give. 

They should have been here on this occasion, but in one case their 
attorney was tied up in court, and in the other case the man just said 
he could not come. But we do want them to know the record will 
show that they have been advised of the meeting and of the nature 
of the testimony that will be brought out, and we wanted them here 
to state their side, and they will have a full opportunity to do so. 

Senator Tobey. First, may I ask the witness : You are from Ten- 
nessee ? 

Mr. Evans. Yes, sir. 

Senator Tobey. What is the law of Tennessee with respect to liquor ? 

Mr. Evans. We have what is known as local option. 

Senator Tobey. Each community can decide for themselves whether 
they want it sold ? 

Mr. Evans. The county can vote as a separate unit. 

Senator Tobey. Counties vote by counties? 

Mr. Evans. Yes, sir. 

Senator Tobey. But not in the individual towns. 

Mr. Evans. There has been a change in the law just recently, so 
that there is one district wdiich is unincorporated at Oak Ridge, 
a new municipality or a new urban district that has sprung up, and 
the law, passed just a week or so ago, where it is provided that it can 
be treated as a town for purposes of voting — of having liquor licenses, 
and independently going wet if he wants to. 

Senator Tobey. Then the jurisdiction as to whether liquor is sold 
or not applies to counties rather than the State as a whole, is that 
right? 

Mr. Evans. It is settled — the jurisdiction is by counties ; yes, sir. 

Senator Tobey. All right. 

How many counties are there in Tennessee ? 

Mr. Evans. Ninety-five counties in the State. 

Senator Tobey. How many of those bar the sale of liquor ? 

Mr. Evans. Well, I will answer it by subtraction. 

Senator Tobey. Approximately? 

Mr. Evans. Let me give you this picture : Memphis, Shelby County, 
is wet ; that is the western end of the State. Nashville, the big urban 
area in the middle of the State, Chattanooga, the urban area of the 
Senator's home town, is wet; Knoxville, the urban area near Oak 
Ridge, is dry; but Anderson County, just adjacent to Knoxville, is 
wet and, of course, there is this new complication in the law about 
Oak Ridge that I just mentioned. 



224 '^ORGAlSriZED CRIME IN INTERSTATE COMMERCE 

In addition, there is one connty adjacent to Nashville, AVilliamson 
County, is wet ; and there are two other counties down on the river in 
west Tennessee. 

Senator Tobey. Well, is the charge that they are flooding the coun- 
ties with liquor, is that the story ? 

Mr, Evans. Yes, sir ; that is the charge as to my State. 

Senator Tobey. That is the charge in Tennessee? 

Mr. Evans. Yes, sir. 

Senator Tobey. In other words, the liquor interests that are send- 
ing liquor into the State counties are breaking the law. What are you 
doing about it? 

Mr. Evans. That is the story we have here today. 

Senator Tobey. All right. 

Mr. Evans. It is a long story. 

Senator Tobey. Proceed. 

Mr. Evans. When I became commissioner 2 years ago 

Mr. Burling. If I may interrupt you, I think a short answer to 
Senator Tobey would be "a great deal," and we are going to try to 
bring that out, sir. 

The Chairman. Yes ; they have been making a terrific effort. 

Mr. Evans. Let me point this out in that connection. In Tennessee, 
under our statutes, it is not my intention to enforce the bone-dry law. 
I have taken the position tliat that is a local officer's problem. I do 
consider it my function to keep liquor from moving in interstate com- 
merce into the State, and that is the problem that we are dealing with 
here. 

Wlien I became commissioner I soon discovered that this traffic was 
going on, and the size of the traffic was amazing to me at the beginning. 

I have with me a few figures, a few sample sheets, of statements out 
of Illinois from the Southern Wholesale Liquor Co., July 1949, for 
example, listing consignments to Tennessee purchasers. 

We promptly went to work and tried to make cases on those people, 
and to seize their trucks, and we were successful in some instances, as 
Mr. Argo of my staff can go into in some detail. I call him one of 
my bird dogs because he is one of the fellows who gets out on the road 
and does the work. 

Mr. Lauderdale is here with him, and he will testify also, if the 
committee cares to hear him, with respect to those seizures. Mr. 
Lauderdale will also cover his experiences working in Cairo as an 
undercover man. 

At the same time that we were faced with this problem, I found 
that North Carolina had already gotten into it through Mr. Winston, 
who is here to testify. 

Shipments were coming from Maryland. Rather, I would like 
to have Mr. Winston — I would ask him if he would testify as to his 
experience with Maryland and how Maryland cooperated, and took 
away the incentive of a tax-free movement out of Maryland by changes 
in their regulations. 

The Maryland operation was, I would not say stopped, but it was 
definitely slowed down. 

When that happened, the same people or the same type operation 
involving some of the same people, apparently moved to Cairo, 111., 
and took over just exactly the details of their trade or their con- 
tract, I do not know, but they moved in with Mr. J. B. Wenger, a 



ORGANIZED CRIME IN INTERSTATE COMMERCE 225 

wholesaler there, and proceeded to continue their sales, and conspiring 
to facilitate shipment into the Southeastern States in the course of 
which they used clandestine methods, such as going out into the coun- 
try and reloading the trucks at night and putting it in flat-bedded, 
fake-bottomed trucks, and in creosote-oil trucks with fake tanks in 
them, and all such practices as that, which Mr. Argo and Mr. Lauder- 
dale are here to tell about, and coupled with the use of false invoices 
and false signatures of receipts on the invoices, in order to obtain 
the tax exemptions in Illinois. 

Mr. Burling. Mr. Evans, perhaps you ought to explain the tax 
situation with respect to the so-called export houses. What is the 
Federal tax situation? What is the Illinois State tax situation? 

Mr. Evans. All of this liquor is Federal tax-paid. That is taken 
care of at the distillery level before it ever gets to the wholesalers 
in Illinois. 

There are in Illinois these border export houses which do j^ractically 
no domestic business in Illinois but which do an export business, and 
there is no incentive to do an export business except to an area where 
it is illegal or where they are ducking taxes. 

Mr. Burling. By "export" you mean a shipment out of Illinois 
into some other State? 

Mr. Evans. Yes, sir. 

Mr. Burling. What is the Illinois tax law with respect to such 
sales? 

Mr. Evans. As I understand the Illinois tax law, they are ex- 
empted from paying the Illinois tax if they have the proper docu- 
ments to establish that the shipment was or the sale was to a party 
going outside the State. 

It has been the position of all of the southeastern commissioners 
that the sales taking place, the delivery taking place, and the money 
changing hands in Illinois, that it was an Illinois sale and it should 
not be exempted from taxes. 

Mr. Winston had detailed conversations — I believe Mr. Hewitt was 
with him — in Springfield with personnel of the Illinois Liquor Tax 
Board, and again Mr. Winston will get into that in detail. 

We thought that they had agreed with us and were going to do the 
same thing Maryland clid, but they never have, although this has been 
going on for over a year and a half now, a year, with Illinois. 

So the sales and deliveries made there in Cairo are enjoying an Illi- 
nois tax-free situation or exemption, which makes the liquor move into 
the Southeastern States bearing or having paid the Federal tax and 
nothing else. 

But our tax of $2 a gallon — Georgia's tax is the highest, and inci- 
dentally I have told my friend, Mr. Redwine, I think this act accen- 
tuates this problem — is $15 a case ; ours is $6 a case. 

Mr. Redwine, I believe, has caught bootlegging right there in wet 
areas right in Georgia, in and around Atlanta, because of that eco- 
nomic incentive. 

Mr. Burling. Do I understand you correctly, sir, that it is your 
o])inion and your experience of where the tax is sufficiently high, then 
bootlegging will take place even in a wet area ; and where the tax is not 
very high, then bootlegging will not take place in a wet area? 

Mr. Evans. Yes, sir; and I might point out in that connection, al- 
though it was not before this committee, that the proposed additional 



226 ORGAlSriZED CRIME IN INTERSTATE COMMERCE 

$3 tax on liquor is going to accentuate the bootlegging problem because 
of the same economic factors. 

One of our primary complaints is that in order to obtain these tax- 
free privileges in Illinois, these export houses will resort to the use of 
phony or false signatures. 

Mr. Burling. Before you get to that, Mr. Evans, I think you should 
explain wliat documents the Federal law requires a liquor wholesaler 
to have ; what license and what records he is supposed to keep. 

Mr. Evans. Well, I am not any authority on the Federal law, but as 
I understand it 

Mr. Burling. Mr. Avis is here, 

Mr. Evans. Mr. Avis can correct me if I make an error in this. 
They are required to keep two forms, what are known as 52-A and 
52-B ; their A being their inflow and the 52-B being their outflow. 

They make those up, I presume, from their original records, and 
their original records in some instances, in the instances that we have 
run across, take the form of a sales ticket or bill, you might call it, such 
as this one [indicating]. I do not want to put this in evidence now. 
It is to come later in a specific matter. This is just typical of it. 

On the bottom of the form is an affidavit, that affidavit being to 
substantiate delivery and to be returned to the company, and they in 
turn to file it to claim their Illinois tax exemption. 

Mr. Burling. Is that an Illinois form or a Federal form ? 

Mr. Evans. That particular form is an Illinois form, but they 
take that or their other original records and make up their 52-A's 
and B's from it. 

Mr. Burling. But the 52-A's and B's are Federal forms ? 

Mr. Evans. They are the Federal records. That is the log of all 
their flow. 

Mr. Burling. In other words, a wholesale liquor seller is required 
by Federal law to keep records indicating to whom he sells the liquor ; 
is that correct? 

Mr. Evans. That is right. 

Mr. Burling. Is there any regulation as to who may purchase 
liquor from a wholesale house ? 

Mr. Evans. As I understand it, a wholesaler may sell under Federal 
law to anyone, but in excess of certain small, quantities a person must 
have an RLD stamp, a retail liquor dealer's stamp, in order to have 
large retail quantities of liquor in his possession. 

I further understand that they are not required to establish that 
they have an RLD — retail liquor dealer's stamp — when they go up 
to make a purchase from the wholesaler at Cairo. 

Now, does that clarify the point you are talking about? 

Mr. Burling. I am not quite clear. Can I walk in off the street 
and purchase, say, 500 cases of whisky in Cairo from one of these 
export houses, or do I have to identify myself and establish that I 
have some Federal license or stamp ? 

Mr. Evans. You do not have to establish that you have a Federal 
license or stamp, as I understand it. 

The buyer, when he walks in there, though, would be in violation 
of the law if he gets into the — the Federal law — if he gets into the 
retail liquor business with 500 cases of whisky on his premises. 

Mr. Burling. But we are trying now to get at what the wholesaler 
is required to find out. 



ORGANIZED CRIME EST INTERSTATE COMMERCE 227 

]Mr. Evans. The seller, he can sell to anyone. I think they have a 
regulation requiring reasonable assurance as to the identity of the 
vendee, but they do not — they have had a practice of requiring them 
to establish their RLD, that they do have an RLD, but, as I under- 
stand it, that has been more or less a ground rule set up out there, 
and is not a requirement of the Federal ATU's regulations. 

Senator Tobey. When does title pass to the liquor that is passed 
from Cairo into a dry section of Tennessee? Does it pass to the 
buyer in Cairo or does it pass on delivery ? 

Mr. Evans. In most instances it passes in Cairo. 

Senator Tobey. So that John Jones, in the dry portion of Ten- 
nessee, owns the liquor when he buys it in Cairo and then he orders 
it shipjied to his home town ? 

jNIr. Ev.ANS. He goes up there with a truck or maybe he sends a 
trucker up there or maybe a man buys a truckload and has arranged 
a resale in some Southern States. 

Senator Tobey. There is no violation for selling the liquor to John 
Jones or Mary Smith ? The burden of guilt is the man who buys the 
liquor and brings it into the dry territory, is it not? 

Mr. Evans. Except for the fact that the liquor dealers in Cairo 
conspire with and send agents and arrange all of the movements into 
the Southeastern States. 

Senator Tobey. They provide the trucks and so forth? 

Mr. Evans. They have tie-ins as to trucks; they send their people 
down. For example, Mr. Lauderdale over here participated in one 
of these movements where a man from Cairo goes to Georgia and 
arranges the whole transaction. 

Senator Tobey. So they are guilty of conspiracy to break the law, is 
that correct? 

Mr. Evans. That is correct. 

Seiiator Tobey. You are prosecuting them for it? 

Mr. Evans. We try to get jurisdiction, sir. 

Senator Tobey. Don't you have jurisdiction under the law ? 

Mr. Evans. They are not coming down there. Mr. Reclwine has 
some of them under indictment and he will tell about that. He started 
a criminal prosecution in one of his counties in Georgia and, I think, 
Mr. Wenger is one of the parties in that case. 

Senator Tobey. What hapj^ened to the prosecution? 

Mr. Evans. I am not sure about what the state of that is, and inci- 
dentally he has had a tax case against Wenger in Illinois, but which 
too he can tell about. 

Senator Tobey. I see. 

Mr. Burling. Well, is this correct, Mr. Evans, that there are two 
export houses in Cairo which do not do business with anyone except 
bootleggers, that is, they do not sell in Illinois and do not ship out 
of the State except into the dry Southeastern States? 

Mr. Evans. If they do any other business it is entirely negligible. 
I have been informed, and my men tell me, that they don't do any 
other business. 

The Chairman. Well, name the companies. We have invited them 
to be here, so let us get the names. 

Mr. Evans. That is M. & B., and Southern at the present time. It 
used to be J. B. Wenger prior to this. I am informed that Mr, Wenger 
now has what is called Security Warehouse. Security Warehouse is a 



228 ORGANIZED CRIME IN INTERSTATE COMMERCE 

warehouse through which federally bonded — through which all of this 
liquor passes and from which deliveries made to the two export houses 
as orders come in, and as the goods need to flow. 

Senator Tobey. That is located in Cairo ? 

Mr. Evans. Yes, sir. Mr. Wenger is still right there in the business. 

The Chairman. Who runs the other company ? 

Mr. Evans. Mr. Charlie Smith. I believe he was formerly a beer 
distributor down in Nashville, and has gone up there, and is the active 
manager of the M. & B. 

The other one is Hymie — the Rubins. Now, there is some question 
as to which Rubin is which and who does what, but the Rubins are 
the ones that run the other. 

Senator Tobey. Do you spell that R-u-b-i-n-s? 

Mr. Evans. R-u-b-i-n. 

The Chairman. Mrs. Wolf, do you have a questionnaire that you 
can give us more information about, which was returned by these 
people as to who they are ? 

Mrs. Wolf. I just wanted the record to be straight as to which 
company Rubin was in. 

The Chairman. Is it straight now ? 

Mrs. Wolf. No. 

The Chairman. Will you straighten it out? 

Mr. Evans. Rubin is in the Southern ; Charlie Smith is in M. & B. 

Now, all the owners and the ramifications of it, I don't know. In 
fact, what I am telling you uoav is what my men have told me, and 
what the investigators 

Senator Tobey. Have you ever talked to Rubin and Smith and these 
other fellows ; have you talked with them ? 

Mr. Evans. No, sir ; I have not talked with them. 

Senator Tobey. What is their defense for breaking the law; what 
do they say ? How do they explain it? 

Mr. Evans. The only defense they have got is that they are making 
a sale there in Cairo, I presume. That is what they would have to tell 
us, and yet they tell the Illinois tax authorities that they are exporters 
I did write Mr. Wenger one time, and he assured me there would be 
no more of it to Tennessee. Well, what they do is they will bill it to 
some other State on a fake billing. 

Senator Tobey. Transship it. 

Mr. Evans. And ship it into Tennessee or Georgia, and bill it to 
North Carolina, and ship it to South Carolina, and so on down. 

The Chairman. Let us get these names correct. The M. & B., who 
operates the M. «fe B ? 

Mr. Evans. Charlie Smith. 

The Chairman. Charles Smith is the manager ; is that correct ? 

Mr. Evans. That is right. 

The Chairman. Do you have any other officers of the M. & B ? 

Mr. Evans. No, sir ; I do not have the officers. 

The Chairman. Do you have, Mrs. Wolf ? 

Mr. Evans. I have all kinds of rumors as to who is involved. 

The Chairman. Let us not get rumors. 

Mr. Evans. Some of my other witnesses here 

The Chairman. Charles Smith is the manager, and he is the only 
one you know for sure ? 

Mr. Evans. Yes, sir. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 229 

The Chairman. What is the name of the other company ? 

Mr. Evans. The Southern. 

The Chairman. Who runs the Southern? 

Mr. Evans. The Rubins. 

The Chairman. Who are the Rubins? 

Mr. Evans. There are two, Jake Rubin and Hymie Rubin. 

The Chairman. Yes. 

Do you know which is president and which is something else? 

Mr. Evans. I am not sure. There have been some wires here, where 
apparently each one is passing it off on the other. 

Senator Tobey. Are either Charlie Smith or any of the Rubins here ? 
Is Hymie Rubin here ? 

Mr. Evans. I would not know whether they were. 

Senator Tobey. Are any of these gentlemen here named today, the 
Rubins or Smith or any of the entourage from Cairo here? If they 
are, will they hold up their hands or stand up? 

(No response.) 

The Chairman. They were notified. They were notified, Mr. 
Burling ? 

Mr. Burling. Yes, Mr. Chairman. 

The Chairman. And asked to be here, by both telephone and tele- 
gram, is that correct ? 

Mr. Burling. The telephone conversation was betw^een me and 
someone who said he represented them, a lawyer in Chicago. 

The Chairman. But telegrams were sent to them? 

Mr. Burling. Yes, sir. 

The Chairman. All right. 

Before you get any further, let us get the amount of your investiga- 
tion. How much of volume in some typical period is sent into the 
Southeast or into Tennessee, or whatever you can testify about? 

Mr. Evans. These houses, these two houses, according to computa- 
tions that we have made, and there are people — some of us say they are 
conservative and some liberal — but over-all M. & B. and Southern are 
doing about a $20,000,000 business, total business, in the period of 
a year. 

Senator Tobey. That ain't hay, is it ? 

Mr. Evans. No, sir ; it is not, and it ain't chicken feed. 

I have here some men who were in the room when Mr. Bob Den- 
ham, of Memphis, last Tuesday told me — first, to identify Mr. Den- 
ham, he is a distiller's representative and has sales connections through 
the suppliers who supply these export wholesalers. 

Mr. Denham gave me some case figures per month. I forgot exactly 
what he said, but we checked that through and computed it out, and 
came up with this $20,000,000 figure. 

Incidentally, I might point out that M. & B. and Southern are 
not doing business, as we understand it, directly with distilleries. 
They are doing business through, for example, Mueller, another whole- 
saler in Illinois; I believe he has several houses, and he does a re- 
spectable local business with retailers over the State of Illinois, but 
he transships or rewholesales through Security to M. & B. and to 
Southern. 

The Chairman. What are Mr. Mueller's first name and his com- 
pany, Mr. Evans ? 



230 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Evans. George and Fred ; I think there are two brothers in it. 
The company is in Springfield, 111. 

Mr. Goldstein. George A. 

Mr. Evans. Mueller Wholesale. 

The Chairman. Speak up so we can hear you, Mrs. Wolf. You 
said you had it through your records. 

Mrs. Wolf. We have it through the various distilleries which gave 
it as George A. Mueller Co., of Springfield, 111. 

The Chairman. Go ahead, Mr. Evans. 

Mr. Evans. Now, one of the ways I said— one of the things they have 
to resort is to known falsification of these receipts in order to get 
their tax advantage. 

I have here the record in the case of United States of America 
against John Pearson, tried in the district court, w^estern district of 
Tennessee, May 24, 1950. Mr. Pearson was on trial for hijacking 
liquor. Mr. Pearson, incidentally, is a man from wdiom or from 
whose brother, Mr, Argo had seized a truck just a few months earlier. 
Mr. Pearson's case is now on appeal and he is loose in the area down 
there, and I understand through my men who have contacts wdth the 
underworld, that he is right now going on his way hijacking, pending 
this appeal. 

He was convicted and given 5 years by the judge. But the thing I 
want to bring out now is the testimony of D. R. Senter. Mr. Senter 
testified that Mr. Pearson sent him down to George and he bought 
an RLD stamp, a Federal liquor license. 

Q. A Federal liquor license to do what ? 
A. Sign for whisky. 

Q. Well, to do what? Sign for whisky in what connection, deliver it some- 
where? 

A. Yes, sir. 

Q. Whereabouts? 

A. Winder, Ga. 

Q. Do you know what county Winder, Ga., is in? 

A. I don't remember, sir. 

And he says he purchased this stamp in Atlanta. 

Then Mr. Senter goes on to tell how he goes up to Cairo and he 
says, "He gave me $100 a week and expenses to sign for the whisky.'' 

In other words, he sat right there in Cairo on a $100 a week and 
signed these receipts. 

Mr. Redwine has and will introduce a group of those receipts on 
shipments to Georgia that Mr. Senter was testifying about in this case. 

Now, that was done with the actual and the full knowledge of the 
people up there in Cairo. 

My own men can give you facts that they did have full knowledge 
of it; they can give you instances where the men went to the South 
and arranged these shipments, and they can hardly plead that they are 
innocent individuals, simply selling to the man who walks in off the 
street. 

The Chairman. Mr. Evans, I suppose this has been printed, the 
transcript now, has it not ? 

Mr. Evans. This transcript? 

The Chairman. Yes. 

Mr. Evans. I guess it has, sir; yes, sir. 

The CiiAiRjiAN. For the information of the committee, can that be 
made as an exhibit — not to be copied into the record — but for the 
committee's files? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 231 

Mr. Evx\^NS. Yes, sir. I will be very happy to have it put in. 

The Chairman. That will be made an exhibit, this transcript will 
be made an exhibit to Mr, Evans' testimony. 

(Exhibit No. 18 is on file with the committee.) 

Mr. Evans. I call particular attention to pages 6, 8, and 10 where 
Mr. Senter is giving his background of how they operated before the 
particular hijacking o})eration took place. 

Senator Tobey. Can you buy these licenses, these stamps? 

Mr. Evans. That is one of our complaints. There is a difference of 
opinion as to how to correct the situation ; but an RLD, the Alcohol Tax 
Unit is careful to point out an RLD is, according to the statute, purely 
a tax stamp. It is not a license; that it is not a license before it is 
issued. 

When a man applies for that RLD he used to have to swear to a 
Form 11. That Form 11 has to show his home address, and he was 
violating the Federal law, of course, when he put something down 
there which was untrue. This year they left the oath off the Form 
11 that pertains to applications for RLD's, for liquor, and I think 
slot machines, and so forth. 

Senator Tobet. Has the Department of Justice in Washington ever 
taken any cognizance of these situations? 

]Mr. Evans. I have not discussed it with them ; no, sir. I don't know 
what they have done. 

We think that some change should be made so that a man who under 
the Federal law gets an RLD stamp has got to establish his true 
identity before it can be issued to him, by picture, by something to 
establish definitely that he is who he says he is, and if he goes up and 
says, "I have got an RLD to ship to Knoxville, Tenn.," to see that he is 
not in fact some fellow from over in Virginia shipping to North Caro- 
lina. 

Senator Tobey. Wliy can't you add on that a condition precedent 
liere to getting a stamp, a statement that this liquor was not to be 
shipped into a place where the sale of liquor is illegal, make a state- 
ment to that effect ? 

Mr. Evans. That would be all right, sir, but the problem is to pin 
liim down and locate him. You see, what he will do is to get a stamp, 
maybe under a false name, for Knoxville, Bristol, Winston-Salem, 
N. C., and maybe ship the liquor to South Carolina. We get copies of 
invoices when they go into the Springfield, 111., State Tax Authority, 
and go to look for this man, and he is not there. We have instances 
where it was a vacant lot. 

Senator Tobey. He is guilty of fraud, is he not ? 

Mr. Evans. Sure, he is guilty of fraud, but you cannot find him. 

Senator Tobey. Have any prosecutions ever been successful? 

Mr. Evans. You can't find him. 

Senator Tobey. Cannot find who? 

INIr. Evans. You cannot find the fellow guilty of fraud ; the whole 
transaction is a phoney. 

The Chairman. Explain that a little further, Mr. Evans. Why 
can't you find him? 

Mr. Evans. Well, take the case of Mr. Jones from, actually Winston- 
Salem. He comes to the Knoxville Internal Revenue Office and gets 
an RLD stamp. He puts down there "Jack Johnson from Virginia." 
They have to sell it to him regardless of where he is from. 



232 ORGANIZED CRIME IN INTERSTATE COMMERCE 

He goes to Cairo and buys liquor, and he says, "I am Jack Johnson 
from Virginia," and the liquor moves out, and actually he will take 
the liquor and deliver it somewhere in South Carolina. 

Senator Tobey. Does he have to sign an affidavit, a sworn affidavit, 
that he is Jack Johnson ? 

Mr. Evans. Well, when he signs that receipt up there certifying 
that the goods have been delivered where they said they were going 
to be delivered, he has to sign s^ome name, but that does not mean any- 
thing. Just like Mr. Senter here, he will just sign a false name or send 
it to Cairo. 

The Chairman. What Senator Tobey means is when he gets the 
ELD, he does not sign any affidavit that he is Jack Johnson. 

Mr. Evans. He formerly had to sign his application for an RLD on 
Form 11. 

Senator Tobey. Isn't that done now ? 

Mr. Evans. That has been changed. That, I don't know, that is a 
Treasury Department form. Mr. Avis can probably tell you about 
this. 

Let me tell 3'OU about this, I was informed yesterday that there is a 
general statute that will put the effect of perjury on it, as to Form 11, 
whether it was sworn to or not. 

Mr. DwiGHT Avis (assistant deputy commissioner, alcohol tax unit). 
That is the situation ; it does not have to be sworn to. 

The Chairman. How many of them have ever been prosecuted for 
perjury, Mr. Avis? 

Mr. Avis. I don't know of any prosecutions of that character. 

The Chairman. It is not a very effective perjury statute, is it? 

Mr. Avis. Well, it is a question of identification. 

The Chairman. Well, we will hear you later, Mr. Avis. Thank 

I just wanted to bring out whether it was effective. Excuse me, Mr. 
Evans; you go on. 

Mr. Evans. If that is a sufficient outline preliminary of what the 
outline is, there are various aspects of it, and I would suggest that 
possibly Mr. Redwine would testify next as to the experience and the 
scope of it in Georgia, these legal entanglements with Wenger and the 
rest of the crowd ; and also as to our conferences and negotiations at 
the distillers' level ; and then that Mr. Winston testify as to his deal- 
ings or trying to get action, and the rest of us have tried too, with the 
distillers at the distillery level, to cut out this business, to cut out the 
flow to these houses. 

The Chairman. Do you want to testify about what conversations 
and assurances you have had from the distillers, that they would stop 
this business, or can Mr. Winston do it better ? 

Mr. Evans. Mr. Winston was host to our conference that we had 
with him in North Carolina last spring. He has the minutes, and I 
think he can state exactly who was there, and he can review that for 
us, I think. There in substance is what they said. 

The Chairman. We will let Mr. Winston testify to that. 

Mr. Evans. Mr. Saunders is here. He is from Virginia. They do 
not have the acute problem that the rest of us have, but he does have a 
problem, and has a constant flow of seizures, and he tells me that right 
now he is getting a problem from right here in the District, bought at 
retail level, not wholesale level, and then I have Mr. Argo and Mr. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 233 

Lauderdale, from Tennessee, in my department, who have made seiz- 
ures, and who have worked under cover, and been on the inside up 
there in Cairo, and seen just what w^ent on with this M. & B. house, 
and what w^ent on for the purpose, of course, of gathering testimony 
on it. 

Mr. Argo and Mr. Lauderdale should testify in detail about these 
seizures. Then Mr. Evans, of the alcohol tax unit, I asked him to be 
here. He has been assigned to work with the Tennessee State depart- 
ment in eliminating this flow of nontax paid bonded whisky into the 
State. 

Let me take this opportunity to say that Mr. Evans and his district 
chief, Mr. Fred Farrel, in Louisville, and also Mr. Dwight Avis, here 
in Washington, have done their best, and worked with us 100 percent, 
insofar as their law and authority permits them to do; that is, Mr. 
Avis, Mr. Farrel, and Mr. Evans. Mr. Evans investigated one par- 
ticular case, and he told me about it when we first started on this, and 
I would like for him just to tell you of a typical case of how they set 
up these operations with these false stamps, and so on. 

Mr. Avis, I did not ask him to appear, but I certainly want him to 
give the over-all viewpoint of the alcohol tax unit. He has worked 
with us 100 percent, and he has lived with the problem, I expect, longer 
than any State official liere, so I would suggest now that Mr. Redwine 
or Mr. Winston, either one, be called. 

The (^iiAiRMAN. Any questions of Mr. Evans? 

Mr. BuRLiN(;. Is there anything, Mr. Evans, that would stop me 
from walking into the Federal office in Knoxville and saying, 'T am 
Clarence Evans, and I want a retail liquor license stamp?" 

Mr. Evans. $27.50. 

Senator Tobey. Where do they get that figure "27" ? 

Mr, Evans. I do not know how they arrive at that. 

Senator Tobey. $27? 

Mr, Evans. $27.50, 1 believe it is, is it not, Mr. Avis? 

Mr. Avis. Yes, sir. 

Mr. BuRLiN r. If I have $27.50 in my hand, I can get a stamp under 
the name of Clarence Evans without any check, any investigation to 
see who I am? 

Mr. Evans. Yes, sir ; that is the way they have been got. 

]\Ir. Burling. And once I have that stamp, I can buy liquor in 
Cairo? 

Mr. Evans. You can buy it without the stamp. 

Mr. Burling. I can buy it without the stamp? 

Mr. Evans. But you cannot have it in your possession and sell it 
without the stamp. 

Mr. Burling. But under Illinois law, as you understand it, if I 
have the stamp showing that I am in some State other than Illinois, 
the liquor can be sold witliout au}^ tax, any State tax being paid in 
Illinois? 

IMr. Evans. Tliat is correct. 

Mr. Burling. But the Conunissioners, such as you, who then go to 
Illinois to find out where the liquor is going to 

Mr. Evans. . Or have got form 52- V. 

Mr. BURUffG. Or to the Federal form, can't find anything because 
false names are being used? 

6^958r-51 — pt. 12 16 



234 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Evans. False entries are in there. Go look for the man in 
Knoxville and you come to tirid out he is nonexistent as far as Knox- 
ville is concerned. 

Mv. J^URLiNG. And the name of the person to whom it is being 
sliipped may be an address of a name in Georgia. In going through 
Tennessee they may drop it off thei-e? 

Mr. Evans. They drop off from time to time in the States they go 
through, and he may give Geoi'gia and travel through Tennessee and 
the North and South Carolinas. He may go through Georgia and 
dorible back up to throw everybody off the track. 

Mr. Burling. Is there also a problem of shipment^ Supposing 
that I want to ship to Alabama, is there any law in Tennessee relating 
to my taking liquor through your State ? 

]\Ir. Evans. I have set up in Tennessee a permit sj^stem. Under 
that system if the State of the proposed consignee, the State authori- 
ties send in tlieir approval of the shipment — I have the regulation 
here — if the State authorities send in their approval of it, then we is- 
sue the permit which must accompany the truck, name the driver and 
describe the truck as it mo\es through the State. 

The Chairman. We will have to recess until we can come back. 
Would it be better for everybody if we moved to 301 ? 

Mr. Evans. It would be more comfortable. 

The Chairman. We will meet in approximately 15 minutes in 
room 301. 

(Short recess — hearing resumed in room 301, Senate Office 
Building.) 

The Chairman. The committee will come back to order. Mr. Bur- 
ling, do you have any further questions of Mr. Evans? 

Mr. Burling. I just want to get one point clear. 

The Chairman. The Chair is glad to have at the conference table 
an old and dear friend who has been very prominent in legal, political, 
and social matters in Tennessee for many years, Maj. Phil Whitaker, 
whose brother is a judge on the court of claims. Will you stand up. 
Major Whitaker, and let everybody see you. 

Major Whitaker. Thank you very much, sir. 

The Chairman. Mr. Burling, any other questions of Mr. Evans? 

Mr. Burling. I just want to clarify one point, Mr. Chairman. Mr. 
Evans, you said that if someone were a lawful liquor dealer someplace 
in the South, say, in Florida 

Mr. Evans. Under State law. 

Mr. Burling. Under State law, you would give a permit to ship 
across Tennessee ? 

Mr. Evans. That is correct. 

Mr. Burling. But supposing I am a bootlegger in Georgia and I 
want to ship liquor from Cairo, 111., to Georgia; is that a violation of 
Tennessee law ? 

Mr. Evans. A violation of Tennessee law to possess, transport, or 
carry nontax paid whisky, that is, bearing a tax stamp of Tennessee, 
across or into or through the State unless proper permit has been 
issued or unless it is by common carrier. 

I have here a set of the rules and regulations of the alcohol division 
of the department, and rule 18 covers that matter. Part 2 of rule 18 
reads as follows : 

There shall be included with such application — 



ORGANIZED CRIME IN INTERSTATE COMMERCE 235 

that is, an application for a permit — 

a statement addressed to the commissioner and signed by the proper taxing 
authorities of tlie State in which the destination is located — - 

that is to cover the across-State situation — 

said statement to approve said proposed shipment and to state tliat it is legal 
and authorized under the laws of said receiving State. 

I have taken a position that we should not facilitate the movement 
where it defeats the tax or other laws of a sister State. 

Senator Tobey. I have only been here a few minutes. This is all 
new to me, but I propound this question to you. The liquor industry 
of this country is a legitimate business since the eighteenth amendment 
was repealed, and they have got a lot of territory in which they can 
shij) goods where it is legal, as with any other commodity, and yet, 
according to what you tell us — and I am sure you are telling us the 
truth — they, in their greed for abnormal profits or greater profits, are 
willing to lend themselves by various devices to break down the law in 
communities where it is illegal to sell. Is that right so far? 

Mr. Evans. I have reluctantly come to that conclusion ; yes, sir. 

Senator Tobey. That being true, what is the liquor interests answer 
to this thing? Is it supergreed? Why is it that they are not willing 
to be law-abiding citizens and ply their trade and traffic where it is 
legal and not where it is illegal ? 

Mr. EvAiSrs. I cannot defend their position, sir. 

Senator Tobey. Did you ever put it to them at all ? 

]\Ir. Evans. Yes, sir. Mr. Winston plans to get into detail on that. 

Senator Tobey. What did they say ? 

Mr. Evans. They give legal excuses that "We can't combine to 
decline to ship to M. & B., for example, or an export house. We will 
be subject to antitrust action." 

There is a difference of legal opinion on that point. They said at 
Asheville, "You leave it to us. We do not want to make any agree- 
ment with you and put it down in black and white because we might 
wind up in an antitrust action, but you leave it to us. You notify us 
of who is doing what and we will stop it." 

Senator Tobey. It seems to me that the one thing any industry 
needs — and that particularly applies to the liquor industry — is a fair 
measure of respect that they are obeying the law, and when and if it 
happens they are not obeying the law and use excuses rather than 
leason in their zeal for profits, it seems to me a most amazing thing 
if they do not get onto themselves and say, "We will lean backward 
to obey the law and all its forces, and we will go the other way to 
the extent of seeming arbitrary. We must keep the law as law-abiding 
citizens." Do yon agree with me ? 

Mr. Evans. Yes, sir, and I have told them that I thought they 
should do that for the reason that there are many areas of the South 
that are borderline in public opinion, and it would take very little 
animosity from the public to prevail on those areas to vote dry. 

In the Senator's home county of Hamilton there was a referendum 
about a year ago on whether to go dry. It stayed wet by about 1,000 
votes out of a total of 29,000-and something, cast. That is how close 
public opinion is, and if I were in a business where I was looking for 
that trade area, I would, to use the phrase, keep my own self clean, 
and, as you say, lean over backward to do it. 

Senator Tobey. That is all. 



236 ORGANIZED CRIME IN INTERSTATE COMMERCE 

The Chairman. Mr. Evans, can you give us any estimate of how 
much the State of Illinois is losing by way of tax on these shipments 
that are consigned for outside territory from these wholesalers in 
Cairo? 

Mr. Evans. It would take a computation on a $20,000,000 business, 
figured at $50 per case. That is how many cases ? 

Mr. Goldstein. 400,000. 

Mr. Evans. 400,000 cases, they are not losing but $400,000. 

The Chairman. $400,000 a year ? 

Mr. Evans. I believe that is correct. That is just a quick com- 
i:)utation. 

The Chairman. In other words, the bootlegger or the man comes 
to the wholesaler in Cairo and gets around paying the Illinois tax 
on the ground that he has his shipment consigned to somebody in 
another State ; is that correct ? 

Mr. Evans. That is correct. 

The Chairman. And they do not pay the tax of the State in which 
they ship it, so they are paying no State tax to either State; is that 
correct ? 

Mr. Evans. That is correct. They are paying only the Federal tax. 

The Chairman. All right, Mr. Evans. We are very grateful to 
you, and again I want to express the thanks of the committee for the 
lead you have taken in working up information for the committee 
on this particular problem, and to express my personal opinion, which 
T am sure the committee and the staff join in, that we think you are 
a very excellent State official and you certainly have been vigorous in 
trying to do something about this matter. We are very much obliged 
to you. 

Mr. Evans. Thank you, sir. 

Senator Tobey. In Tennessee has this thing gotten into politics ? 

Mr. Evans. Into politics? No, sir, it is not into politics. I have 
been very careful to keep it out of politics. 

Senator Tobey. Have the different machines and groups taken sides 
in favor or against the liquor interests doing this thing ? 

Mr. Evans. You mean against tolerating their shipping from Cairo 
or from Baltimore? 

Senator Tobey. Yes. 

Mr. Evans. Let me put it this way : Some administrations look at 
one problem, some administrations seem to look at another. I do not 
know what the attitude of past commissioners was. All I know is 
that when I came in, I saw the problem was there and I have tried 
to go about doing something about it. 

I do not say that they deliberately facilitate it or anything of that, 
sort. I do not know whether it was facilitated or whether it was; 
ignorance. I have nothing to justify saying that they cooperated or' 
conspired in any way. 

The Chairman. All right ; thank you, Mr. Evans. 

Mr. Evans. Mr. Redwine, I think, would be the proper man to 
follow me. 

The Chairman. All right; Mr. Redwine, will you come around. 

Mr. Redwine, do you swear the testimony you give this committee 
will be the whole truth, and nothing but the truth, so help you God ? 

Mr. Redwine. I do. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 237 

Mr, Evans. Mr. Senator, may I apologize for interrupting and 
point out one other fact, if you will excuse me, Mr. Redwine. These 
truckers that we referred to might own the truck, the fellow on it 
might own it or a fellow in Cairo might, or a bootlegger down South 
might own it. 

In any event, unless they are hauling for themselves, as I under- 
stand the Interstate Commerce Act, they are required to have proper 
authority from the ICC, and if any one of them ever got it, I never 
heard about it. I think I am safe in saying they never did, and 
therein is another violation of Federal law. 

The Chairman. All right, sir. 

Mr. Burling. Mr. Redwine, will you state your title, please? 

TESTIMONY OF CHARLES D. REDWINE, REVENUE COMMISSIONER, 

STATE OF GEORaiA 

Mr. Redwine. I am revenue commissioner of the State of Georgia. 

Mr. Burling. And what is the situation in Georgia with respect to 
liquor controls ? Is it dry or wet or by local option ? 

Mr. Redwine. It is a local option State. 

Mr. Burling. By counties? 

Mr. Redwin. By counties, on the vote of the people. 

Mr. BuRLiiNG. And what is the situation? How many counties are 
wet and how many are dry ? 

Mr. Redwine. We have 159 counties in Georgia. One hundred and 
thirty are dry. Twenty-nine are wet. 

Mr. Burling. And do you have a problem similar to that which 
was discussed by Mr. Evans? 

Mr. Redwine. I do. 

Mr. Burling. Do you want to tell us briefly about it, and what you 
are doing about it and what you think should be done about it, if 
anything, by way of Federal legislation ? 

Mr. Redwine. I assumed my present duties about the middle of 
November 1948. I found a very bad condition existing in my State at 
that time with reference to violation of the liquor laws. 

Being a new official, it naturally took me some time to become 
fully acquainted with the situation. Wlien I did, I found that a 
great deal of liquor was coming into our State in violation of the law, 
and with your permission I would be glad to state at this time the 
method and the only legal method by which it legally can come into 
the State. 

The Chairman. You just tell all about it in your own language 
and then we will ask questions, Mr. Redwine. 

Mr. Redwine. The State owns warehouses, operates the warehouses. 
The distillers must have a permit to ship liquor into my State, froiT< 
my department, and it can be transported only by common carrier, 
that is, rail or bonded bus line, and it is a violation for any carrier to 
deliver liquor other than to a State warehouse. It is delivered from 
the State warehouse to the wholesale distributor. 

The tax and warehouse charges are collected on this liquor at the 
warehouse, and it is a violation of law for a distributor to sell other 
than to a licensed retailer. 

In other words, it is illegal for liquor to be sold in Georgia except 
in cotinties that have voted wet by a majority of the people, and if 



238 ORGANIZED CRIME IN INTERSTATE COMMERCE 

the laws are followed it is impossible for any consumer to buy more 
than 2 quarts from any retailer within 24 hours. 

The problem we have had is with the 130 dry counties being flooded 
with liquor, and I might add some of the wet counties have been 
flooded with liquor from out-of-State shipments, wholly in violation 
of our laws. 

The first effort I made was made at the suggestion of Commissioner 
Winston of North Carolina and Commissioner Evans of Tennessee, 
at which a meeting was called in Atlanta a little more than a year 
ago, and I believe 12 or 13 States were represented by the proper 
officials at that meeting, and we all found that we had a common 
problem in these interstate shipments wholly in violation of the laws 
of the State. 

At tliat meeting where the chairman of the alcoholic control 
board, Judge Taylor, of Illinois, and he agreed to give us a copy or 
information as to the amount of liquor that was being shipped out 
of Cairo, 111., into the various States. 

From August the 1st, 1940, to February the 12th, 1950, on informa- 
tion that I hold in my hand, furnished to me by that department, it 
is disclosed that there were 30,043 cases of liquor shipped into Georgia. 

Mr. Burling. From Cairo, 111. ? 

Mr. Redwine. From Cairo, 111., by J. B. Wenger. The amount of 
taxes that the State of Georgia lost on that liquor was $450,645. 

Mr. BuRLixG. Will 3'ou state once more the source of this infor- 
mation ^ 

Mr. Redwine. It was furnished my office by the Department of 
Liquor and Cigarette Revenue Division of the State of Illinois. 

Mr. Burling. Will you state whether any official of the State of 
Illinois has advised you that that State has done anything about Mr. 
Wenger ? 

The Chairman. Just a minute. First, Mr. Taylor is a Federal 
man? 

Mr. Redwine. Judge Taylor is the head of the State board of 
alcoholic control, and in conformity with the agreement he made 
at the Atlanta meeting, he furnished me this information. It was 
mailed to my office. 

Mr. Burling. Have you been furnished, sir, with any information 
that the State of Illinois has taken any action with respect to this? 

Mr. Redwine. I have not. I believe Mr. Evans will bear me out in 
the statement that he said he was powerless to do anything, that 
they had an export law, at the Atlanta meeting. 

Mr. Evans. That is correct. That w^as his first statement. 

Mr. Redwine. The first statement he made. 

Mr. Burling. Was any Federal official present at this meeting? 

Mr. Redwine. Yes. 

Mr. Burling. Will you name him and state his title ? 

Mr. Redwine. Mr.'Malsie, of the ATU unit of Atlanta, and Mr. 
Ty dings of the ATU. 

The Chairman. Give the first names if you will. 

Mr. Redwine. I am sorry; I do not know. They are in charge of 
the Alcohol Tax Unit of the Atlanta office, and Mr. Conerty, he is 
from Chicago. 

Mr. Burling. He is also at the ATU ? 

Mr. Redwine. I invited the officials of the ATU office to be 
present, Atlanta ATU officials to be present at this meeting, and 



ORGANIZED CRIME IN INTERSTATE COMMERCE 239 

on the morning of the Atlanta meeting they advised me that Mr. 
Conerty of Chicago, who is liead of the Athuita district, happened 
to be coming through town on his way to Florida and he woidd be 
glad to be present if there was no objection, and I told him that we, 
of course, would be delighted to have him. 

Senator Tobey. Mr. Eeclwine, do I understand that all this liquor 
in the State of Georgia has to go into State warehouses? 

Mr. Redwine. That is right. 

Senator Tobey. So it conies in there en masse and goes out in dif- 
ferent shipments, is that right ^ 

Mr. Redwine. It comes in en masse and goes out to the wholesalers, 
usually on trucks. Senator. 

Senator TobeY". And the State controls the warehouse? 

Mr. Redwine. The State is in control of the warehouse. 

Senator Tobey. And they get the liquor out of there. If I get 
500 cases in there, I have got to get a release from the State warehouse ? 

Mr. Redwine. Yes, sir. You must pay your tax and get a release. 

Senator Tobey. And can I ship it then into a dry State? 

Mr. Redwine. No, sir. 

Senator Tobey. But it is shipped into dry counties, is it? 

Mr. Re'dwine. Not from my State. There is very little. It is not 
shipped out of the warehouse into any dry county, no, sir. Very little 
of it goes from the wholesaler into dry counties at this time. It so 
happens that I revoked about 15 of the biggest dealers in Georgia and 
I stopped that practice. 

Senator Tobey. Then this liquor that floods the dry counties that 
you tell about never goes near the warehouse, does it? 

Mr. Redavine. Never goes near the warehouse. 

Senator Tobey. A secret operation ? 

Mr. Redwine. It is coming out of Cairo, 111., and Louisiana, Sena- 
tor, most of it. 

The Chairman. What was that from August 1, 1949, to February 
12, 1950, the State of Georgia lost? 

Mr. Redwine. $450,645 would have been collected on that liquor 
had it legally gone through the warehouse. 

The Chairman. That is about at the rate of $1 million a year, is 
it? 

Mr. Redwine. Yes, sir. 

Senator Tobey. Is this a fair statement, sir? It is also illegal in 
dry counties to possess or transport ? 

Mr. Redwine. That is true. Pardon me, it is illegal to possess more 
than one cpiart. It is legal to possess one quart. 

Senator Tobey. But I mean in quantities? 

Mr. Redwine. Of liquor with the Federal and State tax paid on it 
in a dry county. 

Senator Tobey. But nobody gets this tax. Much of the money goes 
for the expense of violating the law ; is that right ? 

Mr. Redwine. I would presume that to be true. 

The Chairman. You only read the figures from one company. How 
about other companies ? 

Mi\ Redwine. Now, I have here the M. & B. Wliolesale Liquor Co., 
who started their first shipment into Georgia on July 26, 1950, and 
the last shii)ment seems to be on Sei)tember 2. 



240 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Senator Tobey. What do you, as an official, think can be done to 
effectively stop this practice ? 

Mr. Redwine. I think that the Federal Government, instead of 
considering a State wet, when one county in the State is wet, should 
protect the dry area in a State that is dry and only permit wet counties 
to receive liquor legally. 

I think that a great forward step would be made if the Federal 
Government would provide some method whereby — it only took $27.50, 
a fictitious name and a false address to get an RLD stamp. That 
protection, they say it is not a license. They insist to me it is not a 
license, but to all intents and purposes it is a license. 

It serves the purpose of a license because a man possessing or own- 
ing one of those stamps, I'egardless of whether he is a real or a fictitious 
person, regardless of wliether he lives in jNIemphis, Tenn., or some 
place that lie gives as his address in Georgia, is imder the protection 
so far as seizure or any effort on the part of the Federal Government 
to stop that flow of liquor. 

Senator Tobey. Well, then to put it to the lowest terms, the issuance 
of these stamps aids and abets the interests of the countiy who want 
to do business in illegal sections ? 

Mr. Redwine. That is right. 

Senator Tobey. To break down the law ; is that right? 

Mr. Redwine. That is right. I have on the list furnished me by 
the Alcohol Control Unit of Illinois names and addresses of any 
number of people in small cities in Georgia, that no such person lives 
there or has ever lived there nor is there any such street address in 
that town as given by that person. 

Senator Tobey. Well, who would you point your finger at as the 
interests most guilty of contributing to the breakdown of the dry 
'■•actions of the State of Georgia by allowing liquor? Who is the 
t>"uilty person, in your judgment? 

Mr. Redwine. Well, I would not single out any guilty person. ] 
think it is a question of probably a system that ought to be corrected. 
I have been astounded, Senator, to find a number of Congressmen 
from my State that I have talked with did not even know that such 
condition as this existed. 

Senator Tobey. See no evil; speak no evil; hear no evil; is that it? 

Mr. Redwine. Beg pardon? 

Senator Tobey. See no evil ; speak no evil ; hear no evil. 

Mr. Redw^ine. Well, the ATU unit advises us that under the hnv 
they have to issue these. We refer to them as licenses in the South. 
They call them RLD stamps, and as I said, they serve all the purpose 
of a license, whatever you call it. 

I have any number of names here in little towns. Senator Rus- 
sell's home town, Mr. Evans referred to it as "Wender," Ga. It is 
Winder, Ga. This man, D. R. Senter, that he referred to in his testi- 
mony who stayed in Cairo, 111., gave his address at 200 Broad Street, 
Winder, Ga. It is a small city where everybody knows everybody. 
I). R. Senter was never heard of in Winder, Ga. There is no such 
address in Winder. Ga., as he gives. There is no such street nor 
address. Yet he holds an RLD stamp as a citizen of Winder, Ga. 

Senator Tobey. Hold that. What I said in the other room I think 
is pertinent. Tell me if it is not. If to get that RLD stamp they 



ORGANIZED CRIME IN INTERSTATE COMMERCE 241 

had to make affidavit they ^ye^e the person named in the application 
for the stamp, that the liquor was to be shipped to only places that 
had voted wet, and that it was not going to break a law in any sense 
or they will be held responsible and accept guilt and summons if 
it was, with full understanding of the law in the affidavit, wouldn't 
you have them by the neck? 

Mr. Redwink. I think the United States Government would have 
them in strict violation of the law. 

Senator Tobev. Why do you not do it then? 

INIr. Redwine. What we are asking you to do is do it. We cannot 
get jurisdiction. He lives in Cairo, 111. He does not live in Georgia. 
He probably did not make an affidavit in Georgia. I do not know. 
They say it does not even require an affidavit. 

Senator Tobey. That modus operandi you speak of would make it 
kind of difficult. 

Mr. Redwine. If the Federal Congress we are speaking of would 
do that, it would make it very difficult. I think it would be most 
helpful. 

Senator, if you ask for my o])inion, the Federal Government through 
enactment of Congress, if it is necessar5% should require a man that 
they issue a stamp to — and you know these people, they say it is not 
necessary to ha^e one to buy liquor, but my information is they re- 
quire them to have one in order to shield and protect themselves, and 
a copy of the original invoices that they send me gives his RLD num- 
ber, and I think that he should be identified, and I think if we had 
the identity of that man — and I still think further, I do not know 
whether it is possible but I do not think the Federal Government 
ought to issue a man a license to sell liquor in a dry county. I think 
they ought to go that far. 

Senator Tobey. That ought to be elementary. The tragic part is 
it is not. 

Mr. Redwine. What we are asking you to do is to do that thing. 
That is the appeal we are making to you. 

Now we were talking about Mr, Senter. It was called to your at- 
tention a few minutes ago — I have photostatic copies I would be glad 
to show you across the table there of Mr. D. R. Senter. That is the 
man who gave his address as Winder, Ga., 200 Broad Street. 

Senator Tobey. What is his real name? 

Mr. Redwine. His name is Senter. He is the man who was hired 
by J. B. Wenger. 

Senator Tobey. And he gave the wrong address? 

Mr. Red^vine. He lived in Cairo, 111. 

Senator Tobey. If the application required him to give the right 
address on penalty of crime punishable by imprisonment, he would 
be very careful not to do it. 

Mr. Redwine. I think he would. 

Senator Tobey. In other words, we know how to do it but we do 
not want to do it ; is that it ? 

Mr. Redwine. I do not know. I hope you want to do it. I hope 
when you find out what the condition is in the South that you will 
want to do it. 

Now that man there was paid $100 a week to stay in Wenger's store, 
according to his own testimony that was quoted to you a few minutes 



242 ORGANIZED CRIME IN INTERSTATE COMMERCE 

ago by Mr, Evans, to sign those receipts which exempted that liquor 
from Illinois tax. He said it was being exported. 

The Chairman, In other words, Mr, Senter never came from 
Georgia in the first place. 

Mr. Redwine. Never been there. He was an employee of J. B. 
Wenger according to his own testimony. I believe that is correct. 

Mr. Evans. Yes. 

Mr. Redwine. Working in Wenger's warehouse and signing those 
receipts to exempt that liquor from the Illinois tax, and if you will 
just look a little further there you ^vill find he signed those invoices 
there in December and they were witnessed by a notary public in 
Atlanta on April 5. 

Senator Tobey. So Mr. Senter lied, did he not? 

Mr. Redwine, If he swore that — and I am informed by Mr. Evans 
that he did — yes. I do not know what he said on his RLD stamp ap- 
plication, but I think he lied ; yes, sir. 

Senator Tobey. Doesn't that bother him to tell a lie ? 

Mr. Redwine. Well, I imagine it would almost run him crazy, the 
type of man he is. I imagine his conscience would keep him awake 
at night. 

The Chairman. Do you know where he got his RLD license? 

Mr. Redwine. No, sir ; I do not. 

The Chairman. He may have paid it at Louisville or Cairo or 
somewhere else? 

Mr. Evans. Senator, I think the record shows he got it in Atlanta, 
made a trip down there to get it. 

Mr. Redwine. I will check the record on it. 

The Chairman. Can we have some of these for our files ? 

Mr, Redwine. If you would give me permission later on to with- 
draw them. That is my permanent file. I would be glad to assist 
you in any way I can, Senator. 

Senator Tobey. Do you know Mr. Senter personally ? 

Mr, Redwine, Never saw him. 

Senator Tobey. Is Mr, Senter in the room? 

(No response.) 

The Chairman. We will photostat and return this to you, 

(Exhibit No, 19 was returned to the witness after analysis by the 
committee,) 

Mr, Redwine. That would be fine. I will be delighted. 

The Chairman. All right, let us go on. You were talking about 
the M. & B. Co. began business in July 1950 and lasted until Septem- 
ber. What did they do? 

Mr. Redwine. They sent 2,064 cases into Georgia in just a little 
over a month upon which the tax would have been $30,960 had it gone 
through the State warehouse and paid the proper taxes. 

The Chairiman. How much do you estimate from all people that 
are coming into Georgia untaxed? 

Mr. Redwine. That of course would be an estimate, Senator. I 
asked the legislature in order to help me stop this tremendous flow of 
liquor for an extra appropriation. I have put on 100 enforcement 
officers in my State. We captured and confiscated a great deal of this 
liquor on the roads. 

Louisiana was cooperating with me and I even kept men in the ex- 
port towns of Louisiana, and we checked the head of these boys and 



ORGANIZED CRIME IN INTERSTATE COMMERCE 243 

we confiscated quite a bit of liquor, and according to the records the 
flow in Georgia has been stopped pretty largely, but I do not think 
the record speaks the truth. 

We got so hard in behind tliese bootleggers that they went to invoic- 
ing tlie liquor to other States, North Carolina and South Carolina, 
and we had no point of beginning to chase them to stop them out of 
Georgia. This was going oii the basis of $1,000,000 a year, and in 
my opinion it will be double that if we knew the full truth. I think 
they are swindling my State. 

The Chairman. You mean the tax you are losing? 

Mr. Redwine. My estimate is we are losing a minimum of $2,000,000 
a year on bootleg taxes. 

Senator Tobey. That won hi help pay the school teachers, would it 
not? 

Mr. Redwine. Yes, sir, and it would. Senator, do more than that, 
and a finer thing than that. It would break up racketeering and 
gangsters that we have never known much about until this thing 
started. They are infesting us. I think that is infinitely worse than 
selling liquor. 

Mr. Burling. Going back briefly to the Atlanta conference, I think 
the people who were present from the ATU were Mr. Donald S. 
Tydings? 

Mr. Redwine. That is right. 

Mr. Burling. Mr. W. G. Malsie ? 

Mr. Redwine. That is right. 

Mr. Burling. And Mr. Dan J. Conerty, is that correct, sir? 

Mr. Redwine. Yes. 

Mr. Burling. Was anything said by anybody present about Mr. 
Wenger who was at that time shipping all this liquor into Georgia? 

Mr. Redwine. There was. 

Mr. Burling. Will you state what was said and who said it? 

Mr. Redwine. Mr. Conerty made the statement in an address just 
before the meeting closed, that he thought probably we had the wrong 
impression of ]Mr. Wenger, that he is just a good American citizen, 
a human being just like the balance of us were, and that he thought 
probably we had the wrong impression. That is from my recollection, 
and I would be glad for Mr. Winston and Mr. Evans — they were pres- 
ent. Am I correct in that statement? 

Mr. Evans. The substance of it. 

Mr. Redwine. I know Mr. Evans immediately challenged this state- 
ment, asked him if he thought a man who was violating the law or 
flooding the Southern States with liquor, as Wenger was, if he con- 
sidered him a good citizen. 

Senator Tobey. What did he say ? 

Mr. Redwine. Well, to be frank with you. Senator, the meeting 
got pretty warm at that point and I do not know if he had anything 
to say. There was a number joined in the discussion, as southerners 
will do, agreeing with Mr. Evans on his challenge of his statement 
about Mr. Wenger. 

The Chairman. Where is this Mr. Conerty from? 

Mr. Redwine. Chicago. He is the head of the Chicago ATU or 
was at that time, and Atlanta is in that district. 

Mr. Burling. And so is Cairo; is that correct? 

Mr. Redwine. Yes ; Cairo is in Illinois. 



244 ORGANIZED CRIME IN INTERSTATE COMMERCE. 

The Chairman. Is he still in the Federal service ? 

Mr, Redwine. My inforiiiation is that he is. 

Mr. Burling. When you said Atlanta was in the district, that was 
a slip, was it not? You mean Cairo? 

Mr. Redwine. Malsie and Donald S. Tydings are under that office. 
That is the information I have. That is what they tell me. My in- 
formation was o-ained from them. 

Mr. Burling. Did you get any explanation as to why a high official 
of the Federal Alcohol Tax Unit should say that Wenger, who was 
one of the largest sellers of unlawful alcohol, unlawful liquor in the 
country, was a good American citizen ? 

Mr. Redwine. He did not give any reason why. He just said he 
w^as a human being and good American citizen, thought we had him 
wrong. 

Senator Tobey. That would let us out of a lot of things, just say- 
ing we are human beings. 

Mr. Redwine. And a good American citizen, and he thought we had 
the wrong opinion of him. 

Senator Tobey. What is his name; Conerty ? 

Mr. Redwine. Yes. 

Senator Tobey. Let us have him down here and see his definition 
of a good American citizen. 

Mr. Redw^ine. I beg your pardon ? 

Senator Tobey. I think we had better have him down here to have 
a dress rehearsal of this thing. 

Mr. Redw^ine. You have the power to bring him, I don't, but I 
think that there would be i:)robably V2 or 15 men that would verify the 
statement that I made, that that is substantially what he said. I know 
he used the words "good American citizen'' and he was immediately 
challenged when he made the statement. 

The Chairman. You said that, Mr. Evans said that is what he 
said. Who else ? 

Mr. Redwine. Mr. Winston over there of North Carolina, and Mr. 
Andrews, I believe, was there. 

The Chairman. Is that what he said, Mr. Winston ? 

Mr. Winston. Yes, sir; that is what I understood him to say. 

Mr. Redwine. Mr. Andrews was there. Mr. Hewitt was there 
from Missouri. Judge Hewitt over there from Missouri was present. 

Mr. Winston. He got up and said he was a good citizen. 

Senator Tobey. There is an amazing thing to one member of the 
committee. The record seems to be fairly good and exhaustive, and 
then we find that one of the Alcoholic Tax Units stands up and de- 
fends these gentlemen as good American citizens. You wonder where 
you can turn for help if you cannot turn to the Government agencies 
wdio are specifically charged with enforcing the law. 

The Chairman. Mr. Avis, where is Mr. Conerty ? 

Mr. Avis. He is the deputy supervisor in Chicago, and I would 
like an opportunity to address myself to this situation when the time 
comes, if I may. 

The Chairman. Yes, sir; you will be given an opportunity. 

Mr. Redwine. I have a copy of the minutes, not a detailed copy 
of the minutes, at that Atlantic meeting. 

The Chairman. That will be filed as an exhibit to the record. 

(Exhibit No. 20 is on file with the committee.) 



ORGANIZED CRIME IN INTERSTATE COMMERCE 245 

Mr. Redwine. I did not quote him verbatim, but there was a copy 
of a resolution atJ opted following his speech at that meetino;. 

Mr. Burling. Mr. Chairman, I think in fairness to the Alcoholic 
Tax Unit and to Mr. Conerty, I should say that your committee's 
staff only learned of this incident last night at which time it was too 
late to get Mr. Conerty here. 

The Chairman. Let us advise Mr. Conerty as to what has been 
said, and we will talk to Mr. Avis to see if we cannot give him a 
cliance to be heard. 

Mr. Avis. I would certainly like an opportunity to be heard on the 
over-all situation, and with particular reference to this. 

The Chairman. I think it might be well for you to call Mr. Conerty 
in if you can get him in, Mr. Avis. This does not look very good 
for him. 

Mr. Avis. Perhaps you want to hear my explanation of it first, 
Senator. 

The Chairman. Yes, sir ; we will. 

Mr. Avis. It is subject to your pleasure. 

The Chairman. All right, Mr. Avis. Everybody says you have 
been quite cooperative in the matter. We certainly expect to hear 
from you today. 

Mr. Avis. I certainly want to be heard. 

The Chairman. All right. Anything else, Mr. Redwine? 

Mr. Redwine. I know of nothing else unless there is something the 
committee would want to ask me about. 

Mr. Burling. I have no further questions. Mr. Evans suggests 
that I ask you this. It is correct, is it not, that you joined with other 
commissioners from Southern States in trying to get the distillers to 
police their own actions? 

Mr. Redwine. Oh, yes. I have called their attention to it by letter 
and to their representatives personally, and I was present at a meet- 
ing at Asheville when the group that controlled practically the largest 
amount of liquor in the United States was present, and we begged 
them to put it in ordinary language to stop supplying these houses 
that were flooding these Southern States with liquor illegally. 

Mr. Burling. When was this? 

Mr. Redwine. I believe it was in June 1950. 

The Chairman. Well, we pleaded with them here in November 1950, 
and they have not paid any attention to either of us, have they? 

Mr. Redwine. No, sir. They asked us to just not make them tell 
us that they would not do it, that they might become involved in the 
question of the antitrust laws, but said, ''Leave it to us and you will 
see the results." 

The Chairman. All right, thank you very much, Mr. Redwine. 
We appreciate your coming here. 

Mr. Redwt;ne. Thank you, sir. It is a pleasure for me to come. I 
certainly think we need some help in the South from this vicious 
system that is being carried on. 

The Chairman. I want to ask one further question. I do not want 
you to go into too much detail, but in answer to Senator Tobey's ques- 
tion, when he asked you if this would not have meant $2,000,000 
more for school teachers, you said that was important but even more 
important was that if this could be stopped it would eliminate rack- 



246 ORGANIZED CRIME IN INTERSTATE COMMERCE 

eteering which went along with this illegal industry. What do you 
mean by that? 

Mr, Redwine. I mean the breaking down of the legal system, and 
when you have a number of people who are willing to openly, fla- 
grantly violate your laws for the sake of making money, it is bad, 
and I think that is a system that if it is not discontinued and stopped, 
will continue to grow and grow until it becomes intolerable. 

The Chairman, You mean, in other words, that law violations 
for one purpose brings about law violations for other purposes? 

Mr. Redwine, That is right, and breaks down the system of free 
government. 

Senator Tobey. Breaks down the moral fiber of the country. 

Mr. Redwine. That is right. If you will pardon me for this state- 
ment, I have sent one of my men to Cairo, 111. I am sure Mr, Evans 
can witness that. They tell me that the automobiles carry sawed-off 
shotguns and machine guns, and if a stranger goes in that town and 
does not identify himself, he is going to be in jail in short order, and 
my man, Mr, L, H. Crawford, went up with an official of the State 
of Illinois to get a photostatic copy of the papers that I have just 
filed with you, and he said that he got out of town in a hurry. He 
was covered by the time he hit town and he was glad to leave, and 
he tells me he would not go back there, I could not force him to go 
back. 

That is the system that I am talking about. That is the condition, 
and I think the continued wholesale violation of the liquor law will 
bring it into our State, and I hope that I can be a part in breaking it 
up and stopping it. 

The Chairman. Also it means, I suppose, that it is corruption of 
public officials, and if they are corrupted for one purpose, they are easy 
prey for other purposes. 

Mr. Redwine. The grand jury of Fulton County, of which Atlanta 
is the county seat, 2 weeks ago brought out presentment against this 
corrupt system and said that they had gone to the point of building 
up a financial empire for the purpose of electing officials. 

Senator Tobey. And were there any indictments under that grand 
jury's report? 

Mr. Redwine. They have not. They asked the preceding grand 
jury to continue the investigation. They said they had not com- 
pleted it. 

The Chairman. Would it be of any assistance to you in your effort 
if these consignees were put into our record as an exhibit to this 
testimony ? Is the use of their names privileged ? 

Mr. Redwine. No, sir; they are not privileged. I would be glad 
to furnish them to you. I would like the same reservation. They 
are my records. I will be glad to let you photostat them and mail 
them back to me in my office in Atlanta. 

The Chairman. I think it should be understood a big part of them 
are false ; is that correct ? 

Mr. Redwine. I would not say the big part of them. The addresses 
are false. Pearson, the man that you tried, wasn't it, he gave his 
address in there. His brother is under a 5-year penitentiary 
sentence from Nashville, No, Pearson has never lived there. There 
are some of them that are not false, but many of them are. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 247 

The Chairman. We do not want to take any chance on hurting any 
innoccent person. 

Mr. Redwine. I do not think it woukl hurt any innocent person. 

The Chairman. Do you suppose John Jones might luive used the 
name of somebody who was innocent and did not know anything about 
it, and these addresses ? 

Mr. Redwine. No, sir. No innocent person in Georgia would object 
to your publishing it if they were innocent. 

One address has been given on a RLD stamp in Georgia that is the 
home address of a very high State official. He did not give his name 
but he gave his residence address and street. You will not have 
anything like that. Those are very narrowed lists there. 

The Chairman. We will make them a part of our exhibits and we 
will discuss the matter of releasing them. 

(Identified as exhibit No. 21, and returned to witness.) 

Mr. Redwine. I would be glad if you would make photostatic copies 
and return them, because they are my permanent records in my office. 

The Chairman. We will do that. We have facilities to do that. 
Thank you, Mr. Redwine. 

Mr. Hewitt wants to get out of town, I believe. Suppose you come 
around very briefly, Mr. Hewitt. Mr. Hewitt, do you swear the testi- 
mony you give this connnittee will be the whole truth, and nothing 
but the truth, so help you God ? 

Mr. Hewitt. I do. 

Mr. Burling. Will you give your full name and your title, please. 

TESTIMONY OF COVELL R. HEWITT, SUPERVISOR OF LIQUOR 
CONTROL, STATE OF MISSOURI 

Mr. Hewitt. Covell R. Hewitt, supervisor of liquor control of the 
State of Missouri. 

Mr. Burling. All the counties of Missouri are wet? 

Mr. Hewitt. It is a wet State ; yes. 

Mr. Burling. You do have a problem, do you not, with relation to 
the transportation through Missouri of liquor into States which are 
dry ? 

Mr. Hew^itt. My State is a wet State. We do not have local option. 
It is a license State, it is not a monoply State, that is operated by the 
State. It is operated by private individuals. 

I met with these various southeastern administrators two or three 
times trying to get at the heart of this problem of the supplying of 
liquor to dry counties in the Southeastern States and the transporta- 
tion of intoxicaing liquors across the State of Missouri against the 
law, against the laws of our State. I am heartily in sympathy with 
these gentlemen from the Southeastern States in their problem. They 
have a tremendous problem, and their problem all stems from one 
place, and that one place is Cairo, 111. 

There are two wholesalers over there that supply 90 percent, in my 
judgment, of the illegal liquor that goes into the Southern States. 
It is not illegal in the sense that it is made illegally. It is liquor 
that is legally made and becomes illegal liquor wiien it touches these 
wholesale houses and they distribute it to the Southern States. 

Senator Tobey. And the sale of which sets the laws of the State 
at variance ; does it not ? 



248 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Hewitt. Yes, it does. My problem over there is the transpor- 
tation of liquor across into Oklahoma. Oklalioma is the only totally 
dry State, I say legally dry State, but it is a very, very wet State. 

Mr. BuRLiN(;. May I interrupt you a moment, sir. Isn't the State 
of Mississippi theoretically bone dry, also? 

Mr. Hewitt. Theoretically, yes. They have what they call down 
there a black-market tax. It is dry, but yet there is a statute down 
there that permits the revenue officers to collect what they call a 
black-market tax, and that is collected by the sheriffs, and I have been 
told that it does not all get into the State treasury. 

Senator Tobey. Then you have the law in Mississippi wliich is a 
dry State ? 

Mr. Hewitt. Yes. 

Senator Tobey. And yet you say that it permits certain officials to 
accept a tax and let it come in ; is that it ? 

Mr. Hewitt. Yes, that is right, under the statute. I am not from 
Mississippi; you understand that. 

Senator Tobey. Yes; I understand. 

Mr. Hewitt. They do do that. I do not know what kind of a 
system it is, but they do that down there. They collect a black-market 
tax on unlawful whisky coming in there. 

Senator Tobey. So that the agents of the State of Mississippi operate 
a black-market tax and create a black market and aid and abet a 
black market which is illegal. 

Mr. Hewitt. Yes. It is an intolerable situation down there. 

Mr. Burling. Is this correct, sir, that tiie law in Mississippi is, first, 
that liquor may not be sold in the State, and, second, that a tax shall 
be levied on the sale of goods, the sale of which is otherwise pro- 
hibited by Mississippi law ? 

Mr. Hewitt. That is correct. I am not too well acquainted with it. 

Mr. Burling. Is that approximately it according to your under- 
standing ? 

Mr. Hewitt. Yes, that is right. That is approximately right. 

Senator Tobey. Here we have got a Southern State that prohibits 
a thing, whatever it may be, in this case it is liquor, and yet it has 
the duly constituted authority to issue black-market authorities upon 
the receipt of a tax to nullify the State law, is that right? 

Mr. Hewiti\ That is the way I understand it, and I think it is 
right because I had a call from an official of the State of Mississippi. 
My agent seized $15,000 worth of intoxicating liquors going to a 
man by the name of Muse in Mississippi some place, N. A. Muse, 
Jackson, Miss., a person who represented himself to be an official 
called me and said, "Why don't you turn that whisky loose that you 
have seized up in Missouri, because he is one of the honest boot- 
leggers?'' 

Senator Tobey. That is an anomaly, isn't it ? 

Mr. Hewitt. Well, yes, I thought so. It was a ludicrous situation 
to me. They wanted me to tuin him loose because he is one of the 
fellows that is honest with us and he paid that 10-percent tax. Am 
I right, Mr. Evans? 

Mr. Evans. I did not hear the conversation, but the general situa- 
tion on Mississippi is that, as I understand it. I would like to point 
out this. I do not know whether you realize what you said, and you 
ought to have an opportunity to correct it. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 249 

The State officials under the State, there is a set-up of a section 
which collects the black-market tax. The word "whisky" is not men- 
tioned in that law. 

That State section and the officials in it have nothing to do with 
the enforcement of the bone-dry law. That is a matter, as 1 under- 
stand it, that is left to the local sheriffs and also to the highway patrols. 

Senator Tt)BEY. They are all agents of the sovereign State of 
Mississippi, so you have on the one hand holding up the symbol and 
saying '"Thou shalt not pass," and the other one saying, "'For quid 
l)ro quo come in and play the game," is that right? 

Mr. EvxVNS. That is right, sir. You made a statement, and as I un- 
derstood what you said, you said those black-market administrative 
officials did not turn in all of it or the State did not get all the tax. 
I do not know whether you want to clarify that or not. 

Mr. Hewiit. No, no. We are getting too far away from Missouri, I 
think. 

Mr. Evans. In fairness to you, I want to bring it up. 

The Chairman. Let us get to Missouri, 

Mr. Hewitt. The problem in Missouri is the transportation of in- 
toxicating liquors into the State of Oklahoma. Now we have a trans- 
porter's-permit law in the State of Missouri which says that you cannot 
transport liquor across the State of Missouri without a permit issued 
by the supervisor of liquor control. 

Now, I do not issue any permits to Oklahoma, because I know that 
all the people that transport liquor into Oklahoma are bootleggers, 
and it keeps 10 or 12 of my agents busy guarding the Mississippi River 
to prevent these Cairo fellows and their stooges from transporting 
liquor through my State into Oklahoma. It ties up my agents to do 
that. I stop loads all the time. 

The other day not too long ago we stopped a load of $17,000 worth 
of whisky in a big van that was going to F. S. Moody, at St. Louis, 
Okla. That is 368 cases of whisky. There are only 394 people 
in the city of St. Louis, Okla., and that just show^s how ridiculous 
this situation is. 

Senator Tobey. You say there are only 394 people in St. Louis, 
Okla.? 

Mr. Hewitt. That is right ; 394. 

Senator Tobey. It is not a city, then, is it? 

Mr. Hew^itt. Just a little village. 

The Chairman. How many cases were shipped into there? 

Mr. He-witt. Three hundred sixty-eight cases at one load in a town 
of 394 people. 

Senator Tobey. That is a case per person almost. 

Mr. Hewitt. That is right. 

Senator Tobey. Men, women, and children. 

Mr. Hewitt. Yes ; that is right. These names in Oklahoma, I will 
not say they are fictitious, but they all are bootleggers, all of these 
shipments that are made down there. I have a complete list here of all 
the bootleggers, I think, almost a complete list of all the bootleggers 
in the State of Oklahoma. 

Now, I get lists from the Department of Revenue of the State of 
Illinois of shipments made to the State of Oklahoma. None of the 
liquor that is shipped has any Illinois taxes on it. 

68958— 51— pt. 12 17 



250 ORGANIZED CRIME IN INTERSTATE COMMERCE^ 

Illinois does not exact any tax against these importers and dis- 
tributors, notwithstanding the attorney general, I think, of Illinois 
has said that these export houses are operating illegally. The attorney 
general says that in an opinion. 

The Chairman. Do you have any objection to making this list an 
exhibit to your testimony ? Let us photostat it and send it back to 
you. 

(Exhibit No. 22, returned to witness.) 

Mr. Hewitt. I can list them all off for you. I believe I could do 
that. However, you can get it from the department of revenue from 
the State of Illinois. I will be glad to supply it to you. 

The Chairman. All right ; if you will supply it, it will be made a 
part of the record as an exhibit to your testimony. 

Mr. Hewitt. Thank you, sir. 

Now, all of these people that get this liquor in Oklahoma, they have 
RLD stamps and WLD stamps. A WLD is a wholesaler. That has 
been gone into by the various men here. Oklahoma, I think, is seventh 
in the Union in the number of RLD stamps, wholesaler stamps that 
are sold in the United States. 

Now, they use that as a color of authority over in Cairo. It is just 
a tax. It is not a license at all, but they put that on there, Mr. South- 
ern Wholesaler puts that up here, WLD, 2551, Wholesale Liquor 
Dealer. That goes on every one of his shipments. It is not a license 
at all. If there are any questions that you want to ask me about 
this situation — we seize loads all the time. We seized a load the 
other night. 

Senator Tobet. What do you do with the whisky you seize ? 

Mr. Hewitt. We confiscate it. We bring a suit in the circuit court 
of the county where it is seized and publish a notice that we have seized 
it, and then if nobody claims it, we sell it. If anybody claims it — 
they do not come in and claim it any more, much, because we have been 
successful in every suit. 

Senator Tobey. Then what do you do with it ? 

Mr. Hewitt. We sell it at public sale and put the money in the 
State treasury. 

Senator Tobey. You sell it where ? Where do you sell it ? 

Mr. Hewitt. In the county, as a rule, where the seizure is made. 
We send out notices. 

Senator Tobey. Supposing that that is a county which is a dry 
county ? 

Mr. Hewitt. We do not have any dry counties in Missouri. Our 
State is totally wet. 

The Chairman. Can you, sir, give us any estimate of the amount of 
liquor that is shipped into the State of Oklahoma during any given 
period, according to the records you have, that is, from these two 
wholesalers ? 

Mr. Hewitt. It is indicated in the reports of the Illinois Depart- 
ment of Revenue — I would not know how to estimate it. The opera- 
tion over in those two places I would think would run ten or fifteen, 
maybe $20 million a year at those two places in Cairo, 111. 

The Chairman. You mean into Oklahoma ? 

Mr. Hewitt. No, I mean all over the Southeast, including Oklahoma. 

Senator Tobey. These large concerns — can anybody around the 
table answer — in Cairo that do the bulk of this selling, are they rep- 



ORGANIZED CRIME IN INTERSTATE COMMERCE 251 

resentatives of any larger brewer interests who dominate them, or 
are they independent ? 

Mr. Hewpit. They do not sell beer. 

Senator Tobey. No, no, liqnor. 

Mr. Avis. Am I supposed to answer that ? I purposely stayed out 
of it. I would say that maybe they might have one or two minor lines, 
but generally speaking I would characterize it as a front operation. 

Senator Tobey. And who do they represent, for instance ? 

]Mr. Avis. I think they represent themselves. 

Senator Tobey. Wlio are the large liquor interests ? 

Mr. A^^s. These wholesalers. Let us get at it this way, Senator. 
Practically all the leading distillers and many of the small ones have 
wholesalers that represent their lines, and those wholesalers in Illinois 
then in turn sell to these two concerns which have been under discus- 
sion here this morning. 

Senator Tobey. And they probably have a monopoly of that busi- 
ness tied up to a certain group, a certain brand ? 

Mr. Avis. I would not say that; no, Senator. This is just a con- 
venient way of the so-called reputable wholesaler not dealing directly 
with this export traffic. 

Senator Tobey. Is there such a thing as a reputable wholesaler ? 

Mr. Avis. I would say "Yes, sir ; there is." 

Senator Tobey. I think there are. 

Mr. Avis. Yes, certainly. This is a legitimate business. 

Senator Tobey. I agree. The only illegitimate part is when they 
break the law by aiding and abetting sending it into dry States, and 
that brings up my point. Why do they not lean over backward to 
respect the law and get favor of the public toward the liquor dealers 
of this country ? 

Mr. Avis. Senator, I would rather the distillers would make their 
own case out here. I would just prefer not to get into a discussion 
of that. I certainly do not w^ant to be in the position of defending 
any action of theirs. 

The Chairman. We have, I might say for the benefit of everyone 
here, following our meeting of November 8 — we had some previous 
meetings, we had Mr. Avis and others of the Alcohol Tax Unit, Mr. 
Evans and others representing their States, and we had representa- 
tives of all of the big-time distillers in, and we voted to get together 
and submit a program as to how this matter could be handled. 

We have the report, some instructions by the Alcohol Tax Unit 
to its agents, and a good many documents here which we are going to 
release, but in a good many respects it is not satisfactory, particularly 
from the viewpoint of the distillers. 

Also, there is an obligation on the part of Congress, I think, to 
pass some laws. Some of the activities of the Alcohol Tax Unit have 
not been satisfactory, so that is the reason we are going further into 
the matter, and this committee, which has been working together, has 
been asked to give the matter further consideration and make a fur- 
ther report, which I think will be done, and Mr. Avis will discuss 
that later on this afternoon. 

Senator Tobey. Mr. Chairman, is it too Utopian to suggest that if 
these large distillers were brought in before this committee and told 
of this situation which has developed, which they may know already 
and doubtless do, and pointed out to them the anomaly of them aid- 



252 ORGANIZED CRIME IN INTERSTATE COMMERCE 

ing and abetting men in a lower strata of business flooding these dry 
States with liquor which emanates from them originally, and get 
from them a pledge before a public hearing that they would see to it 
and set up the rules and regulations and make it absolutely impossible 
for anybody buying liquor from them — they must give an affidavit 
under penalty and fine, and so forth, pay tribute and be considered a 
fine if they did use this liquor to send it to places where it should not 
be sold. 

Couldn't we get, if they were willing to do it, a response from the 
heads of this thing, the producers of liquor, to go before the Ameri- 
can public and say, "We are clean as a hound's tooth and we are 
going to keep so. We are going to stop all this vermin underneath 
us from breaking down State or county laws." What do you think 
about that, Mr. Avis ? 

Mr. Avis. Senator, this is a very complicated subject and I wish 
that you would hear me on all phases of it before you ask me that 
kind of question. I would just like to deal with it in its entirety. 

Senator Tobey. What do you think, Mr. Chairman? 

The Chairman. Senator Tobey, I think it is a very splendid thing 
you suggest. During your campaign, when you could not be here, 
we did have such a meeting with all the principal distillers. 

Senator Tobey. How did they react? 

Tlie Chairman. Some were indifferent, some apparently wanted to 
do something about it, but it was rather difficult for one to do some- 
thing about it unless they can all act as a unit. 

The also have legal complications about getting in trouble with 
the Sherman Anti-Trust Act, and so forth and so on. The transcript 
of the hearing is here, and then this report that they have made is in 
response to this hearing. It is not satisfactory, and I think we are 
going to have to go back for another session. 

We tried to impress them along the line that you suggested, that a 
big part of the burden was on them to clean their own house. Most 
of them said they agreed. Some of them were rather reluctant to go 
along with the idea. We will get to that with Mr. Avis. 

Mr. Evans. Mr. Chairman, on that same point the next witness is 
Mr. Winston. We had in mind having him testify as to our approach 
to the distillers at the distillers level in order to arrive at a Utopia 
at which we never arrived. I want to interject this comment with 
respect to the report of November 30 which you referred to that this 
committee made up. 

While I was present and did discuss this with them, I would like 
for the record to show, and I want to make it plain, that their report 
is not one in which I concur. I do not know and it is not my under- 
standing either that the ATU concurs in it. It is purely a distillers' 
report, and it was made up, however, in conference with us from time 
to time. Is that your position ? 

Mr. Avis. Yes, it is, Mr. Evans, and I would like the record to show, 
as long as it has been raised, that we discussed our report with you, 
than you did see it in advance and it was more or less a combined 
viewpoint. 

Mr. Evans. Of the distillers. 

Mr. Avis. Yes, that is right. 

Mr. Evans. I want to make it plain I was there, but I did not and 
do not concur in their report. 



ORGAOTZED CRIME IN INTERSTATE COMMERCE 253 

Mr. Avis. We made certain suggestion and you saw the report that 
we rendered, and as I understand you, you did concur in the report 
that we made, the Alcohol Tax Unit, not the distillers. 

The Chairman. Just so we will get it on the record, the distillers' 
report is addressed to Mr. Carroll E. Meaney, Deputy Commissioner, 
November 30. That is the report in which Mr. Evans and Mr. Avis 
did not concur although you were there and the matter was discussed 
with you. 

Mr. Evans. That is correct. 

The Chairman. The connnissioner's report of Mr. Carroll E. 
Meaney is addressed to the chairman of this committee on December 
7, 1950. That is the Alcohol Tax Unit report. 

Mr. Avis. That is right, and we stand on it. 

The Chairman. And you stand on that report. Then the report 
was transmitted to the chairman of this committee by letter of De- 
cember 7, 1950. That will be gone into this afternoon and we will get 
the reports out for public information, but let us get on with our 
witness. 

ISIr. Burling. Mr. Chairman, I do think it should be shown in the 
record that some distillers sold directly to one or the other. 

The Chairman. Mr. Hewitt, is there anything else you have there? 

Mr. Hewitt. Relative to the transportation of liquor across the 
State of Missouri, I want to make it clear that these men in Okla- 
homa do not altogether transport their liquor across the State of 
Missouri. Some of them go across Missouri and some of them go 
across Arkansas and then go up as far as Iowa, I am informed, and 
come down that way, and they go up the Mississippi River as far as 
Hannibal, which is 300 miles north of Cairo, to get down into Okla- 
homa. 

In other words, they go 600 miles out of their way to get across 
the State of Missouri or the State of Iowa. 

Mr. Burling. One last thing. Were you present at this conference 
in Atlanta where Mr. Conerty made a remark about IVIr. Wenger? 

Mr. Hewitt. Yes, I was there. I was invited there by these South- 
eastern State men. 

Mr. Burling. Wliat is your recollection ? 

Mr. Hewitt. Well, we were drafting a resolution and Mr. Conerty 
was there from the Alcohol Tax Unit in Chicago, and we had been 
discussing our problems and Mr. Conerty, as well as I can remember — 
we were jumping on Mr. Rubin, Hyman Rubin, and Jake Rubin, and 
Mr. Wenger pretty hot and heavy. All of us had the same problems, 
and Mr. Conerty got up and said that, "I think you gentlemen have 
the wrong ideas about Mr. Wenger." 

He led us to believe that he was a very high-type citizen and in a 
lawful and good business in Cairo. As to what his particular words 
were, I cannot remember, but he conveyed the idea to us that he was 
a good, law-abiding citizen of Cairo, 111., of course, when we all knew, 
we thought we knew quite the contrary. 

Senator Tobey. With any of this liquor that is transported from 
Cairo into the dry counties of the various Southern States, do they 
use planes to do it? 

Mr. Hewitf. Well, no, I do not know out of Cairo. I heard of that 
out of Louisiana at one time, but I have no evidence of that. It goes 
in big trucks, trucks that have no insignia on them, a lot of them. 



254 ORGANIZED CRIME EST INTERSTATE COMMERCE 

Now I have seized two or three big truck loads; $17,000 worth of 
whisky hurts a fellow pretty bad. 

Senator Tobey. Do you confiscate the truck also ? 

Mr. Hewitt. Yes, I did, but they get that away from us sometimes 
because it is always financed b}' some innocent person. They go into 
court and get the trucks away, but they have not been successful in 
getting any whisky away. 

Senator Tobey. That could always be cared for by the law being 
changed so that contraband liquor being seized, any agency who 
transported it was seized if guilty. 

Mr. Hewitt. It could be. There is a lot of ways in which the situ- 
ation could be helped. But now they are hauling it, they put over- 
load springs on passenger cars. A Mercury car is a car that is used 
a great deal. They put what they call overload springs on it and 
they can haul $3,000 worth of whisky in an ordinary passenger car. 
They lug this whisk^'. It does not go in cases. 

It is wrapped up in what they call lugs for distribution to the boot- 
leg trade, it is tied up in brown wrapping paper in the Cairo place 
of business and put in these cars so they can get lots of whislry in 
there. It is not in the cases. It is in lugs. That demonstrates to any 
sensible person that it is going into the bootleg trade. 

Senator Tobey. And it is in the back seat in the rear compartment? 

Mr. Hewitt. They just fill it up, the trunk of the car they fill it in 
so it will not rattle, and then they build it up in the back seat. 

Senator Tobey. Of course there is no back-seat driving with that 
kind of a passenger, is there ? 

Mr. Hewitt. No ; that it correct. Now that is the way they haul it 
now. A man just driving along, why, an agent can't tell whether 
he is a bootlegger or not. He has nothing to arouse his suspicion. 

They use fake licenses. They have the wrong license on every car. 
They have a fake license. I have been running down licenses until I 
am black in the face down there trying to find out. Well, this fellow 
says he lost his license or it was a stolen license and all that. They 
never have the right license. 

The Chairman. All right, anything else, Mr. Hewitt? 

Mr. Hewitt, while you are on the stand, may I ask this : When we 
were in Kansas City we found that you had some wholesalers out 
there, Joe Di Giovanni, and also his brother. What is his first name? 
Vincent Di Giovanni, was it not ? 

Mr. Hewitt. I can't remember. That was a partnership and I 
revoked their licenses. 

The Chairman. Have they been revoked ? 

Mr. Hewitt. Yes. 

The Chairman. How does the matter stand now ? 

Mr. Hewitt. There has been a license issued to the two sons of the Di 
Giovannis, which is a corporation. There is a city license been issued 
and a State license been issued to the sons of the corporation. 

The Chairman. You mean we just got the gi'own-ups out and sons 
took over ? 

Mr. Hewitt. They are much better types of citizens, in my esti- 
mation. 

The Chairman. This Joe Di Giovanni first denied he had ever 
been arrested or convicted, and we found he had quite a criminal rec- 
ord, if you remember. 



ORGA]SnZED CRIME IN INTERSTATE COMMERCE. 255 

Mr. Hewitt. Yes. I filed, after your committee up there, Senator, 
a revocation order against this Midwest Distributors, Inc., and re- 
voked their license and they took it to the circuit court of Jackson 
County, and my decision was affirmed. 

The Chairman. Don't you think they are just operating to do a 
blind? 

Mr. Hewitt\ I do not, no. Under the law of Missouri I felt that 
I had to issue these licenses, the license to the new corporation. 

The Chairman. Did they take over the same line? 

Mr. Hewitt. I do not know anything about that. 

The Chairman. I believe they had the exclusive agency for 
Seagrams. 

Mr. Hewitt. I do not know about whether they had it exclusively. 
They did have the Seagram line. 

The Chairman. Did you find out whether the fathers are putting 
up the money for their sons to operate ? 

Mr. Hewitt. They have executed notes to the fathers. The fathers 
are going to be entirely out of the business. I have the statement of 
the attorneys who represented them. That is a very reputable firm 
in Kansas City, that the fathers be clear out of the business entirely, 
will not even go to the place, will not have anything to do with it. 

Now the city issued a license to them about 3 weeks before I issued 
a license to them — about 3 weeks before I issued a license. 

The Chairman. Has a Federal license been issued, too ? 

Mr. Hewitt. No, it has not. As I understand it, a basic permit — 
I was informed by the Alcohol Tax Unit that the sons could operate 
under the old basic permit when they got their State and city license, 
they could operate under the basic permit that had been issued to the 
fathers. 

The Chairman. Let me say, Mr. Hewitt, it looks like we are going 
to have a hard time getting the criminals out of this business if 
when we apprehend a fellow engaged in blackhand activities, a pair 
of the worst criminals we have had before this conunittee, if they 
simply turn their business over to their sons and continue on. 

Mr. Avis. I do not like to interrupt, Senator, but as long as the Fed- 
eral permit has been brought into this thing, I would like the record 
to show that we have investigated the new application and contem- 
plated denial. They asked for a hearing under the merits and it 
will go on before a hearing examiner on March 20. 

The Chairman. Well, good for you. All right, that is all, Mr. 
Hewitt. 

Now we are going to have Mr. "Winston and then we will recess for. 
lunch. Mr. Winston, do you solemnly swear the testimony you give 
the committee will be the whole truth, and nothing but the truth, so 
help you God ? 

Mr. Winston. I do. 

Mr. Burling. Mr. Winston, will you state your title, please ? 

TESTIMONY OF R. W. WINSTON, CHAIRMAN, NORTH CAROLINA 
ALCOHOLIC BEVERAGE CONTROL BOARD 

Mr. Winston. Chairman of the North Carolina Alcoholic Beverage 
Control Board. 

Mr. Burling. And is North Carolina a local-option State? 
Mr. Winston. Yes, sir. 



256 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Burling. How many counties are wet and how many are dry ? 

Mr. Winston. Twenty-nine counties wet and seventy-one dry, but 
may I say that we have some municipalities also wet. There are four 
of those. 

Mr. Burling. You have been here this morning throughout the 
hearing and heard the other commissioners testify. 

Mr. Winston. Yes, sir. 

Mr. Burling. Do you have a similar problem in North Carolina ? 

Mr. Winston. Yes, sir. 

Mr. Burling. That is, liquor which is federally tax paid floods into 
,your State, into the dry counties? 

Mr. Winston. Yes, sir. 

Mr. Burling. Do you have knowledge as to where an important 
part of that liquor comes from ? 

Mr. Winston. Yes, sir. 

Mr. Burling. Will you tell us what that is ? 

Mr. Winston. Cairo, 111. 

Mr. Burling. These same export houses ? 

Mr. Winston. M. & B. Wholesalers. 

Mr. Burling. M. & B. ? 

Mr. Winston. Yes, sir. 

Mr. Burling. In general, your experience would be parallel to the 
men who have already testified ? 

Mr. Winston. Yes, sir. 

Mr. Burling. Was there a meeting with representatives of the 
major distillers which was held in your State? 

Mr. Winston. Yes, sir. If the committee would permit me to, I 
could very briefly outline the steps that have been taken. 

The Chairman. Yes, sir; you go on. 

Mr. Winston. I do not want to take too much credit for it, but I 
believe I was sort of a pioneer in this thing, and I have been through 
the whole thing and I think I could acquaint the committee with var- 
ious steps that have been taken, probably going a little bit further 
back than the gentlemen who have preceded me. 

The Chairman. All right, sir. 

Mr. Winston. I have written most of it out so that I could get it in 
proper shape. I think. Senator, I wrote you a letter outlining rather 
fully what had been done by me, but I will briefly review it here. 

The Chairman. Yes, sir ; we have your letter. 

Mr. Winston. Upon taking office as chairman of the North Carolina 
ABC Board, news items featuring the enormous flow of illegal liquor 
into North Carolina appeared in the Nortli Carolina press. I then 
and there announced my policy of doing all within my power to put a 
stop to this illegal practice. Most of the liquor was coming from the 
State of Maryland, the District of Columbia, and the State of Illinois. 
It occurred to me that to get at the jiroblem from its source would be 
the best means of attack. I conferred with the American distillers 

The Chairman. Tell us wdien you took office, Mr. Winston. 

Mr. Winston. June 1044. 

The Chairman. All right, go ahead. Excuse me. 

Mr. Winston. I conferred with the American distillers in their own 
offices soliciting their voluntary aid. Right here I might say. Senator 
Tobey, that I approached them along the same line that you suggested 
a few minutes ago, that a large part of the people of our State thought 



ORGAXIZED CRIME IN INTERSTATE COMMERCE 257 

that this whisky coining into the State illegally came directly from 
the distillers, and if they would cooperate with me and put an end 
to this, we would not only put them in better light in the State, but 
that they would lose no revenue because the people who had been 
buying from the bootleggers would go to our legal stores and buy. 

Senator Tobet. What is the sequel to that ? 

Mr. Winston. I am coming to that in a minute. 

Senator Tobey. I beg your pardon. Excuse me. 

]Mr. Winston. I was very much encouraged to find from what they 
said that they wished to help me. Conditions after these conferences 
did not improve, whereupon I wrote a letter to all American distillers 
requesting that they write their distributors that if they, the distrib- 
utors, continued to furnish wholesalers and/or exporters with liquor, 
which in turn was knowingly sold to North Carolina bootleggers, 
drastic stei:)S against such distributor would be taken to put a stop to 
such practice. After some difficulty with two or three of the large 
distillers, they wrote this letter. I might say that one excuse they 
gave was that it would be in violation of the Sherman antitrust law. 
Well, that sounded very silly to me and I conferred with my Attorney 
General and also some of the leaders of our bar and they did not see 
any merit in that at all. 

In fact, one of the distilling companies sent their lawyer down to 
see me and argue the point and stayed all morning and finally I got 
a little bit tired and told him I did not want to hear any more about 
that, that I had been just as kind and generous as I knew how to be, 
and if he did not write the letter, I was sorry, but I would have to 
delist with his products. 

He said, "Give me a little more time." I said, "How much more 
time do you want?" He said, "Two hours," and he brought the 
letter in. 

Despite such letters the bootlegging situation in my State got no 
better, whereupon I wrote a letter to the southern and southeastern 
commissioners suggesting that we meet in Atlanta on March 29, 1950, 
for a conference to see what we could do about the problem. The 
result of this meeting was the passage of resolutions to the effect 
that if in the future any appreciable amount of distillers' brand of 
whisky was found coming in illegally into the several Southern 
States, drastic action would be taken by the commissioners to stop 
such practice, resorting, if necessary, to the delisting or canceling 
the licenses of the companies handling such brands. 

As this issue was being pressed, a request came to the commis- 
sioners of the Southern States from the distillers for a conference. 
We met in Asheville. The sum total of the Asheville conference 
was that definite commitments were made by the distillers to the 
Southern States that if the States would furnish the distillers with 
the names of the offenders and the sore spots, that they, the distillers, 
on their own initiative would take such steps as were necessary to 
end the illegal practice. 

The Chairman. Wliat is the date of the Asheville meeting? 

Mr. Winston. That was in June 1950. 

Since this meeting I have been sorely disappointed to find that con- 
ditions have not improved. 

The Chairman. Give us the names of the distillers represented at 
the Asheville meeting. 



258 ORGANIZED CRIME EST INTERSTATE COMMERCE 

Mr. Winston. Senator, I haven't got them, but there was the presi- 
dent of the five leading distilling companies in the United States. 
They did not send the scrub team down there. They had the varsity. 

The Chairman. They had the presidents ? 

Mr, Winston. They had the presidents of the five leading distilling 
companies. I think I can find that in a minute. Here it is, sir, right 
here. 

The Chairman. All right, read it out. 

Mr. Winston. E. E. Joyce, National Distillers; Warren Oakes, 
Fleischman's Distilling Corp.; Frank R, Schwengel, Joseph E. Sea- 
gram & Sons; Carlton Healy, Hiram Walker & Sons; Frank B. 
Thompson, Glenmore Distilling Co. 

The Chairman. Do you have Schenley on there? 

Mr. Winston. This meeting was called by the Distilled Spirits 
Institute. At that time Schenley was not a member of the institute. 
However, since then they have joined, and in order to get Schenley 
and one other big company, which I do not remember, on record as 
approving what was done in Asheville, I wrote them a letter and 
told them what we had decided on and they wrote back and said that 
they would be glad to cooperate. 

The Chairman. Now the Distilled Spirits Institute is here in 
Washington, has its headquarters here, and Howard T. Jones is the 
chairman, is that correct? 

Mr. Winston. That is correct. It is a highly significant develop- 
ment at this point to observe from reports which came to me from 
enforcement officials, it came to light that during the period in which 
the distillers were threatened with cancellation or being delisted, boot- 
legging conditions improved in North Carolina. 

The Chairman. What is that now ; conditions improved ? 

Mr. Winston. During the period in which we were threatening 
them with being delisted things got better. 

Senator Tobey. For the bootleggers or the public? 

Mr. Winston. For me and the ABC board, the public, so to speak, 
sir, but after the Asheville conference it got worse again. 

A report from the Department of Revenue of the State of Illinois 
dated January 24, 1951, shows that during the month of November 
and December 1950 over 30,000 gallons of bootleg liquor were sold and 
consigned to individuals giving North Carolina as their address. 

The Chairman. That was the very month we had our meeting here 
with the distilleries. 

Mr. Winston. Yes ; I believe it was. 

.Senator Tobey. Strange interlude ; is it not ? 

Mr. Winston. AVithin the last week a 500-case truck was caught in 
Davie, one of our dry counties. This liquor also came from M. & B. 
Wholesale Liquor Co., Cairo, 111. The distillers have been advised of 
the activities of this company, yet apparently nothing has been done 
on their part to put an end to this illegal traffic. 

Senator Tobey. Who was that liquor consigned to ? 

Mr. Winston. I do not have the name of the man, some fictitious 
fellow that nobody ever heard of before ; wasn't the real man behind 
the guns at all. Some fictitious persons. Senator. 

Senator Tobey. Who was he going to deliver it to? 

Mr. Winston. He would not tell us. He has not been tried yet. 
We just got it. He refused to tell us where he got it from and who he 
was taking it to. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 259 

Again, I give as my opinion, based on statements made to me by the 
high officials of the distilling industry, also based on a clearer insight 
which I have gotten during my 2 years, almost 2 years, of dealing with 
this problem, that if the distillers really wanted this illegal practice 
stopped, they could stop it without any difficulty. 

Senator Tobey. Well, of course, they could. 

Mr. Winston. That is my opinion, sir. 

The Chairman. What would they do now if they were going to 
stop it; will you tell us? 

Mr. Winston. They would tell the distributor who is the man who 
sells to the wholesaler or exporter, "Now, you sell any more of my 
goods to this wholesaler or exporter, and I am going to fire you." 

The Chairman. "And if you keep on violating the law, we will 
revoke your license" ; is that it ? 

Mr. Winston. Yes, sir. 

The Chairman. That seems simple enough. 

Mr. Winston. Very simple. It got noised around somewhat that 
in my drive I was putting the distillers in bad light in North Carolina, 
and that was one reason for the conference in Asheville in which Mr. 
Redwine, Mr. Evans and myself sat with them, and after days of 
discussion we agreed to let them see what they could do on a volun- 
tary basis and they led us to believe that if we would furnish them 
the name 

Senator Tobey. Who were you appointed by, the Governor? 

Mr. Winston. Yes, sir. 

Senator Tobey. And you are responsible only to him ? 

Mr. Winston. Yes, sir. 

Senator Tobey. He is backing you 100 percent? 

Mr. Winston. Yes, sir. 

Senator Tobey. Good ! What is his name ? 

Mr. Winston. Scott. 

Senator Tobey. Is he a Democrat or a Republican ? 

Mr. Winston. He is a Democrat. 

I address myself now to the cooperation which I received from the 
commissioners of the several States who were furnishing North 
Carolina bootleggers with liquor. Maryland passed a regulation to 
the effect that sales by their wholesalers and/or distributors for con- 
signment to States in which the sale of liquor was illegal would 
subject the licensee to a forfeiture of their license. The District of 
Columbia has given me full effective cooperation. 

Senator Tobey. Were any Maryland fellows canceled, their licenses ? 

Mr. Winston. Yes, they were. There was a fellow named Winner 
up there who was the first fellow we had to deal with. 

Senator Tobey. So in this case the action of Maryland did put a 
stop to something, is that right ? 

Mr. Winston. Yes, sir; and these fellows moved on out, Senator, 
to Illinois. 

Senator Tobey. Go thou and do likewise. Let us send that to each 
one of these governors. 

The Chairman. Now give us the time when Maryland passed this. 

Mr. Winston. July 194:4, 1 month after I went into office. 

The Chairman. And Winner was operating in Maryland then? 

Mr. Winston. Yes, sir. Winner was. 

The Chairman. What is his company ? 



260 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Winston. Senator, this is more or less hearsay, but I get it from 
very reliable sources it is the same old crowd out there, M. & B., 
Winner, Wenger, and the whole bunch. 

The Chairman. Moved out to Cairo ? 

Mr. Winston. Yes. 

The Chairman. Now, how about the District of Columbia. Did 
they cooperate with you ? 

Mr. Winston. Very fully ; yes, sir. Of course, there has been some 
whisky brought into North Carolina from some retailers up here. 

The Chairman. As far as the wholesalers are concerned 

Mr. Winston. They have cooperated very well. 

The Chairman. Is that through the District of Columbia Com- 
missioners, ABC Board here ? 

Mr. Winston. Yes, sir. 

The Chairman. Did they threaten revocation if they shipped it? 

Mr- Winston. I understand they do ; yes sir- I understand that is 
one of their regulations. 

The Chairman. So you do not have a problem with Maryland and 
the District of ColumJbia. 

Mr, Winston. Not at the moment. It is Cairo, 111., and M and B 
with me. By the way, I have the Illinois report here showing 30,000 
gallons for November and December. 

The Chairman. Does it have names in there ? 

Mr. Winston. Yes, sir. 

The Chairman. We will make that a part of the record, an exhibit 
with your testimony. We will return the original. Most of them 
are fictitious names? 

(Exhibit No. 23 returned to witness.) 

Mr. Winston. All of them so far as we know. We never have 
been able to find any of these fellows that we get names for. 

Senator Tobey. That could all be taken care of by a prohibition in 
the rules that anybody using fictitious names shall have their license 
canceled and be guilty of a misdemeanor or a crime, w^oulcl it not? 

Mr. Winston. Senator, I am coming to that in one minute- I will 
show you what we are going to do in North Carolina if my legislature 
will go along with me, and I believe they will. 

However, I have not been so successful in the State of Illinois- 
With due respect to this State and the laws and regulations of the 
liquor board, I must say that this State has been our greatest offender. 

It seems that when Maryland and the District saw fit to pass drastic 
regulations on illegal and interstate shipment of liquor, the base of 
operation was moved to Illinois. After lengthy correspondence with 
the Illinois commissioner, I met with his board in Chicago the latter 
part of 1949. He invited me to come out there to discuss the whole 
thing. 

I Avas led to believe that Illinois would pass the same regulation as 
Maryland had passed. However, this was not the case due to causes 
unknown to me. 

The Chairman. Whom did you talk with out there ? 

Mr. Winston- At that time they had a chairman whose name I do 
not remember right now, but somebody else had just been appointed. 
He was I believe a Eepublican chairman and the fellow that took his 
place, named Taylor, was a Democrat under the new administration, 
and I went to Taylor after the meeting was over and told him that 



ORGANIZED CRIME IN INTERSTATE COMMERCE 261 

I was a Democrat and him being from a Democratic State he indi- 
cated he was going to help me. 

The Chairman. That is a good reason all right- 
Mr. Winston. I agree with you, Senator. The Illinois commis- 
sioner met with the southern group in Athinta where he heard the 
commissioners of practically every Southern state say that nearly all 
the bootlegging liquor coming into their State was coming from 
Cairo, 111. 

Senator Tobey. M. & B. ? 
Mr- Winston. M. & B., yes, sir- 
Senator ToBEY. What does M. & B. stand for? 

Mr. Winston. At this time it was this fellow Wenger you heard 
so much about. This is before M. & B. went into existence. 
Senator Tobey. Wliat does M. & B. stand for? 

Mr- Winston. I do not know. I do not think anybody knows. 
Jus»; a couple of initials. 

They stated the experiences of their law enforcement officers who 
went to Cairo in an eti'ort to spot the trucks being loaded with liquor by 
Cairo wholesalers signed to the Southern States. 

The reception, according to these law-enforcement officers, in Cairo 
as related by these enforcement officers, revealed that they were prac- 
tically ushered out of town either by the town officials or the guards 
of the exporting companies. I quote from the minutes of this confer- 
ence the remarks of one of the southern law-enforcement officials. 
I believe, by the way, he is here. [Reading :] 

I went to Illinois and watched Wenger in operation. He knew we were watch- 
ing him so he took his trucks marked "produce" or "lumber," and would take 
whisky out of warehouses and stash it in barns and would then distribute it with 
feeder busses. He would send cars out to block roads so that our cars could not 
see where his trucks went. We were stopped by State officials and State patrol 
and the State ordered arrest of us for carrying arms. We would identify our- 
selves, but nevertheless Illinois officials would search us. 

I give as my opinion before anything can be accomplished to stop 
conditions as they now exist in Illinois, some Federal legislation will 
have to be passed. 

The most surprising thing that I have ever run across is one of these 
Federal regulations which has been the subject of discussion here this 
morning, and when I found it I was never more astounded in my life, 
and I will read this regulation. This is in regard to issuing RLD 
stamps. It is one of their regulations. [Reading :] 

Collectors are without authority to refuse to issue a special tax stamp to a 
liquor dealer engaged in business in violation of State law. The stamp is not 
a Federal permit or license, but merely a receipt for the tax. The stamp affords 
the holder no protection against prosecution for violation of State law. 

I venture to say that very few of the Members of Congress of the 
United States know that such a law or regulation exists. I know that 
the Congressmen in my State do not know anything about it. 

Although there are no permittees or licensees to sell liquor in North 
Carolina, the Federal Givernment issues these stamps to North Caro- 
lina citizens which gives them immunity from arrest by Federal 
authorities, although in plying their trade they are violating our 
State law. It would seem to me that the Federal Government would 
not desire to pass any law or regulation whereby the Federal Govern- 
ment made it possible for a citizen of the State to conduct a business in 
violation of State laws. 



262 ORGANIZED CRIME IN INTERSTATE COMMERCE 

For my part I would like to see the Congress pass a law or regula- 
tion forbidding the issuance of a retail liquor dealer's stamp in States 
that are dry or in States that are partially dry. 

However, if this cannot be done, I earnestly recommend that Con- 
gress amend the Federal liquor regulations to the extent that anyone 
applying for a retail liquor dealer's stamp shall make his identity 
wholly known, first by a photograph attached to the application and 
by a certificate of some State probate official to the effect that the 
applicant is known to such official and that the name of such appli- 
cant is his true name. 

Senator Tobey has gone out. I am getting to the part he suggested 
a minute ago. I will get it in the record. 

As this matter now stands, none of the boys in the big money have 
RLD stamps. These stamps are held by their stooges. In nearly 
every instance some wholly inconspicuous insolvent unknown person- 
ality whom you find residing in the backwoods has the stamp. This 
was forcibly demonstrated in the case of State v. A,. L. Graham:,, 
Cumberland County, N. C. Graham did not have an RLD stamp, 
but Jones, his stooge did. Graliam was caught with the goods on 
him, fined $35,000 and given a o-year sentence. 

We found on his person checks made payable to Wenger. One of 
them was for $18,000. I have a photostatic copy of that. 

The Chairman. Yes; let us make it a part of the record. 

(Check was marked "Exhibit No. 24," and is on file with the com- 
mittee.) 

Mr. Winston. It is my opinion that if the law or regulation can be 
amended as suggested, it would do more to stop bootlegging in the 
South than any one law now on the statute books. 

There has been a bill prepared to be introduced in the Legislature of 
North Carolina, making it a felony for anyone to procure, obtain, 
possess, purchase, permit to be issued, or to have issued to any person 
a license permit, stamp, or other autliority from the Government of 
the United States to manufacture, sell, transport, handle, or purchase 
intoxicating liquor in the State of North Carolina. 

Mr. Burling. Before you leave the Graliam case, was any Federal 
action taken with respect to that ? You said he did not have a Federal 
tax certificate himself. 

Mr. Winston. I do not know whether the Federal Government 
has indicted him or not. Graham was indicted by Federal authorities 
for narcotics and marijuana, a typical gangster. This was in our 
superior court where he was fined $35,000 and given a 3-year sentence. 
I have here photostatic copies of the important part. 

The Chairman. Let that be made part of the record. (Exhibit No. 
25, on file with committee.) You mean, sir, that people dealing in 
narcotics have also gotten into the liquor business? 

Mr. Winston. That is our information; yes. Here is the check 
for $18,000 made payable to J. Wenger, a cashier's check. 

The Chairman. It will be made a part of the record. (See exhibit 
No. 24. ) That is dated September 23, 1949. 

Mr. Winston. Well, sir, that is about all I know about it. I have 
had a great deal of correspondence with these people. 

The Chairman. It is your opinion now that the distillers are doing 
anything toward helping you witli your problem ? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 263 

Mr. Winston. I regret very much to say that I do not think they 
are. 

The Chairman. So tliat the Asheville meeting of June 1950 did not 
amount to anything? 

Mr. Winston. It amounted to nothing so far as I think we accom- 
plished any good. 

The Chairman. Have you delisted any of their brands ? 

Mr. Winston. No, sir. We are now pursuing the attitude that we 
had in Asheville up until this moment. I do not know what we are 
going to do from now on. These large shipments have just come to 
light. These reports come out sometimes 2 or 3 months after the 
shipments are made. 

These things liaA'e just come to my office here recently that I have 
been referring to and I am very much surprised, and I have written all 
the distillers despite what they said in Asheville, whisky continued 
to come in, and I did not understand it. 

The Chairman. This gentleman back here, he is with you ? 

Mr. Winston. Yes, sir ; he is my chief enforcement officer. 

The Chairman. What is his name? 

Mv. Winston. George H. Andrews. 

The Chairman. Mr. Andrews, will you come around and sit with 
the commissioner a minute. Do you solemnly swear the testimony 
you give the committee will be the whole truth, and nothing but the 
truth, so help you God. 

JNIr. Andrews. I do. 

The Chairman. Sir, we have been reading in the papers and we 
have some information relative to quite a substantial narcotics ring 
down in North Carolina. Are you familiar with that problem? 

TESTIMONY OF GEORGE H. ANDREWS, CHIEF ENFORCEMENT 
OFFICER, NORTH CAROLINA ALCOHOLIC BEVERAGE CONTROL 
BOARD 

Mr. Andrew^s. I am not familiar with it. The FBI in our State 
is part of the State agency in North Carolina that is handling that 
investigation, so the information that they had I just know a little 
of it, what is turned over to the Federal authorities, and in the Graham 
case there is a detainer filed for Graham at the completion of his 
present sentence that he is serving now with the State. There is a 
Federal detainer that is filed. 

The Chairman. What is he serving time for with the State now? 

Mr. Andrews. He is serving for violation of the State prohibition 
laws. He was a principal offender in Cumberland County. He with 
Wenger and Pearson were importing liquor for resale in dry counties 
of North Carolina. 

The Chairman. And there is a Federal indictment for violation of 
the Harrison Narcotics Act awaiting him when he is released? 

Mr. Andrews. Yes ; that is pending in Federal court. 

The Chairman. Is he one of the chief liquor offenders that you 
have ? 

Mr. Winston. He was one of the chief ones that had come to 
Cumberland. There is quite a few in North Carolina that have moved 
to Florida and to other States. The pressure was brought on and 



264 ORGANIZED CRIME IN INTERSTATE COMMERCE^ 

through these reports that we get in North Carolina, eventually they 
moved into other States where they bought their KLD stamps, and 
in that way North Carolina was not advised by the State of Illinois 
of shipments that were coming out of there. 

For instance, a part of it goes from North Carolina to Cairo, 111., 
and purchase a truckload of whisky and it would have a South 
Carolina RLD stamp. South Carolina would get the information of 
that shipment and North Carolina would have no knowledge of it. 

We are not getting the information that we at one time got, due to 
the fact we think because we are beginning to bring so much pressure 
on them. 

The Chairman. Is it your information that part of the same ring 
that was involved in the narcotics difficulty in North Carolina recently 
is also in this business of illegally bringing whisky into the State ? 

Mr. Andrew^s. Definitely so. The Graham ring of Cumberland 
County, the one to which I just referred, he was arrested in a hotel 
with this $18,000 check. For over a period of approximately 3 months 
it showed that he had imported or bought from Wenger through 
cashier's checks purchased at banks and payable in excess of $100. 
That w^as just at one time. His activities were tied in from Florida to 
New York with the narcotics ring. 

The Chair::man. That was a pretty big narcotics ring, was it not? 

Mr. Andrews. It definitely was ; yes, sir. 

The Chairman. Wliere did he come from ? 

Mr. Andrews. He is a native of Cumberland County, N. C. 

The Chairman. How many people were arrested with him or 
indicted with him of this narcotics ring ? 

Mr. Andrews. I am not able to give you that information, but I 
have information that it leads from Miami into New York. 

One of our men that was endeavoring to contact authorities in 
New York by telephone to arrange for sale or purchase of narcotics, 
they advised our authorities that it would be necessary to contact 
Dan Graham before anything could be cleared. 

The Chairman. Graham had a substantial criminal record? 

Mr. Andrews. He did, right along. 

The Chairman. Is he the man that you found the $18,000 check on? 

Mr. Andrew^s. Yes. 

The Chairman. So M. & B. was dealing with him ? 

Mr. Andrews. Yes, sir. He had a man by the name of Jones who 
was a TB victim that was not solvent. In other words, he was prac- 
tically on charity. 

Jones bought the RLD stamp and all of the invoices and transac- 
tions from Cairo to North Carolina were shoAvn in the name of Jones, 
but until we apprehended the $18,000 check and Graham, why we were 
never able to bring Graham into the picture. 

The Chairman. So it is your opinion that people in this liquor 
business are also in narcotics and any other kind of criminality where 
they can make an easy dollar? 

Mr. Andrews. I beg your pardon, I did not hear your question. 

The Chairman. I say, it is your opinion as the chief enforcement 
officer of ABC Board of North Carolina that some people who are in 
this whisky-running business are also in narcotics or any other kind 
of criminality where they can make an easy dollar? 

Mr. Andrews. That is my opinion. Senator. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 265 

The Chairman. That they all run along together? 

Mr. Andrews. They all I'un along together. Some of them are 
men of power with a lot of money and influence, and their stooges 
and help are more or less underworld people that would resort to 
violence of practically any nature if it became necessary. 

The Chairman. Do you find that they carry arms and sawed-off 
shotgims ? 

Mr. Winston. They do in many instances. It is associated with 
small bandit rings and holdup people. All of it is closely associated 
and tied together. 

The Chairman. Is there anything else j^ou want to say about it? 

Mr. Andrews. I believe that is all. 

The Chairman. Mr. Burling had a question. 

Mr. Burling. Mr. Winston, I believe you were present at the 
Atlanta conference. 

Mr. Winston. Yes, sir. 

Mr. Burling. "Wliat is your recollection of what was said about 
jSIr. Wenger? 

Mr. Winston. I beg your pardon, sir? 

Mr. Burling. What is your recollection of what Mr. Conerty said 
about Mr. Wenger? 

Mr. AViNSTON. He got up, and my recollection is he said he was a 
good citizen, and left the impression on me that there was nothing on 
earth wrong with him. He talked along that line quite at length. 
When he sat down Mr. Evans got up and made the statement that he 
resented very much an official of the United States Government saying 
that a man with the notorious reputation of Wenger was a good 
citizen. 

The Chairman. Did you say Wenger operated over in Maryland ? 

Mr. Winston. No, sir. That fellow's name was Winner, 
W-i-n-n-e-r. Winner closed up, and the next thing we heard it was 
Wenger. I do not know whether he changed his name or what it was. 

The Chairman. Does j'our enforcement man know anything about 
Mr. Wenger? 

Mr. Winston. He was at Atlanta with us, Mr. Andrews. 

The Chairman. Was that your recollection of what was said? 

Mr. Andrews. My recollection was practically as related by the 
gentleman who preceded me. To the best I recall, it was something to 
this effect: That Mr. Wenger was a man of good character and he 
regarded him as a gentleman. 

The Chairman. We are very grateful to you, Mr. Winston, and to 
you, sir, for coming up and giving us the benefit of this testimony. 
We will stand in recess until 2 : 45, and then we will finish up with all 
these witnesses. 

(AVliereupon, at 1 : -io o'clock p. m., the committee recessed, to recon- 
A'ene at 2 : 45 o'clock p. m., this same day.) 

afternoon session 

The Chairman. Mr. Clyde W. Saunders, Jr., director of the Vir- 
ginia Alcoholic Board of Control, Richmond, Va. 

Do you solemnly swear the testimony you will give this committee 
Avill be the whole truth, and nothing but the truth, so help you God? 

Mr. Saunders. I do. 

68958— 51— pt. 12 18 



266 ORGANIZED CRIME IN INTERSTATE COMMERCE^ 

TESTIMONY OF CLYDE W. SAUNDERS, DIRECTOR, VIRGINIA 
ALCOHOLIC BOARD OF CONTROL, RICHMOND, VA. 

Mr. Burling. Mr. Saunders, were you liere this morning? Were 
you present here this morning ? 

Mr. Saunders. I was. 

Mr. Burling. Did you hear the testimony given by the commis- 
sioners of various Southern States ? 

Mr. Saunders. Yes. 

Mr. Burling. The commissioners of various Southern States for 
alcohol ? 

Mr. Saunders. Yes. 

Mr. Burling. Does Virginia have a parallel problem? 

Mr. Saunders. Yes ; we do. 

Mr. Burling. Do you care to make a statement about it? 

Mr. Saunders. Yes. I think that the statement I make stems back 
to 1938 and 1939 when we had a problem similar to this southeastern 
States problem, emanating from Maryland and New Jersey and New 
York. In 1939 we promulgated regulations through our Virginia 
Alcoholic Beverage Control Board, which incidently, is a State- 
operated monopoly system, by which any alcoholfc beverages being 
transported into or through Virginia would be in violation of our 
laws. We made seizures as a result of that legislation. However, 
those seizures went to our supreme court and were nullified. 

In 1940, following the Duckworth case in Arkansas, we resubmitted 
a case to our supreme court and, as a result of those cases the decisions 
were affirmed and subsequently affirmed by the United States Supreme 
Court. 

Since that time our problem on enforcement of the importation or 
import laws of other States have been more or less minor. 

In 1946 or 1947, I began to work with the District of Columbia 
Alcoholic Beverage Control Board and the Maryland Liquor Author- 
ity, requesting them to refuse their licensees, or have their licensees 
refuse shipments to these illegal operators who live both in Virginia 
and use the State of Virginia as a means of reaching North Carolina, 
Georgia, South Carolina, and Tennessee, 

I met with no success whatsoever; however, with the legislation 
we had on our statute books, we did meet with some enforcement 
success. 

In 1949 I returned to Maryland and, following Bob Winston's con- 
ference, we met with unusual success. I would say that in the last 
o years — in 1948 we seized going through Virginia, not stopping in 
Virginia, destined for North Carolina, Georgia, and Tennessee, 116 
trucks which included tractors and trailers. In 1949 we seized 98 of 
those types of vehicles. P^ollowing the agreement with Maryland and 
with New Jersey, we only seized 29 during the calender 3^ear of 1950. 

So far as Illinois is concerned and Cairo, I attended both of the 
Southeastern States conferences in Atlanta to cooperate with our 
sister States. We have seized one shipment in Virginia, far southwest 
Virginia, from Wenger, from Cairo, 111., that being 100 cases, which 
came in through Kentucky and was seized as it entered Wise County, 
Va. 

We had information on another shipment. We do not know the 
amount of the shipment, but we had our road patrol waiting at the 



ORGANIZED CRIME IN INTERSTATE COMMERCE 267 

borders of Virginia and Nortl), Carolina, when we were advised that 
the Tennessee patrol and investigators had made the seiznre in Ten- 
nessee, that being a Martinsville bootlegger by the name of Clay Earls. 
I understand hehas since been apprehended and is being prosecuted 
at this time. 

The onl}^ problem that we have, insofar as Maryland and the Dis- 
trict of Columbia is concerned, is where local bootleggers will come 
over into the District or over into Maryland and buy at retail and 
bring it back into Virginia. I think most of the business that was 
previous to 1949 that was going through Virginia is now circumvent- 
ing Virginia and coming in, I understand, through the other States. 

The Chairman. So that the wholesalers in the District of Columbia 
and Maryland, by virtue of the orders or regulations of the control 
boards are cooperating with you? 

Mr. Saunders. One hundred percent. 

The Chairman. Is that correct ? 

Mr. Saunders, Yes. 

The Chairman. Did you attend the Asheville meeting ? 

Mr. Saunders. No ; I did not. 

The Chairjman. Anything else? 

Mr. Burling. You did attend the Atlanta meetings ? 

Mr, Saunders. That is correct. That was in 1950 and in 1949. 

Mr, Burling, Do you have a recollection as to what was said by 
Mr, Conerty about Mr. Wenger ? 

Mr, Saunders, Yes. 

Mr, Burling, What was it ? 

Mr. Saunders. My recollection is substantially the same as that 
testified to this morning. There was an open discussion relative to 
Wenger and his operations in Cairo and right after lunch this Alcohol 
Tax Unit investigator made the statement that he thought we were 
confused about Wenger; however, I did not know Wenger personally. 
He said that he was a good American and a substantial citizen. He 
gave his name, his age, and his weight, and what his condition of 
business was. 

Mr, Burling, Are you familiar with H, R, 1278 ? 

Mr. Saunders, Yes ; I am, 

Mr. Burling, Do you care to make any statement as to your views 
on that ? 

Mr, Saunders. Yes. 

The Chairman. Let's make H, R, 1278, which is a bill introduced 
by Congressman Camp, of Georgia, upon the recommendation of 
Mr, Redwine, the commissioner, and which is a bill now being referred 
to — let's make it a part of the record. 

(The above-described document was marked "Exhibit 26," and ap- 
pears in the appendix on p, 759.) 

Mr, Evans, May I interpose, as to the parentage of that bill, that, 
in order to give credit where credit is due, I think that H. R, 1278 
and the thought it originated, originated with Mr. Avis in the course 
of our discussions of this problem, and we have wholeheartedly taken 
it up? 

The Chairman. That is right. 

I knew Mr. Avis felt kindly toward the idea, I did not know 
whether the bill itself was approved by him or its general principles. 



268 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Evans. The Treasury Department has not taken an official posi- 
tion about it, but the general principle was approved. 

It was thrown out by Mr. Avis to us as a possible solution. 

The Chairman, I think it is also indicated as reported to this com- 
mittee, which report will be released later, that he approves this gen- 
eral idea ; is that correct ? 

Mr. Evans. I haven't seen that report, Senator. 

Mr. Burling. Do you care to express a view on this bill ? 

Mr. Saunders. I am definitely heartily in favor of this bill. This 
bill was discussed in detail at the 1951 Atlanta conference and at 
that time I requested, for the State of Virginia, inasmuch as we had a 
definitely workable system, which seemed to be controlling somewhat 
this importation and transportation of alcoholic beverages through 
Virginia, an amendment to the bill, and I think I am positive that 
that was approved by those present. 

I think that this is certainly a definite need in the enforcement of 
the alcoholic beverages and liquor laws throughout the entire United 
States. 

The Chairman. The bill speaks for itself. Generally, it provides 
that anybody who "shall import, bring, or transport, or attempt so 
to do, or assist in so doing, any intoxicating liquor," containing more 
than 4-percent alcohol by volume, into or through a State where it 
is illegal to do so, shall be guilty of a misdemeanor and fined not more 
than $1,000 or imprisonment not more than 1 year if a permit is not 
secured." 

Is that the purport of it ? 

Mr, Saunders, That is right. 

Mr. Burling. The amendment which the commissioners desire to 
make provides that it be raised to a felony and the fine be raised to 
$5,000? 

Mr. Saunders. There were three phases of the amendment, making 
it a felony and making a maximum fine of $5,000 and also malving it 
a violation when alcohol beverages were transported into, within or 
througli any State in violation of the alcoholic beverage control laws 
or the alcoholic beverage revenue laws of that particular State, 

We felt in Virginia we had a system that was working 100 percent 
with us and we wanted to see that system retained. 

The Chairman. All riglit, Mr. Saunders. Thank you very much 
for coming and for your cooperation with the committee. 

Let's get Mr. Argo and Mr. Lauderdale together. 

Do you solemnly swear the testimony you will give this committee 
will be the whole truth, and nothing but the truth, so help you God ? 

Mr. Argo. I do. 

Mr. Lauderdale, I do. 

TESTIMONY OF WILLIAM AEGO AND HARRY LAUDERDALE, 
INVESTIGATORS, ALCOHOL DIVISION, STATE OF TENNESSEE 

Mr. Goldstein. Mr. Argo, what is your occupation? 

Mr. Argo. I am an investigator for the State of Tennessee, alcohol 
division. 

Mr, Goldstein, And how long have you been an investigator for the 
State of Teimessee alcohol division? 

Mr. Argo. Since May 23, 1949. 



ORGANIZED CRIME IN miERSTATE COMMEKCE 269 

Mr. Goldstein. And yon, Mr. Lauderdale, your occupation, please ? 

Mr. Lauderdale. Investigator for the State of Tennessee, alcohol 
division. 

Mr. Goldstein. And how long have you been an investigator, sir? 

Mr. Lauderdale. May 23, 1949. 

The Chairman. Do you both live in Tennessee ? 

Mr. Argo. Yes, sir. 

Mr. Lauderdale. Yes, sir. 

The Chairman. That is your home ? 

Mr. Argo. Yes; in Chattanooga. 

The Chairman. Where do you live? 

Mr. Lauderdale. Nashville. 

Mr. Goldstein. Mr. Argo, in the course of your official duties, are 
you required to investigate the situation at Cairo, 111., with respect 
to the importation of liquor illegally into the dry areas of Tennessee? 

Mr. Argo. Yes, sir. 

Mr. Goldstein. When did you first go to Cairo, 111., and place cer- 
tain premises under surveillance? 

Mr. Argo. On December 1, 1949. 

Mr. Goldstein. When you first went to Cairo, was the organization 
known as J. B. Wenger operating as J. B. Wenger at that time ? 

Mr. Argo. Yes, sir. 

Mr. Goldstein. And after you completed your first survey in Cairo 
and your first activities toward the summer of 1949, did J. B, Wenger 
change its organization? 

Mr. Argo. Yes, sir; it did. 

Mr. Goldstein. And became what? 

Mr. Argo. M. & B. 

Mr. Goldstein. So M. & B. Wholesalers is the successor to J. B. 
Wenger. 

Mr, Argo. That is correct. 

Mr. Goldstein. And the operating personnel is the same as far 
as you know ? 

Mr. Argo. As far as I know, yes. 

Mr. Goldstein. Among the operating personnel, so we get some 
idea of the people involved, was there a Mr. Charles Smith, the man- 
ager ? 

Mr. Argo. Yes. 

Mr. Goldstein. A Mr. Wishnia? 

Mr. Argo. Yes, sir. 

Mr. Goldstein. Ruby Wishnia? 

Mr. Argo. Yes. 

Mr. Goldstein. Mr. Markoff? 

Mr. Argo. Yes. 

Mr. Goldstein. Do you know his initials or first name ? 
Mr. Argo. I do not know his first name or his initials. 
Mr. Goldstein. Mr. Lauderdale, were you in Cairo with Mr. Argo 
during that same period ? 

Mr. Lauderdale. Yes, sir. I first went there with him in January 
1950. 

ISIr. Goldstein. When you were there, you put under surveillance 
the trucks that were loaded at the J. B. Wenger establishment for 
the purpose of trailing them into Tennessee? 
Mr. Lauderdale. That is correct. 



270 ORGANIZED CRIME IN INTERSTATE COMMERCE. 

Mr. Goldstein. Could you give us, Mr. Argo, a brief description of 
how the feeder truck operates? 

Mr. Argo. Yes, sir. At this particuhir time he had a red Dodge 
feeder truck. 

Mr. Goldstein. That was a truck owned by J. B. Wenger ? 

Mr. Argo. Yes. It had a Georgia license plate and was registered 
to Ed Campbell, of Memphis, Tenn,, to a fictitious address, which we 
found to be false. 

He would take this truck from the warehouse, load it and go out into 
remote sections, such as country roads, oil to the side of the river 
around Cairo, and it would be convoyed with two or three automobiles. 

Mr. Goldstein. The people occupying these automobiles were 
armed ? 

Mr. Argo. There was one f)articular time they were that I came in 
contact with them. I couldn't say the other time. This went on every 
day. They had two entrances. One feeder would come in one end 
and the truck to be loaded would come in the other end. They would 
put two cars, one at each entrance, to see that no suspicious-looking car 
came in there where they were loading. If you tried to get in there in 
any way, they would block you and start following you around. 

Mr. Goldstein. This feeder truck was loaded with whisky that was 
ordered by some person who was intending to carry it down to one of 
the dry areas ? 

Mr. Argo. Yes. 

Mr. Goldstein. The feeder truck would put on the load and transfer 
it at this hidden spot outside or within the limits of Cairo to the truck 
that would eventually carry it down to Tennessee, North Carolina, and 
so forth? 

Mr. Argo. That is right. They would always be camouflaged 
trucks, such as lumber, produce. 

Mr. Goldstein. There was a truck that was camouflaged as a creo- 
sote truck ; wasn't it ? 

Mr. Argo. Yes, sir. 

Mr. Goldstein. Could you tell us a little bit about that ? 

Mr. Argo. We caught a fellow on it named Shapiro from Chicago. 
It was loaded, however, at the warehouse, but there are two entrances 
to the warehouse. There is an old freight line by the side which is 
not an entrance to the Wenger Co., but they load the feeder truck from 
the Wenger truck and back it into the tanker, which is the Southern 
Creosote Co., and load it. It stayed there until after dark and pulled 
out after dark from the warehouse that night. 

We followed it down into Tennessee and the man told us he was 
hauling creosote. He said he had purchased it in Chicago. He went 
around and turned one of the faucets on and creosote ran out. 

Upon further investigation, we found 145 cases. He had a small 
container welded in the top, about a five-gallon container, fixed so that 
the tube would run out the back. 

Mr. Goldstein. I have some pictures here of a creosote truck, which 
is identified on the truck as that of the Southern Creosoting Co. I 
wonder if you can tell me if these are pictures of the same truck you 
apprehended. 
Mr. Argo. That is right. 

Mr. Goldstein. Mr. Chairman, may I have placed in the record 
this clipping containing two i^ictures ? 



ORGANIZED CRIME IN INTERSTATE COMMERCE. 271 

The Chairman. Let that be made an exhibit to Mr. Argo's testi- 
mony. 

(The above-described document was marked "Exhibit 27," and is 
on hie with the committee.) 

Mr. Goldstein. When you apprehended this truck, did you find a 
bill from Mr. Wenger which listed the contents of the truck, the 
alcoholic contents of the truck ? 

Mr. Argo. I did. 

Mr. Goldstein. Does this bill made out to Jack Ajiderson, of 
SjDartanburg, S. C, for 156 cases appear to be the same bill'^ 

Mr. Argo. That is it ; yes, sir. 

Mr. Goldstein. Was Mr. Anderson on the truck? 

Mr. Argo. No, sir. 

Mr. Goldstein. Have you been able to find out if there is such a 
person as Mr. Anderson at that address ? 

Mr. Argo. No, sir. 

Mr. Goldstein. Do you know if Mr. Anderson is, what has been 
referred to before, as a phony name ? 

Mr. Argo. It is a phony name ; yes, sir. 

Mr. Goldstein. Mr. Chairman, may I ask that the bill of lading of 
the creosote truck be a part of the evidence ? 

The Chairman. That will be made exhibit No. 28. 

(The above-mentioned document was marked "Exhibit No. 28," and 
appears in the appendix on p. 760.) 

Mr. Goldstein. During the course of the time you and Mr. Lauder- 
dale put trucks, either feeder trucks or trucks directly loaded at 
Wenger's under surveillance for the purpose of following them into 
Tennessee, were you at any time ever stopped by any person who 
sought to interfere with your activities of following the trucks ? First 
of all, let me ask you whether any of the convoy group ever stopped 
you from following the truck ? 

Mr. Argo. Yes, sir. One night they became suspicious of our car 
and they started following us around. We went over into Kentucky 
and stayed about 40 minutes. That was on March 8, 1950. I would 
say it was about 40 or 50 minutes later wdien we came into Cairo. They 
were waiting at the city limits. They were in a red Cadillac, bearing 
an Ohio 1950 plate, AA-5917. They followed us for about an hour 
and finally they got the State patrol to help them. The State patrol- 
man, whose name I learned was Buwie 

Mr. Goldstein. This is an Illinois State patrolman ? 

Mr. Argo. He came up behind us, stopped us and the Cadillac 
pulled up behind the State patrol. He asked us who we were. We 
told him and showed him our credentials, and everything. He said, 
"Do you know who that is following you ?" 

I said, "No, sir." Then I went on to say, "With your permission, I 
would like to find out." 

He said, "That is a couple of our local bootleggers, here." 

I reached down on the seat and took a sawed-off shotgun and went 
back to the car and told them to get out of the car. 

Mr. Goldstein. That shotgun was furnished you by the State of 
Tennessee for your own protection ? 

Mr. Argo. Yes, sir; it was Tennessee property. This fellow 
wouldn't tell me who he was. I later learned his name was Lou 
Jacobson. 



272 ORGANIZED CRIME IN INTERSTATE COMMERCE. 

Mr. Goldstein. Was Mr. Jacobson or any of the occupants of the 
car armed? 

Mr. Argo. Lou Jacobson had a pistol under his beh. I asked him 
who he was. He never told me. The patrolman asked him his iden- 
tity and he would not tell him that. 

Mr. Goldstein. The patrolman ? 

Mr. Argo. Buwie. 

Mr. Goldstein. Did Buwie require him to give his identity ? 

Mr. Argo. Yes. He asked him for a driver's license or something to 
identify himself by. He said he didn't have it. He then said, "Go 
ahead. I will see you down in the hotel in about an hour." So we 
departed. 

Mr. Burling. Was the gun in plain sight under Mr. Jacobson 's belt ? 

Mr. Argo. Yes. 

Mr. Burling. So Mr. Buwie had an opportunity to see it ? 

Mr. Argo. Yes. 

Mr. Burling. Wliat action did he take with respect to the pistol? 

Mr. Argo. That was all he said. The patrolman told us we better 
not get back into the Cairo city limits that night because they had both 
ends blocked and they would put us in jail. We went back to Metrop- 
olis and spent the night. 

Mr. Burling. The patrolman said the city police in Cairo would 
put you, a law enforcement officer, in jail ? 

Mr. Argo. Yes. 

Mr. Burling. Did he explain why ? 

Mr. Argo. No, sir. 

Mr. Goldstein. During the time from January 1950 until the spring 
of 1950, when you and Mr. Lauderdale followed and reported cargoes 
of liquor going into Tennessee, do you have any idea of the value of 
the cargoes and the equipment which was seized in Tennessee during 
that period? 

Mr. Argo. On December 1, 1949, to March 1, 1950, we seized nine 
trucks valued at about $100,000 to $150,000. 

Mr. Goldstein. During that time did you also cooperate with the 
law enforcement officials of your sister States by reporting trucks in 
transit through or to those States ? 

Mr. Argo. Yes, sir. 

In one instance we saw a truckload from North Carolina and called 
the North Carolina authorities on that. In another instance we saw 
a South Carolina truckload and we called the South Carolina authori- 
ties. The truck was going to North Carolina, so we seized it. 

Mr. Goldstein. Was there a truckload that you reported to the 
State of Georgia that involved some $15,000 worth of liquor? 

Mr. Argo. That was $30,000 worth. It was seized out of Columbus, 
Ga., and it had 600 cases on it. The Georgia authorities. Commis- 
sioner Red wine of Georgia 

Mr. Goldstein. As a result of your activities and Mr. Lauderdale's 
activities up to the period of March 1950, was there any change in the 
activities in Cairo in terms of Mr. Wenger ? Did he change his busi- 
ness at that time? 

Mr. Argo. Yes, sir ; he did. 

Mr. Goldstein. When ISIr. Wenger changed his business what name 
did he start to operate under? 

Mr. Argo. M. & B. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 273 

Mr. Goldstein. He became M. & B. at that time? 

Mr. Argo. Yes, sir. 

Mr. Goldstein. After j'oii people had followed his trucks for a 
J:-moiith period into Tennessee and other States? 

Mr. Akgo. Yes, sir. Shortly after March 1950 they be^an to put 
some counterfeit stamps in in Tennessee, bring in the whisky and put 
counterfeit stamps on it. 

Mr. Goldstein. In other words, in a part of Tennessee, Tennessee 
tax stamps were placed on liquor bottles when those tax stamps were 
counterfeit? 

Mr. Argo. Yes, sir. 

Mr. Goldstein. At that time you and Mr. Lauderdale went to 
eastern Tennessee to investigate; is that correct? 

Mr. Argo. That is correct. 

]\Ir. Goldstein. Would it be fair to say that, as a result of your 
investigation in eastern Tennessee, it became apparent that the stamps 
were coming from another State and were being brought into Tennes- 



see 



Mr. Argo. Some we were informed w^ere brought in from Illinois. 

Mr. Goldstein. Mr. Lauderdale, as the result of this investigation 
showing that counterfeit revenue stamps in Tennessee were being pro- 
duced elsewhere and brought in and used in Tennessee, you were given 
orders to go under cover into the liquor industry in Cairo; is that 
correct ? 

Mr. Lauderdale. That is correct. 

Mr. Goldstein, Mr. Lauderdale, you changed your name, didn't 
you, at that time on orders, of course ? 

Mr. Lauderdale. Yes, sir. 

Mr. Goldstein. Wliat name did you go under ? 

Mr. Lauderdale. I had three names I went under. I was taken off 
the payroll of the State of Tennessee and I was being paid under the 
name of J. W. Hunter. In Illinois I was known as J. H. Duval. 

Mr. Goldstein. As J. H. Duval, did you contact a bootlegger in 
Mississippi whom you had previously put out of business through the 
seizures of his cargoes ? 

Mr. Lauderdale. That is correct. But he knew I was Lauderdale 
and I explained to him I was resigning from the State. 

Mr. Goldstein. You explained to him that you were resigning from 
the State service and you were going into the bootlegging business and, 
on the basis of your knowledge and know^-how of Tennessee, you could 
be of service to him ; is that right ? 

Mr. Lauderdale. That is correct. 

Mr. Goldstein. As J. H. Duval, working with this gentleman from 
Mississippi, you went to Cairo, 111., to purchase liquor ? 

Mv. Lauderdale. That is correct. 

Mr. Goldstein. And you initially purchased liquor for transporta- 
tion in an automobile with overload springs ? 

Mr. Lauderdale. That is correct. 

Mr. Goldstein. Subsequently, when business became better, shall 
we say, you began to use a truck ? 

Mr. Lauderdale. That is correct. 

Mr. Goldstein. That truck was owned by this bootlegger from Mis- 
sissippi with whom you worked? 

Mr. Lauderdale. That is right. 



274 ORGANIZED CRIME IN INTERSTATE COMMERCE. 

Mr. Goldstein. Did you ever make known to the people at M. & B. 
in Cairo your true identity ? 

Mr. Lauderdale. I did. 

Mr. Goldstein. Wliat did you tell them ? 

Mr, Lauderdale. I told them that I was Lauderdale, but that I did 
not want everyone to know it. I wanted to tell them. The reason 
I didn't want a lot of people to know it was because a lot of people 
that I had called in Tennessee were still haulinj; whisky from there. 
The reason I told him was I was trying to find the counterfeit plates. 

Mr. Goldstein. Did you tell that to Mr. Charles B. Smith at M. 
& B. ? 

Mr. Lauderdale. I did. 

Mr. Goldstein. Did subsequently Mr. Wishnia and Mr. Markoff 
know you were also Lauderdale and you were interested in the counter- 
feit plates ? 

Mr. Lauderdale. That is correct. 

Mr. Goldstein. When you purcliased liquor at M. & B. for carrying 
through the State of Tennessee into other areas, what name appeared 
on the invoices or the bills ? 

Mr. Lauderdale. W. R. Scott. 

Mr. Goldstein. W. R. Scott? 

Mr. Lauderdale. That is correct. 

Mr. Goldstein. The address was given as what? 

Mr. Lauderdale. Vernon, Ala. 

Mr. Goldstein. Mr. W. R. Scott was not in Alabama? 

Mr. Lauderdale. No, sir. 

Mr. Goldstein. Did the people in M. & B. know that Mr. Scott 
was not in Alabama ? 

Mr. Lauderdale. Yes, sir. 

Mr. Goldstein. In order to protect you if you went into Mississippi, 
in order to avoid the payment of so-called black-market taxes in 
Mississippi, were the bills made out for Alabama? 

Mr. Lauderdale. That is riglit. 

Mr. Goldstein. They knew that at M. & B. ? 

Mr. Lauderdale. That is correct. 

Mr. Goldstein. Did they also give you a second set of bills to use 
in case you ran into difficulty with law enforcement officials in Ala- 
bama ? 

Mr. Lauderdale. Tliey did. 

Mr. Goldstein. What state was shown as the final destination on 
those second bills? 

Mr. Lauderdale. Columbus, Miss. 

Mr. Goldstein. Columbus, Miss. Where were all these bills pre- 
pared ? Did you prepare them ? 

Mr. Lauderdale, On one occasion I prepared them and I would 
read from the regular bills and Mr. Smith sometimes would type it 
up. The bogus copy to Columbus would be typed by Mr, Smith. 
On one occasion Mr. Wishnia did. 

Mr. Goldstein. In other words, normally both sets of bills, the 
bogus and the so-called correct bills were prepared on the premises 
of M. & B. by people in charge at M. & B. ? 

Mr. Lauderdale. That is right. 

Mr. Goldstein. So they had full knowledge of the two sets of bills 
and they had full knowledge of the bogus transactions ? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 275 

Mr. Lauderdale. That is right. 

Mr. Goldstein. At any time did you proceed to carry on independ- 
ent business for M. & B. ? In other words, were you ever asked by 
M. & B. to transport liquor for them instead of for yourself at a fee? 

Mr. Lauderdale. I was. 

Mr. Goldstein. How were the arrangements made in that case? 

Mr. Lauderdale. I transported a lot of whisky, 102 cases to Gaines- 
ville, Ga. 

Mr. Goldstein. Gainesville, Ga. ? 

Mr. Lauderdale. On January 5, about a w^eek or 4 or 5 days prior 
to that time, I was in Cairo and Mr. Smith asked us if we would 
haul this load of whisky down there, he would pay us $4 a case. He 
also told us he would like to make about a dollar a case on the whisky, 
which we said was all right. So he made the arrangements and 
on January 4 I went to Cairo and left the truck on the street and 
got in touch with Mv. Smith, who was to pick up the truck early 
the next morning when the warehouse opened and load it. And 
after it was loaded, he was to call us at the Cairo Hotel, because we 
got into town late that night. 

He did. We left there, and the bill showed the whisky going 
to Vernon, Ala. 

Mr. Goldstein. But the actual destination you were told was 
Gainesville, Ga. ? 

]Mr. Lauderdale. That is right. 

The Chairman. I am awfully sorry to have to interrupt the com- 
mittee hearing but we will have to have a 10-minute recess because we 
have an important vote. 

The committee will be in recess for 10 minutes. 

(There was a 10-minute recess.) 

The Chairman. The committee will come back to order. 

Mr. Goldstein. Mr. Lauderdale, just to bring things back into 
focus, you, in your undercover work, told this gentleman from Missis- 
sippi, whose name, I believe, is Scott 

Mr. Lauderdale. That is correct. 

Mr. Goldstein. xYnd these other people that you were no longer 
connected with the Tennessee authorities. 

Mr. Lauderdale. That is right. 

Mr. Goldstein. And you were able to assist them because of your 
previous knowledge of TenneSvSee and because, if I may say so, Mr. 
Argo was a very good friend of yours and you could depend upon 
him to assist you in your activities ? 

Mr. Lauderdale. That is correct. 

Mr. Goldstein. So far as Mr. Scott was concerned, and the people 
at INI. & B. were concerned, you. were an ex-cop, so to speak, who 
decided to make money the easy way. 

Mr. Lauderdale. That is right. 

Mr. Goldstein. Do you know the address of M. & B. in Cairo? 
Do you know it, Mr. Argo ? 

Mr. Argo. 1601 Commercial. 

Mr. Lauderdale. I think it is 1601 Commercial. 

]Mr. Goldstein. Where is Southern Wholesaler in Cairo ? 

Mr. Lauderdale. One block south of there. It would be in the 1500 
block, I guess. 



276 ORGANIZED CRIME IN INTERSTATE COMMERCE. 

Mr. Goldstein. The people you dealt with in M. & B. were the same 
people who were running J. B. Wenger when you first came to Cairo? 
Mr. Lauderdale. That is my information. 

Mr. Goldstein. Getting back to your activities under cover, I be- 
lieve you were telling us about the situation where you had been hired 
by Smith of M. & B. to run a cargo of liquor into Georgia; is that 
correct ? 

Mr. Lauderdale. That is correct. 

Mr. Goldstein. You did not have any ICC registration as a carrier, 
did you, as a contract carrier, an unscheduled contract carrier, to 
carry that liquor under contract for them ? 
Mr. Lauderdale. No, sir. 

Mr. Goldstein. Do you happen to know offhand, or have you seen 
any of the trucks carrying contraband, referring to the liquor, with 
ICC registration? 

Mr. Lauderdale. I have not. 

Mr. Goldstein. And is it your understanding of the laws relating 
to motor carriers that unscheduled contract carriers going in inter- 
state commerce do have to file with the ICC? 
Mr. Lauderdale. That is w^hat I understand. 

Mr. Goldstein. Getting back to the shipment to Georgia, you said 
that you were to be paid $i a case and that Mr, Smith was to make a 
dollar profit. 

Mr. Lauderdale. That is right. 

Mr. Goldstein. But when you delivered the liquor, did you find 
out another arrangement was in effect? 

Mr. Lauderdale. I did. Mr. Smith sent someone who worked for 
him or with him, I do not know tlie exact connection, down to Gaines- 
ville, Ga., to make all the arrangements for unloading it and taking 
care of the money situation. When we unloaded this whisky, we cut 
the Federal serial numbers off, so that, if any law enforcement officer 
sees that whisky in the stash, they couldn't run a check, 

Mr. Goldstein. This was in Georgia? This unloading was in 
Georgia? 

Mr. Lauderdale. That is right. 
Mr, Goldstein, In a dry county in Georgia ? 
Mr, Lauderdale, That is right. 

We unloaded it and cut the numbers off in two different spots. 
Mr. Goldstein. The purpose of cutting the numbers off Avas to pre- 
vent tracing the shipment of that particular case through its serial 
number back to M. & B. ? 

Mr. Lauderdale. That and to keep anyone from tracing and find- 
ing out that it was billed Alabama and yet it was sent to Georgia, 

Mr, Golds'J'ein. Is that also true of the shipments that are made in 
lugs, where they reroute them out of the cartons? That also deletes 
the serial number? 

Mr, Lauderdaijs, Yes, sir, I understand, when all the whisky is 
taken out of the case, it is a Federal law that they have to destroy the 
number, 

Mr, Burling, Will you describe the manner in which you cut the 
serial numbers off? Did you just cut the paper carton on which the 
number is printed? 

Mr, Lauderdale, Yes, sir. 



ORGAjSnZED CRIME IN INTERSTATE COMMERCE 277 

You can take a pocket knife and cut along the cardboard and just 
rip it off. 

Mr. Burling. In otlier words, the Federal law requires each case 
of liquor to bear a serial number which can be traced back to a dis- 
tillery; is that correct? 

Mr. Lauderdale. I understand that. 

Mr. Burling. Under that, the reason for physically cutting the 
piece of paper that has the number on it off the case was to make it 
impossible to trace the chain of ownership of that case of liquor? 

Mr, Lauderdale. That is right. 

Mr. Goldstein. And also ro prevent a conflict in the records between 
the liquor showing up, say in Georgia, where that same serial number 
appears on an invoice showing a shipment to Alabama? 

Mr. Lauderdale. Tliat is right. 

Mr. Goldstein. When you unloaded at this stash or place in 
Georgia, did you hear any conversation concerning the payment to this 
agent of Smith's, or M. & B.'s per case? 

Mr, Lauderdale. I did. We waited in one room and the people 
who bought the whisky paid for it in another. The load of whisky 
itself on the bill — the bill which I had — cost about $3,973. The people 
who received it paid approximately $5,000 for it, which meant that 
they Avere getting a fee for hauling it down there that ran about $10 
a case. 

Mr. Goldstein. You were to get $4 so actually there was some $600 
profit to Mr. Smith and his agent as their commission for the hauling. 

]\Ir. Lauderdale. As their commission for making the arrange- 
ments. 

Mr. Goldstein. For making the arrangements? 

Mr. Lauderdale. That is right. 

Mr. Goldstein, That $t>00 extra cost does not appear on the invoice 
which would be the company's records on which income taxes and 
other records would be based ? 

Mr. Lauderdale. That is light. As far as I know, there wouldn't 
be any record of that $600 at all. 

The Chairman. Was that a customary sort of arrangement? Is 
that what other people did, t<>o, at M. & B. ? 

Mr. Lauderdale. I don't know. 

The Chairman. You only If now what you did ? 

Mr. Lauderdale. That is right. 

Mr. Goldstein. Getting back to the counterfeit-stamp problem, 
when you and Mr. Argo first discovered that counterfeit stamps were 
being used in eastern^Tennessee, that is, Tennessee revenue stamps, 
you went under cover shortly after that and contacted Mr. Scott from 
Mississippi? 

]\Ir. Lauderdale. That is right. 

Mr. Goldstein. And with Mr. Scott did you make any attempt to 
investigate the counterfeit-stamps situation? 

Mr. Lauderdale. Yes, sir. Scott called Cairo and talked with Mr. 
Smith. He told him that he Avas going to get back in the business and 
that he wanted to make some contacts. Mr, Smith referred him to a 
man in Atlanta. 

Mr. Goldstein. At Atlanta, Ga. ? 

Mr. Lauderdale. That is right. 

Mr. Goldstein. Go ahead. 



278 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Lauderdale. We arranged a trip to Atlanta, and we made con- 
tact with this person and 

Mr. Goldstein. After you made contact with this person, you made 
it through Mr. Smith eventually ; is that the idea ? 

Mr. Lauderdale. That is right. 

Mr. Goldstein. And just to bring the story along, you were in a 
hotel room with Mr. Argo ; is that correct ? 

Mr. Lauderdale. That is right. 

Mr. Goldstein. And your friend Mr. Scott was in another hotel 
room with this man from Atlanta, who was going to meet you on the 
counterfeit-stamp deal ; is that correct ? 

Mr. Lauderdale. That is right. 

Mr. Goldstein. Were you in a position so you could overhear the 
conversation between Mr. Scott and the gentleman from Atlanta con- 
cerning the counterfeit-stamp situation ? 

Mr. Lauderdale. I was. 

Mr. Goldstein. Were you able to find out who the person from 
Atlanta, Ga., was who was involved in the situation ? 

Mr. Lauderdale. I did. 

Mr. Goldstein. What was his name? Does the name Timberlake 
mean anything to you ? 

Mr. Lauderdale. That is it, Phil K. Timberlake, Jr. 

Mr. Goldstein. Does he have any business in Atlanta, Ga. ? 

Mr. Lauderdale. He has the Central Chevrolet Co., I understand. 

Mr, Goldstein. What conversation took place between Mr. Scott 
and Mr. Timberlake concerning counterfeit stamps? 

Mr. Lauderdale. First of all, when Timberlake came into the room, 
he introduced himself, and Mr. Scott introduced himself. Mr. Scott 
said that he could be verified by calling Smith in Cairo. Timberlake 
told him that he had already done so. 

I will see if I can remember some of the things, 

Mr. Goldstein. Mr. Argo, did you hear that, too ? 

Mr. Argo. Yes. 

Mr. Goldstein. Would you like to carry on, sir ? 

Mr. Argo. He said he had some connections in Tennessee. This is 
Mr. Scott talking to Mr. Timberlake. He said, "I have some connec- 
tions in Tennessee and I will have to get some counterfeit stamps, 
because they are 'hot' up there now," 

Mr. Goldstein. Wliere, in Georgia or in Tennessee ? 

Mr. Argo. In Tennessee. 

He would have to make some connections on Tennessee stamps. 

He said, "As far as I know, a fellow named Big Dick Richards in 
Savannah, Ga., is handling all the stamps for Georgia, but, as far as 
Tennessee, you will have to see Mr. Smith, in Cairo, 111,, to get Ten- 
nessee stamps," 

Mr. Goldstein. Did he indicate there was a difficulty recently in 
Georgia on the counterfeit stamj:)S? 

Mr. Argo. Yes, sir. He said Georgia had changed that particular 
time and they would have their dies set up a month later and would be 
a month behind, but would soon be able to supply it. 

Mr. Goldstein. Did he indicate there was a place in Illinois where 
the plates were and the printing was going on ? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 279 

Mr, Argo. Mr. Scott asked Timberlake where they were being made 
in Illinois. He said it is a legal printing company, but the printers go 
in after hours, in Mounds, 111. 

Mr. Goldstein. Is that Mounds City, 111. ? 

Mr. Argo. Mounds is a little way from Mounds City. 

Mr. Goldstein. As a result of that information, you went to Illinois 
then to see if you could get the counterfeit plates for Tennessee ? 

Mr. Lauderdale. That is right. 

Mr. Goldstein. You discussed with Mr. Smith the possibility of his 
obtaining the plates for you ; is that correct ? 

Mr. Lauderdale. That is correct, 

Mr. Goldstein. When you asked Mr. Smith for the counterfeit 
plates, what sort of a proposition did you make to him and how did 
he reply ? 

JNIr. Lauderdale. Well, I told him that I was interested in getting 
the plates for this reason, that the State of Tennessee was going to 
change its stamps if they didn't get some satisfaction about these 
counterfeit stamps and that, if I could get those plates, I would turn 
them over to Argo and let Argo give them to Commissioner Evans 
and that I could get a permit to go through Tennessee and not have 
any trouble. They didn't like to travel through Tennessee much 
because we had been seizing some of their trucks. 

Mr. Goldstein. At that time, Mr. Argo was traveling with you ; was 
that correct ? Or was it a later period ? 

Mr. Lauderdale. I do not remember exactly. It was right about 
then. 

Mr. Goldstein, Did Mr, Smith say he would have to take it up with 
anybody ? 

Mr. Lauderdale. Yes; he said, "Would you mind if Julius Markoff 
was told who I was?" If I minded if he told Julius Markoff. I told 
him, "No, I wouldn't mind." 

The Chairman. Who is Julius Markoff ? 

Mr. Lauderdale. He is part of M. & B. 

Smith told me that that was what the M stands for in M. & B. — 
Markoff. I also overheard a conversation one night where they said 
Markoff was president of M. & B. 

Mr. Goldstein. Smith said he discussed that Avith Markoff? 

Mr. Lauderdale. He said he would discuss it. 

Mr. Goldstein. You would discuss it, and Mr. Smith, with Mr 
Markoff? 

Mr. Lauderdale. That is riglit. 

Mr. Goldstein. Did you ever discuss it with Mr. Markoff? 

Mr. Lauderdale. I did. 

Mr. Goldstein, Was Mr, Smith with you ? 

Mr. Lauderdale, Yes. 

Mr. Goldstein. What did you and Mr. Markoff have to say about 
the proposition? 

Mr. Lauderdale. I explained to him the reasons I wanted to get 
them and it wouldn't do whoever had them any good because they 
were going to change the stamps and, if I got them, it would do me 
some good. And he said he would see if he could get them. 

I told him I could keep Argo off him. They don't like Argo up 
there very much, and to keep Argo off them, they would appreciate it. 



280 ORGANIZED CRIME IN INTERSTATE COMMERCE 

k. 

I told them I would try to keep Argo off them if they could get me 
the plates. Markoff said he didn't know for sure, but he thought he 
could. 

Mr. Goldstein. So Markoff said he thought he could get you the 
plates ? 

Mr. Lauderdale. That is right. 

Mr. GoLDSiTsiN. He set a date wheu he could get them for you ? 

Mr. Lauderdale. He said it would take him 2 or 3 weeks. 

Mr. Burling. I want to be sure that the record is clear and we all 
understand it. At this time, Smith and Mai'koff were under the im- 
pression that you were a former cop, that you had become dishonest, 
and that you had connections with Mr. Argo ; is that correct ? 

Mr. Lauderdale. That is right. 

Mr. Burling. And that your promise was that, if they could get 
the plates for you, which were being used for counterfeiting Ten- 
nessee revenues stamps, you could then make a deal with Argo 
whereby he would leave them alone, he would stay out of Cairo, and 
you could get a permit to carry liquor through Tennessee ? 

Mr. Lauderdale. That is right. 

Mr. Burling. In return for the plates? 

Mr. Lauderdale. That is riglit. 

The Chairman. What was Mr. Argo going to do with the plates, 
if you got them? 

Mr. Lauderdale. Turn them over to Commissioner Evans. 

The Chairman. Why would Mr. Argo want to turn them over to 
Commissioner Evans ? 

Mr. Lauderdale. Why? 

The Chairman. Yes. 

Mr. Lauderdale. Because we wanted the plates pretty badly. 

The Chairman. If he was going to change the plates, why would 
Mr. Argo want to turn them over to Mr, Evans ? Wliat would be the 
incentive for Mr. Evans? 

Mr. Lauderdale. Understa^Kl that Mr. Evans never told me he was 
going to change the plates. 

Mr. Evans. Getting the plates is step No. 1 in a counterfeit 
situation. 

The Chairman. I know. Maybe there wouldn't be other plates so 
you wouldn't have to change your stamps. That would be the idea. 

Mr. Lauderdale. So we could make a case. Markoff asked me on 
three occasions, "Will you assure me if I get these plates for you, there 
won't be any repercussions?" 

I told him I w^ould assure him of that. 

The Chairman, What kind of stamps do you use, Mr. Evans. 

Mr. Evans. Decal stamps. We use small stamps that are pasted on 
the side of the bottle. 

The Chairman. Is that called decalcomanias ? 

Mr. Evans. Decalcomanias, commonly called a decal stamp. 

Mr. Goldstein. These negotiations for the plates, however, never 
resulted in the plates getting in your hands, because eventually your 
cover was broken before they got into your hands ; is that correct ? 

Mr. Lauderdale. That is right. Markoff would work there ap- 
proximately a month and he would leave and Ruby Wishnia would 



ORGAJSriZED CRIME EST INTERSTATE COMMERCE 281 

come in there and work approximately a month and then Markoff 
would come back. 

When this blew up Markoff was not due in town until the 24th of 
February. 

Mr. Goldstein. Do you happen to know where Mr. Markoff and 
Mr. Wishnia went on their time off ? 

Mr. Lauderdale. I couldn't say for sure. On one occasion I know 
Mr, Wishnia was here in Washington. 

Mr. Goldstein. Do you know whether Mr. Wishnia has a phone 
here in Washington ? 

Mr. Lauderdale. Yes, I do. 

Mr. Goldstein. Could you give me that phone number, please? 

Mr. Lauderdale. Georgia 3149. 

Mr. Burling. Mr. Chairman, I might say, through the investigat- 
ing work of these gentlemen, we got his number and traced it through 
subscribers' investigation, and I sent a man yesterday to try to siib- 
pena Mr. Wishnia, but we received word he had just left for Cairo. 

The Chairman. You tried to subpena him in Washington and got 
word that he had left for Cairo ? 

Mr. Burling, Yes, sir. 

The Chairman. Is this number in his name ? 

Mr. Lauderdale. Yes, sir. 

The Chairman. What is the address ? 

Mr. Lauderdale. I don't recall, sir. It is in the telephone directory. 

Mr. Argo. 7700 Eastern Avenue, Apartment 302. 

The Chairman. What does he do here in Washington? 

Mr. Argo. He is vice president of the Foster Distributing Co., 
Potomac Wine & Liquor Co. 

The Chairman. Is that two companies ? 

Mr. Argo. Yes, sir. 

The Chairman. Do you have their addresses ? 

Mr. Argo. No, sir ; that is all I have. 

Mr. Lauderdale. They are not listediin the telephone book. 

The Chairman. How did you find that out ? 

Mr. Argo. Through the office here. 

The Chairman. What office ? 

Mr. Burling. With the committee staff. 

Mr. Argo. We were here with Mr, Goldstein, 

The Chairman. Let's get the names again. 

IMr. Argo, He is listed as vice president for the Foster Distribut- 
ing Co, 

Mr. Avis. Is that a Washington Company ? 

Mr. Goldstein, The Foster Distributing Co, and the Potomac Wine 
& Beverage are not listed in the Washington directory. 

Mr. Avis. I think Foster is Baltimore. The other I do not know. 

The Chairman. What was the other one ? 

Mr. Argo. Potomac Wine & Liquor Co. 

Mr. Goldstein. At a period of time when you were working under 
cover, Mr. Argo began to accompany you in another car ? 

Mr, Lauderdale, He did. 

Mr, Goldstein. The purpose of Mr. Argo's accompanying you on 
these occasions was because of a fear that you might be injured due to 
hijackers? 

68958 — 51 — pt. 12 19 



282 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Lauderdale. That is correct. 

Mr. Goldstein. Has there been much hijacking in this particular 
trade ? 

Mr. Lauderdale. I have heard of a lot of it. 

Mr. Goldstein. Mr. Argo was trailing you or keeping you under 
surveillance to protect you during that period of time ? 

Mr. Lauderdale. That is correct. 

Mr. Burling. Just before you leave that, in other words, it was 
feared that you might be shot or otherwise injured by a hijacker, and 
Mr. Argo was, in effect, acting as your bodyguard ? 

Mr. Lauderdale. That is correct. 

Mr. Goldstein. Mr. Argo, did Commissioner Evans also tell you 
to go with Mr. Lauderdale in case someone discovered who he was, 
to protect him in that event as well as against hijackers? 

Mr. Argo. Yes, sir. On one occasion, Mr. Lauderdale learned in 
Illinois, in Cairo, that Commissioner Evans had gone to Washington 
to get a certain bill passed and they told him what time the plane 
landed. They had connections. So they knew where he lived and 
what he said in Washington. And Commissioner Evans got in that 
night, and I called Lauderdale on the phone in Columbus, Miss., and 
he told me what Mr. Evans said. I in turn called Mr. Evans and he 
told me that was correct, and he said not to let Lauderdale get out of 
my sight any more. 

Mr. Goldstein. Do the names Hayes Transport Co. or Roadway 
Express mean anything to you gentlemen? 

Mr. Argo. Yes ; we seized one truck driven by Clay Earls of Martins- 
ville, Va., with a 1949 license plate, T-80-680, that had a phony bill 
of lading on Roadway and Hayes Freight Line, billed for automobile 
parts going to Norfolk, Va. He had 155 cases of whisky. 

Mr. Goldstein. Do you have any information or source of infor- 
mation concerning the place where these phony bills of lading for 
automobile parts were typed up ? 

Mr. Argo. No, sir. It was typed up. I wouldn't say where it was 
typed up. But it showed that it was picked up at the St. Louis 
Salvage Co., St. Louis, Mo. 

Mr. Goldstein. Do you have any information, or has anyone ever 
told you what the typewriting on the bill of lading seemed to indi- 
cate as the source of the typewriter or the location of the typewriter? 

Mr. Argo. Same as on the original bills from J. B. Wenger. 

Mr. Goldstein. So that these phony bills of lading were apparently 
also prepared at J. B. Wenger's ? 

Mr. Argo. Yes, sir. 

Mr. Goldstein. I would like to get some information, if I might, 
to tie in with your knowledge, information made available to the 
committee by various distillers concerning their distributors and 
their relations to Cairo, 111. Do you know if Paul Tick of Spring- 
field, 111., is in any way associated with either M. & B. or Southern 
Wliolesalers ? 

Mr. Argo. Paul Tick owns the Central Liquor Co. in Cairo, 111. 

Mr. Goldstein. Does any of his liquor go into M. & B. or Southern 
Wholesalers ? 

Mr. Argo. They make up their orders from the M. & B. and pick 
up a brand from Paul Tick along with the rest of the various things. 



ORGANIZED CRIME EST INTERSTATE COMMERCE 283 

Mr. Goldstein. Our records sliow that tlie National Distillers Co. 
lists the Paul Tick Liquor Co. as one of their distributors. Do you 
know whetlier any National Distillers products are the ones picked 
up at Paul Tick's for M. & B. ? 

Mr, Argo. I have seen feeder trucks go to Paul Tick and pick up 
liquor and we seized their truck. 

Mr. Lauderdale. I have heard them order from Paul Tick and 
tell them they wanted so many cases. 

Mr. Goldstein. In otlier words, they do not carry big stocks and, 
when they get a special order, they call on their wholesalers and pick 
it up? 

Mr. Lauderdale. They do not keep stock at all on their floor. 

Mr. Burling. Will you make clear who "they" are? 

Mr. Lauderdale, M. & B. doesn't keep any stock on their floor at 
all. They store their whisky. I guess they store their whisky. I 
have seen the stencils on the top of the cases where whisky has been 
sent to them, to M. & B. Whisky Co., Inc., in care of Security Ware- 
house, Cairo, 111. 

Mr. Goldstein. Who owns the Security Warehouse ? 

Mr. Lauderdale. That is the former J. B. Wenger building. It is 
my understanding that J. B. Wenger is still in there and that whisky 
goes through the hands of J. B. Wenger before M. & B. gets it. 

Mr. Goldstein. Have you ever heard of the Central Wholesale 
Liquor Co. in Cairo, whose president's name is Julian Venessky, and 
also Hy Rubin ? 

Mr. Lauderdale. I have never heard of that first name. I have 
heard of Central and heard of Hymie Rubin. 

Mr. Goldstein. Can you tell us something about Mr. Rubin ? What 
have you heard about him? 

Mr. Burling. Before you do that, I might say that Mr. Rubin was 
given an opportunity to be here. I spoke to Mr. Rubin's lawyer 
yesterday on the telephone and urged liim to come here — Mr. Rubin to 
come here. The lawyer stated that Mr. Rubin has stated to him that 
he couldn't get here in time. 

The Chairman. All right. 

Mr. Burling. But he did have notice. 

The Chairman. He had notice ; all right. 

Mr. Goldstein. You have also stated, I believe, or it has been stated 
here before during this morning, that in most cases the Wenger out- 
fit received its liquor from another wholesaler instead of directly from 
a particular distiller. 

INIr. Lauderdale. That is right. 

Mr. Goldstein. Do you know whether any of the products of the 
American Distilling Corp. were ever used on the trucks ? 

Mr. Lauderdai^e. If you name the brands, I can tell you. 

Mr. Goldstein. Good Old Giickenheimer, Still Brook, INIeadwood 
Bourbon Supreme, Burton's, Old Colony, Old American Brand, and 
so forth. Are any of those names familiar to you ? 

Mr. Lauderdale. Still^J^rook. 

Mr. Goldstein. American Distilling Corp. has informed us that 
one of their distributors is J. B. Wenger in Cairo, and the Central 
Wliolesale Liquor Co., Cairo, 111. I believe you mentioned them 
before. 



284 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Lauderdale. Yes, sir. 

Mr. Goldstein. Do you know whether products are picked up from 
Central Wholesale Liquor as well as from Paul Tick by M. & B.? 

Mr. Lauderdale. I do not know that. I suspect that. 

The Chairman. Tell what you know. What makes you think so? 

Mr. Lauderdale. If I go up there and turn in an order for 100 cases 
of whisky, I will have several brands on it. Sometimes I have turned 
in the order after I have gotten there and sometimes it is called in, 
and on other occasions, when it was turned in after I arrived in Cairo, 
they would get on the phone and call these different people around 
town and make arrangements to pick those brands of whisky up and 
bring them to the warehouse. 

Mr. Goldstein. Did you also know whether or not the George A. 
Mueller Co. in Cairo or Springfield, 111., supplied liquor to M. & B. ? 

Mr. Lauderdale. I do. I have heard Ruby Wishnia call Fred 
Mueller one night and order 2,500 cases of whisky. 

Mr. Goldstein. I might say at this point that our records show 
that Brown-Forman Distillers, Glenmore, Schenley, and Sunset, Inc., 
have listed George A. MeuUer & Co. as their distributor. 

Do you know if Valley Liquor Co. has ever been involved in these 
transactions ? 

Mr. Lauderdale. Yes, sir. I have seen some cases when they bring 
that liquor in there and load it on a truck. There is usually always 
a stencil on the top with the name of the company where the whisky 
comes from. I have noticed S. & R. Co., Valley Co. and also Mueller 
Co. names on these cases, and, when they are loaded on these trucks, 
they take a knife and strip those stencils off, just as they would do 
with the serial numbers. I don't know why they do that. 

Mr. Goldstein. I want to say at this point, Mr. Chairman, that our 
records also show that the Valley Liquor Co. has been listed by 
Schenley as a distributor, by M. S. Walker of Boston, by Jim Bean 
of Chicago, 111., and Sunset, Inc., and Mar-Salle of Chicago. 111. 

Do you have any knowledge of the principal brands that have been 
hauled during the time out of Cairo, 111. 

Mr. Lauderdale. Yes, sir; I can name some of them. 

Mr. Goldstein. I wish you would, please. 

Mr. Lauderdale. Old Crow, Seagram's Seven Crown, Seagram's 
VO, Old Charter, Schenley, Calvert's, Old Forrester, Kentucky 
Tavern, Sunnybrook. 

Mr. Goldstein. Paul Jones ? 

Mr. Lauderdale. Paul Jones, Cream of Kentucky. There are gins 
and Scotches I couldn't remember. 

Mr. Goldstein. Can you name any of the gins at all? Gordon's? 

Mr. Lauderdale. Yes; Gordon's. 

Mr. Goldstein. Kinsey? 

Mr. Lauderdale. I do not know about Kinsey. 

Mr. Goldstein. I might say that our records show that Barton 
Distilling Co. of Kentucky sells directly to Southern Wliolesale Liquor 
of Cairo, 111., which you have named as one qf the other export houses 
besides M. & B. in Cairo. 

Would you tell us, please, sir, something about the incidents which 
ended in Alabama for both of you — both you and Mr. Argo? I am 



ORGANIZED CRIME IN INTERSTATE COMMERCE. 285 

correct, am I not, in saying that you had arranged to take a load of 
liquor into Mississippi ? 

Mr. Lauderdale. That is correct. 

Mr. Goldstein. And that you had, shall we say, the correct or pres- 
ent bill head or invoice fonn indicating that the load was to go to 
Alabama, to Mr. Scott in Alabama, at Highway 18, I believe west of 
Vernon, Ala. ? 

Mr. Lauderdale. That is correct. 

Mr. Goldstein. At that same time you had another invoice made 
out on an old form, showing you were on your way to Columbus, 
Miss.? 

Mr. Lauderdale. That is correct. Wlien I got to Columbus, Miss., 
I would destroy this old invoice. 

Mr. Goldstein. That was the same arrangement we discussed before, 
to protect you in Alabama as well as in Mississippi. 

Mr. Lauderdale. That is right. 

Mr. Goldstein. The reason for that invoice is this 

Mr. Lauderdale. The reason is, if your whisky is going through 
tlie State of Alabama, they do not have the proper laws that can hold 
that whisky. We had that bill made up so in case we were stopped 
in Alabama we could show that bill and the officer who would stop 
us would let us go. 

Mr. Goldstein. When you got to Mississippi you wouldn't have to 
pay the so-called black-market tax because your bill showed you went 
to Alabama ? 

Mr. Lauderdale. That is right. 

Mr. Goldstein. I believe you were stopped when you got to 
Alabama. 

Mr. Lauderdale. That is correct. 

Mr. Goldstein. You were taken into custody by the Alabama 
officials ? 

Mr. Lauderdale. That is correct. 

Mr. Goldstein. Mr. Argo was also taken into custody, were you not ? 

Mr. Argo. Yes. 

Mr. Goldstein. You identified yourselves as officials of the State 
of Tennessee? 

Mr. Argo. Yes, sir ; we did. 

Mr. Goldstein. You were using Tennessee State property in the 
form of an automobile purchased and owned by the State of Ten- 
nessee ? 

Mr. Argo. Yes, sir. 

Mr. Goldstein. And the arms you were carrying in the car with 
you were the property of Tennessee and so labeled the property of 
Tennessee ? 

Mr. Argo. That is right ; yes, sir. 

Mr. Goldstein. When you were apprehended, what did you do with 
the two sets of invoices that you had with you ? 

Mr. Lauderdale. I gave the phony set that we made up 

Mr. Goldstein. That is the Mississippi set? 

Mr. Lauderdale. That is right — to this man I later learned to be 
the sheriff. 

Mr. Goldstein. This is in Alabama? 

Mr. Lauderdale. That is right. I gave the other bills to Argo who 
hid them in the car. 



286 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Goldstein. That was the bill that was made out for Alabama, 
the original bill on which the records at M. & B. were to be kept; is 
that right? 

Mr. Lauderdale. That is correct. 

Mr. Goldstein. I want to ask you if this is a photostatic copy of 
the original bill reading "Sold to W. R. Scott, Highway 18, west of 
Vernon, Ala.," on the letterhead of M. & B. Wholesale Liquor Co. in 
Cairo, dated February 17, 1951. 

Mr. Lauderdale. Yes. 

Mr. Goldstein. Do you identify that as a photostat of the Alabama 
bill? 

Mr. Lauderdale. I do. 

The Chairman. Let it be made part of the record. 

(The above-mentioned document was marked "Exhibit No. 29," and 
is on file with the committee.) 

Mr. Goldstein. Were these additional papers in handwriting part 
of your records? They show, for instance, certain cases of whisky 
and serial numbers, and one sheet is headed "Tick" and another sheet 
is headed "Meuller," and then there is a listing of the cases in your 
cargoes. Is this the same one, sir ? 

Mr. Lauderdale. Yes, sir. 

Mr. Goldstein. May that be made a part of the record ? 

The Chairman. It will be made a part of the record. 

(The above-mentioned document was marked "Exhibit No. 30," and 
is on file with the committee. ) 

Mr. Goldstein. After you were taken into custody in Alabama, did 
the people at M. & B. become informed of the situation ? 

Mr. Lauderdale. Yes, sir. 

Mr. Goldstein. Were they at all interested in the fact that you had 
been taken into custody ? 

Mr. Lauderdale. I presume they were ; they tried to help us. 

Mr. Goldstein. They tried to help you ? 

Mr. Lauderdale. Yes, sir. 

Mr, Goldstein. After you were released from custody in Alabama, 
did the people at M. & B. make any attempt to reach you for any 
reason whatsoever ? 

Mr. Lauderdale. They did. 

Mr. Goldstein. Will you tell us what happened in Nashville when 
you got home that night ? 

Mr. Lauderdale. Yes, sir. 

Let me explain this first. The bills were still in the car. The bills 
that we have the pictures of were still in the car. 

Mr. Goldstein. The ones made out to Alabama ? 

Mr. Lauderdale. That is right. They got in touch with me by way 
of telephone and asked me if I had the bills, and I said that I did. 
They wanted me to bring them up that night. 

The Chairman. Wlio got in touch with you ? 

Mr. Lauderdale. Smith. 

Mr. Goldstein. That is Smith of M. & B. ? 

Mr. Lauderdale. That is right. 

I told them I couldn't bring them up there that night ; that I would 
bring them up there the next day. The reason for this was that they 
were still in the car and we had to bond the car out before I could 
get the bills. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 287 

He said he would send someone down to get them and so someone 
parked in front of mv house that night, and my phone rang every 30 
minutes from 12 o'clock that night until 8 o'clock the next morning. 

I slipped out the back door and went with Mr. Argo back to Vernon, 
Ala., and bonded the car out. 

Mr. Goldstein. Then you got the bills ? 

Mr. Lauderdale. Got the bills. 

Mr. Goldstein. And you had them photostated ? 

Mr, Latjderdale. Brought them back to Nashville and went over to 
Selmar. I called Smith 

Mr. Goldstein. You called Smith of M. & B. ? 

Mr. Lauderdale. Yes. 

I told him I had car trouble and I would be up later on. In the 
conversation on the phone I asked him if he wanted the serial numbers 
too, and he said that he did. 

I used that as an excuse for being late, that I had to go to Alabama 
to get those serial numbers. 

We came to Nashville and made pictures of the bill and the serial 
numbers and invoices. 

Mr. Goldstein. Did Smith tell you what he wanted the bills for, 
the ones made out to Alabama ? 

Mr. Lauderdale. Yes, sir. 

Mr. Goldstein. What did he tell you ? 

Mr. Lauderdale. They had changed their records on them in Illi- 
nois, and they wanted the originals so they could destroy them. 

Mr. Goldstein. They wanted to change their records to show that 
the shipment was going to Mississippi ? 

Mr. Lauderdale. They had already changed them ; that night when 
I was in jail, I called Scott. 

Mr. Goldstein. Who is Scott ? 

Mr. Lauderdale. He is the man I was supposed to be working for. 
He called Smith and told them what happened. I found out later 
ihey changed their records early, at 4 o'clock in the morning. 

Mr. Goldstein. Who told you they changed their records ? 

Mr. Lauderdale. Mr. Smith told me. 

Mr. Goldstein. At M. & B. ? 

Mr. Lauderdale. That is right. 

Mr. Goldstein. Did he indicate that he did it alone or was anyone 
there who helped him ? 

Mr. Lauderdale. He showed me where he had changed the records. 
On this heading showing the billing of the whisky to Scott, he changed 
it to read: "W. R. Scott, Highway 82, west of Columbus, Miss." 

Mr. Goldstein. So instead of iHighway 18, west of Vernon, Ala., 
the records were erased and retyped as Highway 82, west of Columbus, 
Miss. ? 

Mr. Lauderdale. That is correct. He showed me the triplicate 
copy of this and said that he and Euby Wishnia had changed it early 
Monday morning. 

Mr. Goldstein. Are those the records they give to the State of 
Illinois? Were those the ones that were submitted to the State of 
Illinois on which the export tax exemption is granted ? 

Mr. Lauderdale. That is correct. 

Mv. Goldstein. So those are official records which would go to the 
State of Illinois that they had falsified by changing in this case ? 



288 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr, Lauderdale. I guess those are are the records. 

Mr. Goldstein. Those are the records on the Internal Revenue 
Form 52-B, showing outflow of liquor from a wholesaler. That is 
the thing on which those records are based. 

Mr. Lauderdale. I presume they are made up from this triplicate 
copy. 

Mr. Burling. Is it also true that those records are required to be 
maintained by Federal law ? 

Mr. Lauderdale. I think so. 

Mr. Burling. Well, we will ask Mr. Avis when he gets on the stand. 

Mr. Goldstein. Do you know what Smith did with that original 
record and whether there was a phone call to Washington? 

Mr. Lauderdale. Yes, sir. Wlien I got there with the records that 
nighty he made a station-to-station call to Georgia 3149. 

Mr. Goldstein. That is in Washington, D. C. ? 

Mr. Lauderdale. Yes, sir. 

He talked with Ruby and I guess it was Ruby Wishnia. He said 
they would be in the mail tomorrow in the morning. 

Mr. Goldstein. He was going to send the falsified records up to 
Ruby in the morning? 

Mr. Lauderdale. He was going to send the original and the dupli- 
cate to Ruby and the triplicate had been changed, which they keep in 
the office. 

Mr. Goldstein. In other words, Ruby would have the copies as 
they originally come out for whatever purpose he might see fit to use 
them ? 

Mr. Lauderdale. That is right. If he wanted to destroy them so 
they couldn't have evidence against him to show where he changed 
the books 

Mr. (toldstein. It would be fair to say that Ruby wanted to satisfy 
himself that the records had been turned in, so there would be no 
trouble for him? 

Mv. Lauderdale. That is correct. 

Mr. Burling. Mr. Argo, have you ever been in the State of Missis- 
sippi in a room in which large quantities of liquor were stored? 

Mr. Argo. Yes, sir ; I have. 

Mr. Burling. Describe the place and the room, if you please. 

Mr. Argo. On one particular instance someone referred to Nam- 
Muse, Jackson, Miss., loaded in Cairo, 111., on Sunday night. We 
waited for him in Memphis, Tenn., on the following morning. He 
must have become suspicious of us because he laid over until Wednes- 
day. I flew there, into Jackson, Miss., and described the truck and 
also gave them the number on it, and the tax collector's office in 
Jackson, Miss. 

Mr. Burling. To whom did you describe the truck ? 

Mr. Argo. To the chief enforcement officer there, in Miss Bailey's 
office. 

Mr. Burling. Who is Miss Bailey? 

Mr. Argo. Miss Bailev is the State tax collector, and Mr. Battle is 
the chief enforcement officer. 

He asked me if I knew the truck, and I said, "Yes." He said there 
was a place called the Gold Section and that it might be out there, 
I should see if I could identify it. 



ORGAlSnZED CRIME IN INTERSTATE COMMERCE. 289 

We drove out there and it was backed up to a two-car garage wliicli 
was Muse's place, as I was told. He had whisky stacked there over my 
head in this garage. They couldn't get the car in. They were backing 
it in there. They had 800 to 1,000 cases. 

He said, "Did you ever see their retail place?" 

I said, ''No, sir." 

He showed me that place. The place was built like a whisky store 
and had whisky sitting on the shelves with the j)rices around the 
bottles. 

Mr. Burling. Was the door wide open? 

Mr. Argo. Yes, sir ; wide open. He said, "That is our dry county 
in Mississippi." 

Mr. Burling. You were accompanied by whom ? 

Mr. Argo. Mr. Battle. 

Mr. Burling. He is the chief enforcement officer ? 

Mr. Argo. Yes, sir. 

Mr. Burling. For the black-market tax ? 

Mr. Argo. Chief deputy for the State of Mississippi. 

Mr. Burling. What action did this law-enforcement officer take 
when he saw 800 to 1,000 cases of whisky stacked in the garage? 

Mr. Argo. He explained to me the set-up in Mississippi and told me 
they couldn't do anything as long as they paid the $3 black-market 
tax. He said, "You have to see the sheriff if they operate in the 
county." They couldn't seize it or close it up or anything. 

ISIr. Goldstein. At the present time, M. & B. instead of using feeder 
trucks that are disguised use feeder trucks which bear the legend 
"M. &B." on their sides? 

Mr. Lauderdale. That is right. 

Mr. Goldstein. They still operate on the convoy system? They 
load up, meet at some rendezvous with their convoying cars, and they 
meet the truck to carry it into the other States and transfer it from 
the truck marked "M. & B."? 

Mr. Lauderdale. That is correct. 

Mr. Goldstein. Does Southern Wliolesalers have trucks of that 
sort? 

Mr. Lauderdale. That is right. 

Mr. Goldstein. They are marked "Southern Wholesalers"? 

Mr. Lauderdale. Yes, sir. 

Mr. Goldstein. Their operations are substantially siixdlar to the 
operations you have described for M. & B. ? 

Mr. Lauderdale. That is correct 

Mr. Goldstein. Do you have information as to the names of the 
persons associated with Southern Wholesalers? 

Mr. Lauderdale. Southern Wholesalers will also be spoken of as 
Hymie's place. 

Mr. Goldstein. That is a rather new outfit, isn't it ? 

Mr. Lauderdale. I do not know how new it is. They weren't 
doing any business when we were working on J. B. Wenger there. 
1 think that Southern was open a while before they reopened. They 
were closed for a while. 

Mr. Goldstein. I have no further questions. 

Mr. Burling. Mr. Argo, I show you a photograph and ask you if 
that relates to a seizure of a truckload of whisky by you. 



290 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Argo. Yes, it was. It was loaded in J. B, Wenger Co. in Cairo, 
111. It was seized in Sullivan County, Tenn. 

The Chairman. Will you describe that picture ? We will make it 
part of the record. Will you tell what the picture shows ? 

(The above-described picture was marked "Exhibit No. 31," and 
is in the files of the committee.) 

Mr. Argo. That was a truck trailer, commonly known to us as a 
feed-and-gi-ain trailer, flat bed, in other words. This whisky was in 
a false bottom. The whisky was lugged in lugs and placed in and 
the top put down and it looked as if it were empty. There were 125 
cases in there. 

Mr. Burling. How did you succeed in detecting these? 

Mr. Argo. I had information that he was going, and I figured his 
running time and figured how long it would take him to rmi to 
Illinois, how long it would take him to load and get back. We caught 
him that night. He was due in. 

The Chairman. I understand these trucks they use are poultry 
trucks or any kind of truck. Do they disguise the name on the side 
of them? 

Mr. Lauderdale. The ones hauling to these dry areas do. They 
disguise them as niunerous things. 

The Chapman. How is the poultry truck disguised ? Do they have 
chickens around it or just the names ? 

Mr. Lauderdale. I don't know about that truck. 

The Chahiman. Can you tell us about the poultry truck? 

Kr. Argo. Yes, sir. 

The Chairman. How about it ? 

Mr. Argo. They would put the chicken coops around the sides with 
chickens in it and make a false bed inside and load the whisky inside, 
and all you can see from the outside are the chickens. However, we 
weren't able to catch that particular truck, but I saw it loaded oc- 
casionally in Illinois. 

The Chairman. But you saw that truck being loaded up? 

Mr. Argo. Yes, sir. 

The Chairman. How many cases could you carry on the side where 
the chickens were ? 

Mr. Aroo. About 400. 

The Chairman. What were some of the other disguises they used? 

Mr. Argo. They used the Southern Creosote Co. They used R. O. 
Watson Produce Co. They used Southern Containers, Inc., and Tri- 
angle Paper Co., and a lot of others. They had a load of goats and 
had whisky concealed like this, with a load of goats on top of it. 
They had this trip in the bottom that hauled 150 lugs and had a load 
of goats on top of that. 

The Chairman. They would put this under the floor and put the 
goats on top of the floor ? 

Mr. Argo. That is right. 

The Chairman. Did you know an Indian by the name of Lubess 
who worked out of Cairo for one of these companies ? 

Mr. Argo. I know of him. 

The Chairman. We were out in San Francisco and he told about 
the same kind of operation in Oklahoma. 

Mr. Argo. They also have lumber trucks. They load lumber 
trucks with short pieces about 2 feet long, and they put about 400 



ORGANIZED CRIME IN INTERSTATE COMMERCE 291 

cases of whisky, and then put the hiniber on top of that, and it looks 
like a solid load of lumber. 

The Chairman. Back at the end of the truck they had short pieces 
of lumber, but it looked like it was all lumber? 

Mr, Argo. Yes, sir. 

The Chairman. Mr. Avis, you have been very cooperative in help- 
ing us work out these problems. 

Are there any questions or answers that would be of information 
to you about these activities that you would like to ask? 

Mr. Avis. Well, I can get all of this, Mr. Chairman, and I have 
listened to this with a great deal of interest, I assure you. 

The Chairman. I know Mr. Evans will arrange to stay over and 
talk to you, Mr. Avis, 

Mr. Avis. Yes, he is very cooperative in every respect, I am cer- 
tain that we can get this evidence, and it will all be made available. 

The Chairman. I do not know whether right now there was any 
matter you wanted to ask about. 

Mr. Avis. I do not want to take any time. 

The Chairman, Are there any other questions ? 

Mr. Goldstein. No, sir. 

The Chairman. Well, I just want to say 

Mr. James C. Evans. Mr. Chairman, if I may interrupt you, do 
you contemplate closing now? 

The Chairman. No, we are going to have Mr. Avis testify. 

Mr. James C. Evans. I have another witness, Mr. Neal Evans, who 
is no relation, although I would be glad to claim him as a relation, 
who is the ATU agent who works out from around Tennessee, who 
is assigned out of Mr. Farrell's office, Mr. Farrell being the Kentucky- 
Tennessee supervisor; I had in mind his testifying as to particular 
types of operation. But I mean, your testimony would be cumulative, 
Mr. Evans, and I do not see any reason in belaboring the committee 
with piling it up, and I hope you will pardon me for your having 
made a trip up here. 

The Chairman. Well, Commissioner Evans has stated you are very 
helpful. 

Mr. James C. Evans. He has, and the figures in Tennessee show 
that. 

The Chairman. I think since he is here, he ought to make a short 
statement, and if he will, we will have him do so. 

I just want to say at this point that I am very much impressed with 
the seriousness and effectiveness of the actions of the commissioners 
where the commissioners of these States who have testified here today, 
have gone after this problem. Particularly, I think, it would be 
understandable, with pardonable pride, if I especially compliment 
Commissioner Clarence Evans, who has been working with our crime 
committee for many, many months, as I said before, and these enforce- 
ment officers who have testified here, for the action they have taken, 
over and above the ordinary call of duty in trying to get at thij; liquor 
problem, and also this stamp problem. 

You have performed a very excellent service, and you have done it 
mighty well, and you have directed it splendidly, Mr. Evans. 

We hear so often of enforcement officers who are lax and wlio seem 
to be indifferent about law violations that go on, so that it is ilhiminat- 
inof and encourajrino; to see enforcement officers who do a wli(*le lot 



292 ORGAlSriZED CRIME IN INTERSTATE COMMERCE. 

more than may be expected of them. I know that we do have a lot 
of bad situations in the South, and certainly we have in Tennessee, 
but if this activity is representative of the desire of officials, I do not 
think we have anything to fear. 

So, we are very grateful to you for coming up. We may want to 
ask you some more questions off the record later on. 

Mr. Evans, we would like to hear from you briefly. Will you come 
around, sir. 

Mr. Neal Evans. There is nothing that I can add, sir. The only 
thing that I can say is that I have given my time to assist the State 
of Tennessee in any way I could with their liquor problems, and in 
my humble way, I have done the best thing that I could with them. 

The Chairman. Mr. Evans, were you given the assignment by 

Mr. Neal Evans. By Mr. Fred Farrell, who is the District 

The Chairman. Mr. Evans, do you swear the testimony you give 
this committee will be the whole truth, so help you God? 

Mr. Neal Evans. I do. 

TESTIMONY OF NEAL EVANS, SPECIAL INVESTIGATOR, ALCOHOL 

TAX UNIT 

The Chairman. "NAHiat is your official position? 

Mr. Neal Evans. Special investigator, Alcohol Tax Unit. 

The Chairman. And you were assigned by Mr. Farrell, the district 
supervisor at Louisville, to help Mr. Evans, the commissioner of fi- 
nance and taxation, with the Tennessee liquor problem ; is that correct ? 

Mr. Neal Evans. I was. 

The Chairman. You heard most of his testimony about the activities 
of M. & B., and these companies at Cairo? 

Mr. Neal Evans. I have ; yes, sir. 

The Chairman. Does the testimony here fit in with the information 
you have and what you know about it ? 

Mr. Neal Evans. It does ; yes, sir. It is all substantially correct, 
as far as my investigation is concerned. 

The Chairman. What sort of Federal license does this M. & B. 
and these people have? 

Mr. Neal Evans. I do not know ; that is in another district, and I 
assume they have a regular wholesaler's license. 

The Chairman. Tennessee is in the district of which Louisville is 
the principal office ; is that correct ? 

Mr. Neal Evans. That is correct. That is the seventh district, 
comprising the States of Tennessee and Kentucky. 

The Chairman. And Illinois is in the district of which Chicago is 
the principal office? 

Mi\ Neal Evans. That is district 9 ; yes, sir. 

The Chairman. How long have you been working with Mr. Clar- 
ence Evans on this problem? 

Mr. Neal Evans. About 2 years now, nearly 2 years. 

The Chairman. Mr. Evans, is there any particular point you feel 
we should bring out with this Mr. Evans"? You told us about how 
cooperative he has been, and how helpful he has been. 

Mr. James C. Evans. Mr. Senator, Mr. Neal Evans assisted us and 
more or less taught us how to go about investigating and how to go 
about investigatory work. In numbers of instances he brought us in 
information which was most valuable in curtailing this traffic. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 293 

As I said, his testimony would be cumulative as to the phonies that 
have been called RLD, as to their type of transactions, and so on. 

Now, there was one particular case I remember, the Wayne Morris 
case, that Neal did an extremely great amount of work on; but that 
is a typical operation, and I do not believe we need to go into the 
details of it. 

The Chairman. Well, as a man in the field, Mr. Neal Evans, what 
practical steps do you think Congress can take to strengthen the laws 
so as to help eliminate this sort of tiling'^ Of course, I know that rec- 
ommendations are supposed to be made through channels. 

Mr, Neal Evans. Yes, sir. 

The Chairman. I will not ask you that question if 

Mr. Avis. That is all right, let him answer it. I beg your pardon. 
[Laughter.] 

Mr. Neal, Evans. Well, if Mr. Avis will permit me, in my humble 
opinion it seems to me like the most 

The Chairman. Please speak louder. 

Mr. Neal Evans. In my humble opinion it would seem to me that 
the simplest and most inexpensive enforcement would be to pass legis- 
lation to the effect that no distiller, rectifier, or wholesaler could ship 
from one State to another in interstate commerce without the tax 
on the whisky being paid at the source. That would prevent whisky 
crossing the lines without 

The Chairman. Something along the line of the Camp bill ? 

Mr. Neal Evans. In other words, the Federal Government should 
collect this tax at the source. It would be the same thing. 

The Chairman. Are there any other questions? I know Mr. Avis 
speaks for the Department. 

Mr. Goldstein, do you have a question ? 

Mr. Goldstein. No, sir ; I do not. 

The Chairman. All right, thank you very much, Mr. Evans. 

Mr. Avis, you trade places with the people sitting in the witness 
chairs, and let us get him across the table so that we can all talk louder. 

Mr. Avis, you swear the testimony you give this committee will be the 
whole truth, so help you God ? 

Mr. Avis. Yes, sir. 

The Chairman. Mr. Avis, do you want to make any general state- 
ment about the problem and then we might have some questions after- 
ward? I might saj^, by way of a preliminary statement, that at a later 
time, after some personal observations are edited slightly, the hearing 
of November 8, 1950, in which Mr. Avis testified at considerable 
length, will be made public ; but we would be glad if you would like 
to make a general statement about the problem and about what has 
been done, and what proposals you have, Mr. Avis. 

TESTIMONY OF DWIGHT E. AVIS, ASSISTANT DEPUTY COMMIS- 
SIONER, ALCOHOL TAX UNIT, UNITED STATES TREASURY DE- 
PARTMENT, ACCOMPANIED BY ROBERT B. RITTER, ATTORNEY, 
ALCOHOL TAX UNIT 

Mr. Avis. Mr. Chairman, if you could give me some idea of how 
much time I should take, I will try to mold my statement to meet the 
time. 



294 ORGANIZED CRIME IN INTERSTATE COMMERCE 

I have no prepared statement, and what I have to say will be — do 
you want me to try to finish in 15 minutes ? If you do, I will. 

The Chairman. We do not want to rush you, and you take all the 
time you want. 

Mr. Avis. Firet of all, Mr. Chairman 

The Chairman. You are Dwight E. Avis, Acting- 



Mr. Avis. No ; I am Assistant Deputy Commissioner. 

The Chairman. Assistant Deputy Commissioner, Alcohol Tax Unit, 
Bureau of Internal Revenue, in charge of enforcement. 

Mr. Avis. Yes. I have the law enforcement end. 

The Chairman. All right, sir. 

Mr. Avis. Mr. Chairman, first of all, I want to say this : The Alcohol 
Tax Unit would welcome a solution — that is, a legislative solution — 
of this export problem, if there is any solution to it. 

Now, it is not anything new. This export problem has been with 
us since the repeal of national prohibition, and this is a sordid story 
that has been portrayed here today, but it is not anything new. 

Now, the details are new, but this export traffic has existed, as such, 
since the repeal of national prohibition. 

Now, some of the Avholesalers — in fact, I would say most of them — 
that are, should I say, involved or conducting this export traffic abide 
with the Federal internal-revenue laws. In other words, they keep 
records of the consignee and the consignor, as required by the statutes. 
That is what we call a 52-A and B record. That is, they keep a cor- 
rect one. 

Now, it is obvious here from the testimony that there is falsification, 
and you might describe this export traffic as a racket, because law 
violators are involved in it. By that, I mean the law violators in these 
dry States, and in these local-option counties who come up to the so- 
called border export houses and buy this liquor at the export house 
or at the wholesaler's place of business, are law violators, and to that 
extent it is conducted as a racket; and that is clearly apparent from 
the testimony here today, and there is no need for me to reemphasize 
that. 

I think it is very pertinent to first look at the history of this traffic. 

I think the first State to enact an export law was Illinois, and I think 
it was followed by Maryland and then Louisiana, and more lately 
Arkansas. 

Now, there is not any question, and it is very apparent in the 
Arkansas situation, that some of these export laws, if not all of them, 
were enacted for the purpose of enabling the liquor dealers in these 
wet States to get this dry-State and local-option business. 

Now, there is no question about it at all, and in the case of jthe 
Arkansas statute, as Mr. Hewitt, I think, can verify, that statute was 
enacted for the purpose of getting the Oklahoma business. In other 
words, the shortest haul was to Arkansas rather than Illinois or 
Louisiana. 

You know, the Arkansas and Maryland statutes are inoperative by 
virtue of regulations or administrative construction on the part of 
State officials, but they can be changed at the stroke of a pen. 

The Chairman. They are not operating now, but they can be 
changed ? 



ORGANIZED CRIME EST INTERSTATE COMMERCE 295 

Mr. Avis. No ; they are not, but they have, and it can be changed, as 
I say, with the stroke of a pen, v^ith a change in administration or a 
change in policy. 

Now, I think that we ought to admit this : That the situation that 
you have liere is one in which several States, wet States, have enacted 
statutes which permit laAv violators from dry States and from local- 
option counties in wet States to buy tax-paid liquor. 

Now, that is the situation, and that is the reason that we have got 
this traffic. Now, let us see what jurisdiction the Federal Govern- 
ment has got here. 

The twenty-first amendment contemplated, if I am correctly ad- 
vised, that the States be allowed to control the liquor traffic within 
their borders. It also provided for a Federal protection for the dry 
States. 

Now, the Congress, in all its wisdom, in enacting the Liquor En- 
forcement Act of 1936, narrowed by statute this protection of the dry 
State when they said, in effect, that the Federal Government will 
.give the dry State protection if the dry State enacted a permit law. 
In other words, the permit law was a condition precedent to the opera- 
tion of the Federal statute. 

Now, under that law, Oklahoma qualified and later Kansas. Of 
course, as you all know, Kansas has repealed its prohibitory laws 
now, and I will deal with this Oklahoma situation a little bit later, 
because it is a situation in itself. 

Now, I want to make this point. 

The Chairman. Just tell us what you mean by "a permit law," 
Mr. Avis. 

Mr. Avis. A permit law, Mr. Chairman, is an enactment of a statute 
which would set up a permit system. In other words, liquor would 
have to be transported under permit, and if they did set up such a law, 
why, then we would have jurisdiction; yes, a permit for importation 
into the State. 

The Chairman. Or transportation across the State. 

Mr. Avis. Yes ; that is right. 

Now, I want to point out that 

The Chairman. I am sorry, I know your name, but I do not recall 
it. 

Mr. Avis. This is Mr. Ritter. He is an attorney. 

Mr. Ritter. My name is Robert B. Ritter. 

The Chairman. Mr. Ritter appeared with us at our previous 
meetings. 

Mr. Ritter. No ; someone else. 

The Chairman. Sir ? 

Mr. Ritter. Someone else. 

Mr. Avis. I wanted to point out, Mr. Chairman, that the jurisdic- 
tion that the Alcohol Tax Unit, Bureau of Internal Revenue, has is 
dependent, first, as far as the dry State is concerned, on the enactment 
of the permit law that the Federal statute requires ; and, second, as 
far as these local-option States, on an enforcement of the revenue 
statutes. 

Now, there are two statutes that have the application; one that 
requires the payment of a special tax to engage in the wholesale liquor 
business. 



296 ORGANIZED CRIME IN INTERSTATE COMMERCE 

The Chairman. That is the $27.50? 

Mr. Avis. No ; that is the retail. 

The Chairman. The retaiL 

Mr. Avis. The wholesale is $110 ; and the other is the requirement — 
I think it is section 2807 of the Internal Revenue Code, which requires 
the wholesaler to keep records of his transactions. 

If he fails to keep them or if he falsifies them, then he commits 
a Federal offense. 

Now, we pointed out to the committee in a letter under date of Oc- 
tober 3, 1950 — I do not seem to find it, but we said in substance that 
these revenue statutes — I have it here, and we said this 

The Chairman. At this point, let us make the whole letter a part 
of the record. Is there any objection ? 

Mr. Avis. Not at all, sir, Mr. Chairman. 

The Chairman. And then you may read from any part of it. 

Mr. Avis. I would kind of like to have my copy, Senator. 

The Chairman. Well, we have one, and we will put it in the record. 

Mr. Avis. Suppose I put it in ; you may have trouble locating it. 

The Chairman. Let us put yours in and w^e will send it back to you. 

Mr. Avis. We said this — I am not going to read it, but just a short 
paragraph : 

The penalties set out in the statutes referred to are regarded as adequate for 
revenue puiTposes. These laws, however, were never designed to protect the local- 
option State, nor will their enforcement stop the flow of liquor into dry counties 
from wet counties within the State or from outside the State. 

(The letter referred to follows :) 

Hon. EsTES Kefauveb, 

Chairman, Special Committee To Investigate Organised 
Crim,e in Interstate Commerce, 

United States Senate, Washington, D. C. 

My Dear Senatok : This is with reference to your communication of Septem- 
ber 5, 1950, directed to Mr. Carroll E. Mealey, Deputy Commissioner, Alcohol 
Tax Unit, in which you indicate that your committee is interested in the inter- 
state traffic in tax-paid distilled spirits, particularly as it may relate to operations 
of organized criminals. 

As you are aware, since the repeal of the eighteenth amendment and the 
National Prohibition Act, the .iurisdiction of the Federal Government over the 
interstate traffic in liquor has been confined within three channels : First, the 
protection of dry States ; second, the collection of internal-revenue taxes on 
spirituous, vinous, and malt liquors; and, third, protection of the consumer and 
the prevention of unfair trade practices under the Federal Alcohol Administra- 
tion Act. 

To provide for the protection of dry States, Congress enacted the Liquor 
Enforcement Act of 1936. By the terms of this act, it was was necessary for a 
State to pass certain enabling legislation which would prohibit imports generally 
or provide a permit system. The States of Kansas and Oklahoma originally 
qualified for such protection, and during the period the Liquor Enforcement Act 
was applicable the Alcohol Tax Unit apprehended and prosecuted hundreds 
of interstate transports. Kansas repealed its prohibition amendment and laws 
in 1948 and became a wet State. The Liquor Enforcement Act was no longer 
applicable. 

Oklahoma, though constitutionally dry. repealed its enabling statute in 1947, 
and from that time until 1949 the Liquor Enforcement Act was not applicable 
to traffic into Oklahoma. In 1949 the Oklahoma Legislature again enacted what 
the State attorney general ruled to be enabling legislation. The Alcohol Tax 
Unit again undertook the enforcement of the Liquor Enforcement Act. Cases 
were made in all three of the judicial districts in the State. The judges in two 
of the districts ruled that the latest Oklahoma statute did not meet the re- 
quirements of the Liquor Enforcement Act and that the act was not applicable 



ORGANIZED CRIME IN INTERSTATE COMMERCE 297 

to traffic into Oklahoma. These cases have been appealed and are awaiting 
the decision by the Tenth Circuit Court of Appeals. Mississippi, another dry 
State, has never qualitied for Federal protection. 

The Bureau's principal remedy in aid of tax collections, insofar as the traffic 
in tax-paid liquors is concerned, is the prosecution of wholesalers who carry on 
business without payment of the occupational tax, who fail to keep proper 
records, or who falsify their records (violations of sees. 3250, 2857, I. R. C.). 
These sections have been used, where applicable, in the prosecution of those 
engaged in the practice of selling to dealers from monopoly or local-option States. 

The files of tlie attached list of cases will furnish tlie names of persons who 
have been engaged in interstate traffic in violation of Federal law during the 
last 10 years. Only the principal defendants connected for the most part with 
wholesale liquor dealers have been listed. 

As to the operations of the J. B. Wenger Co., wholesale liquor dealer, Cairo, 
111., to which State Revenue Commissioner Evans referred, the Alcohol Tax 
Unit has caused indictments to be returned against J. B. Wenger in both the 
northern and southern judicial districts of Mississippi ; and a third case, in the 
southern judicial district of Illinois, involving, in additon to Wenger, the Balti- 
more groui3 — Winer, Markoff, Wishner. Gildar, et al. — is now ready for submis- 
sion to the United States attorney. This case involves a conspiracy to falsify 
records in connection with the sale of liquor to customers from North Carolina 
and one or two other States. 

The Bureau is fully conversant with the objective of Commissioner Evans in 
Tennessee ; and the district supervisor of the Alcohol Tax Unit, Louisville, Ky., 
has cooperated with him to the end that the State liquor tax might be collected 
in its entirety. 

The Bureau has no facts to indicate that the group referred to by Commis- 
sioner Evans is financed by the persons naujed. A. T. McAboy and Sol Auslander, 
referred to in this connection, have been associated with the interstate traffic for 
more than 10 years. Insofar as is known, neither has any financial interest in 
any wholesale liquor-dealer establishment at the present time, although they 
are profiting from this traffic, probably through some brokerage arrangement. 
Both have been convicted of Federal liquor-law violations. Joe Davis, also re- 
ferred to, is connected with the Seagram Distilling Co. in a sales capacity. 

The penalties set out in the statutes referred to are regarded as adequate for 
revenue purposes. These laws, however, were never designed to protect the local- 
option State, nor will their enforcement stop the fiow of liquor into dry counties 
from wet counties within the State or from outside the State. 
Very truly yours, 

Geo. J. ScHOENEMAN, Commissioner. 

Mr. A\t:s. In other words, these are revenue statutes passed a great 
many years ago for the purpose of enabling us to trace liquor for tax 
purposes, and never designed or intended to stop the flow of liquor into 
dry States or into local option counties, and their enforcement will not 
do it at all. 

Now, that is the limit. 

Mr. Burling. May I interrupt ? I would like to get, if I have your 
permission, Mr. Chairman, I would like to get your ideas a little more 
clear on the record as to why, if the enforcement of the laws requiring 
truthful statements concerning consignees was effected, why that 
would not go a long way in cutting down the export trade since the 
commissioners of the State could then check to see where the liquor 
was going. 

Mr. Avis. Well, the State of Mississippi is using those records to 
collect the 10 percent black-market tax and they are doing an awful 
good job of collecting it and finding it very applicable. As a matter 
of fact, in order to satisfy the United States attorney here about a year 
ago I had the records of the largest exporter in this business investi- 
gated, and he sells largely to Oklahoma and Mississippi. It took us 
about 3 months to do it but to satisfy him, I had every transaction in- 

68958— 51— pt. 12 20 



298 ORGANIZED CRIME IN INTERSTATE COMMERCE 

vestigated, and the net result was that we practically traced every 
shipment and the records were accurate, and they were true. 

Now, in other words, as far as the State of Mississippi is concerned, 
there is not any reason to falsify the records except to defeat the 10 
percent black-market tax, and in most instances, I would say, that 
the records are not falsified and that the tax is collected. 

The Chairman. Now, Mr. Avis, these commissioners here, particu- 
larly one from Georgia and North Carolina, said they had a whole list 
of names, and all of them were falsified, and that that was the usual 
practice. 

Mr. Avis. I was addressing myself to Mississippi. 

The Chairman. Yes, sir. 

Mr. Avis. And do not misunderstand me, Mr. Chairman, tnere 
have been falsifications involved here, there is no doubt about that 
at all. 

The Chairman. Do you revoke their license when they falsify 
records ? 

Mr. Avis. We proceed against their permits, and we proceed crim- 
inally also ; and that is if the Department of Justice does not compro- 
mise the case, why, in that event, that prevents us from proceeding 
against the permit. 

The Chairman. Well, how about these fellows here. Have you 
ever proceeded against them? 

Mr. Avis. I am coming to that situation. Do you want me to come 
to that now ? 

The Chairman. Go ahead. 

Mr. Avis. I would like to make this general statement, if I can. 

The Chairman. Yes. 

Mr. Avis. Now, I have pointed out here what our jurisdiction is 
with reference to the dry State, and I pointed out what our jurisdic- 
tion is with reference to the local option State. 

I would like to deal with, just most briefly, the Mississippi and the 
Oklahoma situations, and then I will come to Georgia and Tennessee, 
and if you want me to take the time, I think it is necessary to a full 
understanding of this situation. 

In Mississippi, at the State level, they have a 10 percent, which 
has been described as the black-market tax, which is nothing more 
than a sales tax in which they collect, and in which they use our records 
from wholesalers primarily in Louisiana, because that is the short- 
haul to collect, and it is a dry State, constitutionally dry, but they are 
interested in taxes at the State level, and not prohibition, and that is 
the situation there. 

Now, that becomes important. You might ask why is tliat impor- 
tant? When you consider legislation, if you take the basic proposi- 
tion that the States are entitled to regulate the liquor traffic in the 
State, then when you start to consider legislation which is going to 
meet the situation in Mississippi, Oklahoma, Tennessee, Georgia, and 
these other States, you have got to determine wliat the State's attitude 
is, and I think that Commissioner Evans thoroughly understands that. 

Mr. James C. Evans. I do agree with you. 

Mr. Avis. Because we have discussed it. 

Mr. James C. Evans. I understand. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 299 

Mr. Burling. May I interrupt you ? I just want to get this clear. 
Would it be your position or your assumption that the State of Mis- 
sissippi is not trying to 

Mr. Avis. For all practical purposes at the State level, I would say, 
to each State; that is a pretty broad statement. In other words, they 
are taxing liquor and collecting it. I think Mr. Argo here referred 
to the State tax collector, I believe, going in there with a large quan- 
tity — I believe that was the testimony 

Mr. Burling. He said eight hundred to a thousand cases. 

Mr. Avis. And, of course, that is confirmation of what I am saying. 
It is hard to believe, but that is the situation. 

Mr. Burling. Is it your position, then, that the bill that, I believe, 
you assisted in drafting 

Mr. Avis. Yes ; I will deal with that if you will permit me. 

The Chairman. Let us permit Mr. Avis to continue. 

Mr. Avis. I do not want to delay this thing, and I have talked 
already for 15 minutes. 

The Chairman. You go along in your own way for awhile, and we 
will not ask any questions. 

Mr. Avis. Now, in Oklahoma, let us see what the situation is there. 
They complied with the Federal statute in 1937 or '39, in enacting 
enabling legislation. We prosecuted practically all the large vio- 
lators in that State, and it is a matter of court record. 

In 1947 they repealed their State law. That meant that the Federal 
law was no longer applicable. 

We then began to enforce the internal-revenue laws in the State of 
Oklahoma, and qualified these liquor dealers, these violators, these 
bootleggers, if you want to call them that. In other words, we sort of 
legitimatized them. In other words, we made them pay a special tax, 
made them keep records as wholesale liquor dealers, because the law 
says, and it makes no distinction between, as far as taxpayers are con- 
cerned, whether they are criminals or legitimate businessmen, so we 
qualified them as best we could, and that is some undertaking in itself. 

Next, the legislature passed another law, and there is some doubt as 
to whether or not it was enabling legislation, but the State attorney 
general held that it was. So we started to enforce the Federal law 
again, and these people that we qualified, then all went underground. 

Then, the Federal court, and after 8 months, and it went clear to the 
Tenth Circuit Court, held that it was not enabling legislation, so we 
are now engaged in requalifying under the internal-revenue law the 
violators in Oklahoma, if you want to describe them as such. 

Now, right now the wets and the drys in the State legislature in 
Oklahoma are slugging this thing out as to whether or not they are 
going to have another enabling act, and if they do, then the Federal 
law will be applicable again, and we will go through the same thing 
all over again. 

Now, the difficulty with that proposition, Mr. Chairman, is, as a law- 
enforcement proposition, and from the point of view of the prosecutor 
in the courts, that you become less effective every time you change the 
situation. It just is bound to be that way, and that is the history of it. 

Now, Georgia, I want to say this : that Mr. Redwine is really trying 
to enforce his law, there is not any doubt in our minds about that. 

The Chairman. He impresses me very favorably. 



300 ORGAlSnZED CRIME IN INTERSTATE COMMERCE 

Mr. Avis. Yes ; and he is interested in maintaining local option, as I 
understand it, keeping this liquor ont of these dry counties. 

Now, in Tennessee, Mr. Evans has frankly told you here that he is 
the revenue commissioner, and he is trying to get the taxes out of this 
traffic. In other words, if it is going to exist, he wants to get the taxes 
out of it, and I think he is entitled to it, and we have been cooperating 
with him in every way to the end that the State of Tennessee can col- 
lect its taxes. 

Now, North Carolina, I think that situation is somewhat similar to 
that in Georgia. Mr. Winston is endeavoring to enforce his law, and 
the State bureau of investigation is trying to make cases where liquor 
is transported into the local-option counties. 

South Carolina has still another situation. They have a county- 
store system, and in this bill that we have drafted, it does not take 
care of their situation. 

Now, I will deal with the bill just very briefly. That bill, I might 
say, was drafted in the Alcohol Tax Unit after we had had several 
conferences with the State administrators in an effort to try to let 
the States control their own situation, whether they are interesed in 
revenue or whether they are interested in State prohibition or local 
option, or whatever it is, by providing a way, through action of the 
legislature, in setting up of a permit system whereby they could get 
some Federal protection. 

Now, it is the nearest thing that we have been able to determine 
that would in anywise give these State administrators the revenue that 
they want. 

I do not know, and I want to be frank about this thing, whether 
it can be enforced or not. We did a pretty good job on the Liquor 
Enforcement Act in Oklahoma, although the road was going in at 
every section line, and you just could not keep liquor out, but we did 
prosecute a lot of people, and undoubtedly did restrict it. 

I think the effect of that bill was probably that it eliminated this 
border wholesale situation that you are talking about, but it will 
spread to the retail outlets, there is not any question about that. 
Instead of hauling 500 or 300 or 400 cases, why, it will be lO's and 
20's and 30's, and there is a great number of retail outlets where 
liquor can be purchased, and I say this bill would require consid- 
erable personnel to do any kind of an enforcement job, and an ex- 
tremely difficult one, and because this whole picture, while it has 
its revenue aspects, from the point of view of the States, and par- 
ticularly those States that are interested in revenue, and certainly 
the Federal Government has got a revenue stake in this thing, basically 
it involved a prohibition situation, because it is the demand in 
these dry States and in these dry counties that furnishes the impetus 
for this traffic. 

Now, I spent some 3 hours in the last, less than 2 weeks before 
the Ways and Means Committee in connection with the proposed 
increase in the liquor-tax rate from $9 to $12, and I spent considerable 
time explaining to that committee why we still had so much moon- 
shining, so much illicit distilling, so much ton-tax-paid liquor in the 
Southern States. 

Now, it is in that area where we have this moonshine and this illicit 
distilling that most of this tax-paid liquor that is involved in this 



ORGANIZED CRIME IN INTERSTATE COMMERCE 301 

export traflSc is going, and if there has been lack of vigilance on the 
part of the Federal Government here — and I have explained just what 
our limited jurisdiction is — it is due to the fact that this is tax-paid 
liquor, and it is going into an area where there is a great deal of 
non-tax-paid production. 

I don't say there is any lack, but I say that if there is. 

Now, coming to this — well, first of all, let me give you some figures 
here. There has been a lot of discussion about dollars and cents here, 
and how much liquor is either imported into or exported from these 
various outlets. 

In the month of December our figiu^e shows pretty nearly 35,000 
cases to Oklahoma, 54,000 cases to Mississippi, <,000 cases to North 
Carolina, 2,300 cases — did I give you the South Carolina figures? 

The Chairman. No, sir. You had North Carolina. 

Mr. Avis. 2,300 cases to South Carolina, 1,091 cases to Georgia, 
2,356 to Alabama ; and then there is Mississippi — well, 1,200 to West 
Virginia, and a smaller amount, 503, to Arkansas ; 418 to Kansas, 698 
to Texas. 

Now, we don't keep a record on these other States, but the purpose 
of this record is to give us as much insight as we can get from the 
records of these wholesalers as to this traffic, and I want to deal also 
with the Louisiana situation. 

Now, it has not been discussed here, but we have quite a few whole- 
salers in Louisiana who are also involved in this export traffic. They 
operate from Shreveport, La., supplying the Oklahoma traffic; Tal- 
lulah. La. ; Delta, La. ; Bogalusa, La. ; Galvez, La. ; New Orleans, and 
in a miscellaneous group from other Louisiana points. 

Don't misunderstand me, please, that these wholesalers are all en- 
gaged in falsification of the records. I am just talking about the 
export traffic, because you can conduct it and make a true record or 
you can conduct it and make a false record. Wlien you make a false 
record you violate the Federal statutes. Now, that is your situation in 
Cairo. 

I want to just interject to say on this bill that I think Mr. Evans 
made that point, but I was not here, that we haven't got Treasury 
approval on that ; we have not submitted it, but we did draw it, after 
discussing this situation with the southern administrators, and the 
effect of it will be to substantially restrict this traffic, and probably 
eliminate the wholesale, border wholesale, house. The traffic will then 
go to retail outlets, and be strictly a police problem from there on. 
Is that about your conception of it ? 

Mr. James C. Evans. In general, I agree with you on that. 

Mr. Avis. Now, I might make just one more point before I come to 
the Cairo situation, and that is that we have tried to bring this export 
traffic out in the open. Now, that is particularly true, and I have 
already discussed it with reference to the Oklahoma situation. 

The Chairman. I am going to have to ask for another 10-minute 
recess. Would you rather finish up tonight or tomorrow ? 

Mr. Avis. I would just as soon finish tonight, if it is convenient 
with you. 

The Chairman. We will have to have a recess for 10 minutes. I 
am awfully sorry. 

(Short recess.) 

The Chairman. All right, Mr. Avis. 



302 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Avis. Mr. Chairman, I think, perhaps, I have made it clear that 
we are — I am not authorized to recommend any legislation here, 
because it has not had Treasury approval, but we have submitted this 
bill to the State administrators as being, at least, a partial solution to 
this problem ; and I say to you that I sincerely hope, and I think I can 
speak for my agency, that the outcome of these hearings will determine 
the Federal Government's responsibility in connection with this mat- 
ter, because it has got to the place where it is downright embarrassing 
to us. I mean, this traffic went along for many years without any 
complaint to speak of from the State officials, but they are interested 
in it, and there ought to be a solution found to it, if possible. 

Now, as to the Cairo situation, reference was made here this morn- 
ing to the remarks that our district supervisor, Mr. Conerty, made 
at a meeting of the State administrators in Atlanta. 

Now, I don't know what Mr. Conerty said there, but if he did 
make such a remark, it was very unfortunate, and I will assert that his 
present knowledge of the J. B. Wenger operations are such that he 
would not make that remark today. 

The Chaieman. Well, did you try to find out whether he made such 
remark ? 

Mr. Avis. I have not, but I think there was some transcript of that 
meeting, and I have not — so far as Mr. Conerty is concerned, when I 
finish, if you want him brought here to testify, why, we will be glad 
to do it. Senator. 

The Chairman. How would it be if you got him on the telephone 
or wired him to send us a letter about just what he said and why he 
said it, because on the face of it at the meeting at Atlanta, this Mr. 
Wenger was discussed, and Mr. Wenger has been a thorn in the flesh 
of the southern commissioners for quite a long time ; and on the face 
of it, it does not look like you have got a man much in sympathy with 
the problem if he thinks that Mr. Wenger, according to that time on 
the information that was available about Mr. Wenger, was a good, 
law-abiding American citizen, and didn't deserve to be criticized, as 
he was being criticized. 

Mr. Avis. Well, Mr. Chairman, can I just say this : That since that 
meeting, Mr. Conerty's office has made a case involving J. B. Wenger 
and 

The Chairman. Made a case of what ; a Federal case in the district 
court ? 

Mr. Avis. May I confer here with counsel ? Well, now, I am willing 
to give the nam.es — I do not know whether they ought to be given in 
a public record, inasmuch as this is a matter that has not yet been 
presented to the grand jury, Mr. Chairman. 

The Chairman. Well, if it has not been presented to the grand 
jury, it will be cut, so do not give the names. It will be 

Mr. Avis. I will say 

The Chairman. Wait, just a minute. The names will be given in 
executive session, and the names will be kept in a separate record, and 
I will ask the press not to print it. 

Mr. Avis. I will say that the office of the district supervisor in Chi- 
cago, that is Mr. Conerty's office, has submitted to the United States 
attorney a case involving the falsification of 52 records by certain of 
the individuals that have been discussed here today in connection 
with the J. B. Wenger Co. operation. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 303 

Tlie Chairman. Well, that can go on the record. All right, leave 
that on the record. 

Mr. Avis. And that that case has been in the United States at- 
torney's hands in the eastern judicial district of Illinois since October 
1950. 

The Chairman. October 1950? 

Mr. Avis. Yes. 

The Chairman. What is the status of it now ? 

Mr. Avis. It is to be presented to the grand jury the latter part of 
this month, I think about March 26. 

The Chairman. Isn't that pretty slow action'^ Here we are in 
March, and we have had October, November, December, January, and 
February. 

Mr. Avis. Mr. Chairman, I think in that particular district they 
do not have grand juries very often, and that may account for the 
delay in this matter. 

The Chairman. All right, sir. 

In the meantime, this Mr. Wenger, has his license been revoked or 
suspended ? 

Mr. Avis. I believe it was in September, September 19, that we 
issued a citation, based upon this investigation and, incidentally this 
investigation covers the operations of J. B. Wenger in, what I will 
describe as, the Baltimore group, because there has been some evi- 
dence that this group moved out from Baltimore over a period of 
months. We have issued a citation, that is, the district supervisor in 
Chicago issued the citation, and I believe it was on September 19, 
1950. 

The Chairman. How long does it take a citation to operate? 

Mr. AvTES. Well, ordinarily we do not proceed unless the criminal is 
disposed of, in order that we may not disclose the evidence in the crim- 
inal case. The United States attorneys will almost invariably request 
that these administrative proceedings be held up until tlie criminal 
case is disposed of. 

The Chairman. Well, you do not have to win your criminal case 
to revoke a license, do you ? 

Mr. Avis. No ; but we have to disclose our evidence, Mr. Chairman. 
We have got some confessed testimony in this case, Mr. Chairman, 
and 

The Chairman. You mean on the testimony presented here today 
that you would not be justified in going out and suspending this 
fellow's license, revoking it ? 

Mr. A^t;s. Well, I am inclined to think that the testimony here, 
of course, we have not assembled that in all, that there is a basis for 
proceeding, not only administratively, but criminally. Now, of 
course, that can be determined when we have 

The Chairman. I am glad to hear you say that because that is my 
opinion, too. But the thing is, when information like that is devel- 
oped, how long does it take to get the license revoked ? I mean when 
there is a falsification and flagrant violation and highjacking and other 
tactics that they have engaged in, how long does it take to get the 
license revoked? 

Mr. Avis. Well, that all depends on how long it takes to dispose 
of the criminal case, Mr. Chairman. As I say, a citation has been 
issued, and there is also a letter of contemplated denial involved 



304 ORGMvflZED CRIME IN INTERSTATE COMMERCE 

against the successor company, that is this M. & B., which was also 
issued on the same day, and it involves the same evidence. 

The CiiAiRMAx. What is the law with reference to revocation of 
license, Mr. Avis ? 

Mr. Avis. Well, these permits are subject to revocation for violation 
of the internal revenue laws or for the violation of the Federal 
Alcohol Administration Act. 

The Chairman. Then, they have a right of appeal? 

Mr. Avis. Oh, yes. 

The Chaieman. But the right of appeal does not carry with it the 
supersedeas, does it ? 

Mr. Avis. Oh, yes. 

The Chairman. If you do not want it to, it does not. 

Mr. Avis. Oh, yes. 

The Chairman. Then, they appeal to an agency in your department? 

Mr. Avis. Yes, sir. Since the Administrative Procedure Act was 
enacted, these hearings are held by a hearing examiner, and then 
they have the right of appeal to either the Deputy Commissioner of 
the Alcohol Tax Unit or they can go to the court directly. 

The Chairman. But in going to the court they do not have a right 
to supersede the action of the Alcohol Administration? 

Mr. Avis. Yes, they do, sir. 

The Chairman. They have to make a supersedeas bond and get 
a supersedeas writ, though, do thej not ? 

Mr. Avis. Well, no; I think not. Mr. Ritter is very experienced, 
and I would like for him to answer that question, Mr. Chairman, if 
he may. He is one of our attorneys. 

Mr. Ritter. The permit is not revoked as long as 

The Chairman. You will have to talk louder. 

Mr. Ritter. The permit is not revoked while there is any appellate 
procedure going on. 

The Chairman. That is just your procedure ; that is not mandatory 
under the law. 

Mr. Ritter. Yes. 

Mr. Avis, The law provides for it. Senator. 

The Chairman. The law provides that while they are appealing 
through the courts the permit cannot be revoked. 

Mr. Ritter. The original order of the hearing examiner is appealed 
from, and then the permit stays in effect until action is taken by the 
court, if it goes to the court. 

The Chairman. That is just the way you handle it; the law does 
not provide it. 

Mr. Ritter. We would like to throw them out immediately if we 
could. 

The Chairman. Well, let us examine the law and see if we can do 
something about it. 

All right. Is there anything else ? 

Mr. Avis. I think the Administrative Procedure Act, Mr. Chair- 
man, governs that. I mean that was the situation even before the 
Administrative Procedure Act, but there the Congress reenacted it, 
and it applies to all proceedings in all departments of Government of 
this character. 

Mr. Ritter. We have had cases which have been on appeal for 
2 years. We would like to throw them out immediately, but we cannot. 



ORGANIZED' CRIME IN INTERSTATE COMMERCE, 305 

Mr. Avis. Some of them have been carried to the Supreme Court 
of the United States. 

The Chairman. I thought the Administrative Procedure Act pro- 
vided that as long as it is being operated under that act — that you are 
right — that that holds the permit ; but then when they get to the courts 
that they had to get a supersedeas or mandamus or something to pre- 
vent you from suspending their permit. 

Mr. RiTTER. The law provides for appeal now to the district court. 
It used to be the court of appeals, but the law was changed, and it is 
now the district court, and the permit remains in effect until the law 
passes upon it. 

The Chairman. All right. Is there an3^thing else, Mr. Avis? 

Mr. Avis. I believe not, Mr. Chairman. 

The Chairman. Mr. Burling, do you or Mr. Goldstein want to ask 
any questions? 

Mr. Burling. During the intermission or recess I talked to Mr. 
Avis, and I would like to put on the record my understanding of what 
he means to say and what he meant to say earlier at the time when I 
did not understand the testimony. 

The Chairman. I think 3^011 said at the beginning that the existing 
Federal laws were for Federal revenue purposes, and even the theo- 
retical 100 percent enforcement of them would do little good to the 
States, to prevent the problem we are talking about today. 

I think what he meant to say was that as a practical matter the 
difficulty of enforcing the regulations with respect to proper records 
is so great that the existing Federal law will not work, cannot be 
enforced sufficiently. Is that correct, Mr. Avis ? 

Mr. Avis. That is about it substantially; that is substantially 
correct. 

The Chairman. All right. Is there anything else, Mr. Burling? 

]Mr. Goldstein. I would like to ask a question that does not tie 
in necessarily with your previous testimony, but possibly is some- 
thing in which you could give us some information. 

Do you have any understanding why a State would find it to its 
advantage, that is, the State in terms of its local population in gen- 
eral, would find it to its advantage to have an export law, such as 
Illinois, which does not bring in any revenue to the State, and so 
far as we can see, at least from the testimony, only benefits a small 
group of wholesalers? Is there any incentive for a State to main- 
tain such an export trade? 

Mr. Avis. Well, I would say that only for the accommodation of 
the liquor dealers, and this Arkansas situation, wliich I am rather 
familiar with, and which is not operating today, is clearly indicative 
of that. In other words, that law, that export law, was passed in 
Arkansas to get the Oklahoma business because Arkansas was closer 
to Oklahoma than Louisiana and Mississippi. 

I want to say this, for the sake of the good old State of Arkansas, 
too, that when the governor — and they have got a good one out there — 
and his State liquor commissioner, an excellent commissioner, when 
they found out that the attorney general of Oklahoma had held that 
this statute was enabling legislation, why, they closed these places 
up, and they have had a hard time doing it because one of them 
operated under a court injunction for about 4 months. 



306 ORGANIZED CRIME IN INTERSTATE COMMERCE. 

Mr. James C. Evans. Mr. Chairman, I might say right there that 
the State took the unusual position, the State officers did, that the 
law was unconstitutional. Dean Morley, the revenue commissioner, 
fought the law, and got the export houses eliminated in Arkansas. 

Mr. Avis. "Wliat you have got here is certain States that have 
enacted export laws, and the purpose that those export laws serve 
is to enable law violators in other States to come into those States 
and purchase at the wholesalers' place of business tax-paid distilled 
spirits, and then it becomes a mouse-and-cat game between the local 
officers when the stuff gets on the roads. 

The Chairman. Now, if I may ask you a few questions, is it true 
that this retail liquor dealer's permit, the $27.50 one, that in years 
past you used to require some identification, and some slio.wing that 
the person who paid the money and signed the application or paid 
the license, was actually the person who was going to do business ? 

Mr. Avis. No, Senator — I mean Mr. Chairman — that has never 
been required. There are 400,000 of those special tax stamp holders 
in the United States, and it is nothing but a receipt for special taxes. 
It is in no sense a license whatsoever. 

The Chairman. Why don't we make it a license? Would that 
enable these people, these communities, to do a whole lot toward en- 
forcement ? 

Mr. Avis. W^e had that matter under discussion and consideration, 
and we have this black market during the war, and that was a tremen- 
dous thing. It was a cash side-money transaction, and none of it 
went on the books of account. It was strictly an income-tax fraud 
in toto, and we, because of the tax aspects of this thing, inasmuch as 
millions of dollars were involved in it, why, we considered this very 
question of licensing the retail liquor dealers, but we just regarded it 
as a hopeless proposition, and it was discussed at the high treasury 
level, and we clecided that it was not practical, and it was not feasible 
because, you see, you have got a local situation, if you will permit 
me to inject, confined to a few States here, and to impose it, you have 
got to impose it on all the other retail liquor dealers throughout the 
United States, which we have no difficulty with whatsoever. 

The Chairman. Why should a person coming in and getting his re- 
tail liquor dealer's stamp or paying his tax, why should he object 
to identifying himself, and under penalty of violating the Federal 
law, be required to sign his right name ? 

Mr. Avis. Well, I think, Mr. Chairman — I don't consider that a 
solution to this thing, and Mr. Evans and I have been over it many 
times, and I don't think he does, either. But, nevertheless 

Mr. James C. Evans. It is a help, not a solution. 

The Chairman. It is a help but not a solution; but certainly it 
helps these people to trace down these people doing all this buying. 

Mr. Avis. The only objection of the Bureau of Internal Revenue 
is the additional work, and those problems connected with it. 

The Chairman. Additional work? They come in and put out 
$27.50, and some kind of a receipt is given to them ; they sign some 
kind of a name or sign some kind of an address, and why shouldn't 
we require them to give their right name and furnish some identifica- 
tion? How can an honest man have any objection to doing that? 

Mr. Avis. That, of course, should be done, and we have got that 
matter under consideration. 



ORGANIZED CRIME IN INTERSTATE COMMERCE. 307 

The Chairman. Will you recommend it, sir ? 

Mr. Avis. What is that? 

The Chairman. Will you recommend it ? 

Mr. Avis. Yes ; I recommend it. 

The Chairman. All right. That is what we want. 

Mr. Avis. I don't consider it a solution, though. 

The Chairman. We understand that. 

Mr. Avis. Yes. It would help. 

The Chairman. But at least they w^ould not be running into blind 
alleys every time a person who holds an K,. L, D., who buys a lot of 
liquor at wholesale, gives a fictitious name and address, and these 
people try to chase him down, and they would not run into a blind 
alley every time. It would be helpful in that way. 

Mr. Burling. It is not clear to me whether, as a matter of Federal 
law, if I walk into your office in Tennessee and say, "I am Clarence 
Evans," and put down $27.50, whether I have committed a crime, as 
the law now is. 

Mr. Avis. That all depends on wdiether or not you have made a false 
statement, and if you have, why 

Mr. Burling. Well, I am not Clarence Evans. 

Mr. Avis. If you aren't, then you have committed an offense; you 
have sworn to what is called a form 11. 

The Chairman. You have to sign a form 11 when you get an 
R.L. D.? 

Mr. Avis. That is right; that is the application. They come in 
through the mails, Mr. Chairman, a lot of them. 

The Chairman. Well, it is manifest here that hundreds or maybe 
thousands of falsifications have been made, from the testimony of these 
gentlemen today. Have you prosecuted or recommended the prosecu- 
tion of any of these people for making false entries? 

Mr. Avis. Oh, yes. 

The Chairman. How many ? 

Mr. Avis. We have submitted a list to the committee here under date 
of October 3, of this entire export, all these cases that we have had 
over a period of years. 

The Chairman. How many have been prosecuted under the — you 
prosecute them under the general perjury statute of the Federal Gov- 
ernment, is that correct ? 

Mr. Avis. No ; it is under 2807. 

The Chairman. I mean the false statement. 

Mr. Avis. That is the Internal Revenue Code ; that is the making of 
a false record. 

The Chairman. Well, now, it seems that if you prosecuted a few of 
these cases they might stop doing it. 

Mr. Avis. Since you have raised it, I want to be frank about this 
thing, Mr. Chairman. 

The Chairman. Yes, sir. 

Mr. Avis. The Department of Justice, in fact, many United States 
attorneys are inclined to recommend that these cases be compromised. 

The Chairman. Be compromised? 

Mr. Avis. Yes; and many of them are compromised, and they are 
usually compromised for a substantial amount, considerably more 
than the courts — the fact of the matter is, I would say probably on 
the average 5 tunes what the fuie would be, maybe 10 times what 



308 ORGANIZED CRIME IN INTERSTATE COMMERCE. 

the fine would be, and the courts, because there is no fraud in the 
revenue involved here, the courts, where you do take these cases before 
the courts, have been inclined, generally speaking, to be lenient with 
them with this type of violator, and I think is responsible for the 
United States attorneys' point of view, and is responsible for the 
Department of Justice's action in compromising them. 

The Chairman. All right, sir ; Mr. Redwine. 

Mr. Redwine. You asked a question about false names. 

The Chairman. Yes, sir. 

Mr. Redwine. I wanted to also ask if you did not think it would 
be a criminal offense to give a false address; in other words, giving 
an address in Georgia by men in Illinois. 

The Chairman. How about that ? 

Mr. Avis. The same reason, I mean for the same reason, that is 
desirable. 

The Chairjman. So that is a violation of the present internal- 
revenue laws, but nothing is done about it as a practical matter, 
nothing is done about it ; is that the size of it ? 

Mr. Avis. Well, now, it is our position that it is the wholesale 
liquor dealers' responsibility to know who they are dealing with, and 
a great many of them do. In other words, you don't carry $10,000 in 
cash out to Cairo or some place else without the wholesaler knowing 
who he is doing business with, and it is our position that he should 
know who he is doing business with. 

The Chairman. Now, let us stay with the R. L. D. Undoubtedly 
if they had to give their right name and their right address, under, 
perhaps, a most severe penalty of law, or if the present one were 
more strictly enforced, that, in the judgment of these gentlemen, and 
I certainly agree with them, would be a substantial help to them. 
So that is one thing we can do. 

Mr. Avis. Yes. 

Mr. RiTTER. They are required now to give their correct name 
and address. 

The Chairman. Well, they are required, but they do not do it, 
and some cases may be brought where they get compromised, so they 
all take a chance on it, apparently, so we need stronger enforcement, 
and maj'be we need a rewriting of that law. 

Mr. Ritter. Boost that tax and make it worth while. 

Mr. Avis. That was one of the recommendations that was made. 
The Treasury did not make it, but the Deputy Commissioner made it 
to the Ways and Means Committee. 

The Chairman. You mean boost the $27.50 tax? 

Mr. Avis. Yes. 

The Chairman. Now, while we are talking about the retail RLD, 
are there any more questions ? 

Mr. Avis. Could I make this point, Mr. Chairman ? 

The Chairman. Yes, sir. 

Mr. Avis. You understand that you do not have to have a special 
tax stamp in order to buy liquor ; merely to sell it. 

Now, the reason why the wholesalers that are engaged in this kind 
of traffic want to use this special tax stamp is a matter of defense, 
pure and simple, so that if we make out a falsification case on it on 
them, or attempt to, that they can produce — they can say that, "Well, 



ORGANIZED CRIME IN INTERSTATE COMMERCE 309 

I sold this to a man. I didn't know who he was. He had a special 
tax stamp issued to John Jones." 

The Chairman, ^¥h^y shouldn't we require the wholesaler to sell 
only to the holder of an RLD ? That would bring you in some money. 

]Mr. Avis. That, of course, involves this proposition of sufficient 
identification, and all of these retail liquor dealers. 

The Chairman. Well, you say the present law does not require the 
fellow who goes up to the M. and B. to have an RLD, Suppose 
that you make it a penalty for a wholesaler — I mean, if he sells to 
anyone not having an RLD stamp or tax, whatever you want to call 
it, wouldn't that help the problem a good deal ? 

Mr. Avis. I am inclined to think so. I am not sure that I got the 
full import of your question. 

The Chairman. All right. Are there any other questions about 
the RLD? 

Mr. Goldstein. Mr. Avis, supposing I live here in Arlington, Va., 
and I went down to Georgia, and went to the office there to buy an 
R. L. D. stamp and gave a Mississippi address. Could I get one under 
those conditions, in other words, registering from Mississippi in 
Georgia ? 

Mr. Avis. You could send it in through the United States mail. 

Mr. Goldstein. In other words, I am not limited in purchasing my 
stamp to purchase it in the district where I might be doing business, 
or purport to do business ? 

Mr. A^^:s. Well, of course, always they show in that district. I am 
inclined to think that the collector probably would not issue a stamp 
outside his collection district. Am I right about that ? 

Mr. RiTTER. He would issue it to someone living there or coming 
into the office but, as a matter of fact, he might live in another State. 

Mr. Avis. And again I make the point that when you get into 
these regulations, if you do it by law and regulation as you pose these 
things, we have no problem except in this very limited area, with the 
industr}^ as a Avhole. But we are going to try to work out something 
for identification purposes on this special tax situation. 

The Chairman. Then we have three things: We have, first, to 
require identification and really get after them if they give false 
names and addresses. 

Then we have the second, the wholesaler must and can only sell to 
a fellow who has a stamp ; and the third, suggested by Mr. Goldstein, 
is that they buy the stamp in the internal-revenue district where they 
are doing business. Tliose three things would seem to be 

Mr. Redwine. If you will pardon me, I would say where he is doing 
business. I believe it should be his legal residence. 

The Chairman. All right, his legal residence. 

Mr. Redwine. They do business — they come down from Illinois to 
Georgia, and do business. 

The Chairman. Anyway, let us get him tied down somewhere. 

JSIr. Redwine. That is right. 

Mr. Chairman. Those three things, I think, would be very helpful. 
Can't you do those with your ])resent laws? 

Mr. Avis. Well, we can. This first one, as far as the special tax 
stamp is concerned, we can I believe by regulations require some iden- 
tification and that is one of the things that we have under considera- 
tion. Our agents and our collection people, of course, are opposed to 



310 0RGA1S7ZED CRIME IN INTERSTATE COMMERCE 

anything that means additional work in the collector's office. They 
have a terrific income-tax problem. 

The Chairman. Yes. 

Mr. Avis. But we are going to do something about that, Mr. Chair- 
man. 

The CiixMRMAN. Well, you could send out general instructions to 
the internal-revenue collectors to not 

Mr. Avis. As I say, we have got to handle this mail problem. A 
great many of these stamps are issued through the mails, you under- 
stand. 

The Chairman. All right. 

Are there any other questions now about the RLD ? 

Mr. Burling. Couldn't the problem be dealt with in the particular 
States where the problem is posed, without doing it throughout the 
country, such as by a regulation requiring in a State having — in a 
dry State or county, that an RLD may not be issued except upon iden- 
tification ? 

The Chairman. Then they would buy them somewhere else and 
bring them down, would they not ? 

Mr. Avis. That is under discussion with our general counsel at the 
present time, Mr. Burling. What can be done in that respect is under 
consideration. 

The Chairman. Now, sir, with all due respect, we are anxious to 
get some of these things beyond the discussion stage. 

Mr. Avis. We will, Mr. Chairman. 

The Chairman. All right. 

Mr. GoLD,STEiN. Mr. Avis, in your estimation would it make any 
difference if there were also a further limitatiou which prevented per- 
sons with criminal records from purchasing RLD stamps? In other 
words, would it make any difference if we have persons having a 
criminal record not being entitled to purchase an RLD stamp, with 
possible identification througli a thumbprint or something of that 
sort? 

Mr. RiTTER. Not unless it changes the whole theory. This is a tax, 
not a license. 

Mr. Goldstein. That is right. 

Mr. RiTTER. You cannot discriminate there unless you change the 
whole theory of your law, it seems to me. 

Mr. Avis. We discussed this thing, this fingerprint problem, in this 
regard, and, of course, it is a delicate question, you understand ; and 
it was discussed with the industi'y conference ; and I am not sure that 
it is not covered in some respect in that report, Mr. Chairman. 

The Chairman. All right. 

Now, let us pass on to the WLD, is that what you call it, the whole- 
sale liquor dealers ? 

Mr. Avis. That is right. 

The Chairman. It seems to me, from what we have gathered around 
the country, and from our previous discussion on November 8, the 
big trouble there is that ^-ou blanketed in a bunch of bootleggers and 
rum runners, and people who were in business illegally during the 
time of prohibition. 

Mr. Avis. Yes. 

The Chairman. And they are carrying on as wholesale liquor dis- 
tributors. We found them all over the country, with criminal records 



ORGANIZED CRIME IN INTERSTATE COMMERCE 311 

and bad backgrounds — former rum runners and what not. Tliat is 
your problem, I guess, your big problem. 

Mr. Avis. That is a problem, and we referred in our report to you, 
and also I believe in our testimony on November 8, to a bill which we 
had recommended some 4: years ago to handle this situation as far as 
the extensive black market in distilled spirits was concerned, and since 
November 8 

The Chairman. Have the permits expire, and then let them be re- 
newed ? 

Mr. Avis. Exactly. 

Let me say this, that since you had a hearing on November 8 we 
appeared before the Committee on Ways and Means and that bill was 
reported out in the last Congress, and it has been reported out by the 
committee in this Congress, and is now awaiting a rule from the Rules 
Committee in the House. 

The Chairman. Is that a 2-year expiration or how often ? 

Mr. Avis. That is annual, sir. 

The Chairman. Annual expiration? 

Mr. Avis. Yes, sir. 

The Chairman. All right. 

Now, then, if the permits expired or the license expired every year 
or every 2 years, then to get back to the question of who you would 
blanket in again, that would not do much good unless we also had some 
other machinery to see that the bad fellows were left out when they 
got renewed, is that your plan ? 

Mr. Avis. Well, Mr. Chairman, when you get through with your 
investigation, along with the knowledge that we have got now, I think 
we will know who is good and who is bad and it will be a relatively 
simple thing. 

The Chair]vian. If you do, you will know more than we do as of this 
time. 

Mr. A^T[S. I am telling you that this committee is pretty well in- 
formed. I was up talking to Mr. Halley about the situation, and I 
think that we can separate the sheep from the goats. I don't know 
whether that is a very apropos expression. 

The Chair3ian. Well, the Bureau is recommending this legislation, 
that is correct, is it ? 

Mr. A\t:s. It was very well received by the Ways and Means Com- 
mittee, and with tremendous interest. In fact, when Mr. Huntington 
and I appeared before them and went into this situation, not only from 
the point of view of the black market, but in anticipation of another 
black market, and also from the standpoint of your committee, and the 
hearings that you had on November 8, there was a great deal of interest 
expressed. 

The Chairman. I am glad we have had some little influence in that 
direction. But now what did the distillers say about this bill ? 

Mr. A^^s. Well, I said to the Committee on Ways and Means that in 
connection with the discussions we had had, gi'owing out of your 
hearings, in the discussions that we had had with the industry, I under- 
stood that they wanted to be heard on it. They were not heard. I 
know the wholesalers — I don't want to state what the distillers' posi- 
tion is because, frankly, I don't know — but the wholesalers are con- 
ducting a wholesale lobby all over this country against it. 



312 ORGANIZED CRIME IN INTERSTATE COMMERCE^ 

The Chairman. That is to be expected. 

Mrs. Wolf, would you make a diagnosis and put it in the record, and 
I will ask for it to be made a part of the record of this hearing, briefly 
of the testimony before the Ways and Means Committee on that bill? 

Mrs. Wolf. Yes. 

(Mrs. Wolf's diagnosis, exhibit No. 32, appears in the appendix 
on p. 760.) 

The Chairman. And of the bill itself. So the wholesalers are oppos- 
ing it? 

Mr. Avis. Very vigorously, and I say that a great many 

The Chairjvian. If we can get the bill passed then you are going to 
cull out these bad ones, is that correct ? 

Mr. Avis. We certainly will do the best we can. 

The Chairman. Wliat are you going to do about the situation, like 
this commissioner from Missouri described, where we found the 
Di Giovannis were top criminals, and they lost their license, but the 
first thing we knew their sons had taken over their business and they 
were lending their sons money to go ahead ? 

Mr. Avis. I think it is pretty apparent, as you said this morning, it 
looked like a front ; and that is my analysis of it. 

The Chairman. Well, how are you going to prevent other fronts 
from operating ? 

Mr, Avis. Well, as far as the Di Giovannis are concerned, we have 
issued a letter of contemplated denial and are going to hearing on 
March 20. 

The Chairman. Don't you think your general form ought to be 
revised so that it should get the full connections ^ I have forgotten 
the form that you apply for a wholesale liquor dealer's permit, but it 
has been our impression, frankly, Mr. Avis, that sometimes they form 
corporations, partnerships, and you have undisclosed interests, people 
fronting for others to a pretty serious degree in the wholesale liquor 
business. Can't you revise your form so as to bring out more details 
about who the real owners are and who is putting up the money and 
what their criminal record is, and things of that sort? 

Mr. Avis. Yes ; we can, and we can give them a better investigation. 
I mean, there is no substitute for a good investigation. 

The Chairman. How many people do you have in your investiga- 
tive staff? 

Mr. Avis. Well, about 875. Of course, we deal primarily with the 
law-enforcement problem. These permits, that kind of inquiry is 
made by our inspectors. 

The Chairman. How many inspectors do you have ? 

Mr. Avis. Well, I think roughly about 400, maybe 425. 

The Chairman. Do you need more ? 

Mr. Avis. Well, we would need more if this bill is passed, I mean. 

The Chairman. This interstate shipment bill ? 

Mr. Avis. Well, yes, and if the so-called McCarran bill, which pro- 
vides for annual renewal, and that was made very clear to the Com- 
mittee on Ways and Means at the time they considered the matter, 
and all these, the more you investigate, why, the more personnel you 
need. 

Now, I don't know what our situation is going to be with reference 
to this proposed increase in the tax. We can tell more about that 
when we find out what the Congress is going to do, but that is going to 
require some more men in the southern States, Georgia, North Caro- 



ORGANIZED CRIME IN INTERSTATE COMMERCE 313 

lina, Alabama, and where we have a rather serious non-tax-paid- 
liquor problem. 

The Chairman. Mr. Avis, for your information, and also for the 
p iblic information, in our final hearings, somewhere along the line, 
Mrs. Wolf, together with Mr. Goldstein and other members of our 
staff, has been taking the lead in compiling data received from the 
distilling and brewing industries and we have also asked for informa- 
tion about wholesale distribution outlets, have we not, Mrs. Wolf? 

Mrs. WoLE . Yes. 
'The Chairman. And we will take all the other information, all 
th^ informacion that we have gathered about particular distributors, 
and it will be correlated, so that might be of some help. 

Mr. Avis. It would be very helpful ; very, very helpful. 

The Chairman. This information will be a part of our final re- 
port. But, of course, that is not going to be sufficient because that 
is largely what they tell you and what we have picked up. It will 
be you people, of course, who will have the main burden of it. 

Are there any other questions about the wholesale liquor dealers' 
permit? It seems to me that when we had our hearings on No- 
vember 8 I was very much impressed by the lackadaisical and in- 
different attitude on the part of certain of the distillers as to the 
selection of wholesale distributors and as to their attitude of indiffer- 
ence as to whether they violated the law or not, some of them. 

I must say in fairness — I am not going to separate one from the 
other at this time — some of them said they appreciated the fact that 
this indifference and looking only for volume and not caring about 
whether the law was violated or not, that they realize that that was 
in the long run very adversely affecting the liquor interests and was 
giving the people who were interested in the return to prohibition a 
great argument to work with, and that they wished that the whole 
industry would do something to clean up its own house. But others 
expressed the viewpoint in these hearings that they were only inter- 
ested in the volume of business they were doing and the amount of 
money they were making, and they didn't much care who their whole- 
saler was, as long as he got them a lot of business. 

What has been done about that, Mr. Avis ? 

Mr. Avis. The distillers committee meet with Mr. Neely on two 
or three different occasions and on the final occasion Commissioner 
Evans was present and they submitted a report which we in turn 
transmitted to the committee. We did not, as you recall and the 
record will show, agree entirely with the distillers' recommenda- 
tions and we made some of our own, and one was this bill which is 
sort of a catch-all bill and includes annual renewal of permits and 
other aspects of this matter which we consider necessary to the proper 
enforcement of the liquor laws. I will say that the Ways and Means 
Committee has acted on it and it is now in Eules. 

The Chairman. Suppose we figure that on Monday at noon we 
will release the industry report, the industry report to us, for the 
public information. It will be made a part of the record of this 
hearing. We have it. 

Mr. Avis. I have it. 

The Chairman. '\^^iat is it you think ought to be done about the 
industry ? 

68958 — 51— pt. 12 ^21 



314 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Avis. If you will just let me finish with this report. As I 
say, this is a matter for the committee and I am a little hazy on 
the contents. There is no reason why it should not be released and 
I do not know that the industry in any way considers the report 
confidential. I do not know. 

The Chairman. Well, I do not think there is anything confidential 
in it. I thought your recommendation was very good. 

Mr. Avis. Well, personally, we made it in all good faith, I will 
say that. Now, as to what should be done with the industry — you mean 
this over-all situation, Mr. Chairman ? 

The Chairjsian. Yes; that is right. 

Mr. Avis. Well, let me tell you. This is a very competitive business, 
the whole liquor business is highly competitive. It is my impression 
this thing is largely a matter of regTilation by the Federal and State 
Governments. 

The Chairman. You mean you cannot depend on them to do much 
cleaning up themselves. 

Mr. Avis. Well, I would say I just do not believe they will do it. 
It is too highly competitive. If one distiller w^ould do it, a second one 
would — but you see, they cannot get together, and then you have this 
antitrust situation. 

I think the control of the liquor industry at all levels is a regulatory 
and law-enforcement problem, and I think it ought to be handled 
vigorously. 

The Chairman. Well, I agree with you. 

Mr. Avis. That is my opinion. 

The Chairman. Their report to us is unsatisfactory. It had some 
good suggestions but it did not show any general inclination on their 
part to clean it up themselves to keep these wholesalers, the improper 
ones, down. But we do hope they will cooperate as mucli as they can. 

Now, of course, there is this antitrust angle. From the lawyers I 
have talked to, that does not have a lot of merit and I have had the 
impression that might be something some of them may be falling back 
on as a justification for what they are doing, saying the antitrust laws, 
the Sherman Act or the Clayton Act might be applied against them. 

Mr. Avis. Well, Mr. Chairman, I do not consider myself competent 
to testify on that. We did try to get this same kind of cooperation 
from the distillers, I think I told you at the other hearing, in con- 
nection with black-market operations. They did go and give coopera- 
tion and we were enjoined by the Federal court in Cliicago and we 
lost our case. Now, whether that is in any wise controlling in this 
situation, I just do not think I am competent to testify. 

The Chairman. Well, it is quite true, Mr. Avis, that a distiller has 
a right if A applies and if B applies for a wholesale permit, that he 
can give the permit to either one of them or give it to neither one of 
them or give it to both of them. There is nothing in the law that re- 
quires him to give an outfit like M. & B. a franchise when they might 
select somebody who would not engage in this sort of business. That is 
right, is it not ? 

Mr. Avis. That is entirely correct. 

The Chairman. They can select upright and decent people who 
are going to abide by the letter and the spirit of the law, and they 
could do a whole lot to control the thing themselves, could they not? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 315 

Mr. Avis. There is no question but what the distiller, the importer, 
actine: in his own right and independent of the others, could select 
anybody that he might want to at his discretion. There is just no 
question about it. 

The Chairman. Any other questions or any observations? 

( No response. ) 

The Chairman. Now, you are going to get a statement from Mr. 
Conners as to what he had in mind, what his attitude is. 

Mr. Avis. I certainly will, sir. Now, do you want that in the form 
of a letter? 

The Chairman. Yes ; we would like to have a letter. 

Mr. Avis. And addressed to the chairman? 

The Chairman. Well, I would like to have it addressed to me, and 
as soon as possible, and we may want to call Mr. Conners. But he 
is in a very strategic and vital spot out there that does not look good 
on the face of it ; that is, a man in that position taking the side of a 
law violation. So, we would like to know what he has to say about it. 

Mr. Avis. Yes. I will get that explanation, and I call your atten- 
tion to the fact that there has been a case made by the district super- 
visor's office out there involving these very people and it is in the 
United States district attorney's hands. 

The Chairman. You look like a conscientious man and we want 
to work with you ; but I have a feeling that the public and the Con- 
gress and the people of the country would applaud you and the de- 
partment if 3^ou got more vigor and more determination to keep 
the racketeers and criminals out of this industry, and also help these 
commissioners in these dry and semidry States to enforce their laws. 
I think you will find all of us here will be back of you. 

Mr. Avis. Well, I certainly hope, Mr. Chairman, that these indict- 
ments will resolve that ; we would like to resolve that. 

The Chairman. And I think we have a duty to perform, too, that 
I do not think we have done in the Congress. 

Mr. Avis. Let me say this. Congress had this very matter under 
consideration in 1937 in both Houses and they could not agree on a 
bill and the thing was dropped. But it was under consideration and 
went to the point of committee hearings. Wliatever the solution of 
it is from a legislative point of view, why, I certainly would like to 
see it enacted. 

The Chairman. All right. x\ny other questions, gentlemen? 
(No response.) 

The Chairman. Thank you very much. 

And now, very briefly for just a few minutes we will take up an- 
other subject-matter that has not anything to do with what we have 
been just discussing. 

We have found throughout the country that efforts were made by 
some people who have criminal records and some people who are 
engaged in illegal transactions to use every sort of a guise and system 
and scheme in the world to try to perpetuate and carry on the^ir 
unlawful activities. They try to get fronts and they take advantage 
of maybe innocent people at times, to front for them so that they 
could carry on gambling and other sorts of criminal activities. 

We have found in our investigations in other parts of the country 
that they even resort to the hoodwinking or working their way into 



316 ORGANIZED CRIME IN INTERSTATE COMMERCE 

a veterans' organization or charitable or eleemosynary organization. 
It may be on the contract basis, to operate the license that some 
veterans' organization may have, and I think we have found this 
to apply to practically all of the great and splendid veterans' organi- 
zations at particular places. 

Let it be said, however, to the credit of the veterans' organizations 
that when these matters come to their attention they have forthwith 
and directly taken steps to eliminate the situation and to show more 
care in the future so as to not let somebody take advantage of them. 

In order to show how these racketeers or gamblers have tried to 
do this sort of thing and also to show how a splendid veterans' 
organization cleaned them out, we will ask Mr. Clarence T. Aclamy, 
who is the acting executive director for the national office of 
AMVETS here in Washington, to come up and tell us about a 
situation that occurred out in the State of Montana. It is just an 
example of the sort of thing that has happened to all kinds of chari- 
table and eleemosynary and veterans' organizations. I want to make 
it very clear that the committee is very grateful for Mr. Adamy's 
cooperation as a good citizen in helping the committee with the in- 
formation so that we can know the genei'al ]:)attern of things that 
have been happening not only to the AMVETS but to all other 
veterans' organizations in the country. I also want to applaud Mr. 
Adamy and the AMVETS, which is one of our very finest service 
organizations, for cleaning up the situation immediately it came to 
their attention — they did so immediately — and what is said here is 
not to be taken as any reflection in any way upon the AMVETS. 
What they have done is really rather a compliment to this very fine 
organization. 

Now, Mr. Adamy, I know Mr. Rice has talked to you about this 
problem. Mr. Rice, will you take over ? 

Mr. Adamy, do you swear the testimony you give this committee 
will be the whole truth, so help you God ? 

Mr. Adamy. I do. 

TESTIMONY OF CLARENCE T. ADAMY, ACTING EXECUTIVE 
DIRECTOR, NATIONAL OFFICE, AMVETS 

Mr. Rice. Mr. Adamy, your full name for the record, please. 

Mr. Adamy. Clarence T. Adamy, acting executive director, 
AMVETS. 

Mr. Rice. About how many members are there in your organiza- 
tion, Mr. Adamy ? 

Mr. Adamy. About 220,000 scattered in 1,700 posts. 

Mr. Rice. In 1,700 posts ? 

Mr. Adamy. Yes, across the Nation. 

Mr. Rice. About how many members ? 

Mr. Adamy. 220,000. 

Mr. Rice. And all those are veterans ? 

Mr. Adamy. Of World War IL 

Mr. Rice. That is a nonprofit organization ? 

Mr. Adamy. Entirely, sir. 

Mr. Rice. And in general what are the purposes of the AMVETS 
organization ? 



ORGANIZED- CRIME IN INTERSTATE COMMERCE 317 

Mr. Adamy. In general, the purpose of the AM VETS organization 
IS to help the veterans of World War II, the members, help themselves 
and to help protect their rights. 

Mr. Rice. And that applies to all veterans of World War II ? 

Mr. Adamy. Absolutely. 

Mr. KiCE. Referring to the situation that arose in Montana back in 
1948, will you tell the committee how many posts — you call them posts ? 

Mr. Adamy, Yes. 

Mr. Rice. How many posts did you have in Montana in 1948 ? 

Mr. Adamy. One, sir. 

Mr. Rice. You had one post out there ? 

Mr. Adamy. Yes. 

Mr. Rice. And there came a time when there was an increase in the 
number of posts and Jack Clark and Jack Dwyer had something to 
do witli that . Will you tell us about it ? 

Mr. Adamy. Well, Jack Clark was a man who had been with 
AMVETS in the State of Mississippi and whom we had come to know 
and had no reason to distrust. He left Mississippi at the conclusion 
of the 1948 national convention and went with this man Dwyer to 
Montana. 

Mr. Rice. Was Dwyer from Mississippi, too ? 

Mr. Adamy. Dwyer was from Montana. 

Mr. Rice. But Clark came from Mississippi ? 

Mr. Adamy. Clark came from Mississippi and left Mississippi to 
go to Montana after the 1948 convention. And in the year immedi- 
ately after that about 20 posts came into national headquarters, all 
sponsored by Clark. 

Mr. Rice. Yes. Now, then, that was a very sudden upswing in the 
number of posts in Montana, and I take it the organization became 
interested in the reason for this sudden rise in membership thei'e. 
What did they find out and what did they do ? 

Mr. Adamy. Well, the first thing that came to our notice was, in 
response to our letters of inquiry as to what was cooking, a complaint 
from our people in the field and from other citizens in the State, that 
all was not as it appeared to be. So, we sent one of the vice com- 
manders, Mr. Wermuth of Kansas 

The Chairman. Will you spell that? 

Mr. Adamy. W-e-r-m-u-t-h. At that time he was national vice 
commander of AMVETS for our so-called Fifth District, which en- 
compasses the Rocky Mountain and some of the far Western States. 

Mr. Rice. Yes; and he was a war hero. Do you know what he was 
best known for? 

Mr. Adamy. He was best known for killing 116 Japs on Bataan be- 
fore he was captured by the Japs and he served 3^ years in a prison 
camp. 

The Chairman. And he was given a Congressional Medal, was 
he not? 

Mr. Adamy. No, sir — Silver Star. 

Mr. Rice. All right. What did he do ? 

Mr. Adamy. So Mr. Wermuth on the instructions of the national 
commander proceeded to Montana to investigate the situation. He 
made asurvey of the situation and he did report to us on the status of 
the majority of the posts in Montana, and the general situation. 



318 ORGANIZED CRIME IN INTERSTATE COMMERCE. 

Generally, the report was that some people there were providing 
money to these posts so that they could be set up and they could have 
slot machines, that is, be clubs that would comply with the law. The 
Montana law provides there will be no slot machines except in certain 
clubs. And so these people from the outside would come along and 
they would get together 10 or more veterans and they would get them 
to get a charter and open a room and they would come in with the 
slot machines. 

Upon receiving Mr. Wermuth's report at national headquarters in 
this city we immediately at the next national- State committee meet- 
ing gave the full report to the committee notifying the people of 
Montana so they could make their defense. As a result a number of 
post charters were revoked, I remember, 8 or 12 — excuse me for not 
having the exact figure, but a number of charters were revoked and 
the will of the body was plainly expressed. 

Mr. Rice. And did a Mr. Newcomb then go out there at the time? 

Mr. Adamy. No ; that w^as after that. It was hoped that Mr. Wer- 
muth through his activities had caused them to cease and desist but 
after that it became apparent that it was not completely subsided, so 
it was determined that Mr. Newcomb 

Mr. Rice, How do you spell that ? 

Mr. Adamy. N-e-w-c-o-m-b ; Elliott H. Newcomb. 

Mr. Rice. Who is he ? 

Mr. Adamy. He was executive director at that time. 

Se we determined that Mr. Newcomb would go to Montana and try 
to clean up the whole situation, and to notify them that we expected 
them at the convention when all States would be represented. 

He went out to Montana 2 or 3 weeks prior to that meeting, conduct- 
ing an investigation of his own, with people like Mr. Nelson that he 
had talked to before, and people like Senator Ecton of Montana, 
and Mr. Mansfield who was particularly interested, and they an- 
nounced their recommendations and he talked to other leading citizens. 

Mr. Rice. Did he talk to the Governor, too ? 

Mr. Adamy. As I recall it, he did, and in the towns where there 
were questionable posts he talked to people like the presidents of the 
banks and to the chambers of commerce and that type of people, to 
get an idea of the local community situation, 

Mr. Rice. While he was out there on this investigation for the an- 
nounced purpose of checking into these activities in the AMVETS 
clubs, did he run into a man named Grassechi ? 

Mr. Adamy. Yes ; he did. 

Mr. Rice. How do you spell that name? 

Mr. Adamy. You have it in your papers, sir, the report you have. 
I am sorry. It is Del Grassechi, but I don't know the spelling. 

He operated a slot machine company, that is one of the companies 
that have slot machines and put them out on percentage in Montana. 

Mr. Rice. They were the slot machine distributors, more or less? 

Mr. Adamy. Yes. 

Mr. Rice. What experience did Mr. Newcomb have with Grassechi ? 

Mr. Adamy. Well, he found that Mr. Grassechi was concerned with 
placing his machines in AMVETS posts and that he was providing 
funds to start the posts so that machines could be played in them. 

Mr. Rice. Was he working with Clark and Dwyer on that? 

Mr. Adamy. Apparently; and with other people. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 319 

Mr. Rice. Mr. Grassechi invited him to play in a card game or some- 
thing like that ; did he not ? 

Mr. Adamy. Well, that is hearsay, as far as I am concerned. 

Mr. Rice. We understand that. 

Mr. Adaimy. Bnt we understood that he was offered an opportunity 
to play in a card game in which he was assured there would be a chance 
of winning. 

]\Ir. Rice. In other words, they invited him to go and join a card 
game that he could not lose? 

]Mr. Adamy. Yes, just across the street. So he told them, "I don't 
know how to ]3lay poker," and they said to him, "That don't make 
any difference." 

Mr. Rice. They said, "Go across the steet and join this little game, 
you can't lose — beginner's luck"? 

Mr. Adamy. Probably. 

Mr. Rice. How much was he supposed to win? 

Mr. Adamy. A very large sum ; as I recall, about $25,000. 

Mr. Rice. And what was Mr. Newcomb's impression why he was 
supposed to win or what he was supposed to do after he won ? 

^Ir. Adamy. Pack his bag and go home. 

Mr. Rice. He was to invite himself out of the State after he had 
won the money. Needless to say, he did not do that? 

]\Ir. Adamy. He didn't do that. And after, they elected Walter 
Haugh State commander, a very nice young fellow from Livingston, 
and on his election he recognized his duty W'as to establish a reorgan- 
ization and throw out the bad people. Also, at the State convention, 
at Mr. Newcomb's insistence the questionable charters — and again I 
do not know the exact number — were taken away from some posts and 
they were disbanded by the State convention, which had that right. 

]Mr. Rice. And then a control committee was set up? 

Mr. Adamy. Also at that time there w^as a control board established 
by the national commander and State commander, to be composed of 
five people jointly appointed. 

The idea was that before any charters could be issued in Montana 
the control board had to pass on them. 

Mr. Rice. That is, screen them? 

Mr. Adamy. Screen them for the validity of their request. We 
wanted them to be really a part of the organization and not something 
else. 

Mr. Rice. There came a time, too, when the State legislature con- 
sidered the problem. Wliat did they do? 

Mr. Adamy. Shortly thereafter in the session of 1950 in the Mon- 
tana State Legislature a bill was introduced to completely outlaw slot 
machines and not allow them even in private clubs, at which time such 
law was enacted and that situation has been cleaned up, so that now 
we have very little fear of their return. 

Mr. Rice. All right. Now, could you give us a few examples of 
these private clubs that were not as private as the w^ord would imply? 
For instance, the one at Livingston, that had a bar — what was that 
like? 

Mr. Adamy. Well, I don't recall them by name, sir, but I recall that 
there were several of them that were just bars, where they would get 
10 or 15 or 20 members, just enough to fool us, since we were 1,000 
miles away, and they would put in a bunch of slots. 



320 ORGANIZED CRIME IN INTERSTATE COMMERCE^ 

Mr. EiCE. In other words, they would just put a little sign over 
the slot machine and you had a post. 

Mr. Adamy. That is all there was to it. 

Mr. EiCE. Now, was there not one place where Grassechi built a 
building? 

Mr. Adamy. That was in Great Falls. 

Mr. Rice. And what was that? 

Mr. Adamy. Well, he built a building that cost over $100,000. 

Mr. Rice. The building cost $100,000. He put up the money ; did he ? 

Mr. Adamy. It was his money. 

Mr. Rice. How did he get his money back ? 

Mr. Adamy. As I understand it, out of a percentage on the slot 
machines. 

Mr. Rice. He was to get a take of $1,000 a month and it was called 
"rent"? 

Mr. Adamy. $1,000 a month rent was mentioned in it. Our under- 
standing was that it was a concession ; that when the post was estab- 
lished he gave the slot machines as a concession and he would give 
the post a nickel or a dime when he felt like it, and when the members 
would come into this club along with the public and spent their money, 
he got it, and if he felt like it he would give them a little. 

Mr. Rice. He completely dominated the situation there; but there 
were others in other places and posts, and sometimes they would take 
40 percent of the money from the slot machines, and I believe in one 
instance the record shows 90 percent was taken of the revenues from 
the slot machines. 

Mr. Adamy, That is right. 

Mr. Rice. How many posts are there now left in Montana ? 

Mr. Adamy. I think we had seven out there the first of the year. 

Mr. Rice. What was the maximum at any one time? 

Mr. Adamy. 23, 26 — something like that. 

Mr. Rice, And a number of them dropped out because of these 
activities and some because the fellows were going back in service. 

Mr. Adamy, Most of those that dropped out, the difference between 
7 and 23 or 26, whatever the maximum was, were as the result of our 
activities. They either died — we just couldn't find them — of the 
seven that are now there I think there may be one or two more will 
be lost because of these activities. 

Mr. Rice. Are there any questions ? 

The Chairman. No. I just want to say that I have been informed 
by some of your high officials that you now have a very healthy and 
good organization in Montana and that you have done a good job of 
cleaning it up and getting these outside outfits out, and I think you 
deserve to be congratulated. 

One thing I did want to mention is that a good many organizations 
have been using punchboards, I hope that all those organizations 
will read the testimony about the punchboard operations in raising 
funds. It seems to be a sort of general way of raising some funds. 
That does not apply to any one organization particularly, 

I want again to congratulate you upon the job you did in Montana 
in getting rid of tins situation. It shows the extent to which gamblers 
and racketeers will go in trying to use the names of good organizations 
for their own purposes. And I think the AMVETS are a very fine 
organization throughout the country. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 321 

Mr. Adamy. Thank you. 

The Chairman. We will put an end to our hearings for today in 
open session. We will go into executive session now for the purpose 
of receiving some names. 

(Whereupon, at 6:45 p. m., the committee retired into executive 
session.) 



INVESTIGATION OF ORGANIZED CRIME IN INTERSTATE 

COMMERCE 



THURSDAY, MARCH 22, 1951 

United States Senate, 
Special Committee To Investigate 
Organized Crime in Interstate Commerce, 

Washington^ D. C. 

The special committee met, pursuant to call of the chairman, at 
10 : 30 a. m., in the caucus room, Senate Office Building, Senator 
Herbert R. O'Conor presiding. 

Present: Senators Kefauver (chairman), O'Conor, Hunt, Tobey, 
and Wiley. 

Also present: John L. Burling, Alfred M, Klein, George Robin- 
son, associate counsel ; E. Ernest Goldstein, assistant counsel ; William 
D. Amis, investigator. 

The Chairman. The committee will come to order. 

Let the record show that all of the five members of the committee. 
Senator O'Conor, Senator Hunt, Senator Tobey, Senator Wiley, and 
the chairman, are present for this hearing this morning. 

I am sorry that we have had some delay about getting started, but 
we have had unfortunate confusion about radio facilities. 

We are happy that this morning we have with us our distinguished 
member of the committee from the State of AVisconsin, the Senior 
Senator, Alexander Wiley. 

Senator Wiley has been a very active and devoted member of this 
committee, and has been with the committee to California, Kansas 
City, Chicago, and at most of the hearings. 

During the past week. Senator Wiley, as ranking minority member 
of the Foreign Relations Committee has had to be in Washington 
to look after the affairs of that committee on the floor of the Senate. 
He endeavored to get away from his duties here in order to be in 
Xew York, but it was impossible for him to do so : but Mr. Cahn was 
there, his administrative assistant, during part of the time. 

His duties here were of greater importance than being in New 
York. We are awfully glad to have him with us today. 

At the session this morning, the distinguished Senator from Mary- 
land, Senator O'Conor, will preside. 

Senator O'Conor. The first witness will be James J. Carroll. 

Mr. Burling. Mr. Chairman, it might be appropriate at this 
time 

Senator O'Conor. Mr. John Burling, committee counsel. 

Mr. Burling. Mr. Chairman, it might be appropriate at this time 
to read into the record the agreement that I have with Mr. Morris 

323 



324 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Shenker, the attorney fro2ii St, Louis. I made it orally on the tele- 
phone with him a few days ago. 

Senator 'Conor. Might I suggest, Mr. Burling, that we wait 
until Mr. Shenker 

Mr. Shenker. I am here. 

Senator O'Conor. Is your client here? 

Mr. Shenker. Yes, sir ; he is here. 

Senator O'Conor. Will he come forward and be sworn? 

You are James J. Carroll ? 

Mr. Carroll. Yes, sir. 

Senator O'Conor. Do you solemnly swear the testimony you shall 
give in this hearing shall be the truth, the whole truth, and nothing 
but the truth, so help you God ? 

Mr. Carroll. I do. 

Senator O'Conor. Counsel, will you sit with him? 

Just for purposes of identification, you are James J. Carroll ? 

Mr. Carroll. Yes. 

Senator O'Conor. And your address? 

Mr. Carroll. 4605 Lindell Boulevard, St. Louis, Mo. 

Senator O'Conor. Counsel, just for purposes of the record 

Mr. Shenker. I am M-o-r-r-i-s A. S-h-e-n-k-e-r of St. Louis, Mo., 
a lawyer. 

Senator O'Conor. And you are attorney for 

Mr. Shenker. For Mr. Carroll in this hearing. 

Senator O'Conor. Thank you. 

Mr. Shenker. Yes, sir. 

Senator O'Conor. Now, Mr. Burling. 

Mr. Burling. I think, with your permission, Mr. Chairman, the 
record ought to reflect an agreement which Mr. Shenker and I made. 
We called Mr. Carroll at the hearing in St. Louis, where Senator 
Kef auver was acting as a subcommittee of one. Mr. Carroll declined 
to testify at that point on the ground that he was being televised, 
and that such television invaded his right of privacy. 

Thereafter, the committee voted that such refusal constituted a 
contempt of the Senate or of a committee thereof. 

Mr. Shenker, on behalf of Mr. Carroll, wrote that Mr, Carroll would 
appear at his own expense in Washington and testify. 

I then telephoned to Mr. Shenker and asked him if Mr. Carroll 
would appear and submit to the identical degree of television to 
which the witness Frank Costello was submitted or which he was 
given in the course of the recent New York hearings of this com- 
mittee, and after an hour or so, Mr. Shenker called me back and said 
that Mr. Carroll would accept such conditions, and he is here pur- 
suant to that agreement; and I think in all fairness to the witness, 
and in pursuance of my oral agreement with his counsel, Mr, Carroll 
should not be televised any more than Mr, Costello was. 

Is that agreeable to you, Mr. Chairman ? 

Senator O'Conor. First of all, in order that we may determine 
the status of the matter, may I ask INIr. Shenker if counsel's state- 
ment of the conversation is in accord with your understanding? 

Mr. Shenker, It is substantially in accord. 

Now, however, since that time some matters developed insofar as 
the manner in which the hearings in New York were conducted per- 



ORGANIZED CRIME IN INTERSTATE COMMERCE 325 

taining to Mr. Costello, and I found out that a movie was made of 
Mr. Costello, and then used subsequently so that by using the movie 
and then the recordings of the words of the testimony — we would 
like to, and this is a matter which Mr. Burling and myself did not 
cover — and having learned about that, I would like for the record 
to show that we are requesting that no movie be made of the witness 
during his testimony. 

Mr. Burling. In all fairness both to Mr. Shenker and myself, Mr. 
Chairman, I would like to say that I told Mr. Shenker on the telephone 
that I did not know what the conditions were in New York ; that he 
had as good a way of knowing as I did by way of 

Senator O'Conor. The hearing will please be in order, and remain 
so. 

The committee is of the opinion that the same conditions which pre- 
vailed in the previous hearing ought to be maintained at this time; 
in other words, the same general conditions will apply. Inasmuch as it 
is permissible for those who are taking the movies, if such there be, 
and if they can do it intermittently during the hearings, which is a 
public hearing, or continuously at one or the other time, the com- 
mittee does not feel that it is proper to change the rules at this juncture. 

Mr. Burling. May I complete my statement ? 

Senator O'Conor. Yes, I thought you had. 

Mr. Burling. Excuse me, I was saying that I had told Mr. Shenker 
that I did not know what the conditions were in New York because I 
had been in Washington and that he had about as good information 
as I did, and that the agreement was whatever the conditions hap- 
pened to be in New York were to be followed here. 

I do not mean to assert that Mr. Shenker necessarily understood 
precisely that, but my understanding was that it was an agreement 
that Mr. Carroll would submit to precisely the same conditions that 
Mr. Costello had submitted to, and that I did not know what they 
were, but it would be up to the committee here. 

Senator O'Conor. Very good. 

Mr. Shenker. I have no difference with Mr. Burling. That was 
the understanding and the agreement. However, I simply wanted to 
point out that there are some matters which I discovered and found out 
after and subsequent to my conversation with Mr. Burling. 

I would like at this time, Mr. Chairman and members of the com- 
mittee, to state that any movies that are made or any proceedings that 
are broadcast, insofar as — or rebroaclcast or any exposures that are 
made of Mr. Carroll by any of the networks or any of their agencies, 
that they are doing that against Mr. Carroll's will; that he is not 
voluntarily submitting himself for a rebroadcast of any of his testi- 
mony or for any movies to be shown of him or for any pictures to be 
made of him and to be shown at any place within the United States 
or any other place ; that they are doing this in violation of his consti- 
tutional rights ; that Mr. Carroll is no longer a public figure, not being 
engaged in any business, being retired, and he is entitled to his rights 
of privacy. 

Senator O'Conor. Very good. 

Mr. Shenker, the committee has heard you and, of course, your 
comments are duly noted. 

I might just make one final observation, and that is if in regard to 
any specific act or acts that you feel that your client is interfered with 



326 ORGANIZED CRIME IN INTERSTATE COMMERCE, 

in the presentation of his testimony, we, of course, will be glad to 
have you notify the committee. 

Mr. Shenker. I would be very glad and it would be very simple to 
state, Mr. Chairman, that the lights pertaining to television are quite 
annoying to him. 

Senator O'Conor. Yes. 

The Chairman. Mr. Chairman ? 

Senator O'Conor. Senator Kef auver ? 

The Chairman. Mr. Chairman, in order that the record may be en- 
tirely clear about the attitude of the chairman, myself, and also what 
the action of the committee has been and what the history of this mat- 
ter is, I think I should make a very brief statement. 

At the time Mr. Carroll appeared in St. Louis I was acting as a 
committee of one to pi-eside at the hearing in St. Louis. As I reported 
to the committee, the television situation in St. Louis was the best I 
had ever seen, with indirect lighting, and it was just about as bright 
as it is in the chamber on the floor of the Senate. 

The committee, upon the recommendation of the chairman, by a 
vote of four affirmative votes, and Senator O'Conor not voting, ap- 
proved the recommendation of the chairman to cite Mr. Carroll for 
contempt of the committee for refusing to testify before television. I 
think it is fair to state that was the only issue involved. He appeared 
and said he was ready to testify otherwise. 

There is some division among the Members of the Senate as to the 
question, so that the committee decided that when in New York if the 
conditions were not as favorable at least as they were in St. Louis, that 
the. committee in its discretion could, if any witness did not want to be 
televised, if the lights were obtrusive or the heat was obnoxious, that 
until the matter of Mr. Carroll was decided that witnesses who made 
objection would not be televised. 

When we arrived in New York, particularly the first 3 days, in a 
very small hearing room, the lights and heat were very bad and much 
worse than they are here. So that when the issue was raised by Frank 
Costello it was determined, in line with the policy of the committee 
which had been agreed upon, to not televise his face, so that was car- 
ried out. 

Then when this request was made, we felt that inasmuch as we made 
that exception for Frank Costello, that Mr. Carroll wanted to come 
in under the same circumstances and situation that Costello had, that 
he should be given an opportunity. 

I want to say, however, that it is my personal opinion that tele- 
vision is a great means of public communication; that if the lights 
are not obtrusive and the heat is not obnoxious, and the physical 
condition of the witness is not going to be injured or bothered, that 
at a public hearing of this kind that television should have the same 
rights that the movie cameras or the ladies and gentlemen of the press 
or other means of communication. It is the way I feel about it. 

The hearing could be held, of course, in a larger place, where the 
public could come and see, and I cannot personally see any difference 
between holding a meeting where thousands of people could attend 
and televising it. But anyway, that is the background of how this 
is gotten here at the present time. 

Senator O'Conor. Counsel, you have heard the comments and, of 
coui'se, you can be assured that in every respect the committee will be 



ORGANIZED CRIME IN INTERSTATE COMMERCE 327 

vigilant to insure the proper presentation of the testimony without 
undue interference. 

Mr. Shenker. Very welL In order that the record may be clear 
then, that becomes a moot question of our action that we took in St. 
Louis ? In other words, the question of whether Mr. Carroll was sub- 
ject to possible citation for contempt or not; isn't that coyrect. 

Senator O'Conor. The committee is not making any decision at this 
time. 

Mr. Shenker. Well, of course, that was my understanding so far — 
as a part of the understanding insofar as Mr. Burling was concerned. 

Senator O'Conor. Well, there is no deal, if that is what you mean ; 
there is no agreement. 

]Mr. Shenker. Well, it becomes moot anyway. 

Senator O'Conor. Yes. 

Mr. Shenker. All right. 

Senator O'Conor. Will counsel then proceed with the interrogation. 

Mr. Burling. For the record, Mr. Carroll, you state your full name 
and your address. 

TESTIMONY OF JAMES J. CARROLL, ST. LOUIS, MO., ACCOMPANIED 
BY MORRIS A. SHENKER, ATTORNEY, ST. LOUIS, MO. 

Mr. Carroll. James Carroll. 

Mr. Burling. Isn't there a "J" in it ? 

Mr. Carroll. James Joseph Carroll. 

Mr. Burling. Where were you born, sir ? 

Mr. Carroll. St. Louis, Mo. 

Mr. Burling. Where do you live today ? Wliere do you reside ? 

Mr. Carroll. 4605 Lindell Boulevard", St. Louis, Mo. 

Mr. Burling. Is it correct, Mr. Carroll, that on April 2G, 1950, you 
testified before a subcommittee of the Committee on Interstate and 
Foreign Commerce of the Senate? 

Mr. Carroll. That is true, sir. 

Mr. Burling. That was popularly known as the McFarland sub- 
committee? 

Mr. Carroll. That is true. 

Mr. Burling. That was a committee dealing primarily with the 
problem of what is called the race wire service; is that right? 

Mr. Carroll. I think so. 

Mr. Burling. I do not in the least mean that there is anything 
improper about this or to impugn Mr. Shenker, but I merely wanted 
to lay the foundation for a question. You did have Mr. Shenker repre- 
senting you at that time, is that correct ? 

Mr. Carroll. That is correct, sir. 

Mr. Burling. Do you recall that Mr. Shenker said to that com- 
mittee, "You may rest assured that Mr. Carroll will be glad to answer 
any questions." Do you remember that ? 

Mr. Carroll. Yes ; and that is true, sir. 

Mr. Burling. Do you feel prepared to give the same assurance to 
this committee? 

Mr. Carroll. I don't know, sir. I have a little thing here. You see, 
3^ou have injected the fright factor into this proceeding. 

Mr. Burling. The what ? 

Mr. Carroll. Fright, f-r-i-g-h-t factor. 



328 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. BuRMNG. In other words you are in fright at the moment ? 

Mr. Carroll. That is correct, sir. 

Mr. Burling. I see. So you do not feel that you can 

Mr. Carroll. If you will 

Senator O'Conor. The Chair understands that the witness has a 
statement he desires to make ? 

Mr. Carroll. Not at this moment, but I do want to state that there 
has been a fright factor presented here; that I just — I don't know 
whether I can answer if I am frightened ; I take this position ; that I 
am unable to think clearly by reason of all this. I certainly can't 
answer questions properly, and my answer to the counselor, Mr. 
Burling, is that your name, please, sir ? 

Mr. Burling. Burling, B-u-r-1-i-n-g; yes, sir. 

Mr. Carroll. He asked if I could be prepared 

Senator O'Conor. The committee agrees with you to this extent, 
that the continuation of the flashlights in front of your face can very 
well be an interference with the proper and orderly presentation of 
your testimony. The committee, therefore, asks the news photog- 
raphers, will they take at this time whatever pictures they need, and 
then vacate from just in front of the table so that there will be no inter- 
ference between counsel and the witness and between the committee 
members. 

Mr. Carroll. Mr. Chairman, I will answer to the best of my ability. 

Senator O'Conor. Just so we get that over with. 

Mr. Carroll. He asked me to say something, and I am speechless. 
The phenomenon of light fright and mike fright, and that is what I 
am subject to, and I am speechless. 

Senator Wiley. Have you felt that way before ? 

Mr. Carroll. I have never experienced anything like this before. 

Senator O'Conor. It is noted then that the photographers have left 
the front of the table, counsel, and I assume you consider that satis- 
factory to you? 

Mr. Shenker. I consider it much more satisfactory than it was a 
few seconds ago. 

Senator O'Conor. Counsel will proceed, please; Mr. Burling? 

Mr. Burling. If I may, Mr. Chairman, now that the photographers 
have gone and the popping of the flash bulbs has ceased entirely, I 
would like to reask the question. 

Mr. Carroll, will you give this committee the same assurance that 
your attorney gave the McFarland subcommittee, which was in the 
following language : 

"You may rest assured, Mr. Carroll will be glad to answer any 
questions." 

Mr. Carroll. Well, counselor, I will be glad — I came here for the 
specific purpose of aiding this committee. 

Mr. Shenker. Of course, we are certainly 

Senator O'Conor. Counsel, the question is addressed to Mr. Carroll, 
please. Let him respond. If you wish to advise him you may do so. 

Mr. Carroll. I am the phenomenon of mike fright, the rebroad- 
casting 

Senator O'Conor. In other words, does the committee understand 
you that you think you are interfered with by the fact that at a later 
hour tonight 

Mr. Carroll. Yes. 



ORGANIZED CRIME IN INTERSTATE COMMERCE. 329 

Senator O 'Conor. Well, the committee does not agree with you. 

Mr. Shenker. Mr. Chairman, in order that the record may well re- 
veal that when a statement is made that a witness is willing and ready 
to answer any question, the assumption is, of course, at all times that 
only proper questions, questions which are not in violation of a per- 
son's rights, and questions which are proper for the investigation are 
requested. 

Senator O'Conor. That would certainly be a very fair assumption. 

Mr. Shenker. Very well. On that basis, Mr. Carroll will certainly 
answer any questions that are propounded. 

Senator ToBET. Mr. Chairman, we have spent three-quarters of an 
hour here in a fencing match, going back and forth. Can't we get 
down to brass tacks and start the examination? 

Senator O'Conor. Mr. Burling? 

Mr. Burling. I certainly have no desire to waste the committee's 
time, ^Ir. Chairman and Senator Tobey. I was trying to bring out the 
fact that when this witness appeared before a committee which did 
not have, and quite understandably did not have, all the sordid picture 
that this committee has recounted, the witness was presented as one 
who would answer anything very freely without any reservations as 
to constitutional rights. 

The idea was then "My life was an open book." That is what I was 
trying to establish. 

Mr. Carroll. Senator, may I make this observation, that the tele- 
vision — they asked permission of Senator McFarland to televise the 
hearings, rebroadcast the testimony, and he denied it, and I was assum- 
ing 

Senator O'Conor. That question is already decided, and therefore 
we will not waste any time on it. 

The first question, please. 

Mr. Burling. You were called before the McFarland subcommittee 
as an expert ; is that correct, Mr. Carroll ? 

Mr. Carroll. Well, yes, sir. 

Mr. Burling. You were called as an expert witness ; is that not so, 
sir? 

Mr. Carroll. Yes. 

Mr. Burling. And you heard it said that you were to be qualified 
as an expert, did you not ? 

Mr. Carroll. I believe that to be true. 

Mr. Burling. Well, Senator Capehart said at page 380, "I think we 
ought to qualify him as an expert." Do you not remember his saying 
that? 

Mr. Carroll. Well, if you let me refer to my testimony here, and 
follow the questions 

Mr. Burling. It is at page 380. Can you find that? You under- 
stood that you were qualified as an expert on some phase of the busi- 
ness of betting on horses ? Now, you agree to that ? 

Mr. Carroll. I believe that this — I thinli this here, if I understand 
this right, it says Mr. Shenker assured the committee that I was an 
expert, isn't that true? 

Mr. Burling. I am asking for your understanding, sir. Did you 
not understand that you were being called as an expert witness on 
some matter? 

68958— 51— pt. 12 22 



330 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Carroll. Yes ; I believe that to be true. 

Mr. Burling. And yon furtlier understood that the matter was 
some phase of the business of betting on horses ; is that not so? 

Mr, Carroll. Yes ; I believe that to be true. 

Mr. Burling. And you did not think — I am asking you for your 
understanding now — you did not think that you were being qualified 
as an expert on any legal phase of betting on horses, did you? 

Mr. Carroll. On any what ? 

Mr. Burling. Legal, 1-e-g-a-l. 

Mr. Carroll. Well, I believe so. 

Mr. Burling. You believe what? 

Mr. Carroll. That whether it was legal or my operation was legal 
or illegal 

Mr. Burling. You fail to understand my question. I am not asking 
you at all about your operation; I am asking what you were being 
called on as an expert before the McFarland subcommittee on. What 
did you think you were called as an expert on ? 

Mr. Carroll. Well, Senator, I 

Mr. Burling. I am not a Senator, IVIr. Carroll. 

Mr. Carroll. I am sorry. Counselor, I have not the slightest idea. 
I received a subpena from the United States marshal, and I appeared 
before the Senate, before the McFarland committee. 

(There was a conference between the witness and his attorney.) 

Senator O'Conor. Next question, please. 

Mr. Burling. I have not had an answer, Mr. Chairman, to the last 
question, which is, is it not, in substance, true that you understood 
t hat you were not being called as an expert witness on any legal phase 
of the business of betting on horses ? 

Mr. Carroll. I believe that to be correct. 

Mr. Burling. Yes. For example, you do not know anything at all 
mechanically about how to set up a pari-mutuel or tote board, do you? 
Would 3^ou kiiow how to set up the wire? 

Mv. Carroll. No. 

Mr. Burling. Do you own any stock in any race track anj^where? 

Mr. Carroll. No. 

Mr. Burling. And you were not a jockey, of course? 

Mr. Carroll. No. 

Mr. Burling. Do you own any lace horses? 

Mr. Carroll. No. 

Mr. Burling. Have you ever owned any race horses ? 

Mr. Carroll. No. 

Mr. Burling. So it is clear, is it not, that you were called as an 
expert by the McFarland subcommittee and qualified as an expert 
before that committee on the business of unlawful betting at race 
tracks — off race tracks, excuse me? 

Mr. Carroll. I believe that to be true. 

Mr. Burling. You know that off-track betting is unlawful in every 
State of the Union except Nevada ? 

Mr. Carroll. Well, Senator, that is a question. 

Mr. Burling. Don't you know that ? 

Mr. Carroll. No ; I do not know that. Counselor. 

Mr. Burling. Didn't Mr. Shenker ever tell you that? 

Mr. Carroll. Well, I have a half dozen opinions. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 331 

Mr. Burling. Did Mr. Shenker — excuse me. 

Senator O'Conor. Just let him finish his answer. 

Mr. Carroll. I have half a dozen opinions that under certain cir- 
cumstances off-track betting is not illegal. 

Mr. Burling. Suppose you tell this committee what the circum- 
stances are under which you can make legal bets off the track except in 
the State of Nevada. 

Mr. Carroll. Well, I think you can go into any Western Union or 
Postal Telegraph office in any State, with the exception of the follow- 
ing, Alabama, California, Connecticut, Delaware, Florida, Idaho, 
Maryland, Mississippi, Missouri, Montana, New Jersey, New York, 
Oklahoma, Pennsylvania, Ehode Island, South Carolina, Tennessee, 
Texas, Utah, Virginia, AVashington, Wisconsin, and wire a bet to a 
legalized bookmaker in Nevada, and it is not a violation of the law. 

Mr. Burling. How about a bookmaker, whether or not he is legal- 
ized, either in St. Louis, Mo., or East St. Louis, 111. ? 

Mr. Carroll. That is also wrapped up in this question. 

Mr. Burling. But aside from these telegraphic bets placed through 
Western Union, will you agree that it is impossible to make a legal 
bet on the outcome of a horse race except in the State of Nevada, off 
the track ? 

Mr. Carroll. Well, I would say this, in reply to that question : that 
I think it possible to make a bet in other — in States other than I have 
mentioned ; that would not be illegal. 

Mr. Burling. Well, what other circumstances are there under which 
you can make a bet which is not illegal in those States ? 

Mr. Carroll. Well, if Mr. A, assuming that Mr. A would go in to 
the Western Union office and make a bet with a legalized bookmaker 
in Nevada, and that there would be the element of Mr. B entered in 
here, and he collected the bet from Mr. A, and he wired it to the 
bookmaker in Nevada, there are many lawyers of the opinion that 
that is not illegal. 

Mr, Burling. Well, with the exception of this possible legal com- 
plication with respect to Western Union, it is true, is it not, that with 
the exception of the populaion of Nevada, which is a little over 100,000, 
throughout the United States of America, betting on horse races is 
illegal except at the track? And by "illegal" I mean a crime, sir. 

Mr. Carroll. Yes ; I believe that. 

Mr. Burling. You do. 

You were called to testify as an expert before the McFarland sub- 
committee on the criminal activity of off -track betting, is that correct, 
sir? 

Mr. Carroll. Yes ; that is correct, sir ; I believe that is correct. 

Mr. Burling. And you read before that committee a prepared state- 
ment, did you not? 

Mr. Carroll. That is correct. 

Mr. Burling. Did you prepare it or if not, who did ? 

Mr. Carroll. I prepared it. 

Mr. Burling. Personally? 

Mr. Carroll. With the aid of my son, 

Mr. Burling. Will you give his name, sir ? 

Mr, Carroll. James J. Carroll, Jr, ; and my attorney, Morris 
Shenker. 



332 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. BuKLiNG. One of the topics that you addressed your attention 
to was the setting of odds, is that right ? 

Mr. Carroll. That is correct, sir, 

Mr. Burling. I want to read you the following from what appears 
to be the printed record of this 

Senator O'Conor. Counsel, will you suspend for one moment? It 
has been thought desirable, without reflection on anybody, that smok- 
ing might be stopped during the course of the proceeding. 

Mr. Shenker. I am sorry, very sorry. 

Senator O'Conor. No apology is necessary. That applies to every- 
one. 

Mr. Burling. I want to read from page 380 of that committee and 
ask if this is what you said : 

One, setting of odds — horse racing in general, odds on any particular horse 
in any given horse race is determined a long time prior to the race. The fac- 
tors taken into consideration by the persons setting the odds are (a) history of 
the horse, (b) history of the owner, (c) the background, history and experience 
of the jockey, (d) if possible, the anticipated weather, (e) the length of the 
race, of the other horses competing in the race. 

Was that your statement ? 

Mr. Carroll. That was my statement ; that is correct, sir. 

Mr. Burling. Now, sir, in the light of what this committee has 
uncovered, is it your opinion that that is a full and correct statement 
as to how the odds on horse racing are determined ? 

Mr. Carroll. I am certain of it. 

Mr. Burling. You do not wish to change that statement at all ? 

Mr. Carroll. No ; not a bit. 

Mr. Burling. Can you not add another important factor Avhich 
affects the odds at the tracks or odds which are obtained by bookies ? 

Mr. Carroll. Well, there would be many factors there. Counsellor 
Of course, I would not be able 

Mr. Burling. Perhaps the name Uvanni will help you. 

Mr. CarrolL(.j Uvanni ? I think he was an employee of John 
Mooney. 

Mr. Burling. Well, I am not going to go into, at the moment, Mr. 
Uvanni ; I was just trying to help your recollection or your thought. 

Mr. Carroll. Well, the only thing this committee has a belief, I 
am certain, is jjrovable, they believe something to be true that I am 
sure is provable as false. 

Mr. Burling. I see. Well, let us get right down to it. You are 
talking about our view on the subject of come-back money, is that not 
right? 

Mr. Carroll. That is correct, Counselor. 

Mr. Burling. Tell us what the word "come-back" money means in 
the trade or business. 

Mr. Carroll. Well, it is a man who — a man who certain operators 
have at race tracks for the purpose of relieving them of an obligation, 
and the betting of the money at the race tracks, there is the factor that 
the certainty of payment, and the certainty that they will accept the 
bet. 

Mr. Burling. It is kind of a second degree lay-off, is that right ? 

Mr. Carroll. No ; I don't tliink the question of laying off enters into 
it ;_ and when the statement — I would like to qualify the statement about 
this committee believing it to be false. What the inference or by im- 



ORGANIZED CRIME IN INTERSTATE COMMERCE 333 

plication — some of the testimony or statements by members of this 
committee has been that it is, oh, a trick on the part of the operator 
for to depress the odds, and that, I am certain, is provable that is 
false ; is provable for the simple fact if you had bet a large sum of 
money on one horse it would certainly raise the odds on the other horse, 
and that would 

Mr. Burling. Is it your testimony as an expert in the horse-racing 
business that the come-back money man who is at the track does not 
receive instructions from his principal, such as Mr. Mooney, for exam- 
ple, to throw a great deal of money into the machine and distort the 
odds within the last 60 seconds before post time? 

Mr. Carroll. That is absolutely false. 

Mr. Burling. Well, just exactly why are come-back men employed 
then ? 

Mr. Carroll. Well, for the simple reason, as I stated just a mo- 
ment ago, that a race track would be certain to accept the bet, and 
it would be relieving an obligation on the part of the operator, and 
he would be certain to be paid ; the credit element is removed by rea- 
son of him betting with a race track. 

Mr. Burling. Yes. But a large operator, such as, let us take Mr. 
Mooney, or whatever the operation was at 318-A Missouri Avenue, 
East St. Louis, 111., that had a volume in the millions of dollars, such 
an operator would not need to insure himself against loss on any par- 
ticular race, would he? 

Mr. Carroll. Certainly, Senator, or Counselor — I am sorry. 

Mr. Burling. That is contrary to what you said to the McFarland 
subcommittee, is it not? 

Mr. Carroll. I don't think it is contrary to what I said to the 

Mr. Burling. My recollection — I have not the page reference at 
the moment, Ave will look for it — ^my recollection of your testimony 
is that you said that any operator, if you were large enough, could be 
sure of a certain profit, namely 15 percent, and that the law of aver- 
ages would carry it — let me read to you from the colloquy between 
Senator McFarland and you. I am reading page 385, Mr. Shenker. 

Senator McFarland. In other words, as I understand your answer, putting it 
in my words, it is that if he is a big enough operator it will balance itself in 
time. It might lose some one day but in the end it balances itself. Is that true? 

Mr. Carkoll. That is correct. 

Mr. Carroll. Well, it could be correct. Counselor. 

Mr, Burling. And on the same page you said — well, first. Senator 
McFarland said to you : "If he limits the bet to where he does not go 
broke?" 

And Mr. Shenker said : "The law of averages would take care of it." 

Do you agree with what Mr. Shenker said ? 

Mr. Carroll. I agree with that ; yes. 

Mr. Burling. So what does a come-back man do ? 

Mr. Carroll. He is there for the specific purpose of accepting a 
bet from his principal or his employer, to go into a race track and 
make a wager, as he is directed by his employer or the principal. 

Mr. Burling. And the practice is to have the come-back man go in 
within a few minutes, and if possible within 60 seconds, of the clos- 
ing of the machine, is that right? 

Mr. Carroll. No ; the time element has nothing to do with it ; Coun- 
selor. 



334 ORGANIZED' CRIME IN INTERSTATE COMMERCE 

Mr. Burling. Yoii mean the come-back man might make the wager 
a day in advance? 

Mr. Carroll. That is right; no, not a day, but a race in advance 
or two races in advance. 

Mr. Burling. That is not what Mr. Uvanni told us. 

At any rate, you did not deem it appropriate, while testifying as 
an expert witness before the McFarland subcommittee, to tell them 
anything about come-back money, did you ? 

Mr. Carroll. Well, repeat that again, please. 

Mr. Burling. Will you read it please, Mr. Reporter ? 

(The question was read by the reporter.) 

Mr. Carroll. Well, I don't think it inappropriate. [Laughter.] 

Mr. Burling. I do not understand your answer. Will you explain ? 

Mr. Carroll. Well, Counselor, there are many factors present here, 
and there are many beliefs that are fallacious, and circumstances 
change every operation. 

Mr. Burling. But it was within your own personal knowledge — 
I will come to that later — that Mooney with whom you will admit 
you at least shared an office, had at least one man, Uvanni, who was 
paid a salary to do nothing but place large bets at the track, as come- 
back money ? 

Mr. Carroll. That is true, 

Mr. Burling. But you did not tell the McFarland committee any- 
thing about that, did you, sir? 

Mr. Carroll. I do not believe they asked that question. 

Mr. Burung. You had a prepared statement explaining how odds 
are set, and it must be apparent to you, sir, that the inclusion in the 
machine, of the pari-mutuel machine or tote, as it is sometimes called, 
the inclusion in the betting of large sums of money bet at the last 
minute by come-back men must affect those odds. 

Mr. Carroll. That is true. 

Mr. Burling. But you omitted that. Well, we will go on. 

You further said in a prepared statement : 

As to laying off bets I cannot help but feel that there is an implication 
in the existence of a betting syndicate or syndicates which is engaged in the 
business of accepting or laying off bets or wagers. I can state without any 
mental reservation that I know of no such syndicate, combination, or organization. 

You said that, did you not ? 

Mr. Carroll. Yes, sir ; and it is true. Senator. 

Mr. Burling. You still say it? 

Mr. Carroll. Counselor, I am sorry, I am awfully sorry. 

Senator O'Conor. In other words, you still adhere to the same state- 
ment you made the other time to the other committee ? 

Mr. Carroll. Yes, sir. 

Mr. Burling. You know Frank Erickson, do you not? 

Mr. Carroll. Yes, sir ; I do know Frank Erickson. 

Mr. Burling. After you testified before the McFarland -committee, 
you met Mr. Erickson here in Washington at his request? 

Mr. Carroll. That is true, sir. I beg pardon ? 

Senator O'Conor. At his request? 

Mr. Carroll. Yes, sir ; that is true, sir. 

Mr. Burling. And you do business with Erickson, do you not, or 
you used to up to a few months ago ? 



ORGANIZED' CRIME IN INTERSTATE COMMERCE 335 

Mr. Carroll. No ; I do not do any business with Frank Erickson. 
Mr. Burling. Give me page 484, please. 

Mr. Erickson testified after you did, before the same subcommittee, 
at page 483 : 

Senator Tobey. How close are you with Carroll in business relations? 

Mr. Erickson. We are very friendly. 

Senator Tobey. Partners? 

Mr. Erickson. No. 

Senator Tobey. Associates? 

Mr. Erickson. I wouldn't say associates. We do business witli one another. 
I have known Carroll for many years. I have had very pleasant experiences 
with him. 

Is that testimony by Mr. Erickson true of false ? 

Mr. Carroll. The testimony by Mr. Erickson is true, with one ex- 
ception. 

Mr. Bltrling. Name the exception, please. 

Mr. Carroll. I do not do business directly with Mr. Erickson. 

Mr. Burling. Well, liow^ have you done business indirectly with 
Mr. Erickson in the past ? 

Mr. Carroll. Well, Mr. Erickson does business with John Mooney. 

Mr. Burling. I see. You think that Mr. Erickson is just con- 
fused; that what he said when he said you, was he meant Mooney? 

Mr. Carroll. No; I don't think, Counselor, Mr. Erickson is con- 
fused, but there are many, many people who believe that they do 
business with me that do not do any business with me. 

There are many, many people in St. Louis who, if you would ask, 
they would say that they are associated with me or do business with 
me. 

Mr. Burling. And really they are doing business with Mooney; 
is that it? 

Mr. Carroll. That is correct, sir. 

Mr. Burling. You would deny that you and Mr. Erickson w^ere 
members of a Nation-wide betting or lay-off syndicate? 

Mr. Carroll. Positively. 

Mr. Burling. Well, when you met Mr. Erickson here, after you 
testified before the McFarland subcommittee, first, where did you 
meet him ? 

Mr. Carroll. At the Statler Hotel. 

Mr. Burling. Where in the Statler? 

Mr. Carroll. In a suite ; I don't know the suite. 

Mr. Burling. Whose suite was it ? 

Mr. Carroll. Well, I am unable to answer that. 

Mr. Burling. Was it yours? 

Mr. Carroll. No; it was not. 

Mr. Burling. Was it Erickson's? 

Mr. Carroll, I am unable to answer that. He called me 

Mr. Burling. Now, he did not call you just for fun, did he? He 
must have had some purpose. 

Mr. Carroll. Well, Frank Erickson and I have been friends for a 
great many years. 

^h\ Burling. What did you talk about in this suite at th.e Statler? 

Mr. Carroll. There again. Senator, I have — my recollection, I 
hardly — I have no rorollection of what I talked about at thnt par- 
ticular time. I gave him a copy of the statement that I had made 



336 ORGANIZED CRIME IN INTERSTATE COMMERCE 

before the McFarland committee, and as far as the other things, 
why — as before the McFarland committee, I was in a state of high 
excitement. 

Mr. Burling. But there were not any microphones there, were 
there, or were there? 

Mr. Carroll. No, but I was still in the state of high excitement. 
The microphones, this only aggravates it. 

Mr. Burling. And you are a very excitable man, are you, sir ? 

Mr. Carroll. I would say, yes. 

Mr. Burling. All right. 

What is your relationship to Frank Costello, if any ? 

Mr. Carroll. I have no relationship, I do not know Frank Costello. 

Mr. Burling. You have never seen him? 

Mr. Carroll. Not to my recollection. 

Mr. Burling. How about Mickey Cohen? 

Mr. Carroll. I have no recollection, and do not know Mickey Cohen, 
and have no recollection of ever meeting him. 

Mr. Burling. Did you know Pete Licavoli before he moved from 
St, Louis to Detroit? 

Mr. Carroll. No; not to my recollection. 

Mr. Burling. You testify under oath that you did not ever meet 
Pete Licavoli, do you? 

Mr. Carroll. That is right ; not to my recollection. 

Mr. Burling. Going back to your earlier testimony, you said, I 
believe in substance, that a bookmaker did not need race wire service 
except to relieve nervous tension ; is that in effect true ? 

Mr. Carroll. I am certain that that is true, Counselor. 

Mr. Burling. Now, did you seriously mean that, Mr. Carroll? 

Mr. Carroll. Well, I think it is provable. 

Mr. Burling. You might think it is provable; are you serious now 
or are you fooling? 

Mr. Carroll. Positively serious. 

Mr. Burling. Well, can you explain to this committee how a bettor 
in a bookie joint — I am talking about an open one now, such as the 
one that existed — well, I will withdraw that; I am talking about a 
bookie joint, in general, a horse room. Will you tell how a bettor c5,n 
dare to bet on successive races until there is a race wire coming in so 
that he knows how the previous races come out ? 

Mr. Carroll. Well, Senator, prior — oh, I just don't remember the 
year, I would say '16 or '17 or maybe a little earlier date than that — 
the only thing that an operator needed was results. The prices were 
paid in St. Louis for many, many years in every saloon or in many 
of the saloons there would be what would be called the overnight prices 
p)aid by a price-maker. 

Mr. Burling. May I interrupt you for a moment, Mr. Carroll ? 

Mr. Carroll. Yes, sir; surely. 

Mr. Burling. That was before the custom arose whereby the 
bookie paid track odds ; isn't that so ? 

Mr. Carroll. Well, the bookmaker paid the price that he had up 
on his blackboard. 

Mr. Burling. Sure, and those were the odds that he set and not 
track odds ; is that not correct? 

Mr. Carroll. That is correct, sir. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 337 

Mr. Burling. But today it is the almost universal custom among 
bookmalvers to pay track odds, with certain excej)tions? 

Mr, Carroll. No ; that is not true. 

Mr. Burling. Well, I said with certain exceptions. The excep- 
tion is that a bookmaker often sets a limit; he will not pay 20-to-l. 

Mr. Carroll. That is true. I misunderstood your question. 

Mr. Burling. But with that exception, it is correct, is it not, that 
the almost miiversal custom is for bookmakers to pay track odds, 
whatever they may be ? 

Mr. Carroll. No ; no, that is — your question is contradicting itself 
there. The i-eason that — if the bookmaker has a 20-to-l limit he 
certainly cannot pay track odds. Track odds mean 

Senator O'Conor. Counsel made it plain that was an exception 
which he eliminated from his question. 

Now, the question is outside of that one exception, is it not true 
that they observed track odds? 

Mr. Carroll. I believe that is true. 

Senator O'Conor. Yes. 

Mr. Burling. How can a bookmaker operate without race wire 
service when his obligation is to pay track odds? Does he not have 
to haA'e this service in order to know what the track odds are? 

Mr. Carroll. No, on the contrary, newspapers, racing periodicals, 
that would answer the — for many, many years 

Mr. Burling. You mean the people in a horse room sit around 
for 2 or 3 days without leaving ? 

]Mr. Carroll. No, no, no ; I think in the horse room, the price maker 
put up the odds, and the player — then the player — they remove the 
element of a slot machine in a horse room, and then it is a matching 
of the wits against the price maker by the player, and he would muck 
more — that would be much more preferable than the mutuel opera- 
tion. 

Mr. Burling. Well, the simple fact is, is it not, Mr. Carroll, that 
the horse room puts up the odds which it received over the wire which 
comes originally from Continental, and in your territory, from Pio- 
neer ? 

Mr. Carroll. That is correct. 

Mr. Burling. In other words, the track odds regulate what is paid, 
and the bookie relies on the race wire. 

Mr. Carroll. Yes, sir ; but it is not necessary to have the wire. 

Mr. Burling. How in the world would you know within 2 or 3 
minutes 

Mr. Carroll. The racing form, the daily newspaper, the next day. 

Mr. Burling. Mr. Carroll, we all know Ihat the betting goes on up 
to the post time, and the payoff is within a few minutes after the race 
is run, and that the newspapers do not come out for an hour or so 
later, so you could not conduct business as a bookmaker in the way 
the business is conducted today without a race wire, could you, sir? 

Mr. Carroll. Senator, just as certain as you pass any Federal legis- 
lation prohibiting the race wire, you will have thousands of publica- 
tions published every day in every city where there is enough horse 
players to warrant it, that will have out an edition after every race. 

The Chairman. Mr. Chairman, may I ask a question ? 

Senator O'Conor. Senator Kefauver. 



338 ORGANIZED CRIME IN INTERSTATE COMMERCE 

The Chairman. Mr. Carroll, aside from the horse rooms where the 
customers come themselves and see the returns right after each race, 
to know whether they have lost or won, and how much they can bet on 
the next race, in order to do that, of course, you have to have a wire 
service. 

Mr. Carroll. That is true. Senator. 

The Chairman. Is that correct? 

Mr. Carroll. That is true. 

The Chairman. Aside from that, is not the best evidence that even 
a commission horse room or a bookie horse room for bettors who 
do not come there personally, have to have wire service, the fact that 
the establishment that you have in some degree been associated with, 
Mr. Mooney's place in East St. Louis, had wire service, and had a 
blackboard to put the results on each time so that they could imme- 
diately telephone out to their customers who had won and who had 
lost, and how much it was; and the testimony was that after our com- 
mittee was in St. Louis in July of last year, and the wire service, I 
believe, was taken out, that it was very difficult to continue operations ? 
Is that not about the best evidence of the need for wire service even 
in outfits like Mr. Mooney's, with which you had some association? 

Mr. Carroll. I believe that to be true, Senator. 

The Chairman. Mr. Mooney, and whatever association you had 
with him, just could not have operated that operation in East St. 
Louis with the extensive operation you had there without wire service; 
is that not correct? 

Mr. Carroll. No ; it is not correct, Senator. 

The Chairman. Well, you might have operated in a small sort of 
way with just telephone service, but the fact that you had wire service 
and had a blackboard and then telephones to call out to the bookies 
who called in bets, showed, to put it mildly, the great desirability of 
wire service. 

Mr. Carroll. Well, I would agree with that. Senator. 

The Chairman. And the fact that operations have been greatly 
curtailed, at least since wire service was taken out, shows that you 
certainly cannot operate anything like as well without Continental 
wire service or some kind of wire service. 

Mr. Carroll. Well, Senator, I sincerely believe that the only person, 
or the only group that the wire service aids is the professional bettor. 

The Chairman. You mean the professional 

Mr. Carroll. The professional bettor. 

The Chairman. It does not aid people like Mr. Mooney ? 

Mr. Carroll. No; certainly not. Anybody could carry on their 
operation, and I think that is provable. 

The Chairman. Then, I do not understand why they have paid such 
a tremendous amount for wire service over the course of so many 
years. The average bettor, outside of one man in Hollywood that 
we know of, a fellow who calls in his bets, we have only found that, 
I think, one professional bettor has — that is, an individual bettor 
has — wire service; that it is only the horse room, the places like Mr. 
Mooney's place, and the bookie joints that have wire service. The 
average professional bettor does not have wire service. 

Mr. Carroll. Well, I think there are many people who were de- 
scribed as bookmakers who are, in essence, professional players. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 339 

The Chairman. Well, but these people who were described as book- 
makers, who are professional players, the testimony shows that they 
take bets from other people, that other people call in and come and 
they take their bets, so they are, in fact bookies? 

Mr. Carroll. That, in my opinion, would be solely for the purpose 
of seeking information. 

The Chairman. Well, the record will show, I think, Mr. Carroll, 
that all of these places where wire service has been taken out, that 
they have had tremendous difficulty in operating, and we have had 
many examples of professional operators of horse rooms, bookie 
places, and what not, where the wire service has been taken out and 
they said they had just about had to fold up, might be able to operate 
in a small, little way, but nothing like they could before; that has 
been the report to our committee, and they had dozens and dozens 
of them, but I did not mean to interject my discussion into the counsel's 
questioning. 

Senator AViley. May I ask just one question? 

Senator O'Conor. You may. Senator Wiley. 

Senator Wiley. Supposing that you made wire service illegal, 
what substitute would you have for it; would radio do anything, 
television do anything, telephone do anything, outside of the regular 
wire service ? 

]Mr. Carroll. No ; my thought on that. Senator, is that newspaper 
publications would be and, I think, under — if I remember right — 
under tlie McFarland law, they were to be exempt from it, that would 
be — all that would be necessary for the operator of a large poolroom 
to carry on. It would be a distinction as to what constituted a news- 
paper. I think there would be dozens and dozens in every area with 
an edition after every race with the winner and the mutuel would be 
unimportant. 

Senator Wiley. I want to ask another question, Mr. Chairman. I 
want to get this witness's judgment. The large sums of money that 
are paid for wire service, are they paid for the service plus certain 
protection against hoodlums or for virtually just the wire services? 

Mr. Carroll. Well, Senator, I would not answer that question. I 
could not answer that question. I can say only in the operation that 
I am familiar with that it is not; no one has ever exacted any tribute 
from us. 

Senator Wiley. Well, what I am getting at is, is the large amount 
of money that is charged, virtually charged for protected monopoly 
of the service ? 

Mr. Carroll. Well, I, of course, would not know that, Senator. I 
would not. So far as the operation, the operations that I am familiar 
with. I would say that had absolutely no bearing on it whatsoever. 

Senator AViley. Do you know of any instance except when they got 
iiito sort of a conflict between w^ire services where there was any inter- 
ference with the wire service ? 

Mr. Carroll. Not to my knowledge. 

Senator O'Conor. Senator Hunt. 

Senator Hunt. Mr. Carroll, when you were operating in St. Louis 
how many phones did you have in your place of business, do you 
remenjber? 

Mr. Carroll. I think one wall phone. 



340 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Senator Hunt. Are you saying to the committee that all of the 
business that came into your establishment in a day or that left your 
establishment was done on one phone '^ 

Mr. Carroll. When I was in the business in St. Louis, Senator, 
we did not accept any telephone bets. 

Senator Hunt. Did you accept Western Union bets ? 

Mr. Carroll. At that particular time ; no. 

Senator Hunt. How many telephones would you estimate were in 
service in St. Louis alone for the purposes of bookmaking? 

Mr. Carroll. I would have no idea about that, Senator. 

Senator Hunt. Do you think I would be in error if I would say 
there might be several thousand in St. Louis alone ? 

Mr. Carroll. I would hesitate to hazard a guess there. Senator. 

Senator Hunt. Would I be in error if I would say that throughout 
the United States there are millio7.s of telephone drops used solely 
for the purpase of making books. 

Mr. Carroll. Again, 1 would hesitate to answer. 

Senator Hunt. Wliat I am attempting to develop, Mr. Carroll, is I 
really think you know more than you are telling us, too, I think you 
know, or to give us an estimate on these questions I am asking you. I 
think you could be a little more frank with the committee. I think 
3'OU should be. 

Mr. Carroll. Senator, frankly, I really would not know. I am con- 
vinced that the passing of a law to prohibit the transmission of racing 
information would help the professional prieemaker or ocldsmaker 
immeasurably. 

Senator Hunt. We had testimony in New York the other day by 
an official who was running a daily tabulation on bookie calls, that 
they were running into the thousands, just from New York to New 
Jersey. In our work in Florida we would find as high as 30 phones 
in one horse parlor. We, also, had evidence indisputable that the 
telephone companies were there ready, prepared, when one bookie was 
raided within a couple of hours those same phones would be set up, 
installed in another room, generally very closely adjacent to the one 
that was raided. I want to develop this point: Without the use of 
telephones, without using the Western Union, to my way of thinking 
the bookie could not successfully carry on, because it is the rapidity 
with which a bet is placed immediately after one race is run that 
encourages the bettors to keep on betting. If that information was 
dela5^ed it would not carry with it the same invitation to repeat betting. 
I do not want to labor this point, but I do want to say this : There 
can be no question but what the supervisor of a local telephone exchange 
knows what those telephones are being installed for, knows what busi- 
ness is being carried on over them. There is no question but what 
the operator of the board, as she receives and places those calls, knows 
what those calls are, because they are placed in a second or two, they 
must be rapid and, generally, at certain hours of the day. I think that 
this connnittee is not getting, perhaps, at the very root of this trouble. 
There is no question in my mind but what the highest official of the 
American Telephone & Telegraph knows exactly that they are aiding 
and abetting this illegal operation, and I am going to request the 
committee that we have those people come in and testify as to why 
they are carrying on these, helping in these illegal operations. 



ORGANIZES CRIME IN INTERSTATE COMMERCE 341 

Senator O'Coner. Have you any comment to make in respect to 
that, Mr. Carroll? 

Mr. Carroll. No ; other than I think that it is untrue. 

Senator Hunt. What is untrue, Mr. Witness? 

Mr. Carroll. The statement that you just made. 

Senator Hunt. What part of it is untrue? 

Mr. Carroll. That the telephone company and the telephone offi- 
cials have a knowledge of what is happening. 

Senator Hunt. Mr. Carroll, you do not believe a word you are 
saying. 

Mr. Carroll. Well, Senator 

Senator Hunt'. You know as well as you ai-e sitting there they know 
in detail this type of business. 

Mr. Carroll. To know and to think one knows are two different 
things. 

Senator O'Conor. Let me ask you this one question in line with 
what has been asked you. Based upon your knowledge over the years 
in connection with these operations, do you think that illegal betting 
could have been carried on to tlie extent that it has been carried on 
M'ithout the knowledge of and collusion with the law-enforcement 
"^^cials? 

Mr. Carroll. That I am positive that it did not. 

Senator O'Conor. Well, we will ask you more about that. 

Mr. Carroll. That it requires the collusion or the 

Senator O'Conor. We will ask you more about that a little later. 

The Chairman. While you are on the subject of Avhat Senator Hunt 
brought out, I agree with the conclusion that Senator Hunt made 
full}^, that they have to know about these telephone operations. We 
have an example here. I think, from Mr. Carroll's organization that 
he has been associated with so long. Here is a digest of the telephone 
calls over a period, the incoming collect long-distance calls made to 
the jSfooney organization of which Mr. Carroll has been associated over 
a period of 4 months. You see from the front page of 1 page here 
how they run. There are 228 pages, single print, of long-distance in- 
coming calls from, apparentl3% every State of the Union — Florida, 
Minnesota, Arkansas, Texas, Indiana, California, Michigan, Colo- 
rado — I see one here — this is from March to July 1950 — this has been 
compiled by our staff, the incoming collect telephone calls, and I am 
advised that these come to two numbers. Of course, when one of 
the numbers would be busy I suppose it would automatically switch to 
another number. So how many lines there were and how many instru- 
ments, is not known, but these literally run into the many, many 
thousands over a period of those 4 months. So records from Mr. Car- 
roll's own organization, at least one that he allegedly is associated 
with, would show conclusively, in my opinion, that what Senator Hunt 
said is true. The telephone companies, of course, are bound to know 
what these are. And if they did not know from what is on here, the 
tremendous telephone bill which was brought out in the hearings, 
$120,000 in 1 year, paid to the telephone company by the organization 
with which Mr. Carroll is associated would, of course, put anybody on 
notice about what these operations were. There was not any dispute 
about that in the St. Louis hearings. The telephone officials said they 
knew what they were. 



342 ORGANIZED CRIME EST INTERSTATE COMMERCE 

Mr. Carroll. Senator, I just did not, when I says that I said it was 
untrue, I meant that the top officials — I just, Senator Hunt, I want 
to apologize if I, by inference, said that your statement was untrue. 
I says what I should have says, I believe it untrue that the high officials 
of the telephone company have any knowledge of any gambling opera- 
tions; and if they dicl, what could they do about it? 

Senator Hunt. What could they do about it? I think they could 
very quickly see that those telephones were disconnected if they 
were being used for illegal purposes, and I disagi^ee with you on your 
last statement, Mr. Carroll. I think these executives of the telephone 
and telegraph companies are very intelligent gentlemen. I think they 
analyze their business daily and monthly and by the year. That is 
what they receive their rather handsome salaries for. I think they 
know exactly where their business originates. I think they know 
the direction of all of their traffic. I think they are pretty well advised 
on what is happening. 

The Chairman. Mr. Carroll, not to be printed in the record, but 
anyway so that it will be in our file and a part of our records, so they 
can be referred to, I ask that these incoming collect calls to Mr. 
Mooney's place in East St. Louis, 3 18 A Missouri Avenue, East St. 
Louis, be made a part of the record, because they show very con- 
clusively what the situation is, and I think if I remember the testi- 
mony, the telephone man testified in Missouri that he knew that he 
required a very substantial deposit ; that their position was that they 
had to furnish service unless the local officials asked them to discon- 
tinue the service. 

Mr. Carroll. That is what I meant by my answer to Senator Hunt, 
[ believe 

The Chairman. Anyway, that was their contention. They knew 
that the service was being given for an illegal purpose, but they felt 
that they were under some obligation to furnish it unless some protest 
was made by the law-enforcement officials, but there is not any ques- 
tion but what the officials knew what this was for. 

Mr. Carroll. That might be true. My reply to Senator Hunt — I 
know this has occurred in a number of times that the telephone com- 
pany have been mandamused and forced by court decree to restore 
telephones. 

Senator O'Conor. The tabulations as offered by Senator Kefauver 
will be admitted for reference and will be marked and, of course, 
available to counsel on both sides. Senator Wiley. 

(The record of incoming calls to 318A Missouri Avenue, East St. 
Louis, 111., is identified as exhibit No. 33, and is on file with the com- 
mittee.) 

Senator Wiley. Mr. Carroll, in connection with the subject that 
has been brought up here in connection with my previous question as 
to whether or not the amount paid for service created a sort of mo- 
nopoly or protection, have you ever seen instances of physical vio- 
lence, strong-arm methods, beatings in connection with the gambling 
operations that you know about? 

Mr. Carroll. No, Senator. 

Senator Wiley. Can you give us any guess as to the gambling take 
in St. Louis, Mo. ? 

Mr. Carroll. I could only answer for one operation. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 343 

Senator Wiley. Well, let's get that. That is pretty definite then, 
you mean, one operation? 

Mr. Carroll. Well, I think in 1950 — no, 1949, I think it was in 
excess of $20 million. 

Senator Wiley. That is one operation? 

Mr. Carroll. That is correct, sir. 

Senator Wiley. How many operations are there in St. Louis ? 

Mr. Carroll. Well, that. Senator, that would be a hard question 
to answer. I would not have any idea. 

Senator Wiley. Well, I asked in that connection before for a guess. 
You now give a definite amount, more or less $20 million as to one 
operation. Do you think there are at least half a dozen operations? 

Mr. Carroll, That would be purely a guess. Senator. I just would 
be unable to answer that. 

Senator Wiley. Well, have you any judgment as to it, say, the dif- 
ference in gamblers, professional and amateurs, in St. Louis, any 
approximation as to numbers, the number of professional gamblers 
that enjoy this thing, and how many are amateurs? 

Mr. Carroll. Well. Senator, I really don't know how to answer 
that question. I think gambling is a biological necessity for certain 
types. I think it is the quality that gives substance to their day 
dreams. 

Senator Wiley. To their what? 

Mr. Carroll. To their day dreams. 

Senator Wiley. No night dreams, then? 

Mr. Carroll. Well — that is what I sinceiely believe. 

Senator Wiley. Just a minute, just a minute. Let me finish this. 
I think there is some substance to what you said. That is why I am 
trying to get this. You know Missouri. You have lived there in St. 
Louis, you have lived there? 

Mr. Carroll. All of my life. 

Senator Wiley. Born there, lived there all of your life? 

Mr, Carroll, That is right. 

Senator Wiley, You have made it your life work almost? 

Mr, Carroll. That is correct. Senator. 

Senator Wiley. To know this game and know the people that are 
in it. Now, let's get your percentagewise of the number of people in 
Missouri, the total now, professional and amateurs, that are engaging 
m this business. 

Mr. Carroll. And who are making a livelihood out of it ? 

Senator Wiley. Yes ; the total over-all, I mean, the suckers and the 
fellows that get the big stuff, see ? 

Mr. Carroll. I just would not know. I would say that, oh, attend- 
ance at the race track, I would say 10 percent of the population — I 
think v,e have a population in the metropolitan area of a million people 
and I would say that there are 100,000 people in the area who receive 
or think they receive pleasurable excitement from the act of gambling. 

Senator Wiley. All right. Now how many of them would you 
classify as professionals? 

Mr. Carroll. I would say of the number of people who are making 
a livelihood and, Senator, this is only a guess 

Senator Wiley. You are about the best man we have got in the 
guessing game on that subject, sir. 



344 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Carroll. I would say 10 or 12 hundred. 

Senator Wiley. They are the fellows that really get the take ? 

Mr. Carroll. They are the fellows who make a living out of the 
gambling and that is purely conjecture on the theory that at one time 
in St. Louis there was 150. 

Senator O'Conor. Before you leave that subject, did I understand 
you to say that the handle in this one operation was about $20,000,000 ? 

Mr. Carroll. In 1949. 

Senator O'CoNOR. 1949? 

Mr. Carroll. Yes; that is right. 

Senator O'Coxor. What would you think was the percentage of 
profit, generally speaking? 

Mr. Carroll. In that particular operation I think it was in the 
neighborhood of, oh, between $740,000 and $750,000. 

Senator O'Conor. Out of the $20,000,000? 

Mr. Carroll. That is right. That is the gross profit of the opera- 
tion. 

Senator O'Conor. The gross profit, so it would 

Mr. Carroll. That would be approximately 3i^ or 4 percent. 

Senator O'Conor. Would you think that would apply generally 
to operations of others who were similarly situated? 

Mr. Carroll. I would think not. 

Senator O'Conor. Greater or less ? 

Mr. Carroll. The other operation might be greater, the percentage 
of profit. 

Senator O'Conor. But your $20,000,000 was just confined to the 
one operation? 

Mr. Carroll. That is correct, sir. 

Senator O'Conor. Thank you. 

Senator Wiley. I want to pursue this language a little bit further, 
if I may. You were giving us a rather interesting interpretation, that 
it was a biological necessity for these people to engage in this activity. 

Mr. Carroll. I said I believed that. Senator. 

Senator Wiley. All right. Over the years, seeing that you are our 
expert today on this subject, would you mind telling us the percentage 
of those that play the horses that die broke ? 

Mr. Carroll. Well, contrary to the general opinion. Senator, there 
are many, many horse players who make a livelihood playing horses. 

Senator Wiley. I understand now when they are about to check in, 
how many of them die broke ? 

Mr. Carroll. I would say there are many, many — well, I would 
not know about that. There are certain types, but there are horse 
players wlio consistently play horses and beat them year in and year 
out. 

Senator Wiley. Would you mind telling me who the principal out- 
of-State betting commissioners were with whom you dealt in recent 
years ? 

Mr. Carroll. I do no business with anyone. 

Senator Wiley. You don't? 

Mr. Carroll. No betting commissioners. 

Senator Wiley. What is your average take, that is, the profit? 

Mr. Carroll. Well, my average take. Senator, I have — I directly, 
I never directly accept any wager or any bet. The operation I am 



ORGANIZED CRIME IN INTERSTATE COMMERCE 345 

speaking of, $20 million or in excess of $20 million, divided by 310 
would be approximately $60,000 a day, in the neighborhood of $62,000 
or $63,000 a day. 

Senator Wiley. Have you ever, in view of the operation, had any 
contacts with the police officials of that city for protection ? 

Mr. Carroll. Absolutely not. 

Senator AVilet. Have you discussed with any police officials any 
time this matter ? 

Mr. Carroll. Absolutely not. 

Senator Wiley. Have they ever interfered with your activity ? 

Mr. Carroll. Well, now, my activity. Senator, I have practically — 
have had no phyiscal contact w4th the business in 25, I think, about 
25 years. 

Senator Wiley. Just a financial contact? 

Mr. Carroll. Something of that nature. I just would not know 
how to describe it. 

Senator Wiley. All right. 

Senator O'Conor. Just what is the name of the operation — just 
how do you describe it, that is, of the particular one that you said 
netted $20 million? 

Mr. Carroll. Well, it would be two — it would be the John Mooney 
and Michael Grady. 

Senator O'Conor. And they are affiliated ? 

Mr. Carroll. Well, I would say we are associated. 

Senator O'Conor. Associated? 

Mr. Carroll. In the operation of it. 

Senator O'Conor. Senator Tobey ? 

Senator Tobey. Do you know a man named Rosenbaum, a gam- 
bler? 

Mr. Carroll. I have never met Mr. Rosenbaum. 

Senator Tobey. You want to thank God for that. 

Mr. Carroll. I know who he is. 

Senator Tobey. Do you know wiiat he looks like ? 

Mr. Carroll. I haven't the slightest idea. 

Senator Tobey. That is a good thing, too. Now let me tell you, 
do you know that down in Covington, Ky., the committee's investi- 
gation found that there were many telephones listed in the telephone 
book under the name. Senator Kefauver confirms to me, of the Ken- 
tucky Benevolent Insurance Co., in Covington, Ky, and in that room 
are many, many telephones all used in placing of bets and wagering 
and gambling. Now, you are a man of business acumen, there is no 
question about that at all, and I think you are telling us the truth 
here this morning. 

Mr. Carroll. Thank you, Senator. 

Senator Tobey. So I say this to you, you w^ould not for a moment 
harbor the thought, would you, that a telephone company who in- 
stalled those telephones and listed them under a benevolent insurance 
company does not know they are being used in gambling operations 
which are illegal ? 

Mr. Carroll. Well, Senator, the only answ^er I can give to that 
question that I am acquainted with one of t)ie high officials of the 
A. T. & T. and he said that they were sick and tired of it and I think 
Mr. GifFord at that time was president of A. T. & T. and he said that 

68958 — 51 — pt. 12 23 



346 ORGANIZED CRIME IN INTERSTATE COMMERCE. 

they would give anything, immense sums if they could eliminate what 
they believed to be unfavorable publicity. I think LaGuardia 

Senator Tobey. They are against it just because they are going 
to get unfavorable publicity. They ought to be against the illegality 
of it. All men do not like unfavorable publicity. What we want is 
to have a righteous indignation. And the telephone company officials 
ought to kick them out. 

Mr. Carroll. I am sorry. 

Senator O'Conor. Now, it is your turn. 

Mr. Carroll. I believe that was the stand that Mr. Gifford took. 
He was — I think this fellow pointed out that they had spent many, 
many millions of dollars in the developing of good will for the Bell 
Telephone Co., and I think Mr. LaGuardia was then mayor of New 
York, and that in substance was the theme of his Sunday morning 
broadcasts, that the telephone company, if they would exercise due 
diligence, would certainly stop the handbook operation in the New 
York area. 

Senator Toeey. Now" that you have mentioned LaGuardia, let me 
interpolate in these hearings, when the Lord took LaGuardia we lost 
one of the greatest public officials we ever had, above reproach, who 
called the balls and strikes as he saw them and carried fearlessly to 
liis everlasting credit. 

Coming back to my story, sir, now. I want to say to you that this 
committee will shortly write a report and it has been possible ac- 
cording to testimony that a man in Bangor, Maine, wrote a telegram 
placing $25 or $50 or $100, I forget the amount on one horse, to place 
and to show and one to win, so the Western Union would take that 
money and send it to a State where this gambling is illegal. It is 
my contention that the Western Union Co. then automatically be- 
comes an accessory before the fact and particeps criminis to the 
whole illegality of the matter. 

This committee, so far as one member is concerned, with whatever 
ability we have and purpose we have will put into this report some 
very definite recommendations putting a stop to the use of telephone 
wires for gambling and the use of Western Union wires for gambling, 
and that these officials, if they do not know how to do it, I think 
this committee of five will know how and show the way. I give you 
that assurance now. 

Senator O'Conor. Senator Kefauver. 

The Chairman. I do not think we got it just right. The $20 mil- 
lion operation to which Mr. Carroll was referring said that was John 
Mooney and Michael Grady. 

Mr. Carroll. Michael Grady. 

The Chairman, That is the same operation, is it not, that has a 
post-office address 

Mr. Carroll, That is right. 

The Chairman. In St. Louis and a wire room in East St, Louis? 

Mr. Carroll. That is true, Senator. 

The Chairman. That is the outfit that you have had an interest 
in and that you worked through yourself ? 

Mr. Carroll. Well, I would not use the word "interest," Senator. 

The Chairman. Well, the financial interest, anyway, that you made 
up to about $110,000 a year one year out of? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 347 

Mr. Carroll. Well, it still in my opinion is not an interest. 

The Chairman. Well, anyway you made $110,000 a year or some- 
thing like that out of it and it is still not an interest in the business. 

Mr. Carroll. Well, once again I will have to give you a little back- 
ground of the operation. 

The Chairman. I do not want to get ahead of the story, but, any- 
way, it is the Mooney-Grady and maybe Carroll operation out of 
which you have made considerable money that you were talking about 
as having taken in or done $20,000,000 worth of business a year. 

Mr. Carroll. That is correct. Senator; that is correct. 

The Chairman. All right, sir. 

Senator Wiley. Was that a manager's salary ? 

Mr, Carroll. Manager's salary? 

Senator Wiley. Yes. 

Mr. Carroll. I don't know. 

Senator Wiley. $110,000 sounds to me like something. You haven't 
an interest. What is it for ? 

Mr. Carroll. Well, it is a private venture. 

Senator Wiley. What do you do for it? 

Mr. Carroll. Well, oh, give advice, furnish financing 

Senator Wiley. And take the returns ? 

Mr. Carroll. That is correct. 

Senator Wiley. You get the Pioneer Service there, do you? 

Mr. Carroll. Senator, I think the MG operation by, I believe — it 
was testified that it was in my name, but to my ow^n knowledge I have 
never paid the Pioneer a check or Pioneer Service Co.. a check or cash 
or anything, maybe, I would say for 25 years. 

Senator Wiley. Did they work Des Moines for a number of years ? 

Mr. Carroll. I would not know that, Senator. 

Senator Wiley. Do you know Lou Farrell ? 

Mr. Carroll. Lou Farrell ? 

Senator Wiley. Yes. 

Mr. Carroll. I can't identify him. Senator. 

Senator Wiley. Bart Higgins ? 

Mr. Carroll. I am unable to identify him. 

Senator Wiley. Kennelly brothers ? 

Mr. Carroll. I am still — the names, those names are unfamiliar to 
me. Senator. 

Senator Wiley. Well, they are connected with Des Moines. I was 
just wondering whether you knew about Des Moines. 

Mr. Carroll. No, I am unfamiliar with — I am unfamiliar with the 
names. Senator. 

Senator Wiley. You never met them or knew them ? 

Mr. Carroll. No, not to my knowledge. 

Senator O'Conor. Mr. Burling. 

Senator Wiley. Just one more question. Have you any operation 
in Des Moines? 

Mr. Carroll. No. 

Senator Wiley. Directly or indirectly? 

Mr. Carroll. No. 

Mr. Burling. You have no interest, as you describe it, an interest 
in the Mooney operation at 318-A Missouri Avenue, East St. Louis, 
111., that is your present testimony ; is that right, sir ? 



348 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Carroll. Well, that is true, but that would have to be qualified. 
Mr. Burling. Did you not qualify it at all before the McFarland 
subcommittee, did you — let me read your testimony. 

Senator Capehart. They placed those bets with you in St. Louis? 
Mr. Carroll. That is right. 
And they send you the money? 

Mr. Shenker. What page? 

Mr. Burling. It is at 394 of the record, I am sorry, I will read it 
over again. 

They placed those bets with you in St. Louis? 
Mr. Carroll. That is right. 

Senator Capehart. And they send you the money? 
Mr. Carroll. That is right. 

Senator Capehart. You hold the money until the race is finished? 
Mr. Carroll. That is right. 

Senator Capehart. Will you take a bet on any race track in the United States 
on any horse at any time? 

Mr. Carroll. Yes, sir ; within certain limitations. 

Senator Capehart. You do that in St. Louis? 

Mr. Carroll. That is right, sir ; we have done that. 

When did you think up this idea that you had no interest in the 
Mooney and Grady operation? 

Mr. Carroll. Well, Senator, that was a generalization. 

]Mr. Burling. You mean it was untrue,? 

Mr. Carroll. No, it was not untrue. 

Mr. Burling. Is your testimony I just read true or false, sir? 

Mr. Carroll. Well, it is neither true or false. 

Senator O'Conor. Mr. Carroll, that really requires an explanation. 
You did say before it needs to be terribly qualified. What is the ter- 
rible qualification? 

Mr. Capjioll. Well, Senator, in 1942 I had a license, or I thought I 
had a license in Reno, Nev. Have you the license ? 

M. Shenker. Yes. 

Mr. Carroll. I think in an office at 223 Virginia Street, Reno. We 
had an opinion or thought Ave had an opinion from a Postal Telegraph 
manager and their legal department that pointed out it was an absolute 
legal matter to wire a bet from any point in Illinois and 26 other States 
to a legalized bookmaker in Nevada. 

Mr, Burling. May I interrupt you just a moment ? Were you living 
in Reno, Nev., at this time? 

Mr. Carroll. No, I was not. 

Mr. Burling. Wliat is the relevance of what you are saying then ? 

Mr. Carroll. Well, I am trying — you are asking the question of 
what is my association or my identification with the Mooney-Grady 
operation — I am trying — I told you that it would require a little back- 
ground. 

Mr. Burling. Please proceed, sir. 

Senator O'Conor. Go ahead, Mr. Carroll. 

Mr. Carroll. I have just forgotten where I was. 

Senator O'Conor. Read back his answer. 

(The answer was read as follows :) 

I think in an oflSce at 223 Virginia Street, Reno. We had an opinion or thought 
we had an opinion from a Postal Telegraph manager and their legal depart- 
ment that pointed out it was an absolute legal matter to wire a bet from any 
point in Illinois and 26 other States to a legalized bookmaker in Nevada. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 349 

Mr. Carroll. I secured the license in Nevada, the M. G., that is, 
for the purpose of identification. They were to solicit or to receive 
any business in any way that they could in the East St. Louis area 
or in the Illinois area and to wire it to me in Reno, Nev., and that 
opinion, the whole crux of it was, it was legal, there was no question 
about the legality of the player going in to the Western Union and 
wiring it to Nevada. Now what did Mr. Mooney or Mr. Grady, 
picking up the bet from the customer in wiring it to me, what did that 
do to the proposition? The legal department of the Postal Tele- 
graph Co. — I think it was the Postal at that time — believed that it 
was not illegal. And I made arrangements with Mr. Mooney or Mr. 
Grady whatever bets that they would accept in the area to be wired 
to me in Reno, Nev. 

Mr. Burling. What I do not understand, Mr. Carroll, is that you 
were not in Nevada. How can you get a wire in Nevada when you are 
not in that State? 

Mr. Carroll. Well, I was licensed — I was licensed by the State of 
Nevada and had an office in there. 

Mr. Burling. But you were not there ; were you ? 

Mr. Caroll. No, but I was to hire employees, get 

Mr. Burling. Did you 

Mr. Carroll. Employees. 

Mr. Burling. Did you, sir ? 

Mr. Carroll. No, I didn't. 

Mr. Burling. You were not there personally ? 

Mr. Carroll. Well, yes, during this period ; during the period. 

Mr. Burling. You did not — excuse me — you did not, you were not 
there personally and you did not have employees in the State of 
Nevada, so what has this got to do with anything ? 

Mr. Carroll. Well, you are asking me what is my interest and Sen- 
ator Wiley asked me why I received $110,000 from the Mooney-Grady 
operation in a certain year. Senator Kef auver, I think, asked me that. 
And I am trying to give the reason for it. 

Mr. Burling. But I, for one, Mr. Chairman, am totally unable to 
understand how one can justify receiving $110,000 for being licensed 
in Nevada to receive bets when one is not in Nevada, one does not 
have an office in Nevada, or did you have ? 

Mr. Carroll. Counselor, I had an office. 

Mr. Burling. You leased one ? 

Mr. Carroll. Yes, sir. 

Mr. Burling. In your own name ? 

Mr. Carroll. I had an office in Nevada. 

The Chairman. The whole thing is that you had this plan, but your 
plan never worked out ? 

Ml Carroll. That is true. Senator. 

The Chairman. Then you went on doing business in East St. 
Louis and St. Louis ? 

Mr. Carroll. That is true. 

The Chairman. And the only thing about that is that you contem- 
plated that arrangement but you never consummated it, and in the 
absence of setting up in Nevada, you carried on in East St. Louis and 
St. Louis, and made your $110,000 there ? 

Mr. Carroll. That is in substance, true. 

The Chairman. All right. 



350 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Senator O'Conor. Well, certainly the $110,000 was not paid for 
a plan that did not work out. 

Mr. Carroll. No ; but what I am trying to do, Mr. Burling asked 
me a question of what association I had with the M. & G. operation, 
and I was trying to explain that. This plan started, and the Postal 
Telegraph Co. could not furnish the typewriter necessary for the oper- 
ation, and during all this discussion about the legality of all this 
stuff, it was pointed out to us that our position, while it might not 
have been legal, was to some extent.not illegal. 

Senator O'Conor. All right. 

Senator Wiley. You still have not answered the question as to what 
you gave for the $110,000. You had a license out there in Reno, and 
never operated it. Did you sell them a license — did you sell them 
a cat for $110,000 yearly salary ? 

Mr. Carroll. No, Senator; the Mooney-Grady operation was to 
bet me this one-half of all the money they received, or they were able 
to solicit, and the other half was to bet to a race track — any race track, 
it didn't make any difference about the amount, wherever the bet was 
received — and for that I was to pay them a certain sum of money, 
and when we learned that the wire was not available, that plan was 
carried out; in other words, I received $110,000 in that particular 
year from the fact that John Mooney, or the M. G. operation, bet me 
one-half of the money they received. 

Senator Wiley. How did you happen to come in contact with him, 
or had you known him for a long time ? 

Mr. Carroll. Who? 

Senator Wiley. Mooney. 

Mr. Carroll. I have known him all my life. 

Senator Wiley. And Grady. Are they in sports, too ? 

Mr. Carroll. Yes. 

Senator Wiley. Wliat sports ? 

Mr. Carroll. The business of bookmaking, I would say. Now, I 
believe they are in the business of bookmaking. This is a moot ques- 
tion. Senator, despite 

Senator Wiley. How much do they get each year out of this ? 

Mr. Carroll. They would get the same amount that I get, or did 
get. 

The Chairman. May I ask a question, Mr. Chairman ? 

Senator O'Conor. Yes. 

The Chairman. What you mean is that you got 50 percent, and 
they divided the other 50 between them ? 

Mr. Carroll. Proportionately ; I think that is so. 

The Chairman. So what the situation is, you took out a wire li- 
cense and made application for it with the Pioneer News Service, or 
whatever the service was — we had that, I think, before us in St. Louis — 
you got the wire service, and you were going to work out this Reno 
deal, which did not work out ; so instead of doing that you transacted 
business in East St. Louis with your wire service, and St. Louis with 
your mailing address, and then split the profit with Mr. Mooney and 
Mr. Grady, where they got 50 percent between them, and you got 50 
percent, which in a particular year here amounted to $110,000. But 
you actually did not have anything to do with the business ; is that 
the idea ? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 351 

Mr. Carroll. In physical operation of the business, that is true, 
Senator. 

The Chairman. But anyway, it was 50 percent your business ; that 
is the situation ? 

Mr. Carroll. No, no. I say that it was a private venture. 

The Chairman. All right. 

Mr. Burling. Do you know a lady named Miss Forrestal? 

Mr. Carroll. Yes; I do. 

Mr. Burling. What was her occupation last spring, if you know? 

Mr. Carroll. I think she was an employee. 

Mr. Burling. An employee of what? 

Mr. Carroll. Of John Mooney. 

Mr. Burling, And she has testified that she saw you from time to 
time at 318-A Missouri Avenue, East St. Louis, 111. Would you say 
that is true or false ? 

Mr. Carroll. That would be true. 

Mr. Burling. You did come in ? 

Mr. Carroll. That is correct. 

Mr. Burling. Hoav many telephones did they have there ? Did you 
ever look? 

Mr. Carroll. I would think — I believe 18. 

Mr. Burling. Now, is it your opinion, going back to Senator Hunt's 
question — is it your opinion that alert officials of a telephone com- 
pany could make a pretty good guess at what the nature of a business 
was, in a relatively shabby building, where there were 18 telephones? 

Mr. Carroll. Well, the answer to that is 

Mr. Burling. And a $110,000 a year bill? I should add that the 
telephone bill is $110,000, chiefly for incoming collect calls. 

Now, in your opinion, could a reasonably alert official of the tele- 
phone company make a pretty good guess as to what was going on in 
that building ? 

Mr. Carroll. Well, the answer to that, I believe, would be "Yes." 

Senator Wiley. How about police officials? 

Mr. Carroll. Well, Senator, there we go back to the question of 
the legality of the operation, or the illegality of it. 

Senator Hunt. Mr. Carroll, the counsel's question, or the answer 
to his question, would just certainly be obvious, it would be impossible 
for these telephones to operate in that location Avithout the telephone 
company knowing what they were being used for. 

Mr. Carroll. That is true. Senator, but — I think that is true, that 
the telephone company tried to discontinue the telephones in that 
place, and they secured an injunction enjoining them from removing 
the telephones. 

Mr. Burling. Well, when you say "they," you mean "you"; don't 
you? 

Mr. Carroll. No ; the M. G. operation. 

Mr. Burling. Oh, I see. 

The Chairman. And that is the one you got 50 percent of the profits 
from ; was it not ? 

Mr. Carroll. That is true. Senator. 

The Chairman. All right. 

Senator Hunt. Is that a partnership, is it a corporation, or do you 
hold certificates of stock in the company, Mr. Carroll ? 



352 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Carroll. No ; it is not a partnership. It is a private venture. 
That is what I was considering 

Mr. Shenker. Well, noM% that is your interpretation of it anyway? 

Mr. Carroll. That is right. 

Mr. Shenker. Let us get that in the record. 

Mr. Carroll. That is correct. 

Senator Hunt. Did you have any written agreements with your 
partners ? 

Mr. Carroll. No, no ; I have not. 

Senator Hunt. All right. 

Senator O'Conor. You mentioned before that the sum total of the 
telephone business was about $110,000 or $120,000 a year, if I recall 
correctly ; is that about right ? 

Mr. Carroll. That is right. 

Senator O'Conor. And on incoming calls, was there a standing rule 
that all would be taken ? 

Mr. Carroll. Yes. Well, now, once again, I believe that the M. G. 
operation, anyone could call this particular number and reverse the 
charges. 

Senator O'Conor. In other words, from any point in the United 
States you were satisfied to take a call collect ? 

Mr. Carroll. That is correct. Senator. 

Senator Wiley. Do you know any public officials down there ? 

Mr. Carroll. Well, Senator, I have been there all my life. I proba- 
bly know everybody. 

Senator Wiley. You have made contributions to political cam- 
paigns ; have you ? 

Mr. Carroll. I have been making political contributions all my 
life. Senator, but I have never, or I believe I have never, made a con- 
tribution in excess of $200, and I positively have never made any 
contribution for the purpose of influencing any law-enforcement body. 

Senator Wiley. Without naming any names, do some of these very 
officials that you know so well make bets through you ? 

Mr. Carroll. I would say I cannot recall that, Senator. 

Senator Wiley. Well, is that a convenient answer or 

Mr. Carroll. No; it is not. Physically, I never; I don't believe 
that I have ever accepted a bet in 25 years from anyone but the 
operators of the M.-G. operation. 

Mr. Burling. I have a question. 

Senator O'Conor. Mr. Burling. 

Mr. Burling. But, 3- ou remember, I read to you only a few moments 
ago the following : 

Senator Capehart. Will you take a bet on any race track in the United States 
on any horse at any time? 

Mr. Carroll. Yes, sir ; with certain limitations. 

NoAv, were you telling the truth or not ? 

Mr. Carroll. Well, what I meant was that the operation would 
accept a bet at any race track. 

Mr. Burling. You did not say so before the McFarland committee. 

Mr. Carroll. Once again, I was in a state of high excitement. 

Senator O'Conor. But jou did consider, when it was asked, whether 
you would — that 3^ou and the operation were synonymous; did you 
not? 



ORGANIZED CRIME IN INTERSTATE COMMERCE 353 

Mr. Carroll. That is right. 

Senator O 'Conor. All right. 

Senator Wiley. Then, can I get the answer: Do some of these 
public officials you know so well place bets now and then or more 
often? 

Mr. Carroll. I would say no; I believe that to be true. I don't 
know of any public official who has ever made the operation a bet — 
maybe on an election; yes — but I just could not be certain of that. 

Senator "Wiley. Have you or — I don't know what to call it — the 
enterprise, through any of its so-called partners, ever paid any money 
to public officials for any kind of protection ? 

Sir. Carroll. No. The belief that our operation was not illegal 
would answer that question. We did not feel it was necessary. 

Senator Wiley. Do you mean that you convinced the public officials 
that it was not illegal ? 

Mr. Carroll. It has never come to an issue. 

Senator Wiley. Well, then, if it never came to an issue, it means 
that, either through design, purpose, or neglect, the matter was totally 
ignored. Is that it? 

Mr. Carroll. Well 

Senator Wiley. Or did you do something to get that neglect? 

Mr. Carroll. No ; that is positively not so. That is — I am certain 
of that, Senator. 

Senator Wiley. Did you ever discuss this alleged legal opinion with 
any of them ? 

Mr. Carroll. No ; no ; I did what I think — if I remember right, I 
had gone to some lawyer in the hope of getting a declaratory judg- 
ment from the courts as to whether it was legal or not legal; but 
something intervened, and the suggestion came to my mind, ""Wliy 
find out? Wait until there is some action taken against you," or 
some action taken against the operation. 

Senator Wiley. Well, then, as a matter of fact, you want to say 
that no public official, nor the police, nor the mayor, nor anyone else, 
ever interfered with this operation ? 

Mr. Carroll. That is in East St. Louis. I think in St. Louis there 
has always been a harassment program there; that for many years 
anytime there was a robbery or burglary they introduced the big red 
herring and locked up a few gamblers. 

Senator Tobey. I'hat is a bad expression to use around Wash- 
ington, sir. 

Mr, Carroll. And that happened on many, many, many occasions. 

Senator Hunt. I suggest we strike it. 

Senator Wiley. Now, you said something to the effect, and I want 
to know whether Mooney or Grad}^ have intimate connection with 
the politicians. 

Mr. Carroll. I am certain that they have not. 

Senator Wiley. Do they take bets from public officials? 

Mr. Carroll. The answer there again would be, "I would not believe 
that they do." 

Senator Wiley. Well, have they, or this concern, made contribu- 
tions to political individuals or political parties? 

Mr. Carroll. Well, Senator, I have just testified tliat I have been 
making contributions to political parties and candidates all my life. 



354 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Senator Wiley. AVell, you limited the amount at any one time to 
$200. Now I am asking you whether you have any knowledge as 
to what they have done and what amount they have been contributing. 
After all, you are all in the same boat, the three of you are. 

Mr. Carroll. Well, I am certain that they did not make any 
contributions. 

Senator Wiley. But you have no knowledge on it ? 

Mr. Carroll. I have no knowledge of it ; that would be the better 
answer. 

Senator O'Conor. All right, Mr. Burling. 

Mr. Burling. Specifically, Mr. Carroll, are you acquainted with 
the former sheriff of the county in which East St. Louis is located 'i 
That is Saint Clair County, is it ? 

Mr. Carroll. No ; I have no 

Mr. Burling. First, what county is it ? 

Mr. Carroll. Saint Clair County. 

Mr. Burling. You mean you don't know Sheriff Fisher ? 

Mr. Carroll. No ; I never met Sheriff Fisher in my life. I would 
not know him if he walked in this room right now. 

Mr. Burling. I thought you testified a moment ago that you knew 
almost all the public officials. 

Mr. Carroll. In that particular case, that is one exception. I do 
not know Sheriff Fisher. 

Mr. Burling. Did you make one of these $200 contributions to him ? 

Mr. Carroll. No, no. 

Mr. Burling. Did he ever do anything at any time in any nature 
whatsoever to interfere with this operation we are talking about? 

Mr. Carroll. No ; he did not, Counselor. 

Senator Wiley. I understand neither the sheriff nor the police 
officials 

Mr. Burling. The police commissioner 

Senator Wiley (continuing). Never interferred with the opera- 
tion? 

Mr. Burling. The police commissioner was named English. 

Senator Wiley. Sir ? 

Mr. Burling. The police commissioner was named English. 

Senator O'Conor. The fact is that none of them undertook to in- 
terfere with the operation ? 

Mr. Carroll. That is right. 

Mr. Shenker. With the exception that, there was some interfer- 
ence with the operation sometime in 1950, where the telephones were 
removed from that operation. That will straighten out the question 
as to whether they ever did anything. 

Senator Wiley. Previously thereto, it is clearly understood that 
neither the police officials nor the county sheriff nor anyone else, run- 
ning away up to the Governor, ever took any action in relation to the 
M. & G., as you call it? 

Mr. Carroll. That is correct. 

The Chairman. Mr. Carroll, 1950 was the time when George White 
was with our committee and came into the room — isn't that the time?— 
and then Governor Stevenson ordered the phones to be taken out. 
Wasn't that the time they were interferred with ? 

Mr. Carroll. No ; I think it was a much later date when the tele- 
phones were taken out. 



ORGAIsriZED CRIME IN INTERSTATE COMMERCE. 355 

The Chairman. It was in July 1950. 

Mr. Carroll. Well, the telephones were removed much later than 
that. 

The Chairmax. Yes; but that was upon the order of Governor 
Stevenson to the telephone company, as I recall ; was it not ? 

Mr. Carroll. That I would not know. 

The Chairman. Wasn't it, Mr. Shenker? 

Mr. Shenker. That is my understanding. It is my understanding 
that that took place subsequent to Mr. George White's visit over there 
and some development. 

Senator Hunt. May I ask, Mr. Chairman, were they reinstalled by 
a court order ? Were these phones reinstalled by a court order after 
they had been removed ? 

Mr. Carroll. Not as yet, Senator. 

Senator O'Conor. There is a court proceeding pending, we under- 
stand. 

Mr. Carroll. Well, no. We believe the telephone company, or the 
operation believes the telephone company, removed these telephones 
illegally. They have only discontinued service. 

Senator O'Conor. The fact is, some matter was instituted in court ; 
was it not ? 

Mr. Carroll. Not so far. They have been waiting for the telephone 
company to make a forced entry or replevin the equipment, and then 
the answer, I think, will be made by M.-G. 

Senator Hunt. The telephone company, after discontinuing the 
service, did reinstall the service? 

Mr. Carroll. No; not until, I think it was. Senator, sometime in 
late November. 

Senator Hunt. But the telephones were out at one time in 1950, 
and now they are back in ? 

Mr. Carroll. No, no, no. 

Senator Hunt. They are still out? 

Mr. Carroll. The telephones are still on the premises, as I under- 
stand it. 

Senator Hunt. But the service was discontinued ? 

Mr. Carroll. The service was discontinued. 

Senator Hunt. Now the service has been restored ? 

Mr. Carroll. No, no. 

Senator Hunt. They are still without service ? 

Mr. Carroll. That is right. 

Senator Hunt. That is what I wanted to know. 

The Chairman. Wliat happened was that you moved your place 
of operation to some hotel in St. Louis. Wasn't that about the size 
of it? 

]\Ir. Carroll. You are speaking of my operation now? 

The Chairman. I mean M. & G. 

Senator O'Conor. The one you get 50 percent of. 

Mr. Carroll. I would not know just where operation X had moved 
I had gone to Florida and, oh, shortly after that, and I really couldn't 
say. 

Senator O'Conor. Are you still deriving your income from it? 

Mr. Carroll. No, Senator, I am not. 

Senator O'Conor. Is there any financial income to you at all ? 

Mr, Carroll. No ; not one penny. 



356 ORGANIZED CRIME IN INTERSTATE COMMERCE 

The Chairtman. Well, you mean you just have not gotten any 
right recently, the last 2 or 3 months. You got some in 1950. How 
about the Park Plaza Plotel; didn't you move your operation X 

Mr. Carroll. No; not to my knowledge, and I am almost certain 
about that. I think John Mooney lives in the Park Plaza Hotel, or 
lived there for many years. 

The Chairman. All right, Mr. Burling. 

Mr. Burling. Specifically, Mr, Carroll, with reference to officials 
in St. Louis, the police commissioner is Mr. English — or East St. 
Louis, rather. 

Mr. Carroll. Yes, John English is the police commissioner. 

Mr. Burling. He is an old friend of yours, is he ? 

Mr. Carroll. I think that I have met John English about seven 
times in my life. 

Mr. Burling. Now, during hearings, the open hearings in St. Louis, 
Mr. English testified that he had received between the time that he 
had become police commissioner and up to and through 1949 a total 
of $131,000 in political contributions, which he had declared as per- 
sonal income, and on Avhich he had paid personal income tax. 

I want to ask you this question : What part, if any, of that $131,000 
did you contribute? 

Mr. Carroll. I never made a contribution to John English in my 
life. 

Mr. Burling. But on the other hand, the police commissioner in 
the past 4 or 5 years — I forgot exactly how long — has done, so far as 
you know, nothing to interfere with this operation we are talking 
about ? 

Mr. Carroll. Well, Counselor, we are going on the theory — — 

Mr. Burling. Has it or has it not ? 

Senator O'Conor. Just answer "yes" or "no," and then you may 
make any explanation you wish. 

Mr. Carroll. No. 

Senator O'Conor. All right. 

Mr. Burling. Now, do you wish to qualify your answer or expand 
it ? Otherwise, I will go on to another point. 

Mr. Carroll. Well, you can go on to another point. 

Senator O'Conor. The committee will now take a recess for lunch 
until 2 p. m. 

(Whereupon, at 12 :30 p. m., the committee recessed until 2 p. m. 
of this same day. ) 

afternoon session 

Present: Senators Kefauver (chairman), O'Conor (presiding), 
Hunt, Tobey, and Wiley. 

Senator O'Conor. The hearing will please be in order. Counsel? 

FURTHER TESTIMONY OF JAMES J. CARROLL, ACCOMPANIED BY 
MORRIS A. SHENKER, ATTORNEY 

Mr. Shenker. Yes, Mr. Chairman. 

Mr. Carroll advises me that during the recess there were two par- 
ticular questions which were general in nature to which Mr. Carroll 



ORGANIZED CRIME IN INTERSTATE COMMERCE 357 

made some answers, and we are not certain that those answers were 
exactly in the way in w^iich he would like for them to remain in the 
record, particularly the question which was addressed by Senator 
Hunt. That question pertained to the idea as to whether it is pos- 
sible — if I recall correctly. Senator Hunt — for the leaders and owners 
or directors or persons in charge of the telephone company to carry 
on such a large business with persons engaged in gambling and still 
not know anything about it. 

Now, that question Mr. Carroll would like for the record to show 
that he feels that 

Senator O'Conor. Comisel, we would appreciate Mr. Carroll's doing 
it, if you do not mind. 

Mr. Shenker. Very well then; I will just recall the two questions. 

Senator O'Conor. What was the second question? 

Mr. Shenker. The second question was the question Senator Tobey 
asked, in the form of a statement, which was to the effect whether the 
general operation of bookmaking and bets being transmitted and the 
amount of bets that were made at any period of time or over a period 
of time would be affected any if AVestern Union and Postal Telegraph 
& Telephone Co. were not to permit the use of their facilities for that 
purpose. 

^ow, Mr. Carroll w^ould answer that question also in a manner, 
which was not very clear in the manner in which he answered it before. 

Senator O'Conor. Thank you. 

Mr. Shenker. Thank you. 

Senator O'Conor. Thank you. Counsel. May I say to the witness 
that you have heard, of course, your counsel indicate your desire to 
modify or to enlarge upon or to change in any way at all your testimony 
previously given, first, in respect to the question asked you by Senator 
Hunt. 

Do you care to do so ? 

Mr. Carroll. I think I answered Senator Hunt that I did not think 
it was untrue or it would not affect it. I do think that the telephone 
company and the telephones would have some effect on the business 
today. 

(Conference between the witness and his attorney.) 

Mr. Carroll. Well, your question now, counsel informs me, was, 
"Did the telephone company have a knowledge of the operation?" — 
and, of course, my answer is, "It could very well be." I don't know, 
of course, but it could very well be. I think I said that that was not 
true, if I remember correctly. 

Senator Hunt. I do not think you mean that, Mr. Carroll, because 
don't you know that it would be absolutel}^ impossible for this terrific 
telephone business, with this 30, 40, or 50 drops in one place, to have 
those installed without the supervisor in that area, in that district, 
knowing what they were being installed for ? You know, too, the fact 
is that if a man did that business the supervisor would make that 
known to his superior. 

I think, if I may put the words into your mouth, Mr. Carroll, that 
there just cannot be any possibility but what the very top of the 
A. T. & T. and the Western Union know exactly what is going on. 

Mr. Carroll. Then I believe that is true. 

Senator O'Conor. All right. 



358 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Now, the second of the two matters, may I say to the witness, that 
your counsel indicated you might wish to enlarge upon was that with 
reference to a question propounded by Senator Tobey. Do you desire 
to say anything further with reference to that? 

Mr. Carroll. I don't recall ; what is the question ? 

Mr. Shenker. That is the question pertaining to the idea as to 
whether if the telephone company and the telegraph company and 
Western Union would withdraw their services and not lend their 
facilities for the transmission of wagers or information for the making 
of wagers, whether that would appreciably affect the amount of money 
that is wagered throughout the United States. I believe that was 
Senator Tobey's question, substantially. 

Senator Tobet. I will add a clause to that; not only wagered, but 
affecting the incomes, of those who are in that business, very dras- 
tically to reduce them, 

Mr. Carroll. The answer is "Yes." 

Senator Tobey. It seems elementary to me ; and I want to say, Mr. 
Chairman, that I concur in what my colleague, Senator Hunt, has 
just said. It seems elementary to me, in these days of competition and 
business acumen being so stressed, that these telephone men know 
where it comes from, and they point with pride to it, in my judgment, 
among themselves in the district conventions ; and, if they do not know, 
we will see that they are informed. 

Senator O'Conor. All right. 

Now, the next question, Mr. Burling. 

Mr. Burling. I believe at the close of the morning hearing you said 
that you understood the operation of this anomalous group of you and 
Grady — and which is not a partnership or a corporation, but is a legal 
something — that that legal something was waiting for Southwestern 
Bell Telephone to replevin the telephone instruments which were cut 
off physically ; that is, the wire was cut off at 318 Missouri Avenue, 
East St. Louis, 111. Is that correct, sir ? 

Mr. Carroll. Well 

Mr. Burling. The question is just "Did you say it?" 

Mr. Carroll. Yes ; I did. 

Mr. Burling, Now, my question is : Wliat does the word "replevin" 
mean ? 

Mr. Carroll. Well, it is forced entry, as I understand it, to recover 
the property, the recovery of the telephone property. 

Mr. Burling. You never went to law school ? 

Mr. Carroll. No. 

Mr. Burling. But you know what the word "replevin" means? 

Mr. Carroll. That is correct. 

Mr. Burling. You have quite a familiarity with legal terminology. 
You acquired that over the years ; is that correct? 

Mr. Carroll. Yes ; I would say that would be correct. 

Mr. Burling. You would agree with me, sir, that replevin is one of 
the ancient forms of action that no longer exists as a code practice? 

Mr. Carroll. Yes; that is correct. 

Mr. Burling. How do you account for the extensive familiarity 
you have with legal phraseology? 

Mr. Carroll. Well, I have no answer to that question, Counselor, 
other than I read newspapers and read decisions by courts. 



ORGANIZED CRIME IN INTERSTATE COMMERCE. 359 

Mr. Berling. Yoii read the court decisions as they come out; do 
you? 

Mr. Carroll. Well, yes: I think I read newspapers, and I go 
tliroug;]! them pretty thoroughly. 

Mr. Burling. Have you ever seen the word "replevin" used in news- 
papers ? 

Mr. Carroll. I think it is a common word in our justice-of-the- 
peace courts ; it is a legalism, to recover 

J\Ir. Burling. It may be in Missouri ; it is not my experience. 

I have not heard the word since I was in law school, sir. 

Mr. Shenker. Missouri is one of the States in which they still use 
it, Mr. Burling. 

Mr. Burling. I see. Thank you, Mr. Shenker. 

Now, going to your testimony before the so-called McFarland sub- 
committee — and Mr. Shenker, I am going to read from page 381 — ^I 
am showing you that I am going to read the middle of the paragraph 
about halfway down the page, where you say : 

It is the considered opinion of the persons in this business who are in position 
to know that there is no connection whatsoever between individuals who are 
engaged in gambling, bookmaking, accepting bets, brokers, or commissioners and 
any of the forms of crime wliich have been the subject of concern to us within 
recent years. 

Mr. Carroll. The answer is "Yes." 

Mr. Burling. Have you changed your mind, sir? 

Mr. Carroll. No. 

Mr. Burling. Now, you know Mr. William Molasky, of St. Louis? 

Mr. Carroll. Yes ; I know William Molasky. 

Mr. Burling. Your operation, this legal anomaly, has been paying 
him $350 a week for many, many years ; is that correct ? 

Mr. Carroll. I think that is correct. I never paid 

Mr. Burling. You think it is correct ? 

Mr. Carroll. That is correct. 

Mr. Burling. And you knew that ISIr. Molasky had a partner a 
few years ago named Ragen, did you not — R-a-g-e-n? Does that re- 
fresh your recollection ? 

Mr. Carroll. Yes; I think I recollect that he was the head of the 
Continental News ; I did not know Ragen. 

Mr. Burling. He was a partner in Pioneer News; was he not? 

Mr. Carroll. Not to my knowledge. Counselor. 

Mr. Burling. Continental — at any rate, he was engaged in the dis- 
semination of racing information ; is that correct, sir ? 

Mr. Carroll. That is correct, sir. 

Mr. Burling. And he died of a rather unpleasant malady ; did he 
not? 

Mr. Carroll. I think he was murdered. 

Mr. Buttling. Yes. Do you regard murder as a serious crime ? 

Mr. Carroll. I do very much, sir. 

Mr. Burling. And do you not know that Ragen was murdered in 
connection with the bookmaking business? 

Mr. Carroll. I would not know that. Counselor. 

Mr. Burling. I am not asking you as to the truth or falsity of what 
I am saying, but merely as to the sincerity. I am questioning you 
about the sincerity with which you testified before the McFarland com- 
mittee. Is it not known throughout the bookmaking business, at least 



360 ORGANIZED' CRIME IN INTERSTATE COMMERCE 

as a matter of gossip, that just before Ragen was murdered he testi- 
fied or he appeared before and gave a statement to the district attorney 
of Cook County, 111. ? You knew that ; did you not ? 

Mr. Carroll. Yes; I did. 

Mr. Burling. And you knew that it was said. You knew the gossip 
was that Ragen told the district attorney that he was going to be 
murdered in connection with an effort of the Chicago or Capone mob 
to muscle in on the race- wire service ; did you not, sir ? 

Mr. Carroll. That is true. 

Mr. Burling. But it is a tie, is it not, at least as a matter of repu- 
tation, between murder and bookmaking. Would you agree with 
that? 

Mr. Carroll. It could be true. 

Mr. Burling. You did not see fit to tell the McFarland committee 
that a friend of yours had been murdered after he had made such a 
statement to the district attorney? 

Mr. Carroll. Well, Mr. Ragen — I did not know Mr. Ragen ; he was 
no friend 

Mr. Burling. You never met him ? 

Mr. Carroll. Never met Mr. Ragen in my life. 

Mr. Burling. I see, but he just supplied you with reading infor- 
mation ? 

Mr. Carroll. No; I thought, I believe, that the operation bought 
racing service from, I think it was then, Clarence Owen and Beverly 
Brown. 

Mr. Burling. It was four people ; was it not ? 

Mr. Carroll. I would not know anything about the — originally I 
purchased — the operation originally purchased — the service from Bev- 
erly Brown and Clarence 

Mr. Burling. Well, there was Molasky and Bev Brown, "Gully" 
Owen, and Ragen, as I recall, is that not correct? 

Mr. Carroll. I knew nothing about the arrangements of the Pio- 
neer News. 

Mr. Burling. By the way, you yourself were at one time — excuse 
me, Mr. Shenker. 

Mr. Shenker. I am sorry ; go ahead. 

Mr. Burling (continuing). You were yourself at one time kid- 
naped, w^ere you not ? 

Mr. Carroll. No, sir. 

Mr. Burling. You were never kidnaped? 

Mr. Carroll. Never have been kidnaped. 

Senator CConor. Was there any occurrence which might be de- 
scribed as kidnaping or anj^thing like that that happened in your 
case ? 

Mr. Carroll. In my case, no. 

Senator O'Conor. All right. Mr. Burling? 

Mr. Burling. Without regard to — first, did you know Bugsy 
Siegel ? 

Mr. Carroll. No. 

Mr. Burling. But you had heard of him ? 

Mr. Carroll. Yes. 

Mr. Burling. Last year when you testified? 

Mr. Carroll. Yes. 



ORGANIZED CRIME EST INTERSTATE COMMERCE 361 

Mr. Burling. And in the business it was universally known that 
he was a gambler, was it? 

Mr. Carroll. As far as I knew 

Mr. Burling. I am asking now solely with respect to the sincerity 
with which you testified before the McFarland committee, and at the 
time you testified before the McFarland committee that there was no 
connection between gambling and serious crime, did you not know 
that it was universally said that Bugsy Siegel had been a gambler? 

Mr. Carroll. Well, I believe that was his general reputation, Coun- 
selor. 

Mr. Burling. Yes ; and you believe, at the same time, that he had 
been murdered, do you not ? 

Mr. Carroll. I beg pardon ? 

Mr. Burling. You believed at that same time that he had been 
murdered, did you not, sir? 

Mr. Carroll. Yes ; I believe that. 

Mr. Burling. He had his head blown off with a shotgun through 
a window. 

Mr. Carroll. Yes ; I believe that. 

Mr. Burling. And that is a serious crime, is it not ? 

Mr. Carroll. Unquestionably so. 

Mr. Burling. But you did not see fit to qualify your statement be- 
fore the McFarland committee that — 

In the considered opinion of persons in this business who were in a position 
to know, that tliere was no connection between persons who were engaged in 
gambling — 

I am shortening this, Mr. Shenker — 

and any of the forms of crime which have been the subject of concern to us 
within recent years. 

Mr. Carroll. I am still of that opinion. Counselor. 

Mr. Burling. Who is Mickey Cohen, if you know ? 

Mr. Carroll. I beg your pardon ? 

Mr. Burling. I said, if you know, who is Mickey Cohen? 

Mr. Carroll. I have not — the only knowledge I have of Mickey 
Cohen is the publicity he has received in the newspapers. I happen 
to be a subscriber to a California paper, and he very frequently is 

Mr. Burling. What paper is that, sir ? 

Mr. Carroll. The Los Angeles Times. 

Mr. Burling. And except as you read in the Los Angeles Times 
you never even heard of Mickey Cohen ? 

Mr. Carroll. No, no. 

Mr. Burling. What was it that qualified you to testify as an expert 
on the gambling fraternity before the McFarland committee, Mr. 
Carroll? 

Mr. Carroll. Well, that must have been the opinion of the Mc- 
Farland committee that I was an expert. I never made any claims to 
be an expert about anything, Counsel. 

Mr. Burling. I dare say you are about the only man in this room 
who has not heard of Mickey Cohen as a gambler. At any rate, that 
is your testimony? 

Mr. Shenker. Oh, no ; he did not say that. 

Mr. Carroll. I did not say he was not a gambler. Are you asking 
me what I knew about Mickey Cohen? I told you the only thing 

68958— 51— pt. 12 24 



362 ORGANIZED CRIME IN INTERSTATE COMMERCE 

I know about Mickey Cohen is what I read in the — he had the reputa- 
tion for being a gambler. 

Mr. Burling. I will rephrase my comment, sir. I dare say you are 
the only man in this room who has not heard through other sources 
than the Los Angeles Times that Mickey Cohen is a gambler; and 
I will go on. 

You know that Mickey Cohen has been the subject of murderous 
attacks ? 

Mr. Carroll. Yes ; I know that. 

Mr. Burling. But you do not want to qualify your statement that 
gambling is not closely associated with even more serious crimes? 
You stand on what you said before the ISIcFarland committee ? 

Mr. Carroll. I stand on what I said before the McFarland com- 
mittee. 

Mr. Burling. Who was William C. Kussell ? 

Mr. Carroll. William C. Russell? I don't recall. 

Mr. Burling. I do not mean to be unfair to you, sir. There is no 
such person ; that is an alias. Don't you know that? 

Mr. Carroll. No; I don't. 

Mr. Burling. Well, all right. Who was Russell McBurney? 

Mr. Carroll. Russell ]McI3urney is an employee of the Mooney — 
of the M. & G. operations. 

Mr. Burling. What we haA^e been calling this afternoon the legal 
anomaly ? 

Mr. Carroll. That is correct, sir. 

Mr. Burling. Do you not know that William C. Russell used his 
name in order to obtain numerous telephones at 826 Pine Street, St. 
Louis, Mo. ? 

Mr. Carroll. No ; I do not. 

Mr. Burling. You had nothing to do with that? 

Mr. Carroll. No ; I had nothing to do with it. 

Mr. Burling. You do not deny it? 

Mr. Carroll. No ; I do not deny it. 

Mr. Burling. And you testified, I believe you testified, before the 
McFarland committee concerning the utility of wire service, did you 
not, race-wire service, such as the legal anomaly acquired from, bought 
from, Pioneer for $350 a week? 

Mr. Carroll. Will you repeat the question. Counselor? 

Mr. Burling. Will you repeat the question, Mr. Reporter ? 

(The question was read by the reporter.) 

Mr. Carroll. Well 

Mr. SiiENKER. Just answer the question, "Yes" or "No." 

Mr. Carroll. Yes. 

Mr. Burling. Will you repeat what you said about the utility of 
wire service? I can do it, perhaps, more rapidly now that I have 
found it. I am reading from page 382, Mr. Shenker. 

Senator McFarland. Now, let's start out first with regard to the bookmaker. 
What does he need to conduct his business? 
Mr. Carroll. Money ; nothing else. 

Mr. Shenker. Where is that? 

Mr. Burling. In the middle of 382, Mr. Shenker. 

Mr. Carroll. Money ; nothing else. 

Senator McFarland. Does he need a wire service? 

Mr Carroll. No. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 363 

Then it goes on, and I am skipping, and is as follows : 

Senator McFarland. Is the wire service beneficial to an operator? 
Mr. Carroll. Only as I said in my statement it relieves the anxiety of the 
bettor. He knows whether he has snffered a loss or a profit. 

Now, I believe yon testified that this operation paid $350 a week for 
Pioneer's news service, race-wire service. 

Mr. Carroll. Yes, yes — I am sorry. 

Mr. Burling. And is it not true that at 318-A Missouri Avenue, 
East St. Louis, 111., no customers were allowed to come in? 

Mr. Carroll. That is true. 

Mr. Burling. All the calls were by telephone ? 

Mr. Carroll. That is true. 

Mr. Burling. You have been in the betting business for about 45 
years, have you not ? Horse betting ? 

Mr. Carroll. I would say since 1899. 

Mr. Burling. Well, if I can do a little quick mathematics that is 52 
years, is that right, sir ? 

Mr. Carroll. That is correct. 

Mr. Burling. Are you still very nervous when the ponies are run- 
ning ? 

Mr. Carroll. Well — - 

Mr. Burling. You said you were nervous here; but are you ner- 
vous 

Mr. Carroll. Yes. 

Mr. Burling (continuing). When the horses are 

Mr. Carroll. The answer is "Yes." 

Mr. Burling. And you pay $350 a week to soothe your nerves while 
the horses are running, in your establishment ? 

Mr. Carroll. Well, Counselor, I did not pay the $350 a week. I 
had nothing to do with the physical — I had nothing to do with the 
physical operation for the past 

Mr. Burling. How long have you known Mr. Mooney ? 

Mr. Carroll. Approximately 25 years. 

Mr. Burling. Is he a very nervous gentleman ? 

Mr. Carroll. I could not answer that. 

Mr. Burling. I mean, does he pay $350 a week to soothe his nerves 
while the horses are running ? 

Mr. Carroll. No; I would not think that woidd be his purpose for 
paying $350 a week. 

Mr. Burling. What is the purpose for paying $350 a week, sir ? 

Mr. Carroll. Well, I wouldn't know just why he would pay, other 
than it might be — it is the customers might call for a result, or some- 
thing of that sort, and by giving the customer the result he would have 
developed good will that might result in some business for him. 

]Mr. Burling. So your view is that the customers who telephoned 
in bets are so nervous that they want to find out and are sufficiently 
anxious so that it is worth $350 a week for the operation to pay for 
this service, just to soothe somebody's nerves? 

Mr. Carroll. Well, it is not that, Senator ; I think the horse bettor 
receives a great deal of pleasurable excitement in the act of betting. 

Senator O'Conor. Mr. Carroll, just let me ask you a few questions 
in order to determine the volume and the extent of your operations. 

Under what names did you operate or have you operated, say, in the 
recent past, the last — since about 1944 or 1945 1 



364 ORGANIZED CRIME IN INTERSTATE COMMERCE 

Mr. Carroll. Well, the operation is in the name of John Mooney 
or Michael Grady, the Hawthorne smoke shop, and the Maryland 

cigar store. . , T.r 

Senator O'Conor. Maryland cigar store ? Wliy did you pick Mary- 
land? 

[Laughter.] 

Mr. Carroll. Well, Maryland was one of the first States that had 
legalized racing, and it was probably associated with that fact. 

Senator O'Conor. Were you connected with anybody in Maryland? 

Mr. Carroll. No. 

Mr. Burling. I see. Wliere was the location of the Maryland — 
was it the Maryland smoke 

Mr. Carroll. Maryland cigar store ; at 822 Pine Street. 

Senator O'Conor. Was it not the Maryland book shop ? 

Mr. Carroll. I think at one time it was described as the Maryland 
book shop. 

Senator O'Conor. Why did you describe it as "book"? Did you 
mean books and periodicals ? 

Mr. Carroll. Well, there were books and periodicals sold there; 
there were scratch sheets, racing forms. 

[Laughter.] 

Senator O'Conor. Go ahead. Any of the classics? 

[Laughter.] 

Mr. Carroll. No, no ; I don't think so. 

Senator O'Conor. Mostly in the variety of scratch sheets? 

Mr. Carroll. That is right. 

Senator Wiley. Black Beauty ? 

Mr. Carroll. I beg pardon ? 

Senator Wiley. B1 ack Beauty ? 

[Laughter.] 

Senator O'Conor. With whom were you associated in that particu- 
lar concern. 

Mr. Carroll. Well, I was associated with no one. It was the — John 
Mooney was the owner, and is still the owner of the Maryland Cigar 
Store and of the Hawthorne Cigar Store. 

Senator O'Conor. How was that name, the Hawthorne Cigar 
Store — was that used 

Mr. Carroll. I guess there was 

Senator O'Conor (continuing). To divert suspicion? 
Mr. Carroll. The name was associated with, maybe, sports. 

Senator O'Conor. And to divert suspicion from the true reason 
for the operation ? 

Mr. Carroll. That could be true. 

Senator O'Conor. Did they sell cigars at all or 

Mr. Carroll. Yes ; they sold cigars. 

Senator O'Conor. But most of the business was receiving bets or 
handling wagers in one form or another ? 

Mr. Carroll. I would say that would be true. 

Senator O'Conor. Well, now, coming then and confining attention, 
Mr. Carroll, to the volume of the business, you have previously testified 
that in the M. & G., the total volume in the year was $20,000,000 in the 
1 year we have referred to. 

Mr. Carroll. That is correct, sir. 



ORGANIZED CRIME EST INTERSTATE COMMERCE 365 

Senator O'Conor. I think that was in 1944 or 1945 ? 

Mr. Carroll. 1949. 

Senator O'Conor. 1949. 

Do you have any idea what it was in 1944 or 1945, just approxi- 
mately ? 

Mr. Carroll. I think in the neighborhood of the 20 million dollars, 
16, 17, 18 million dollars ; it varried. 

Senator O'Conor. It varied. Are we to assume between 16 and 
20 million dollars? 

Mr. Carroll. That is correct, sir. 

Senator O'Conor. And was 20 million dollars the highest that 
you can recall? 

Mr. Carroll. Well, it might have been in excess of 20 million dollars. 

Senator O'Conor. What was the highest? 

Mr. Carroll. Between 20 and 21 million dollars. 

Senator O'Conor. Between 20 and 21 million dollars was the 
highest? 

Mr. Carroll. That is correct. 

Senator O'Conor. In the same year what was the volume of the 
Hawthorne Cigar Store? 

Mr. Carroll. I am unable — this is the aggregate volume of both 
operations. 

Senator O'Conor. How about the Maryland? 

Mr. Carroll. That is the total of the two operations. 

Senator O'Conor. The two. 

Well, now, the reason I ask you — I am not trying to lead you to 
anything except to get the actual figures — w^e have some other rec- 
ords which indicated that the gross in 1944 of the two, that is, the 
Hawthorne and the Maryland, aggregated $8,249,917. Would 
that 

Mr. Carroll. I would think that would be incorrect. Senator. 

Senator O'Conor. Incorrect? In what way? You think it is too 
much or too little ? 

Mr. Carroll. It is too little. 

Senator O'Conor. Too little? 

Mr. Carroll. Yes. 

Senator O'Conor. I only referred to Maryland and Hawthorne; I 
did not mention M. & G. 

Mr. Carroll. Well, the M. & G.— when I used the term "M. & G." is 
to describe both units, the Maryland Cigar Store and the Hawthorne 
Cigar. 

Senator O'Conor. I understand. 

Mr. Burling. In that respect I believe there was an error for which 
I take personal responsibility ; that the figure which you have before 
you is this witness' personal participation. 

Senator O'Conor. That is what I was going to ask him. 

Mr. Burling. Of 50 percent. 

Senator O'Conor. Wliether or not it could be explained on the basis 
of whether this was your cut or share in the total operation rather than 
that of the entire operation, that went to Mr. Mooney and to others. 

Mr. Carroll. Well, no, I would think the figures you would have 
would have to show the total receipts and the total disbursements, and 
that is — when I am saying in terms of the total receipts for the two 



366 ORGANIZE'D C'REVCE IK ENTERSTATE COMME'RiCEi 

units, I would say the average would be, oh, in the neighborhood of 
$18 million for the 4-year period. 

Senator O'Conor. I see. But they ranged somewhere between $16 
million, let us say, at the lowest, up to the $21 million. 

Mr. Carroll. That is true. Senator. 

Senator O'Conor. And that would be all-inclusive ? 

Mr. Carroll. That is right. That would be the total receipts of 
the two units. 

Senator O'Conor. Now, with respect to your share in the Maryland 
and the Hawthorne, you answered Senator Kef auver this morning as 
to the $110,000 share you got. What did you get percentagewise in 
the Hawthorne and the IN^Iaryland ? Would it be on a similar basis ? 

Mr. Carroll. Well, the percentage of profit in the Maryland, of 
course, would be much larger than in the Hawthorne for the simple 
reason the volume was larger ; and I just could not give you the figures 
in the absence of any records on that particular 

Senator O 'Conor. What portion did you receive, half or 

Mr. Carroll. One-half. 

Senator O'Conor. One-half ; and the other half was divided between 
the other two ? 

Mr. Carroll. No, they were two separate units. One unit he had — 
he received 50 percent of the profit, that is, he had 50 percent of the 
profits, and the other unit 50 percent of the profits. 

Senator O'Conor. I see. All right, Mr. Burling. 

Mr. Burling. One minor detail that wx did not clear up this 
morning as to the business operation of operation X ; is it correct that 
large bettors had and could get credit accounts through the country 
and wire in their bets without actually transmitting money? 

Mr. Carroll. That is correct. 

Mr. Burling. Is it correct that you had a regular business account, 
that is you, operation X, had a regular business account with Dun & 
Bradstreet whereby you would call for credit reports? 

Mr. Carroll. That is, the operation had that. 

Mr. Burling. Yes. 

Mr. Carroll. That is correct ; that is correct. 

Mr. Burling. In other words, if I wanted to bet $1,000 on the 
Kentucky Derby and I wired you requesting that you accept such a 
bet, you might well have asked Dun & Bradstreet for my credit report? 

Mr. Carroll. Oh, yes. 

Mr. Burling. And if it were satisfactory you would accept the bet 
without any money from me at all ? 

Mr. Carroll. Well, I think primarily the purpose of the inquiry 
was to establish who the bettor was. I think they were very par- 
ticular about who they would accept any bets from. In other words, 
if there were 

Mr. Burling. You did not look to the social register though, did 
you ? 

Mr. Carroll. No ; but it would be this : if we had a bank clerk, I 
think the policy was if they had a bank clerk, who would be betting 
they would just not accept the money on the theory that they could 
have — maybe he could not afford to. 

Mr. Burling. I see. So there were two separate reasons for asking 
Dun & Bradstreet, one, whether the operation should extend credit; 



ORGANIZED CRIME IN INTERSTATE COMMERCE 367 

and the other, to know whether the bettor was stealing the money 
or absconding? 

Mr. Carroll. That is true ; that is true . 

Mr. Burling. Tliat is interesting. 

AVho was Norman Helwig, H-e-1-w-i-g? 

Mr. Carroll. He is an employee of the M, and G. operation. 

Mr. Burling. You know him, do you not ? 

Mr. Carroll. Yes ; I know Norman Helwig. 

Mr. Burling. Do you know his signature!^ 

Mr. Carroll. No, I would not be able to 

Mr. Burling. Will you admit that he also used the alias H. Norman ? 

Mr. Carroll. Not to my knowledge. I would have no knowledge of 
that. Counselor. 

Mr. Burling. Mr. Chairman, I offer in evidence a check payable to 
N. Helwig in the sum of $16,090, dated December 3, 1949, drawn on 
the Southern Maryland Agricultural Association, and signed T. J. 
O'Hara, which is endorsed "N. Helwig" and then has a second en- 
dorsement, "For deposit only, Charles Town Jockey Club." 

I will ask you to look at that, if you w411, and tell us what you 
know about it. [Handing document to witness.] 

]Mr. Carroll. I wouhl know nothing about it, Counselor. 

Senator O'Conor. Did you ever see the check before ? 

Mr. Carroll. No ; never to my knowledge ; no. 

Senator O'Conor. Or were you interested in it so far as being con- 
sulted about it or—- — - 

Mr. Carroll. No, no. 

Mr. Burling. Wliat does Mr. Helwig do for the operation ? 

Mr. Carroll. He is, as you have described, an agent stationed at 
race tracks of America for the purpose of 

Mr. Burling. My description was — — 

Mr. Carroll. I think you called him "come-back." 

Mr. Burling. I believe so, and that was the correct term in the 
trade, was it not? 

Mr. Carroll. Yes ; that is correct. 

Mr. Burling. May that be received in evidence ? 

Senator O'Conor. Yes ; it will be received. 

(The document was received in evidence, identified as exhibit No. 
34, and is on file with the committee.) 

Mr. Burling. I offer now a check dated October 14, 1950, payable to 
N. Helwig, drawn on the account of the Southern Maryland Agri- 
cultural Association, signed by O'Hara, endorsed by Helwig, with 
some initials under it that I do not understand. 

Senator O'Conor. Counsel ? 

Mr. Bukling. AVill you examine that and see if you can tell us what 
it is ? [Handing document to witness.] 

Mr. Carroll. I don't recall ever seeing this check. Counselor. 

Mr. Burling. As you have already testified before one Senate com- 
mittee, as an expert in this business, we are inquiring into — what do 
you suppose, what is your best expert judgment, that this check 
represents ? 

Mr. Carroll. Why, it represents, in my judgment — it represents a 
sum of money wired by the operation to Norman Helwig for the pur- 
pose of buying the tickets or making bets at the race track. 



368 ORGANIZED CRIME M INTERSTATE COMMERCE 

Mr. Burling. Well, no, sir, the checks are drawn on the bank account 
of the Southern Maryland Agricultural Association, on the Union 
Trust Co. of Maryland ; that is the name of the Bowie track, is it not, 
of the corporation that operates the Bowie track ? 

Mr. Carroll. I think so. 

Mr. Burling. So it is not wired by the operation to your come-back 
money agent, is it? 

Mr. Carroll. Well then, that is a return. Will you let me see the 
check again, please ? 

Senator O'Conor. Do you not think that it is a restoration of the 
amounts put up by the operation with the track ? 

Mr. Carroll. That could very well be. Senator. 

Senator O'Conor. You are welcome to see it. 

Mr. Burling. To be even more specific, sir, does not the fact that 
the check bears 

Mr. Carroll. Wliy, sure, that is- 



Senator O'Conor. What do you think it is ? 

Mr. Carroll. It is a sum of money that was on deposit at the 
Southern Maryland ; I believe this was the sum of money on deposit 
at the Southern Maryland Agricultural Association in the name of 
Norman Helwig, and it was, the check was paid to Mr. Helwig. 

Mr. Burling. As a matter of fact, it is probably a transfer of a 
deposit from Bowie to Charles Town, is it not ? 

Mr. Carroll. That could very well be. 

Mr. Burling. Charles Town ; there is a large race track at Charles 
Town,W.Va.? 

Mr. Carroll. That could very well be, but I am just assuming this 
would be— — 

Mr. Burling. Look at the endorsement, sir. 

Mr. Carroll. Well, yes, I would say that that is correct; that is 
correct. 

Mr. Burling. I have one more check, payable to Helwig, in the sum 
of $10,150, signed by O'Hara, drawn on the same account, dated 
October 14, 1950, also endorsed by Helwig, which I offer in evidence. 

Senator O'Conor. It will be admitted after counsel sees it and de- 
sires to make any inspection. 

Mr. Shenker. It is perfectly all right to admit it, and I would like 
to sliow it to the witness. 

( The document referred to will be found in the files of the commit- 
tee identified as exhibit No. 35.) 

Mr. Burling. I now offer a check which bears the endorsement 
stamp "For deposit only, Charles Town Jockey Club," drawn on 
Southern Maryland Agricultural Association, signed by O'Hara, dated 
November 27, 1948, in the sum of $50,000 payable, to H. Norman, and 
bearing the first endorsement, H. Norman. I ask you to examine this 
check and the checks which are endorsed by Helwig and see if that 
does not refresh your recollection that the name H. Norman is an 
alias used by Helwig while he was acting as come-back money man 
for your operation, for the operation ? 

Mr. Carroll, Well, I do not know that. 

Mr. Burling. Will you look at the endorsement, and see if that is 
not obviously so ? 

Mr. Carroll. It does look very much like the same. 

Mr. Burling. Very well. 



ORGANIZED CRIME IN INTERSTATE COMMERCE 369 

Mr. Carroll. It could very well be. 

Mr. BuRiviNG. At least, you know who John Mooney is, do you not? 

Mr. Carroll. Yes; I know John Mooney. 

(Exhibit No. 36, on file with the committee.) 

Mr. Burling. I offer in evidence, Mr. Chairman, a check dated 
December 2, 19o0, drawn on the bank account of the Southern Mary- 
land Agricultural Association in its account in the Union Trust Co. 
of Maryland, signed by O'Hara, in the sum of $20,105, deposited in 
the First National Bank of St. Louis, in the John Mooney special 
account. Do 3^ou know anything about that check, sir? 

(Exhibit No, 37, on file with the committee.) 

j\Ir. Carroll. Well, of my own personal knowledge I know nothing 
about this check, other than I believe it to be a deposit that was 

Mr. Burling. Now, Mr. Carroll, this committee has been looking 
for Mr. Mooney since before December 2, has it not ? 

The Chairman. As a matter of fact, we were looking for Mr. 
Mooney last July Avhen we had executive sessions in St. Louis. We 
could not find him then. We could not find him for the last open 
hearings. Maybe Mr. Carroll can tell us where he is. 

Mr. Carroll. Well, I think he is in California, or in Las Vegas, 
Nev., was the last time I heard from him. 

The Chairman. Mr. Carroll, what was that John Mooney special 
account ? Is that the account for operation X out of which you got 50 
percent ? 

;Mr. Carroll. That is — it is the bank account of a part of the opera- 
tion X, that is the Maryland Cigar Store part of operation X. 

The Chairman. John Mooney special is the Maryland Cigar Store 
operation X ? 

j\Ir. Carroll. No ; John Mooney special account is his own personal 
bank account. 

The Chairman. But then the moneys deposited that way and then 
later divided up between you and between Mr. Mooney and his other 
partners ? 

Mr. Carroll. That is correct, Senator. 

Mr. Burling. Who has the power to draw on this account ? 

Mr. Carroll. I think there is a Harry Landzettel, Russell Mc- 
Burney, and at the moment that is about all I can think of. 

Mr. Burling. How about James J. Carroll ? 

Mr. Carroll. I cannot draw on it. I have not the right to draw 
on it. 

]Mr. Burling. Insofar as you know, who handles the bookkeeping 
of the account, that is, who do jou think physically stamped the 
check, "John JNIooney special account" — Mr. Mooney himself, appar- 
ently, was in hiding ? 

Mr. Carroll. What is the date on it, you say ? 

Mr. Burling. December 2, 1050. This is some months after this 
committee started to look for him. 

INIr. Carroll. Well, it could have been either Russell McBurney — 
that at the moment is all I can think who would have it- — I think Mr. 
Landzettel reti