apartment on Van Dyke Street not far from Detroit’s main downtown
section. And on September 22, 1928, Fleishman reported for duty at the
Customs Patrol headquarters at the foot of DuBois Street on the Detroit
River. The Patrol offices were in an old wooden building enclosed by
a high wire fence. There was an adjoining garage and a slip for the
patrol boats alongside a boat repair shop. In addition to the office,
there was a squad room for the patrolmen, where each of them had a
locker.
During his first week on the job, Fleishman knew he was being watched
with suspicion. He was never given an assignment with any of the night
patrols. Each morning he was assigned to headquarters duty--which meant
sweeping out the offices, tending the coal fires, carrying out ashes,
filling cars with gas and oil, and sprinkling water on the sand pile in
the front yard to prevent the sand from blowing into the offices.
At odd moments, Fleishman sat around watching the older men shoot
craps in the locker room and joining in their talk. Slowly the wall of
suspicion began to crumble, and during the second week he was assigned
to a 12 midnight to 8 A.M. patrol with a senior officer named Raleigh
Hampshire, a big, flabby man who looked as though he slept in his
uniform.
In the first hours of the night they drove aimlessly along Woodward
Avenue, parking occasionally to get a cup of coffee at an all-night
restaurant, or just to sit and watch the traffic. From time to time,
Hampshire questioned Fleishman about his background. Fleishman told him
of his years in the Navy and his experiences in strange ports of the
world. He even confided to Hampshire that he had been a bookkeeper for
the New York State gambling syndicate--but this job had blown up when
the police smashed the operation.
“Maybe you heard about it,” Fleishman said. “It was in all the papers.”
Hampshire obviously was impressed. “Yeah,” he said, “I read about that.”
This conversation apparently resolved any doubts that Hampshire had
about his companion. After a time he said, “Let’s go see what we can
find.” He wheeled the car from the curb and drove to a residential
area which Fleishman later learned was the Lake St. Clair section, a
respectable neighborhood of attractive homes.
Hampshire drove into the driveway of a large house with a tree-shaded
lawn, and Fleishman assumed they were going to visit one of Hampshire’s
friends. He followed Hampshire to the door, and when he knocked a man’s
voice said, “Come in.”
They stepped through the door into a scene that Fleishman would always
remember as one of the strangest he had ever witnessed. Stacked to
the ceiling in what should have been the living room were cases of
whiskey and sacks of ale. On an overturned beer keg sat a man cleaning
a pistol. Six other men, using an overturned crate for a table, were
playing blackjack. A young woman stood watching the gamblers while
sipping from a bottle of ale.
No one showed any surprise at the appearance of the two uniformed
officers. They only glanced at Fleishman and nodded when Hampshire
introduced him as a new man on the job.
“Have a drink?” their host said.
“I’ll take a bottle of ale,” Hampshire said.
Fleishman nodded. “I’ll take the same.”
The hoodlum took a knife from his pocket and flipped open a blade. He
ripped one of the sacks and took out two bottles. When he opened them,
the warm ale spewed out on the floor. They sat and chatted for several
minutes and then Hampshire signalled it was time to go. They bid
everyone goodnight and returned to their car. As they drove from the
house, Hampshire said, “It isn’t everybody that would give a new guy a
break like this.”
“What do you mean, a break?” Fleishman asked.
“I mean introducing you to the guys back there,” Hampshire said. “You
never can tell when you might be working with a special agent. But I
figure you’re all right.”
“Thanks,” Fleishman said dryly. “I appreciate it more than you know.”
This was the break Fleishman had been waiting for. He knew that he had
passed the first test and he figured that Hampshire now would pass the
word to others that he was “okay.” When he returned home that morning
he wrote a long report of the night’s events and mailed it to Elmer
Lewis at the Barlum Hotel.
And then his reports became more and more interesting....
October 1, 1928. (Fleishman reported that he had made friends with
a patrolman named Bill Tompkins, who lived only a few streets
beyond his apartment. He became friendly by giving Tompkins a ride
home after work.) Tompkins opened up wide this morning. He said:
“Don’t let any of these guys give you the runaround. If you see
them talking to bootleggers and they don’t let you in on it, or if
they leave their boats or cars or act suspicious in any manner, you
can be sure they are getting theirs and you are not. Just don’t let
them put anything over on you. Every time they make a run it is
good for a hundred each.”...
October 10, 1928. I reported for duty at base at 1 A.M. Detailed
to land patrol with Inspector G. Slater.... Our first stop was at
the foot of Orange Street in Wyandotte where the picket boat was
tied up ... Slater talked to O’Rourke while I drove to a restaurant
at Slater’s request. When I returned ... Slater said, “Well, it’s
all fixed. We ought to be good for $125 apiece tonight.”... We
drove down to the foot of 23rd Street and parked the car and went
to sleep.... We woke up at 6:15 and a bootlegger named Hamilton
came along. He said, “Is it all right to work?” Slater said,
“Yes.”... He then told us he would see us around 8:30. We then
left from the foot of 23rd Street and went to a restaurant on West
Fort Street and had coffee. Left and drove over to the foot of
Orange Street and Wyandotte. We were there about 7 o’clock. Bill
O’Rourke ... handed Slater a roll of bills. Slater walked over
to the picket boat and another boat was tied up there having a
propeller fixed.... All I saw of this transaction was O’Rourke
giving Slater a roll of bills. We then drove down to the River
Rouge. In the car Slater gave me a roll of bills and said, “Count
it.” I did and found $50. At the River Rouge we went to Peajack’s.
We met his lieutenant who got out of a car, came over, and dropped
a roll of bills in Slater’s lap.... After driving away Slater gave
me another roll of bills containing $50. Slater said, “I bet you
feel funny going into the base carrying $100.” I admitted that I
did feel uncomfortable. Slater gave me quite a bit of interesting
data. The night’s pay-off when they work the River Rouge is $970.
They all work at once and the boat crews and the land crews must
all be fixed. In addition Border Patrol must occasionally be
fixed, nightwatchmen and policemen must be fixed, and recently
the prohibition agents have to be paid off to discontinue their
activities on the river. Slater also told me a number of fellows
were very suspicious of me.... I said, “Why are they so suspicious
of a new man every time?” Slater said, “Because every new man
might be a special agent or a DJ (Department of Justice) man. But
even if you are a special agent you are as guilty as I am because
you have taken money too.”... Near 23rd Street Slater turned up a
side street.... Then I saw Hamilton rounding the corner. He came
over to the car and dropped a roll of bills in my lap. I handed
it to Slater when we drove off.... This made $115 for my share of
the evening’s profit. (Each bill Fleishman received he listed in
his report giving the denomination and serial number of each.)...
Returned to base at 10 A.M. and made out report: “No activities
noted.” Slater made out a similar report....
By mid-November, Fleishman had been admitted to membership in the
Patrol’s crooked inner circle. He was automatically included in the
pay-offs made by the mobsters. He had found many of the patrolmen were
honest men--but they were helpless with so many avenues for rumrunning
left open around them.
Occasionally, Fleishman slipped at night into the Barlum Hotel to
discuss the progress of the investigation with Elmer Lewis. The
evidence of graft and corruption was piling up daily, yet Fleishman was
troubled because he hadn’t been able to link the pay-offs to any of the
higher-ups in the rumrunning syndicates.
“You’re doing all right,” Lewis assured him. “Just be sure you don’t
get into any trouble.”
Fleishman said, “There’s one guy in this racket I would like to
nail--Pete Licavoli. He’s responsible for a big part of this mess.”
Lewis nodded. “You’re not likely to get close to Licavoli. He plays it
smart.”
Then one night Fleishman was detailed to the land patrol with Patrolmen
James Mack and Shell Miller. They climbed into a Buick coach with
Miller at the wheel and Miller headed the car out Fort Street to
Military Road.
“Where are we going?” Mack asked.
Miller said, “I’ve found something worthwhile that I want to show you.”
He turned onto Jefferson Avenue and after a time he drove slowly by a
lumber yard beside a railroad track. “That’s it,” he said. “I got a tip
they’re handling booze in there by the carload. But they don’t ship it
until it’s watered down. We’ll come back later and pay them a visit.”
The three men rode aimlessly around Ecorse until mid-morning and then
Mack drove back to the lumber yard. They walked into a building where
several men were making boxes. Suddenly Mack said, “Here comes a friend
of mine.”
Fleishman saw a big, handsome man emerge from an office. He recognized
him instantly from his pictures. He was Pete Licavoli, and very plainly
Licavoli was upset.
“For God’s sake,” the hoodlum said in disgust, “where did you come
from?”
“We just thought we’d pay you a visit,” Mack said. “Nice place you’ve
got here.”
“Beat it,” Licavoli snarled. “Beat it and I’ll fix you later.”
Mack said, “Okay, boys, let’s get out of here.”
As they drove from the lumber yard, Mack said, “This thing is too good
to put off. I’ll arrange for us to see Pete tonight.”
* * * * *
It was 5:40 when Mack and Miller picked up Fleishman at his apartment.
They drove to Jefferson Avenue, where Mack parked the car. They walked
down a long alley and Mack knocked on a door. They were admitted into
an elaborately furnished restaurant which proved to be the private
restaurant and hangout of Licavoli and his mob. The furnishings were
in excellent taste. There were leather lounging chairs, a bar and the
general atmosphere of a country club. Licavoli was seated at a table
with one of his lieutenants, Sam Georges. He waved his visitors into
seats.
Fleishman left the talking to Mack and Miller as they discussed how
much Licavoli should pay to operate unmolested at the lumber yard
shipping plant.
“This is the first time we’ve worked in a week,” Georges complained,
“and we’re losing money.”
Miller said, “Do you expect me to cry for you?”
The discussion continued through dinner and several rounds of drinks.
Finally it was agreed Licavoli should pay $400 a week to be left alone.
The mobster pulled out a fat wallet, counted out the money, and handed
it to Mack. He stood up and put his hand on Fleishman’s shoulder. “You
boys come around any time,” he said. “The drinks are on the house.” And
then he left.
In dividing the $400 pay-off, it was agreed that Fleishman would
receive $110 and Mack and Miller $120 each, with $50 to be paid to the
tipster who had pointed out the Licavoli operation to Mack. The money
was divided as the men sat at the table.
In the days that followed, Fleishman’s letters to Lewis were filled
with reports of gangster pay-offs. The evidence piled up so rapidly
that officials of the Treasury and Justice Departments, Customs
Service, and the Prohibition Bureau met in Washington to discuss when
and how a crackdown should be made. Elmer Lewis was called from Detroit
to take part in the conference.
Lewis urged the conference to keep a tight lid of secrecy on the
meeting. He warned that any disclosure that a Customs agent was working
undercover in Detroit would be certain to endanger Fleishman’s life.
Sooner or later the hoodlums would discover he was an undercover
man--and the Purple Gang gunmen would be after him.
But such news is difficult to keep bottled up in Washington. Part of
the story, at least, was leaked to reporters. The following morning
newspapers were carrying reports that a “big case” was expected to
break soon over bribery and whiskey smuggling in Detroit. There was
speculation, too, that a shakeup was coming in the Customs Patrol.
When Lewis read these reports, he arranged to take a train back to
Detroit. He knew the news stories would be telegraphed to the Detroit
newspapers.
At midnight on November 18, Fleishman reported for duty as usual. He
was assigned to a patrol with two inspectors to cover the customary run
along the River Rouge and the Wyandotte area. They visited the usual
haunts, looking for any of the hoodlums who might be seeking an “all
clear” signal for moving their whiskey across the river. None of them
at the time had read the dispatches from Washington printed in the
Detroit newspaper.
Shortly before dawn, the three men stopped in a Wyandotte restaurant
for a bowl of soup and a sandwich. The restaurant was operated by Joe
Rosen, one of the mobsters, and after a while Rosen came to the table.
He whispered into the ear of one of the patrolmen and then hurried from
the room.
“What’s going on?” Fleishman asked. “Are we going to get some action?”
The inspector said, “Finish your sandwich and let’s get out of here.”
When they returned to the car, the inspector said, “Joe says at least
three undercover men are working on the force and they’ve put the
finger on about forty men. The mob is trying to find out who the stool
pigeons are. Nothing’s going to move until they do.”
For the next two hours, Fleishman’s companions talked of little else
except the bribes they had turned down, and how honest they had been.
Fleishman knew their talk was solely for his benefit. They were not
good enough actors to conceal their anxiety.
When they finally stopped at a restaurant for a cup of coffee,
Fleishman excused himself on the pretext that he had to call his wife.
Instead he called the Barlum Hotel and asked for Elmer Lewis.
Lewis answered the phone. Fleishman explained what had happened. “This
doesn’t look good to me, Mr. Lewis,” he said.
Lewis said, “Your job’s finished. Now go home and pack your things. Get
over here with your wife as fast as you can. You’ll both be safer here.”
Fleishman moved with his wife into the Barlum Hotel and only then did
she learn of the role her husband had been playing for more than two
months. A few days later, they slipped from the hotel and headed back
East in their Model A Ford.
On November 30, eighteen hoodlums were arrested, along with nineteen
patrolmen. Two-score other patrolmen resigned. The cleanup was a
newspaper sensation.
Pete Licavoli was among those sentenced to prison. The mob leader over
the years had escaped conviction on charges ranging from sluggings to
murders. But this time he pleaded guilty to bribing a Federal officer.
He was fined $1,000 and sentenced to two years in Leavenworth prison.
While Fleishman was uncovering the evidence to convict Licavoli and the
others in Detroit, another young agent--Chester A. Emerick--was making
some interesting discoveries on the West Coast. A big, easy-going man,
Emerick had developed sources which disclosed to him that much of the
liquor bootlegged on the Pacific Coast was being shipped by a combine
of Canadian liquor interests. Emerick learned that the Canadian liquor
interests had formed the Pacific Forwarding Company of British Columbia
to exploit the American liquor market. The company loaded its whiskey
on ships at Vancouver for shipment ostensibly to Papeete, Tahiti. Once
the liquor arrived in Tahiti, the Tahitian customs bond was cancelled
and the shippers were not required to pay taxes on the liquor exported.
Then the liquor was moved from Papeete to Rum Row off Southern
California, off Long Beach and off the Washington coast. Rum Row was
the nickname given by newspapers to the line of ships which stood at
anchor in international waters, three miles offshore and just out of
reach of U.S. maritime jurisdiction.
The Canadians did not merely bring the liquor to Rum Row. They had
a well-organized force of salesmen operating in San Francisco, Los
Angeles and Seattle, selling whiskey to bootleggers and guaranteeing
delivery on a wholesale basis. The money collected by these salesmen
was deposited in several banks along the Pacific Coast to the credit of
the “Gulf Investment Company”--a company owned and controlled by the
Canadian liquor interest. No one knows how many hundreds of millions of
dollars in profit was realized by the Canadian conspiracy.
Emerick doggedly followed up the original leads obtained during
prohibition and pressed for Federal action against the Canadian
liquor dealers. In the spring of 1934--two years after the repeal of
prohibition--two officers of the Canadian interests, Henry and George
Reifel, arrived in Seattle. They were placed under arrest. The warrants
had been issued secretly, and only four or five Customs officials knew
of the action that had been taken. Service was obtained on warrants
against the corporation which they represented, and a Federal action
was brought in the District Court at Seattle, Washington. Before the
case was concluded the Canadian interests had agreed to settle all
liabilities by paying the U.S. government $3 million. This payment was
accepted by the government and the case was closed.
There never were and perhaps there never will be again smuggling
operations of such a magnitude as those which developed during the days
of prohibition. Booze leaked across the borders from Canada and Mexico
in streams. High-powered speedboats brought cases of liquor from supply
ships riding at anchor in international waters. The Coast Guard and
Customs were engaged at times in a shooting war with the rumrunners,
and in the Detroit area alone, Customs had thirty speedboats engaged in
around-the-clock blockade operations.
No authoritative study is available on how many ships and boats were
engaged in rumrunning during the Twenties. But it was a formidable
fleet, and there had been nothing quite like it since the blockade
runners assembled their fleet to challenge the Union’s blockade of the
South during the Civil War.
One of the largest hauls of bootleg alcohol made by Customs came in
1926 with the seizure of the freighter _Cretan_, which was found to be
carrying more than 70,000 gallons of Belgian alcohol easily worth $4
million on the retail bootleg market.
The _Cretan_ was purchased by a “front” man for a group of Philadelphia
and New York racketeers. Early in 1926, the _Cretan_ steamed to the
Bay of Fundy, where it made a rendezvous with the British ship the
_Herald_. The _Herald_’s cargo of alcohol, a total of seven hundred
100-gallon drums, was transferred to the hold of the _Cretan_. Then
several tons of baled waste paper were piled on top of the drums to
conceal them in case the ship was boarded by Coast Guard or Customs
officers.
The _Cretan_ headed for Philadelphia with its valuable cargo of
190-proof spirits, but the mobsters weren’t satisfied with the
arrangements for unloading the cargo in Philadelphia. A message was
sent to the _Cretan_’s captain ordering him to proceed to Boston and
take on more baled waste paper. A decision would be made later on where
to unload the alcohol.
The _Cretan_ steamed into Boston harbor on schedule and tied up at
an isolated pier. It began to take on more waste paper, with no one
suspecting its true cargo. But a Customs officer observed several
well-dressed men coming and going from the ship. He also noticed that
two strange automobiles, both bearing New York license plates, were
parked nearby. And he began to wonder what it was aboard the vessel
that would bring the strangers all the way from New York to Boston--men
who didn’t seem to be seafaring types.
He reported his suspicion to Deputy Collector of Customs Thomas F.
Finnegan. Finnegan decided to send a special duty squad aboard the
ship to determine the nature of the ship’s cargo. The squad boarded
the _Cretan_ but found they could not get into the holds. However,
when they entered a coal bunker next to the holds, they detected the
unmistakable odor of alcohol.
Finnegan ordered an immediate halt to the loading of waste paper. He
posted guards at the gangway to prevent anyone from leaving the ship,
and arranged for a lightering firm to unload the bales of waste paper
from one hold. When the paper was removed, the drums of alcohol were
uncovered. The _Cretan_ and its cargo were forfeited to the government
and sold at public auction. The alcohol was sold to drug companies
which had Federal permits to dispense alcohol.
Some of the rumrunning craft were equipped with armor plate and
bullet-proof glass around the pilot house area. They had underwater
exhaust mufflers installed in order to slide silently through the
water at night and evade the Coast Guard and Customs patrols. Most of
them had two high-speed motors, each with a shaft and propeller. The
conversion work on the boats was done by the rumrunners themselves or
by small boat builders.
The _Whatzis_, operating out of Rhode Island, was believed to be the
first rumrunning speedboat with four high-speed motors--two in tandem
in each engine bed with a reduction gear between the motors. Each set
of motors had one shaft and one propeller. This powerful craft was
seized by the Coast Guard off the Massachusetts coast and later was
inspected by several naval architects interested in its unusual power
plant. Some insist to this day that the _Whatzis_ was the craft that
gave naval designers their idea for the rugged crash boats used at
seaplane bases, and later for the PT boats which won renown in World
War II.
The Twenties was a time of violence and turmoil for all the nation.
And no agency of the government was more actively involved than the
Customs Service, which, with other agencies, had the impossible task
of trying to throw up a dike against the flow of illegal whiskey into
the United States. Many good men tried, honestly and diligently, to
enforce the law. But the great majority of the people simply didn’t
want prohibition.
In this period, Customs developed a tough and experienced corps of law
enforcement agents and supervisors who were to serve the country well
in future years.
7
THE ENFORCERS
Customs now has 240 special agents who police the Atlantic, Pacific,
and Gulf of Mexico coastlines and the borders between Mexico and
Canada. Their work is supported by 487 Customs enforcement officers
(port patrolmen) and 2,551 Customs inspectors and supervisors.
Pressures for a special investigative force to combat smuggling and
fraud developed after the Civil War, when normal trade was resumed
between the United States and other nations of the world. Violations
of the Tariff Act and a loose morality in administrative offices
became so flagrant in those postwar years that in May, 1870, Congress
passed a law providing: “The Secretary of the Treasury may appoint
special agents, not exceeding 53 in number, for the purpose of making
examinations of the books, papers and accounts of Collectors and other
officers of the Customs, and to be employed generally under the
direction of the Secretary, in the prevention and detection of frauds
on the Customs revenue....”
With this act, the Secretary of the Treasury gathered under his
direction for the first time a special police force to combat smuggling
and frauds.
The need for such a force actually dated back to the first days of the
Republic. But over the years, the enforcement work had been handled by
inspectors, guards and other untrained personnel. In 1922 Secretary of
the Treasury Andrew W. Mellon transferred the Special Agency Service
from his personal direction to the Customs Administration, which was
then a division of the Treasury Department. In 1927, the Customs
Division was given the status of a bureau by Congress, with direct
control over its own investigative force.