Empire of Deception

by Dean Jobb

  216 Koretz is not a gunman “Was Preparing for Get-Away to South When Arrested,” Halifax Evening Mail, November 25, 1924. Leo denied rumors he had buried money and employed bodyguards. Transcript, p. 15, In the Matter of the Estate of Leo Koretz in Bankruptcy (Halifax) (see chap. 19 notes). There were press reports, never confirmed, that he stole a revolver from a house detective at the St. Regis Hotel just before he disappeared in December 1923. See, for instance, “Koretz Fled with Million in Boat; Hunt Woman Accomplice,” Chicago Evening American, December 14, 1923.

  217 Course I want to know him “Koretz On Ship for Home,” Chicago Daily Tribune, November 29, 1924.

  217 How is Mr. Koretz today? “Koretz Puts to Sea and Thus Outwits Chicago Reporters,” Halifax Morning Chronicle, December 1, 1924.

  217 FUR-TRIMMED SILK PAJAMAS Halifax Evening Mail, November 25, 1924. The tailor’s accounts, filed in a court action and published in several newspapers, reveal no such purchase between October 22, 1924, and Leo’s arrest a month later. See “Keyte Will Leave Friday,” Halifax Acadian Recorder, November 26, 1924; and the affidavit of Francis Hiltz, dated November 25, 1924, filed in Robert Stanford Limited v. Lou Keyte, NSSC (Halifax), RG 39 C no. 6383, NSARM.

  The Evening Mail’s cartoonist, Donald McRitchie, later lamented the departure of the man who had thrust Nova Scotia into the spotlight—and pumped much-appreciated cash into the local economy. His cartoon on the front page of the paper’s November 27 edition (reprinted in the Chicago Daily Tribune on December 4) depicted Leo in his beard and derby, strutting off to Chicago and leaving a trail of coins and banknotes in his wake. His body was a building labeled “ ‘Lou Keytes’ Inc.,” and the caption read, “Nova Scotia Loses Another Industry.” The arms and legs protruding from the building were clad, appropriately, in striped, fur-trimmed pajamas.

  CHAPTER 29

  218 brilliant, literate, scholarly Murray, The Madhouse on Madison Street, 237 (see chap. 14 notes).

  218 I had lost most “First Interview with Leo Koretz,” Chicago Herald and Examiner, November 28, 1924.

  219 There was no swindle “Koretz Gives $200,000 to His Victims,” Chicago Daily Tribune, November 28, 1924.

  219 The others can stand it “Koretz’ Arrest Halts $1,000,000 Scheme,” Chicago Daily News, November 28, 1924.

  219 he never swindled any one “Koretz Gives $200,000 to His Victims,” Chicago Daily Tribune, November 28, 1924.

  219 consummated a fraud “State and U.S. Claim Right to Punish Koretz,” Chicago Daily Tribune, November 25, 1924.

  220 Koretz’s victims Editorial note, Chicago Daily News, November 29, 1924.

  220 Tell a jury what I know The comments of Kahnweiler, Weil, Decker, and Westerfeld were reported in “Will He Tell Jury of Koretz? He Will,” Chicago Evening American, November 29, 1924.

  221 may take that as a challenge Hit or Miss, Chicago Daily News, November 29, 1924.

  221 pull “innocent” verdicts Hecht, Gaily, Gaily, 50, 52–53 (see chap. 10 notes).

  221 It is to be hoped Editorial note, Chicago Daily News, November 25, 1924.

  221 slow, technical, antiquated procedure Editorial, “An Example to State Courts,” Chicago Daily News, December 1, 1924.

  222 Leo Koretz is my prisoner “‘Hands Off,’ Crowe Warns, ‘Koretz is My Prisoner,’ ” Chicago Evening American, November 25, 1924.

  222 If he were indicted “State and U.S. Claim Right to Punish Koretz,” Chicago Daily Tribune, November 25, 1924.

  222 There really was nothing “Koretz On Ship for Home,” Chicago Daily Tribune, November 29, 1924.

  222 daily press teem with inaccuracies “Mr. Keyte Arrested at Halifax,” Caledonia (NS) Gold Hunter and Farmers’ Journal, November 28, 1924. Banks’s editorial was republished under the headline “Says Reports Misleading” in the Halifax Acadian Recorder, December 1, 1924.

  223 no grounds whatever “Leo Koretz’s Property in Nova Scotia is Valued at $100,000,” Halifax Morning Chronicle, November 27, 1924. A rumor was widely reported, but never substantiated, that Leo had been involved with a teenage girl and that her parents had considered having him prosecuted for statutory rape.

  223 Hail to the Cheat! “Koretz’s Homecoming,” Chicago Daily Tribune cartoon republished in the Halifax Evening Mail, December 6, 1924.

  224 a surprise in the morning Descriptions of the jailhouse rendezvous and Connolly’s conversation with the reporter appeared in “Koretz Party Evades Watchers; Go by Steamer,” Halifax Evening Mail, November 29, 1924; and “Koretz Leaves by Caronia,” Halifax Acadian Recorder, November 29, 1924.

  224 I give you my solemn word “Koretz Gives $100,000 to Avoid Reporters?” Chicago Daily News, November 29, 1924.

  226 Every fugitive from justice “Sheriff Characterized as a Guardian Angel by Koretz, His Prisoner,” Halifax Evening Mail, December 10, 1924.

  226 ingratiating chap Murray, The Madhouse on Madison Street, 287 (see chap. 14 notes).

  226 I knew you before “Koretz Tells How He Refused to Escape,” Chicago Evening American, December 1, 1924.

  CHAPTER 30

  228 Say,” asked the slim woman “Curious Crowds at Union Station to Get Peep at Leo Koretz,” Chicago Evening American, December 1, 1924. The description of his arrival that follows is drawn from Chicago press reports.

  228 the money magician “New Dupes of Swindler Sought in Nova Scotia,” Chicago Herald and Examiner, November 26, 1924.

  228 usually accorded a President “Koretz Grilled by Crowe,” Chicago Evening Post, December 1, 1924.

  229 Leo called the state’s attorney Bob “Koretz Ready to Give Full Confession,” Chicago Daily News, December 1, 1924.

  229 Didn’t buy any Bayano stock “Curious Crowds at Union Station to Get Peep at Leo Koretz,” Chicago Evening American, December 1, 1924.

  230 How did you keep The press briefings, photo session in Crowe’s office, and details of Leo’s confession that follow have been compiled from reports in the Chicago press. The confession does not appear to have survived—there is no copy in Leo’s bankruptcy or criminal file—but his testimony before referee Harry Parkin the following day was described as “a virtual repetition” of what he told Crowe. The only difference was a “more explicit” description of financial matters in his testimony. See “‘Guilty,’ Is Koretz Plea,” Chicago Evening Post, December 3, 1924.

  231 Forget that I have ever lived Only one reporter claimed to have overheard what Leo discussed with his brothers. See “Mother of Koretz Is Stoical in Grief,” Chicago Evening American, December 2, 1924.

  231 I believe he is holding “Koretz on Stand Tells How He Worked Swindle,” Chicago Evening American, December 2, 1924.

  231 that people seemed to throw Ibid.

  232 She is pathetically eager “Wife Anxious to See Koretz. He Wants to See Her. Both Wait,” Chicago Evening American, December 2, 1924.

  232 I’ve hurt her enough “Koretz Wants to See Wife, but Won’t Ask Her,” Chicago Herald and Examiner, December 2, 1924; and “ ‘I Return Willingly, Short of Every Cent for Creditors,’ ” Chicago Herald and Examiner, December 2, 1924.

  232 I don’t think I’ve got “Koretz a Broken Man,” Chicago Daily News, December 1, 1924.

  232 Your father says “Koretz Wants to See Wife, but Won’t Ask Her,” Chicago Herald and Examiner, December 2, 1924.

  233 probably constitutionally impossible Editorial page note, Chicago Evening Post, December 1, 1924.

  233 one of the strangest bankruptcy “10 Year Prison Term Confronts Koretz,” Chicago Daily Tribune, December 3, 1924.

  237 I am indifferent “Koretz Pleads Guilty before Judge Hopkins,” Evanston News-Index, December 3, 1924.

  CHAPTER 31

  238 Leo Koretz, in an indictment This account of the guilty plea and sentencing hearing, unless otherwise noted, is based on press reports and the official record of the hearing: Indictment No. 32273, The People of the State of Illinois v. Leo Koretz, docket 56, p. 499, criminal felony indexes, Arc
hives of the Clerk of the Circuit Court of Cook County.

  240 a veritable family farewell banquet “Koretz Gets 1 to 10 Years,” Chicago Evening American, December 4, 1923.

  240 transformed into a temporary White House “Coolidge Pays Tribute to Chicago and Pere Marquette in His First Speech Here,” Chicago Evening Post, December 4, 1924.

  241 That means death “Was Koretz Victim of Circumstances?” Evanston News-Index, January 9, 1925.

  241 Koretz, who has never shown “Swindler, Broken in Health, Is Given Mercy,” Chicago Herald and Examiner, December 5, 1924.

  242 Steal two million dollars Letters from the People—Law, Chicago Herald and Examiner, December 10, 1924.

  242 We frequently hear it said “Weakening Our Courts,” Chicago Daily Tribune, December 18, 1924.

  242 The criminal of today “This Too Is Vanity,” Wolfville (NS) Acadian, December 11, 1924.

  242 I have shown the defendant “No Parole in Less Than Six Years, Is Demand,” Chicago Herald and Examiner, December 6, 1924.

  243 All these investors “Judge Hopkins to Oppose Parole for Leo Koretz,” Chicago Evening Post, December 5, 1924.

  243 This seems to be my last Leo’s statements during the drive to Joliet prison were widely reported in the Chicago papers.

  CHAPTER 32

  245 Bars, guards, sober faces “Prison Rigor Drives Mirth from Slayers,” Chicago Daily Tribune, September 13, 1924.

  245 The cells are small “Killers in ‘Solitary’ Cells,” Chicago Daily Tribune, September 12, 1924. The cells are also described in S. W. Wetmore, Behind the Bars at Joliet: A Peep at a Prison, Its History and Its Mysteries (Joliet: J. O. Gorman, 1892), 20–22. Leo’s first hours in prison were chronicled in the Chicago press.

  246 He is very ill “Grooms Koretz to Be Waiter,” Chicago Daily Journal, December 6, 1924. Details of Leo’s medical condition were recorded in “Register of Prisoners, Joliet” (1923), inmate no. 9463, p. 98. RG 243.200, Illinois State Archives, Springfield.

  246 Con men were among the lowest Nathan F. Leopold, Life plus 99 Years (Garden City, NY: Doubleday, 1958), 90.

  247 no judge in Chicago Attorney General Harlan F. Stone authorized the dismissal of the charges on January 7, 1925. Edwin Olson to Harlan F. Stone, December 16, 1924; Assistant Attorney General William Donovan to Edwin Olson, January 7, 1925. RG 60, Department of Justice records, Classified Subject Files, file 36-18-3 (Leo Koretz), box 9131, NARA, College Park, MD.

  247 Koretz’s condition is serious His illness and treatments and Fletcher’s comments were widely reported in the Chicago and Nova Scotia press and in the New York Times.

  248 king of con men “‘Guilty,’ Is Koretz Plea,” Chicago Evening Post, December 3, 1924.

  248 the greatest swindler of all time “Koretz Capture Nipped New Flight,” Chicago Herald and Examiner, November 25, 1924.

  248 If I had only known “Return Body of Koretz to Chicago,” Evanston News-Index, January 9, 1925.

  248 No crowds “Simple Burial for Leo Koretz, Lavish Spender,” Chicago Daily Tribune, January 10, 1925. Reports in other Chicago papers provided further details about the funeral.

  251 REVEAL KORETZ KILLED SELF Chicago Herald and Examiner, January 11, 1925.

  251 extra servings of syrup “True: Koretz, Leo,” p. 22 (Swanberg Papers) (see chap. 7 notes).

  251 “uncommon” for diabetics Michael Bliss, The Discovery of Insulin (Chicago: University of Chicago Press, 2007), 20, 38. Robert Allen Preston, a young Chicago university student and diabetic facing his own death sentence, felt he understood Leo’s desperation. “God! the poor devil,” Preston wrote in his diary when he heard the news of Leo’s death. “He may have done wrong, but I pity him.” Leo’s diabetes was a “jail within a jail.” “It is better he has gone. Maybe some day I, too, will journey to that happy land where there is no sorrow, pain, joy, or happiness.” Preston soon made the journey—he committed suicide three months later. “Diary Reveals Plan of Youth to End His Life,” Chicago Daily Tribune, April 13, 1925, quoted in Virginia A. McConnell, Fatal Fortune: The Death of Chicago’s Millionaire Orphan (Westport, CT: Praeger, 2005), 61.

  252 I have heard “Hear Koretz Lives; May Exhume Body,” New York Times, March 7, 1925. The comments of Whitman and Fletcher that follow appeared in the Chicago press.

  252 This is certainly worth Ibid.

  EPILOGUE

  255 worthy of a brief news item It was published in the Chicago Daily Tribune, April 10, 1927.

  255 greatest confidence man “Leo Koretz Dies in Prison at Joliet,” Chicago Herald and Examiner, January 9, 1925.

  255 Leo Koretz bears witness “Imagination,” New York Times, December 4, 1924. Republished in the Halifax Morning Chronicle, December 8, 1924.

  256 second Leo Koretz “Rumor Gottlieb Fleeing toward South America,” Chicago Daily Tribune, November 12, 1929.

  256 swindling brigade George C. Atteberry, John L. Auble, and Elgin F. Hunt, Introduction to Social Science: A Survey of Social Problems, vol. 1 (New York: Macmillan, 1941), 291.

  256 TOO MANY WOMEN! Inside Detective, October 1938.

  256 With oil he was master Jack Wilder, “Artist of Flim-Flam,” Best Detective Cases 1, no. 6 (1958): 10–12, 40–41. See also H. L. Spinner, “Guilt-Edge Genius,” Master Detective 49, no. 5 (February 1955): 16–19, 59–63; and Sumner Plunkett, “The Phony Empire of Lover Boy Leo Koretz,” For Men Only 5, no. 9 (September 1958): 26–29, 42–45, which was republished as “El Falso Imperio del Galan Leo Koretz,” Bohemia 50, no. 35 (August 31, 1958): 32–34, 115–17.

  256 the swindler of the century Swanberg, “The Fabulous Boom of Bayano,” 17, 28 (see chap. 1 notes). Swanberg toyed with the idea of turning the story into a book. When Sumner Plunkett borrowed his research notes in 1958 to write his article in For Men Only, Swanberg took pains to ensure they were returned. “I may want to do something with Koretz later on,” he explained. “There’s enough here for a book on the guy.” Swanberg appears to have drafted an outline for a book—an undated, six-page typescript titled “Outline—LEO KORETZ” survives in his papers—but took the idea no further before his death in 1992. See “True: Koretz, Leo” file (Swanberg Papers) (see chap. 7 notes).

  256 prince of thieves Hecht, A Child of the Century, 154–55 (see chap. 15 notes). Hecht repeated Leo’s story in 1958 when he hosted a short-lived television talk show in New York, only this time he claimed that Hearst himself and the top executives of the Marshall Field department stores and the Yellow Cab Company were among Bayano’s investors. The editor who prepared transcripts of the shows for publication described the story as “an amalgam of memory and imagination” in which Hecht “embellishes, judiciously.” See Ben Hecht and Bret Primack, The Ben Hecht Show: Impolitic Observations from the Freest Thinker of 1950s Television (Jefferson, NC: McFarland, 1993), 65–66. The show aired on November 3, 1958. Hecht also mentioned “Leo Koretz, who peddled millions of dollars of stock in the Bayano oil fields, that didn’t exist,” in his 1963 memoir, Gaily, Gaily, 186 (see chap. 10 notes).

  Some of Hecht’s embellishments appear in Jay Robert Nash, Hustlers and Con Men: An Anecdotal History of the Confidence Man and His Games (New York: M. Evans, 1976), 212–13 (expanded and republished on the Internet as “Leo Koretz: Colossal Swindler of Tycoons,” available at www.annalsofcrime.com); Carl Sifakis, The Encyclopedia of American Crime (New York: Facts on File, 1982), 403–4; George C. Kohn, Dictionary of Culprits and Criminals, 2nd ed. (Lanham, MD: Scarecrow, 1995), 170; and Carl Sifakis, Frauds, Deceptions and Swindles (New York: Checkmark Books, 2001), 107–8.

  For an example of the influence of the pulp-magazine stories, see Nat Howard, “Panama Hat Trick: A Con Man Who Swindled Even His Mother,” D & B Reports 42, no. 6 (Nov/Dec 1993): 62. Another writer erroneously subjected Leo to a thirty-day trial and had him arrested not in Halifax but a continent away, in the Pacific coast port of Vancouver, British Columbia. See Carlson Wade, Great Hoaxes and Famous Impostors (Middle Village, NY: Jonathan David, 1
976), 28, 35–36, 44.

  257 recognized the term Ponzi scheme Zuckoff, Ponzi’s Scheme, 314 (see chap. 10 notes).

  258 The average person thinks Quoted in Diana Henriques, “The Lasting Shadow of Bernie Madoff,” New York Times, December 10, 2011.

  258 expected his lucky clients Diana Henriques, The Wizard of Lies: Bernie Madoff and the Death of Trust (New York: St. Martin’s Griffin, 2012), 59, 214.

  258 a time of madness Galbraith, The Great Crash 1929, xxiv, 9 (see chap. 1 notes).

  259 a safari into Panama’s “Safari into Panama’s Untamed Green Hell,” Chicago Tribune, February 23, 1975.

  259 a perfect gateway Don Winner, “Patrolling the Bayano River Basin for Drug Traffickers,” article posted August 5, 2010, and available online at www.panamaguide.com.

  260 ties between politicians and organized crime To the authors of the Illinois Crime Survey, an investigation into the tainted justice system of 1920s Chicago, McSwiggin’s death exposed the “unholy alliance … between criminal gangs and the political machine” at the heart of Chicago’s epidemic of crime. The Illinois Crime Survey (Chicago: Illinois Association for Criminal Justice, 1929), 841.

  260 Not only had Capone ordered Crowe’s allegation, published in the Chicago Daily Tribune on May 5, 1926, is reproduced in John Kobler, Capone: The Life and World of Al Capone (New York: G.P. Putnam and Sons, 1971), 177.

  260 I didn’t kill him The Illinois Crime Survey, 829.

  260 Crowe was accused of protecting Wooddy, The Chicago Primary of 1926, 136–37, 140 (see chap. 8 notes). Crowe’s failure to secure convictions in gangland killings is noted in Bukowski, Big Bill Thompson, 203–4 (see chap. 8 notes).

  261 no one ever by proof “City Bar Board Opposes Crowe for Bench Post,” Chicago Daily Tribune, October 1, 1942.

  261 a smashing blow “Robert Crowe Services Set for Tomorrow,” Chicago Daily Tribune, January 20, 1958.

  263 jolly millionaire Raddall, In My Time, 130 (see chap. 21 notes).