Empire of Deception

by Dean Jobb

  The closing arguments dragged on for days. Darrow, hulking and rumpled, his hound-dog jowls rippling with every word, accused the state’s attorney of seeking vengeance, not justice. Crowe mustered his indignation and tore into Darrow’s portrayal of the killers as “poor sons of millionaires … mere infants wandering around in dreamland.” They were “perverts”—lovers as well as friends—and Crowe accused them of sexually abusing Bobby Franks before killing him. One of their motives, he told the judge, was “a desire to satisfy unnatural lust.”

  “They are as much entitled to the sympathy and the mercy of this court as a couple of rattlesnakes flushed with venom, coiled, ready to strike,” he thundered. “They are a disgrace to their honored families, and they are a menace to this community. The only useful thing that remains for them now is to go out of this life and to go out of it as quickly as possible.”

  Crowe detected another motive that proved the murder was a deliberate, rational act, not the product of mental illness. He seized on a reference to the Bayano swindle buried in one of the psychologists’ reports. Loeb, driven by greed, had killed Franks for the ransom. “Money, money, money,” he shouted, “not thrill, not excitement.” Loeb had talked of becoming “a clever financial criminal” and had dreamed of pulling off “crimes similar to that of Koretz, who had put through a gigantic stock swindle.” Crowe wondered aloud why Darrow was not blaming Koretz for the murder.

  Judge Caverly announced his decision on September 10. The Franks murder was “a crime of singular atrocity,” he acknowledged, “executed with every feature of callousness and cruelty.” But he believed Leopold and Loeb were too young to hang. “Life imprisonment may not, at the moment, strike the public imagination as forcibly as would death by hanging,” he explained, but “the prolonged suffering of years of confinement may well be the severer form of retribution and expiation.” He sentenced them to ninety-nine years for kidnapping and life terms for murder and advised the parole authorities to reject any application for parole.

  For Crowe, the sentence was a repudiation of his hang-’em-high brand of justice. Darrow, whose successful defense of Fred Lundin on corruption charges had humbled the state’s attorney in 1922, had won another round.

  WHILE LEOPOLD AND LOEB grabbed the headlines, lawyers and courts continued to pick away at the financial mess Leo had left behind. The bankruptcy referee Harry Parkin’s investigation plodded along, earning brief mentions in the press. Leo, it was discovered, had been paying about $50,000 a year in interest on mortgages taken out on Arkansas land worth, at best, $25,000. His rice farms were as much an illusion as Bayano oil.

  Parkin’s preliminary findings pegged investors’ losses at just shy of $1.5 million with another $2 million in claims to be assessed. The figures—millions of dollars less than some of the estimates coming from the state’s attorney’s office—seemed to confirm that many victims had refused to come forward. The dividends investors had earned before Leo’s scams collapsed offset their losses and reduced the amount they could claim in bankruptcy court. By April 1924, Chicago Title and Trust had recovered about $500,000 in assets, including the $175,000 turned in by the Koretz family. A sale of some of the seized property—ten thousand books, the phonograph from the suite at the Drake, items of clothing that included red morocco slippers and a purple silk dressing gown—drew hundreds to a Loop auction house at the end of April. Crowds “mobbed the place all day,” the Daily Tribune reported, looking for deals or a souvenir of the sensational Bayano swindle. “Everybody thinks he was a rich feller an’ the stuff must be good,” one bidder told the paper. The sale netted $7,000.

  As Leo lived the high life in Nova Scotia, his wife struggled. Mae and the children had moved into a modest, five-room home on a quiet side street in Winnetka, a suburb north of Evanston. Mae did not return to teaching and instead found a job selling coal for Edinger and Sons and did clerical work—addressing and stuffing envelopes—at night. She learned to distinguish between grades of coal and their heat content, and her knowledge of the business was said to match that of “any other salesman in the city.” There was some irony in the fact that the wife of a man who sold dreams of oil riches to wealthy Chicagoans had been reduced to selling coal to suburban housewives.

  “That woman is a brick,” said one family friend who lost thousands in the Bayano swindle. “I should think her courage would shame Leo—if anything can.” Julius’s wife, Blanche, was equally impressed: “She has been remarkable in her ability to stand blows.”

  Even with Mentor out of school and working, the family could not get by. Mae refused offers of financial help from Leo’s brothers but accepted it from an unlikely quarter. Henry Klein, the man who fell hardest for her husband’s lies, bought the Winnetka house for her. She refused to live rent-free, however, and paid a reduced rate, about seventy dollars a month. A long friendship between Mae and Klein’s wife, Bertha, survived the humiliation and financial devastation Leo had wrought.

  A scaled-down manhunt continued. After the discovery of Bobby Franks’s body, Crowe and Sbarbaro were preoccupied with trying to send Leopold and Loeb to the gallows. But twice during 1924, the state’s attorney almost dispatched men to Paris based on tips that Leo was there and spending money freely. An Evanston shop owner told her hometown paper she was certain she had seen him in a hotel lobby while she was vacationing in California. Investigators used Leo’s illness to track his movements. Insulin, the new diabetes wonder drug, was expensive but easily within the reach of a man flush with cash. Leo was traced, Sbarbaro later claimed, to a sanatorium in Montreal, where he had sought treatment at some point before his arrival in Nova Scotia. If the patient was indeed Leo, he was long gone by the time word reached Chicago.

  The master swindler, it seemed, was an accomplished escape artist as well. By the summer of 1924, more than six months after he walked out of the St. Regis Hotel, Leo’s whereabouts remained “a matter of conjecture,” noted the Daily Tribune. While rumors and reported sightings continued to trickle in, “not a single clew has resulted in any definite information regarding him.”

  Some Bayano victims took matters into their own hands, retaining private detectives to join in the search. Others took up a collection and approached Chicago Title and Trust with enough money to increase the reward for his arrest from $1,000 to $10,000. Henry Klein provided a personal guarantee to cover the full amount of the reward. The Chicago office of the United States Post Office, as the agency responsible for prosecuting charges of using the mail to defraud, issued a poster announcing the new reward. It featured Leo’s photo and a sample of his handwriting and signature. A detailed and less-than-flattering description followed: Leo was forty-five, Jewish, five foot ten, 180 pounds, with a “distinct paunch” and “slightly stooped” shoulders, light brown hair “thin on top,” gray-blue eyes, a round face, and a pasty complexion. The fugitive “cannot get along without glasses,” had a scar or birthmark on the palm of his left hand, was a lawyer by profession, and spoke fluent German. “Suffers from headaches,” the description continued, “and has a habit of removing glasses for a short time to obtain relief.” The reward would stand for a year, until the first day of July 1925. Chicago Title and Trust was soon receiving several letters a day from people with tips or theories on Leo’s new identity or where he was hiding. The poster was distributed throughout the United States and Canada. Copies may have made their way east to Nova Scotia.

  A train rider who passed through hot, muggy Chicago that summer described it as “an infernal place of noise and fury and gasoline.” The passenger was headed east and looking forward “with thrilling zest,” as he put it—and as only a writer of adventure stories would put it—to spending the next few weeks trying to outmuscle the giant bluefin tuna.

  The man’s destination was the South Shore of Nova Scotia, the prime fishing grounds he had heard so much about from his contact at Abercrombie and Fitch, Laurie Mitchell. He was a famous author, and many of his fellow passengers would have recognize
d him from his picture in the newspapers or on the dust jackets of his books. His name was Zane Grey.

  24

  THE PARIAH

  WHEN ZANE GREY reached Liverpool at the end of July, his boats and fishing gear were waiting for him. Mitchell had seen to that. He was grateful for the work—and even more grateful to be rid of Lou Keyte.

  Mitchell was no longer in charge at Pinehurst; he had quit after a dispute over wages. Keyte enjoyed spending money “just to make a splurge,” Mitchell noted with bitterness, but he could be stingy with his employees. “He didn’t pay me all he promised and when I asked for the money he made things so unpleasant that I left.” He was fed up, too, with his employer’s temper and moodiness. He “was all right when he was well,” Mitchell told W. B. McKay, a Pinehurst regular, but “when he was feeling badly he was finicky and nasty … he didn’t have the breeding a gentleman would have.”

  Leo had changed. It was as if someone had kidnapped the genial boss Charles Kennedy and the Scott brothers were so delighted to work for, and replaced him with Ebenezer Scrooge. Elizabeth Mitchell, who had never liked the man, had urged her husband to quit and was pleased to give up her job as Pinehurst’s housekeeper. The break, to McKay’s mind, left bad feelings on both sides. From then on, Leo “always seemed suspicious of Mitchell,” he recalled, “and I’m sure that in some way Mitchell had become convinced there was something wrong.” Money may not have been the sole reason for the Mitchells’ departure; later, a story emerged that they had caught Leo sending letters and expensive gifts to their sixteen-year-old daughter, Elizabeth, a student at a private school in Halifax.

  Richard Abbott, like the Mitchells, saw Leo’s dark side and came to regret his decision to join the staff at Pinehurst. He was a seventeen-year-old stock boy at a Liverpool grocery store where Leo was a regular customer. One day, when a man came into the store to solicit donations for a local baseball team, Leo obliged to the tune of $200. Abbott could scarcely believe his eyes. “I figured if this man could write out a $200 cheque just like that, then he would be able to pay a man real well for working for him.” Abbott took him aside, asked for a job, and was hired on the spot. They never discussed salary, but Abbott expected a fat paycheck—“maybe even as much as $50 a week.”

  Once at Pinehurst, though, he soon wished he were back stocking shelves. His new boss was prone to “violent headaches” that made him “hateful”; when stricken, he would flee to his bedroom and lock himself inside. And there was the backbreaking work: Abbott rose at five each morning to light the fire in a steam engine that pumped lake water to the lodge. He chopped firewood and carried it to the fireplaces—all seventeen of them. Then he had to scramble to clean up, shave, and put on a “monkey suit” to serve the evening meal. “I worked my backside off,” Abbott grumbled, for what turned out to be just four dollars a week.

  Leo was obsessed with loyalty and secrecy. There was the no-photograph rule, the reluctance to sign his name, and the vague references to his past, to his health, to his writing. He seemed to fear someone might spy on him, and on one occasion, when he was staying at a hotel in Halifax, he made a frantic long-distance call to the lodge. He thought he had left a trunk in his bedroom unlocked, and he was desperate to know whether the maid had entered the room in his absence. The trunk was locked, but upon his return, he fired the woman anyway, saying she was “too big-eyed.” The trunk may have contained something that would reveal his true identity, or perhaps he was becoming paranoid. A fugitive who feared exposure could not afford to take chances.

  Zane Grey’s arrival put Leo in a far more uncomfortable position. He had led his Nova Scotia friends to believe he had “practically made Zane Grey,” taking credit for bringing his work to the attention of New York publishers. He had talked of entertaining him at Pinehurst during his stay in Nova Scotia, of heading to sea aboard Tuna II to join the author’s quest for the giant fish. And Grey was a key figure in a plan that Leo—ever the promoter—was touting to develop a high-end Nova Scotia resort. The idea was to transform Pinehurst from a private retreat into an exclusive club where wealthy sportsmen could hunt, fish, and play golf on the championship course he would build on the property.

  “I’ll show you how we can make some easy money,” he had said when he broached the idea to Mitchell. “We will incorporate and sell stock for a million. … I will get wealthy New Yorkers if you can interest the Nova Scotians and Newfoundlanders.” That’s where the famous writer and sportsman came in. “I planned to make Zane Grey … one of the honorary directors of the corporation,” Leo explained later, using Grey’s star power to attract investors.

  Now that Leo was on the outs with Grey’s host and guide, the chances of a visit—let alone an invitation to go fishing or to lend his name to a resort-investment scheme—had evaporated. To cover his tracks, he concocted a story about a falling-out with Grey. He had “ripped” into the author “pretty hard” in a recent book review, he explained to W. B. McKay, and Grey was “raising hell about it” and “causing a lot of trouble.”

  Grey was on the water with Mitchell and other fishing companions by the first day of August. He landed a 684-pounder that came tantalizingly close to Mitchell’s record catch. On August 22 he battled another giant for more than three hours before bringing it alongside. It was more than eight and a half feet long and tipped the scales at 758 pounds, a new record. The fish was hoisted aloft on a Liverpool dock so that Grey could pose for photographs with his prize. “If it were possible for a man to fall in love with a fish,” he declared, “that was what happened to me.”

  One Sunday in mid-August, when it was too foggy and rainy to fish, Grey drove from Liverpool to Annapolis Royal to inspect a three-masted schooner he was thinking of buying. He was already planning his next fishing expedition, to the Galápagos Islands, and needed a large seaworthy craft to take through the Panama Canal. Grey ultimately bought the vessel, renamed it Fisherman, and had it moved to a shipyard in Lunenburg, where Mitchell oversaw a major refit that included building a main cabin large enough to display both of Grey’s newly caught tuna. The drive to and from Annapolis Royal took Grey past the driveway leading to Pinehurst Lodge, and his party appears to have stayed overnight at a Caledonia hotel, but there is no record of a visit with the area’s best-known man of letters. Leo, for his part, made no effort to seek out Grey before the author returned to the States in early September. The whole time the author was in the Liverpool area, some residents noted, Lou Keyte remained hunkered down at Pinehurst.

  And there were growing suspicions about his claims to be a writer and critic, let alone his claim to have “made” Zane Grey. Leo had fooled Temple Scott, but he proved no match for Dr. John D. Logan, a lecturer on Canadian literature at Nova Scotia’s Acadia University and one of Canada’s leading literary critics. Logan sought out Leo after hearing stories about his collection of rare books and called on him at Pinehurst, hoping to add to his own library of early American humor. The visit was a waste of time. “He didn’t know a good book from a bale of hay,” Logan later scoffed. “I found right away he was only bluffing. I mentioned title after title that every book collector should know and he was not familiar with any of them.” Another visitor thought the books scattered about at Pinehurst were meant only for show; many had never been opened, and for every work of Robert Louis Stevenson and Edgar Allan Poe, there were plenty of “cheap mystery and detective stories.”

  The goodwill Leo had earned when he arrived in Queens County—from the dances and dinners he hosted, the donations to community groups, and the money he pumped into the local economy—was fading. His reputation for being a lavish entertainer with a well-stocked bar did not sit well with some of his neighbors. The Baptist Church, a major force in the area, had condemned drunkenness and rowdiness during the gold-rush days and had objected to miners working on Sundays. The tourism industry of the new century brought new fears. The minister of the Caledonia Baptist Church warned in 1913 that the American sportsmen flocking to the a
rea brought with them ideas and influences that “have a tendency to demoralize these communities.”

  Some thought Lou Keyte posed a new threat to community morals. His housewarming party was “the talk of the district” for weeks, as one newspaper noted, and not all the talk was positive. Wives whose husbands were frequent visitors to Pinehurst were said to be considering lodging a complaint with local Prohibition agents. Tongues wagged about the young women he was inviting to Pinehurst. The era of the liberated flapper had dawned in the big cities, but not in rural Nova Scotia. Local families, by one account, “forbade their daughters attending his parties and entertainments.” Neighbors “soon had no use for him,” Mitchell later claimed, “because of the number of young girls who went to his house at night.” Mitchell had lived at Pinehurst long enough to know who visited the lodge—and if the rumor about Leo’s infatuation with his daughter was true, he had ample proof of his former boss’s eye for young girls.

  Leo’s wealth and generosity had won him a few loyal friends, but it could not buy him approval. His behavior was too brash, his lifestyle too racy. People began to decline invitations to Pinehurst and offered few in return. Social life in Caledonia was a community and a family affair—a succession of church events, sewing circles, citizens’ band concerts, and drama club plays. Leo’s no-expense-spared, booze-fueled, orchestra-serenaded Pinehurst parties would have been a hit back in Chicago. Here, they were as out of place as the derby on his head.

  As summer turned to fall, Leo no longer seemed to care what people in Queens County thought of him. He was spending most of his weekends away from Pinehurst, in Nova Scotia’s largest city.