by Dean Jobb
With the trail growing colder by the day, Crowe and his assistants were content to step back—for now, at least—to let the feds take the lead. “We hope that the federal officials, with their far reaching authority, may be able to act where we cannot,” Sbarbaro told the Daily Tribune.
Hamlin and his investigators, though, fared no better than their Cook County counterparts. A tip that their quarry was on a steamer bound for South America prompted officials in Washington to issue a radio alert to ships heading in that direction. Nothing. Just before Christmas, postal officials distributed a bulletin bearing his photograph and description and offering a $1,000 reward—later increased to $10,000—for his arrest. “Dresses expensively,” the bulletin noted, “is a liberal spender and undoubtedly has a large sum of money with him.” The feds received their share of tips, some of them off the wall: one informant exposed Leo as the finance minister in Russia’s fledging Soviet government; another was certain he was the king of Albania; a third pegged him as kingpin of a bootlegging operation. Hamlin claimed his staff was fielding enough bizarre leads “to supply several humorous magazines.”
Then postal inspectors announced that Leo had been seen in New York with the actress Doris Keane, a glamorous forty-two-year-old who had recently played Catherine the Great on Broadway. A story linking Leo to another woman, and a famous one at that? The newspapers gave it top billing until a Herald and Examiner correspondent tracked down Keane at a cottage in the English countryside, where she was vacationing. She had been in Europe for weeks and had no idea what all the fuss was about. Not only had she never met Leo, but, she insisted, “I never heard the name Koretz in my life.”
THE PRESS SCRAMBLED TO find adjectives to describe Leo’s prowess as a fraud artist. With Charles Ponzi’s scam fresh in readers’ minds, there were references to “the super-Ponzi” and “the Panama Ponzi.” The Daily Tribune even concocted a new word tailor-made for the swindle; his victims, the paper said, had been “Bayanoed.” The New York Times considered Leo “the most resourceful confidence man in the United States.” John Sbarbaro offered a superlative of his own. “This is the greatest swindle in the history of Cook County,” he declared, “and people call Chicago the wickedest city in the world.”
Leo was making headlines across North America. The Associated Press and United Press wire services distributed updates on the latest developments to readers in every major city, and he was big news from Zanesville, Ohio, to Casa Grande, Arizona. As news of the swindle spread, so did the purported sightings. The sheriff in a Michigan town on the main road between Chicago and Detroit reported that Leo had been seen in the backseat of a chauffeured limousine. A Chicago policeman was dispatched to Honolulu to follow up on a report that Leo had been found there. Another tip came from Texas, where a hotel guest in San Antonio was convinced she had spotted him asking the desk clerk for a room. Or perhaps Leo was the man who turned up at a public library in San Francisco and asked to see recent back issues of the Chicago papers.
Two days before Christmas, Sbarbaro and Klarkowski met with Mae. It was a long shot, but they wondered whether Leo had tried to contact her. “If I get any word from him my first act will be to tell you,” she assured them. “I could never forgive him for leaving me destitute, with my children to support.” Sbarbaro and Klarkowski suspected he was still in the country and lying low. When the news coverage subsided, he would pick his time and try to make his escape. A headline in the Christmas Eve edition of the Daily News summed up the situation in four words: KORETZ HUNT AT STANDSTILL. Klarkowski admitted the obvious: “We have pretty nearly run out of clews.”
As leads were drying up and news of the Bayano swindle was fading from the front pages, a small blue envelope was delivered to Sidney Kahnweiler’s home. Inside was a square greeting card. “If—On New Year’s,” it said. He opened it to find a simple verse:
If I could be transported
This moment to your door.
I’d bring you smiles by dozens
And good wishes by the score.
Then he saw the signature at the bottom: “Leo Koretz.”
About two hundred other Bayano investors received an identical card, rubbing salt into still-fresh wounds. “Leo’s last line,” the Daily Tribune called it, “his last joke on the men who made him millionaire and fugitive.” Were they from Leo, or the work of a prankster? The handwriting and signature seemed to match dividend checks and other documents Leo had drafted, and the stunt smacked of his twisted sense of humor. But the postmark showed they had been mailed in Chicago on Christmas Eve; given the intense manhunt, it seemed unlikely that Leo had still been in town, and since he worked alone, it was just as unlikely he had enlisted someone to distribute them.
“Joke or not,” said Kahnweiler, who had lost $4,400, toying with the card as he spoke to a reporter, “I only wish that greetings could come true—that Leo Koretz at this moment could be transported to my door.”
19
THE ALIAS
TEMPLE SCOTT RECOGNIZED the bearded man who approached him that winter evening. Scott was teaching a course on bookselling at New York University and had spotted him in the audience at earlier classes. He stood out. Few men wore a beard anymore—it was a relic of the Victorian age. He introduced himself as Lou Keyte. Could they have a word after the lecture?
Scott was an authority on rare books and a well-known literary critic. Born Isaac Henry Solomon Isaacs in England, he was a graduate of the University of London who had spent much of his life in the publishing industry. Grant Richards, publisher of such luminaries as George Bernard Shaw and James Joyce, met him in London in the late 1890s and considered him a man with “hardly an equal for knowledge, intelligence and cunning in the whole publishing trade.” Isaacs moved to New York at the turn of the century and adopted the pen name Temple Scott. He edited volumes of Jonathan Swift’s prose and Oscar Wilde’s poems, an anthology of garden-inspired poetry, and a guide to reading the Bible. In 1911 he released The Friendship of Books, a compilation of the thoughts of literary giants, from Saint Augustine to Robert Louis Stevenson, on the importance of books and reading. Literature “is one of the most potent teachers,” Scott wrote in his introduction to the collection, allowing readers to learn life’s lessons from the world’s greatest minds. The timeless works of these masters should line the shelves of a truly great bookstore, Scott told his class at New York University, not the latest best sellers.
As they chatted after the lecture, Keyte told Scott he was interested in opening a bookstore. Scott said he knew of one for sale in a good location—the Neighborhood Book Shop at the corner of Madison Avenue and Seventy-Third Street on the Upper East Side, a block from Central Park. If it checked out and he bought it, Keyte asked, would Scott consider running it for him, for at least a year? Scott could put his theories of what made a great bookstore into action. He could turn it into “a model shop,” Keyte suggested, “and then write a book about it.”
Scott was intrigued—and soon was in awe of his new friend. Keyte, he recalled, “was one of the most interesting men I have ever known,” a widely read, cultured man and “a brilliant conversationalist.” Coming from someone as discriminating and well read as Scott, this was high praise indeed. In his introduction to The Friendship of Books, he had lamented how rare it was to encounter someone who read and appreciated great literature.
Scott did not know it yet, but he and Keyte had something in common besides a love of good books. Lou Keyte was not his new friend’s real name, either.
WHILE CHICAGO POLICE AND federal agents chased down leads across the country, Leo Koretz was lying low in New York, getting used to his new name, and growing the beard as a disguise. After checking out of the St. Regis on the afternoon of December 6, he had rented a furnished apartment nearby at 4 East Forty-Eighth Street, a five-story building only a few steps from Fifth Avenue in a desirable and expensive neighborhood. The rent, $300 a month, was what he had been paying for his mansion, and New Yorkers instantly rec
ognized the address as “off the Avenue.” It was the city’s most exclusive shopping district, lined with department stores, jewelers to rival the best of Paris, art galleries, and high-end furniture shops. Saks and Company, the famous department store, was barely a block from his front door.
Leo arrived in New York with $175,000 in cash, and he invested $69,000 of that in stocks and bonds. No risky, fly-by-night investments for Leo; he dealt only with blue-chip Wall Street brokers. The rest—some $90,000—never left the apartment. “I suppose I took some chance,” he admitted later, but the need to have money close at hand for a quick escape outweighed the risk of losing his stash to a burglar.
Robbery was the least of his worries. He was uncomfortably close to a section of Fifth Avenue where a lot of people had known him as Leo Koretz—and now knew him, thanks to the widespread press coverage, as one of the greatest swindlers of all time. If he ventured too far north, he risked running into Basil Curran or someone else on the staff of the St. Regis. Salesclerks at Fifth Avenue jewelers who had trusted him to take home expensive pieces on approval would be on the lookout as well. There was one advantage to his Midtown location: if he needed to make a quick escape by train or to melt into a crowd, the nonstop bustle of Grand Central Terminal was only a few blocks away.
Leo checked the newspapers to make sure he was still a step ahead of the authorities, and he followed the bankruptcy proceedings under way in Chicago. He caught a break from the New York Times—the paper published a handful of reports that December on the Bayano swindle, but none included his photograph or description. He may have chuckled at a report that he was on a plane bound for Honduras, had crossed the border into Canada, or was on a boat setting sail from the West Coast. He would have been less pleased to see a reference in the Times to something his friend Mary Schoener had told investigators: Leo, she believed, was still in New York.
That, though, was akin to directing someone searching for a particular grain of sand to the nearest beach. With a population nearing the six million mark, New York was twice the size of Chicago, and that much more crowded and impersonal. It was “the metropolis of our planet … the culmination of twentieth-century civilization,” Ernest Gruening, who edited the magazine the Nation, boasted in 1922, sounding as windy as Chicago’s boosters. “Its high finance settles the fate of nations. Its shops display the rarest and costliest of the earth’s goods. It assembles the brains and talent in business, invention, and the arts.”
The skyscraper may have been invented in Chicago, but it was being perfected—over and over—in New York’s skyline. The city claimed the world’s tallest building, the fifty-seven-story Woolworth Building, and the humorist Will Rogers joked that builders seemed determined “to make the height of their buildings keep pace with their prices.” The city was so big and so congested that people could come and go unnoticed. “In New York,” noted Gruening, “one rarely seeks acquaintance with one’s neighbor; it would be unusual, suspect.” Strangers remained strangers. No one cared if the new tenant in the building was growing a beard and kept to himself. A fugitive could hide in plain sight.
And no one was looking for a man named Lou Keyte. Not even Leo was sure how he came up with the name. “It just occurred to me,” he said later, when the question was asked. He thought it made sense to keep the initials LK, in case he still had some monogrammed clothing or belongings. People often called him “kite” but he corrected them: it was pronounced “keet.”
AT THE BEGINNING OF 1924, the Chicago Evening Post published a list of New Year’s predictions. One was that Leo would surrender to police in Brooklyn on April Fool’s Day. “Prefers jail, he says,” the paper wisecracked at Brooklyn’s expense.
Brooklyn was as good a guess as any. By now, John Sbarbaro and Stanley Klarkowski suspected their prey was hiding in New York and waiting for a chance to flee the country. Harry Hamlin, the district attorney in charge of the federal investigation, suggested a reason the swindler was so elusive. “Koretz was an insatiable reader of detective stories,” he noted, “and therefore probably is in disguise.”
On January 3, the day archaeologists in Egypt uncovered the beautifully carved granite sarcophagus of King Tut, a Chicago locksmith was hired to search for treasure of a different sort. He spent two hours drilling into the steel case of box 4306 in the vault of the National Safety Deposit Company, as lawyers for the state’s attorney and Chicago Title and Trust looked on. The box had been rented under the name Alice Bronson—of the Shirley Apartments love-nest fame—and investigators hoped it would yield clues to Leo’s whereabouts. An Evening Post reporter was as disappointed as they were to discover it contained nothing of value.
Then Leo was linked to another woman—Jessie Taggart, a stenographer who had left Chicago in 1920 and was rumored to be traveling in the Middle East. She was traced to India after mysterious cables arrived at Leo’s old law office, written in code and signed “Watson.” A Hearst reporter cracked the code and discovered they were desperate pleas for Leo to respond. An even more enterprising Daily Tribune correspondent tracked down Taggart at a hotel in Calcutta. She was penniless and shocked to learn of the swindle and her sudden notoriety. Leo had sent her on a tour of the Orient, and she had been trying to contact him to send more money. “I regarded him as a clever, honest man,” said Taggart, a stout, dark-haired woman in her midthirties. She was not asked why he had sent her away and had funded her travels, but after the revelations of affairs and love nests, the answer seemed obvious: other women had taken her place. And it was just like Leo to get more mileage out of the alias Watson, the name he had given to one of the Bayano Syndicate’s shadowy millionaires.
LEO SETTLED IN FOR the winter in New York. He checked out the Neighborhood Book Shop and bought the business for $4,000, set aside $6,000 to buy books and cover the bills, and hired Temple Scott as manager. The store was more than a vehicle to launder some of the Bayano loot—Leo was free to indulge his love of books. He could browse the shelves and take home any title he chose. “All the books he took from the store or read while here were high class,” Scott was pleased to note, “many of them classics, many by authors who are seldom read.” As Leo explained it later, owning a bookshop added one more layer to the new persona he was creating—the wealthy, well-read Lou Keyte, writer, literary critic, and collector of rare books.
As an investment, the shop proved almost as ill advised as a stake in Panamanian oil wells. Scott’s theories on what made a great bookstore did not translate into sales. The shop was “cozy rather than commercial,” scoffed one journalist who stopped by, “one of those highbrow places, where best sellers are hidden and food for the discriminating few is given preference.” Leo’s own assessment was blunt. “It was a dud,” he later grumbled. “New Yorkers don’t spend their money for books.”
When he grew tired of hanging around his money-pit bookstore, New York offered other diversions. It was “the city of the Good Time,” said the visiting English novelist Ford Madox Ford, with the exuberance of “a storming-party hurrying towards an unknown goal.” There were fifteen thousand drinking establishments in New York before Prohibition, it was said, and more than twice as many after liquor was outlawed. It was, Will Rogers joked, the “city of booze and bankrolls.” It would have been impossible for the free-spending, fast-living Leo to resist the lure of the city’s nightlife. The Cotton Club opened in Harlem in 1923, showcasing the music that would define the Jazz Age. A tune called “The Charleston” debuted in a Broadway show that fall, launching a hit song and igniting a dance craze. People packed New York’s movie houses to see the biggest silent films of the year: The Hunchback of Notre Dame, starring Lon Chaney; The Great White Way, a romantic comedy set on Broadway that featured the Ziegfeld Follies; and Cecil B. DeMille’s epic The Ten Commandments.
But Leo was not sure that New York was the best place to hide. He wanted something more remote, more secluded—“some place in the woods,” as he put it. “I had been considering other possibilities in
the states but they did not come up to expectations.” In other words, none were far enough away from Chicago and New York to lessen the chances of someone figuring out who Lou Keyte really was.
One day, he ventured a few blocks south of his apartment, to the corner of Madison Avenue and Forty-Fifth Street, and walked into New York’s most renowned sporting goods store, founded by David T. Abercrombie and Ezra H. Fitch. It was there that he learned about Nova Scotia and a secluded sportsman’s retreat known as Pinehurst Lodge.
20
THE GUIDE
ABERCROMBIE AND FITCH catered to serious sportsmen, wealthy professionals, and businessmen who demanded the best hunting and fishing equipment. A “citadel of The Leisure Class,” the New York Times called it, where “stylish sportsmen could count on finding the highest-grade rod and guns at the highest prices.” When Theodore Roosevelt embarked on an African safari after leaving the White House in 1909, the store outfitted his entourage with snake-proof sleeping bags. It was where Presidents Taft and Harding bought their golf clubs and Woodrow Wilson went for his riding gear. In 1920 a customer inquired about a game she had seen while traveling in China, played with dice and tiles; Abercrombie and Fitch imported it, and soon mah-jongg mania was sweeping the country.
Leo had no need of a snake-proof sleeping bag, but someone on the staff might know where he could find a secluded property. He was referred to an employee in the fishing department on the eighth floor. Captain Laurie Mitchell was an accomplished hunter and deep-sea angler. An Englishman in his early fifties who hailed from Dorset, Mitchell was heavyset and chubby faced and sported a bushy mustache. His family had sent him to Oxford, but Mitchell had emigrated in the 1890s to Nova Scotia, where he found a wife and the wilderness life he craved. He once posed for a photograph with a rifle in one hand, a pipe in the other, and a hunting dog at his side, looking every inch the country gentleman transplanted to the colonial backwoods. He worked with local hunting and fishing guides and touted the woods and lakes of southwestern Nova Scotia as a “veritable paradise” for sportsmen.
