Empire of Deception

by Dean Jobb

  25

  THE WOMANIZER

  LEO CALLED HER Topsy, and she was young enough to be his daughter. Mabelle Gene Banks was twenty-five, a petite brunette with bobbed hair and a broad smile. They were often seen together in Halifax at restaurants, theaters, and dance halls or poking through shops and strolling along the downtown streets. He showered her with presents, including, it was said, a pearl necklace and clothes from Jensen and Mills, one of the city’s most exclusive stores. When he offered to buy her anything she wanted as they browsed in another store, she chose a paisley shawl with a $100 price tag. That was tip money to Leo.

  Banks was “pretty and slim,” Thomas Raddall recalled, “and avid for a good time.” Her father, George Banks, was editor of Caledonia’s newspaper, the Gold Hunter. Leo became a frequent visitor to the Banks home, and when others in the small community were shunning him or locking up their daughters, Banks and his wife were inviting him to dinner and encouraging the relationship. George Banks, like Leo, was an outsider. He had been born in New Jersey, and his father had moved the family to Caledonia in 1888, at the height of the gold rush, to establish the paper. Banks inherited the business and had little patience for his complacent and conservative neighbors. “Stop knocking, you pessimists and join the procession for a bigger, better and brighter Caledonia,” he railed in one editorial. “The men and women who are lifting the world upward and onward are those who encourage and boost.” Leo, who was doing his bit to boost the local economy, would have struck Banks as the kind of person the community needed. He would also be a good catch. Banks and his wife, Raddall believed, were “flattered with the notion” of Mabelle’s “marrying a millionaire,” and “there was talk of a honeymoon in the West Indies, where they would spend the winter.”

  The Halifax Hotel, Lou Keyte’s home-away-from-home in the Nova Scotia capital.

  Leo often climbed into his flashy Franklin for the hours-long, hundred-mile drive from Pinehurst to Halifax on twisting, graveled roads. George Banks was usually at the wheel and did double duty as chaperone if his daughter was along for the trip. Leo had visited the provincial capital soon after his arrival and usually stayed at the Halifax Hotel, a venerable establishment with a marble-tiled lobby, cherry woodwork, a rooftop promenade, and a dining room big enough to double as a ballroom. Soon he was almost as well known at the hotel and around the city as he was in Queens County. When Temple Scott took time off from managing the New York bookstore and visited Pinehurst that August, Leo whisked him off to Halifax. They arrived in time to see the battleship HMS Hood, the largest warship afloat, steam into the harbor to mark the 175th anniversary of the city’s founding.

  Halifax’s population stood at less than sixty thousand in the 1920s—hardly a decent-size suburb by Chicago standards. Cobblestone streets and refined Georgian architecture gave the city an Old World feel. “Visitors from England,” reported Phyllis Blakeley, a local historian, “commented on the striking similarity of Halifax in appearance and social life to the small garrison towns in England.” And it was a thoroughly British town, where people still played cricket, paused for afternoon tea, and remembered the not-too-distant days when redcoats paraded through the streets, and dashing officers—including the occasional royal prince—were feted at dinners and balls. Nova Scotia had been a province of Canada for almost sixty years but remained, in spirit and in outlook, a cast-off fragment of the British Empire.

  Leo’s favorite Halifax hotel turned its four-floor, shingle-clad face to the street. It was no St. Regis, but it was the best Leo could do in his Canadian refuge. It stood on Hollis Street in the heart of the city, midway up a checkerboard of streets that clung to a steep slope rising from the waterfront wharves to a hilltop citadel. Leo entertained as often and as flamboyantly in Halifax as he did at Pinehurst. He took guests to the Hollis Sea Grill, dispensing charm and picking up tabs. Waiters at one tearoom knew him only as the “foreign Johnny with pots of money.” He frequented the Green Lantern, considered the city’s best restaurant, which offered home-cooked fare and an orchestra that played dance music every evening. It was there that Leo met the waitress who lived with him at Pinehurst before Frances White’s arrival.

  Leo hobnobbed with the city’s elite at the prestigious Royal Nova Scotia Yacht Squadron. Almost a century old, the club had earned the right to call itself “royal” through the good graces of King Edward VII, an avid yachtsman who visited Halifax as Prince of Wales in 1860. The clubhouse stood at the tip of a stone breakwater south of the city center, affording members quick access to the open water at the harbor’s mouth and the ocean beyond. It was a genteel place, where meals were served on china bearing the club crest, and boatmen clad in blue sweaters and white cotton trousers ferried crews to and from their vessels.

  Members—more than three hundred of Halifax’s leading businessmen and professionals—were elected, and the management committee had endorsed Lou Keyte’s candidacy at its April meeting. Leo joined ten other members who preferred powerboats to sailing craft, and he cruised to the city from Liverpool once or twice that summer with a boatload of guests. On one trip, Tuna II slipped into the Northwest Arm, a three-mile-long inlet lined with rowing and canoe clubs and some of the city’s poshest estates. Leo, according to one account, picked the grandest mansion of all—Thornvale, the ivy-draped home of William Webster, who made his fortune selling china—and asked permission to use the wharf. Webster welcomed his visitor and offered one of his custom-made cigars; Leo, displaying his usual chutzpah, declined.

  “No,” he replied, “you take one of mine, they are better. You can’t get this kind down here.”

  The squadron hosted dances, teas, dinners, and picnics during the year, and more were added in 1924 as part of Halifax’s anniversary celebrations. This was Leo’s element, and he was said to have attended his share of social events with guests in tow. At one dinner-dance, sometime in October, he was introduced to Joseph Connolly, the newest member of a leading Halifax law firm.

  “I noticed this very distinguished looking gentleman, and presently I was presented to him,” Connolly recalled. “He was delightful.” They would soon meet again.

  MABELLE BANKS—TOPSY—WAS NOT THE only woman in Leo’s new life. Gossip linked him to a succession of Halifax women “of all classes and standing in society”—from the Green Lantern waitress to store clerks, from maids to wealthy widows. What people found most surprising was the way he flaunted Banks and his other female admirers, escorting them around town as if he were oblivious to what others might say or think. Even Raddall, who was well aware of his friend’s fondness for women and parties, thought he was living “at a furious pace … passing from one woman to another like a hummingbird in a flower bed.”

  Leo’s over-the-top style and his roving eye seemed to repel as many people as they attracted, just as they had in Queens County, and the fact that he was an American—and a vulgar, flashy one at that—was enough to keep his name off guest lists. Many of Halifax’s leading families were descendants of Americans who had remained loyal to Britain during the revolution; bitterness toward the upstart Yankees had been handed down through the generations, like a gene. It was “as if the American Revolution had happened yesterday,” noted Charles Ritchie, a future diplomat who grew up in Halifax. “All our friends and relations are very much against the Americans.” An American who favored the company of young women? That was worse.

  There was one more thing about Leo that, had it been known, would have made his social circle that much smaller. No one in Nova Scotia seemed to suspect he was Jewish. Canada’s Jewish community was small and scattered in the 1920s—there were almost twice as many Jews in Chicago as in the entire country—and faced discrimination and exclusion. There were fewer than six hundred in Halifax in the early 1920s and barely two thousand in all of Nova Scotia. The province’s banks and many companies would not hire them, a Jewish businessman recalled of those days, and they were shut out of many Halifax clubs, among them the yacht club that
welcomed Lou Keyte as a member.

  PINEHURST HAD BEEN BUILT as a moose-hunting lodge, and when the season opened on the first day of October, local guides insisted Leo should try to bag a trophy. Raddall soon heard all about the expedition.

  He turned up, in Raddall’s retelling of the story, dressed “as if he were going for a stroll down Madison Avenue.” During the canoe trip to the hunting grounds, he huddled in a fur coat and buried his nose in a book of poetry, still playing the role of a man of letters. When a guide made moose calls, using a cone-shaped birch bark horn to mimic the bellows of a female seeking a mate, a large bull lumbered into view.

  “There he is!” one of the guides shouted. “There he is, Mister Keet!”

  Leo looked up.

  “Ah! So that’s a moose, eh? Well, well.”

  “There’s the rifle, sir. Shoot! Shoot!”

  Leo had already turned his attention back to his poems.

  “Hell, I don’t want to kill the damned thing. Let him go.”

  GEORGE BANKS POINTED THE sleek nose of Leo’s Franklin in the direction of Halifax. It was November 21, a Friday, and he had volunteered to drive Leo and his daughter, Mabelle, into the city. The sky was overcast as they left Pinehurst, and a recent cold snap must have made Leo wish he had shelled out a few extra dollars for a closed car. “Jack Frost made his appearance this week in real shape,” Banks commiserated with his readers in that day’s edition of the Gold Hunter.

  Weekend getaways to the city had become part of Leo’s routine, and the following afternoon, he took Mabelle shopping. She picked out two dresses, and Leo dropped by the Robert Stanford Limited tailor shop to pick up clothes he had left for repair and pressing and to order an expensive new suit—the material alone cost fifty dollars. Leo seemed to be everywhere that day. He was spotted at the yacht squadron, with a bevy of young women at the Hollis Sea Grill, dining at the Green Lantern. Later he hit the floor of a popular dance hall. The Halifax papers routinely published lists of hotel guests, and that day’s edition of the Acadian Recorder noted that “Lou Keyte, Pinehurst” was in town and staying, as usual, at the Halifax Hotel. This tidbit would have been of particular interest to two men who checked in to the Carleton, a couple of blocks away, that night. They had rushed east by train from a major city in the American Midwest. To make sure no one suspected who they were and why they were in town, they signed the register as visitors from Montreal.

  On Sunday, Leo attended church in the morning with Harriet Schon, the widow of a wealthy merchant. Why he was escorting her to Sunday services was never explained. His church-attendance record back in Queens County was described as somewhere between “seldom” and “never,” which was not surprising given his Jewish heritage and the local backlash against his lifestyle. Not so in Halifax. Despite the gossip swirling around him in the city, he was said to have been invited to speak at an upcoming church service. The subject? Success.

  Sunday evening, Leo entertained Mabelle and other guests in the dining room of the Halifax Hotel. He donned a brown suit for the occasion, matched with a light green vest and gray suede-topped shoes. His beard, some of his friends may have noted, had been lightened to an auburn shade. Outside, the cobblestones of Hollis Street were still wet from the day’s showers. The sky was dark and brooding. Gusts of wind rattled windows as they ratcheted up to gale force, ahead of an approaching storm. The Franklin was parked out front, squeezed between the curb and the trolleys that clattered past.

  About half past eight, Leo retreated to his room with Mabelle. They had a little time to spare before their next engagement, a birthday party at a home in the city’s fashionable South End. They had been inside only a matter of minutes when someone knocked on the door.

  Act 3

  The front page of the Halifax Morning Chronicle, November 24, 1924.

  26

  THE TRAP

  FRANCIS HILTZ, THE owner of Robert Stanford Limited, Halifax’s best tailor shop, was repairing the lining of a suit jacket for a customer, Lou Keyte, when he noticed the maker’s label: “Henry Heppner and Co.,” it read, “Chicago, Illinois.” The name of the jacket’s owner was on the label as well, only the name was not Lou Keyte—it was Leo Koretz.

  Hiltz was puzzled. Why was a wealthy man wearing someone else’s clothes? And the name, Koretz, sounded familiar. Someone connected to the Leopold and Loeb case, perhaps? The trial had been big news in the Halifax papers, and Hiltz wondered whether that was where he had seen the name. Exposure of the Bayano swindle eleven months earlier had received little coverage in the Halifax press—only an article or two—but the Franks murder was fresh in Hiltz’s mind.

  Keyte had opened an account with Stanford’s and given the Bank of Nova Scotia as a reference. Hiltz figured someone at the bank could clear up the mystery. He called on Horace Flemming, the longtime manager of the Halifax branch and secretary to the bank’s board of directors. Since Keyte did his business at the branch in Liverpool, Flemming knew little of his financial affairs. Hiltz described how he had found the tailor’s label and the name Leo Koretz and mentioned his suspicion of a connection to the Leopold-Loeb case. The name meant nothing to Flemming. A wealthy man who wore secondhand clothing, or went by two names? Flemming, who had the poker face of someone accustomed to being discreet, said he would make a few inquiries.

  He began with William H. Davies, manager of the Bank of Nova Scotia’s Chicago branch. Since there seemed to be no urgency in clearing up the confusion, Flemming sent a letter to the bank’s address in the Loop, 105 West Monroe Street. It was little more than a block away from the former law office of a swindler who had gone missing almost a year earlier. Could Davies provide any information about a man named Lou Keyte? Flemming asked. Or a Leo Koretz?

  Davies received the letter at the end of October. He immediately contacted the bank’s Chicago lawyer, Jacob Newman. Newman, in turn, notified Abel Davis, vice president of Chicago Title and Trust, the bankruptcy receivers. “You can imagine,” Davis would later reveal, “the excitement that letter caused.”

  After almost a year of rumors, dubious tips, and false sightings, was it possible Leo had been found? The three men devised a plan to find out more before they alerted the authorities.

  Davies replied to Flemming by telegram, with a synopsis of the swindle and Leo’s disappearance. To prevent the news from being leaked to the press, he wrote the message in a code the bank had developed to protect confidential information. He also mailed Flemming a copy of the wanted poster, which included Leo’s signature, a sample of his handwriting, and his photograph and description. Newman and Davis, meanwhile, boned up on Canada’s extradition laws.

  Flemming responded on November 18, in code. The photograph and description “absolutely” matched Keyte, he reported. Leo, who was “now wearing a full beard,” he added, “was in Halifax last week.” On November 20, a Thursday, Robert Crowe was notified.

  “When we were absolutely sure of everything—when we had Koretz positively identified and his movements under observation,” Abel Davis said, “we called upon State’s Attorney Crowe to make the arrest.”

  “WHAT’S WANTED?” LEO CALLED out, after hearing the knock on the door.

  As he turned the knob, two men burst into the hotel room.

  “You are wanted—in Chicago,” one said as the other seized Leo by the wrists and clapped on a set of handcuffs. The square-jawed man who had spoken was Rainard Scriven, deputy sheriff for Halifax County. The shorter man with the triangle mustache, Malcolm Mitchell, the one working the cuffs, was a former police officer now in charge of the county jail.

  Leo knew who they were and why they had come. He had been expecting them for a long time.

  “Sit down,” Scriven ordered, needlessly. Leo’s legs buckled as he sank into a chair.

  “All right, boys, you don’t have to worry with me,” he said at last. “I’ll go quietly. I’ll give you no trouble.”

  They showed him the wanted poster. He admitted he was Leo Koretz. The
y produced an extradition warrant, based on one of Crowe’s indictments, which accused him of defrauding $38,400 from his former law-office tenant, Samuel J. Richman.

  A search of his pockets produced $450 in cash. Then they turned their attention to Banks. Who was she? By one account, she gave them a false name.

  “For God’s sake,” Leo pleaded, “don’t get her name into this.” After a few more questions, she was allowed to leave.

  Scriven and Mitchell marched their prisoner a few blocks up the hill to the county jail. He was taken to a room where assistant state’s attorneys John Sbarbaro and William McSwiggin—the men who had arrived from Chicago via Montreal the night before—were waiting to interview him.

  Leo was surprisingly upbeat. Sbarbaro later offered the press a brief summary of their discussion. “He was very calm about it all,” he told one Chicago paper. “As he talked to us about his finances, he merely expressed surprise that he had not been caught sooner.” He also dropped a bombshell: he was eager to return to Chicago to face charges, he said, and would not fight extradition.

  Leo outside the Halifax County Jail the morning after his capture with Malcolm Mitchell, one of the men who arrested him.

  At about eleven that night, Sbarbaro and McSwiggin returned to their rooms to notify Crowe and spread the news of the arrest. A reporter for Halifax’s Morning Chronicle tracked them down that night and left with a headline-worthy quote: they had captured “the greatest confidence man in the history of the United States.” Leo settled in for his first night behind bars.

  CHICAGOANS AWOKE ON MONDAY, November 24, to below-freezing temperatures—their first taste of winter—and a banner headline about a half-forgotten financial scam.

  ARREST KORETZ IN CANADA, screamed the front page of the Daily Tribune, exulting in a rare scoop of its morning rival, the Herald and Examiner. That day’s New York Times carried the story, and the news was all over Chicago’s evening papers. Hearst’s American led the charge with an avalanche of stories and photographs and stressed that Leo had been arrested “with a beautiful woman as his companion.” Articles on Koretz’s capture and the effort to bring him back to Chicago would elbow their way onto the front pages all week, upstaging the death of the opera legend Giacomo Puccini as well as Charlie Chaplin’s marriage to his eighteen-year-old leading lady, Lita Grey.