never knew what it was that drew his attention to a battered 1957 Ford
station wagon parked at the northeast corner of Central Park South.
Perhaps it was the driver. He was a huge man with a skull-like face
and large ears who seemed to be interested in Tarditi, too. From long
habit, Cozzi made a mental note of the license number, New York LK8935.
Tarditi went directly to Rosal’s room, and left the brown parcel with
the diplomat. Then he returned to his own hotel.
Narcotics Supervisor George Gaffney and Customs Agent-in-Charge Carl
Esposita sat in a parked radio car near the Plaza Hotel entrance.
They were reasonably certain that if heroin were being smuggled, then
the contraband would be in Rosal’s luggage, for which he had claimed
diplomatic immunity. If their suspicions were correct, the question
was: Where would the delivery take place and to whom?
A dozen agents were dispersed throughout the area in radio cars,
receiving their orders by radio from Gaffney. At noon an alert was
flashed when Rosal called for a bellman to take his bags from his room
to a taxi. He checked out of the hotel and the bellman placed his four
suitcases in the trunk of a taxi.
Only a few minutes earlier, Tarditi had left his hotel. Agents reported
by radio that he had gone to the corner of 72nd Street and Lexington
Avenue, where he was met by Charles Bourbonnais, the TWA steward, and
by a tall, gangling man with a skull-like face. The three men were
still standing on the corner talking when Rosal’s taxi pulled away from
the Plaza Hotel.
“This must be it,” Gaffney said to Esposita. The command car followed
a discreet distance behind Rosal’s cab, which went directly across
town to the corner of 72nd Street and Lexington Avenue. There the
diplomat stepped from the taxi to be joined by Tarditi and Bourbonnais.
Gaffney’s radio car continued on down the street to a vacant parking
space.
From the shadow of a doorway across the street, Mario Cozzi snapped a
picture of Rosal, Tarditi and Bourbonnais as they stood talking beside
the taxi. Then he noticed a familiar-looking Ford station wagon parked
nearby. The man at the wheel was the jug-eared driver he had seen
parked earlier in the day near the Plaza Hotel, watching Tarditi. The
driver was Nicholas Calamaris.
Rosal spoke to the taxi driver, who opened the trunk of the car. The
three men looked into the trunk and for a moment it appeared they were
going to transfer the luggage from the cab to the station wagon. But
Bourbonnais suddenly strode toward the station wagon, while Tarditi and
Rosal entered the taxi after the driver had closed the lid of the trunk.
In that interval of a few seconds, a dozen agents were prepared to rush
the men if the luggage had been transferred to the station wagon. When
nothing happened, Gaffney withheld his order.
Bourbonnais slid into the seat beside Calamaris, who drove toward
Third Avenue with Rosal and Tarditi following closely behind in the
taxi. At Third Avenue the two cars swung north and still the occupants
were totally unaware that their cars were bracketed by the automobiles
carrying Narcotics and Customs agents.
At 75th Street, the taxi was halted by a stop light while the station
wagon continued on. Gaffney made a sudden decision. “Let’s not tail
them any farther,” he snapped into the microphone. “Let’s get them
now.” The control car quickly shot forward and swerved in front of the
cab. Other cars closed in to block the station wagon.
Mike Cozzi leaped from his car to the taxi, jerked open the door and
flashed his agent’s badge. “We’re Treasury agents,” he said. “Don’t
make a move.”
“What is this?” Rosal exclaimed.
Tarditi protested, “Do you know who this man is? He is a diplomat! He
is entitled to diplomatic immunity!”
The agents began firing questions at the two men.
“A diplomat to what country?”
“I am the Guatemalan ambassador to Brussels.”
“Are you on a diplomatic mission to the United States?”
“No.”
“Does your government know you are in the United States?”
“Well, no....”
At the station wagon, Calamaris was protesting, too. “Why are you
stopping us? What’s going on?”
“Don’t worry,” an agent said, “just get moving. Drive off the Avenue
onto 76th Street. Over there!”
“I don’t know nothing....”
“Get the car moving. You’re blocking traffic.”
Passersby gawked curiously as the four men were taken from the
automobiles with a swarm of agents around them.
“What’s in the trunk of the cab?” Rosal was asked.
“Four suitcases,” he said. “One is mine but the other three don’t
belong to me.”
“You brought them into the country, didn’t you?”
“Yes, but they are not mine....”
The cab driver, unable to comprehend what was taking place, was
ordered to open the trunk of the taxi. An agent broke open one of the
suitcases. It was packed with plastic bags containing a white powder
which laboratory tests would later prove to be almost pure heroin.
Rosal himself opened the small case which he insisted was the only bag
which belonged to him. Inside was a package wrapped in brown paper--the
parcel which the agents had seen Tarditi carry into his room at the
Plaza Hotel that morning. It contained $26,000 in U.S. currency.
The men were placed in the agents’ cars along with the heroin-filled
suitcases, and taken to the Narcotics Bureau headquarters for
questioning.
Agent Frederick Cornetta said to Mike Cozzi, “I’ve got to drive the
station wagon to headquarters. Why don’t you ride with me?”
Mike climbed into the front seat of the station wagon beside Cornetta,
who took the wheel.
As they moved down Third Avenue, Cozzi looked into the glove
compartment and examined its contents. Then he ran his hand into the
space beneath the seat and pulled out a paper sack.
“Hey!” he said to Cornetta, “I think I’ve got two more kilos of the
stuff.”
He looked inside and exclaimed, “Money! It’s full of money.”
The sack contained $41,949, which Calamaris and Bourbonnais intended to
hand over to Tarditi.
At headquarters, Rosal talked freely. He claimed that he first met
Tarditi in Paris in the summer of 1959 through a mutual friend. During
one conversation, he had told Tarditi that his mother owed $35,000 on
some property in Central America and was in danger of losing it if he
could not raise the money.
A short time later, he continued, Tarditi had contacted him in Brussels
and asked him to carry narcotics into the United States under a cloak
of diplomatic immunity. Twice he had made deliveries successfully. The
$26,000 found in his suitcase was his commission for the three trips.
Bourbonnais claimed he was only an errand boy for the syndicate. He
rambled on vaguely about a mysterious Madame Simone, the wife of a
doctor or dentist, whom he had met in Paris in the winter of 1960.
Simone had asked him to collect $250,000 from a debtor in New York and
to bring the money to her in Paris. He had made the delivery and she
had paid him a commission of 1 per cent. Then Simone had asked him to
meet a man in New York who would be standing on Fifth Avenue across
from St. Patrick’s Cathedral at 3 P.M. on October 2. This man would be
wearing a gray suit and brown hat. He would hand Bourbonnais a package
which he was to deliver to Tarditi, who would be in New York at this
time.
Bourbonnais said he had met the stranger, received the package, and had
arranged to have the package delivered to Tarditi, who passed it on to
Rosal. Even if the story were fiction, at least it was one explanation
of where the money came from to pay Rosal for the use of his diplomatic
immunity.
The heroin in Rosal’s luggage weighed 49.25 kilos. And four days later,
agents located another 51.89 kilos of heroin which Tarditi had cached
in a trunk on Long Island. It was the largest seizure of heroin ever
made in the United States, and Narcotics officials estimated it was
worth $20 million on the underworld market.
The Guatemalan ambassador to the United States announced that his
government had disavowed Rosal. His trip to the United States had
not been authorized, nor had it been sanctioned in any official
manner--therefore he was not entitled to the diplomatic immunity which
he had claimed.
Rosal was indicted along with Tarditi, Bourbonnais and Calamaris on
charges of violating the narcotics laws of the United States. The four
pleaded guilty. Rosal and Calamaris were sentenced to fifteen years
in prison. Bourbonnais and Tarditi were given nine years each. And in
passing sentence, the Federal judge said:
“... I think the death sentence would not be an inappropriate sentence.
Under the statute, I can imprison them for up to twenty years. If it
had not been for pleas of guilty, I think I would have done so....”
It was only then that the Customs Bureau closed its files on The Case
of the Crooked Diplomat.
13
A STRANGE LITTLE ROOM
On a hot July day in 1941, gray-haired Adrian Grasseley sat at a small
table in a room whose window overlooked Fifth Avenue, peering intently
through a microscope at a large diamond.
Crowds strolled the streets below. Traffic rumbled along the Avenue.
Pigeons sailed about the spires of St. Patrick’s Cathedral. Grasseley
saw and heard none of this. All of his attention was concentrated on
the diamond lying on the table before him--a fabulous stone the likes
of which few men had ever seen.
This was the Vargas diamond, discovered two years earlier in Brazil.
The stone weighed 726.6 carats. It was Grasseley’s job to divide it
into twenty-three smaller stones which would be worth $2 million if he
did his job well. The Vargas was one of the largest and most valuable
diamonds ever to pass through Customs.
For forty years, Adrian Grasseley had cut, sawed and cleaved diamonds
in Antwerp and in New York City. But this slender man with the thin,
tapering fingers had never had the responsibility of splitting a
Vargas. Few men ever had.
Diamond Merchant Harry Winston had purchased the stone for $700,000.
He had turned it over to Grasseley to divide, and the cutter’s first
important move would be to split the giant stone with a blow on the
blade of a knife. If the diamond split smoothly, then the rest of the
job would be relatively simple.
For weeks, hour after hour, Grasseley studied the Vargas, searching for
the “grain” of the diamond. He looked for a hidden flaw which might
cause the stone to burst into fragments, but he could find none.
At last Adrian Grasseley knew what had to be done. He would cut a small
V-shaped notch at the precise point at which he intended to split
the stone. Into this notch he would place a dull-edged knife. If his
calculations were correct, a blow on the knife would cleave the diamond
as truly as a piece of fine wood splits along its grain. If the blow
were too heavy, or if he had misread the diamond’s structure, then the
Vargas might shatter and a fortune would be lost.
On the night before the blow was to be struck, Grasseley did not feel
any undue nervousness. His hands were steady and he congratulated
himself on being relaxed. But he could not sleep. He turned and twisted
in his bed, and he listened to the grandfather clock in the hallway
toll the quarter hours.
“What is the matter with me?” he muttered irritably. “I am not nervous
and I have not been worrying about the Vargas.” It was almost dawn
before he dropped off to sleep.
The diamond cutter slept for only two hours. Then he hurried to the
small room at Rockefeller Center where the diamond waited. All morning
he worked to cut the small notch. He had lunch. And at 2 P.M. he was
ready.
Only Harry Winston and a diamond polisher were in the room with
Grasseley when he placed the diamond on the table. He carefully
inserted the edge of the knife into the notch and, holding his breath,
he rapped the knife with an iron bar. The only sound was the ring of
the bar on the knife.
The Vargas didn’t split. In that instant Adrian Grasseley felt only
numbness. His calculations had been wrong.
Winston grabbed the stone and examined it under a magnifying glass.
He saw at the point of the V-notch a small fracture in the stone. It
wasn’t deep. But it was straight and true along the grain as Grasseley
had planned.
Winston handed the stone back to Grasseley. “Strike it harder,” he
said. “It’s all right.” It was a decision which could cost him a
fortune but he had confidence in the gray-haired man beside him.
Winston had seen Grasseley involuntarily soften the blow when he struck
the knife with the iron bar and he could understand the fear that must
have gripped him.
Again Grasseley placed the knife in the V and struck it with the rod.
The fracture deepened. And when he struck the third blow, the Vargas
split cleanly without even the loss of a fragment of the stone.
Winston heaved a sigh of relief, and when he looked at Adrian Grasseley
he saw that the little diamond cutter was crying. The reaction to the
weeks of strain had been too much.
The story of the Vargas diamond is only one among thousands of stories
of suspense, excitement, glamor and intrigue in the world where
diamonds fire the imagination of men and women and form the basis for
a giant industry. And because the diamond trade is big business, it
becomes the concern of the Customs Bureau.
The Vargas entered the country through one of the most unusual
workshops in all the country, located in the nondescript, sprawling
Customs building on Varick Street in lower Manhattan. The door to this
room is never left unlocked. No one is permitted to enter the room
unless he carries a pass or has special permission.
The reason for the extraordinary security is that the room is one of
the most important clearing points for diamonds in all the world. It
is the workshop of the Customs experts whose job it is to appraise the
value--and determine the duty--on the diamonds, rubies, sapphires, and
other precious and semi-precious stones which are brought into the
United States.
Approximately $75 million worth of cut and polished diamonds enter the
United States each year, along with $75 million to $100 million worth
of rough diamonds and other precious stones. Each shipment of cut and
polished diamonds--with few exceptions--must pass through the obscure
little room presided over by Chief Examiner Leroy N. Pipino, a slender,
dark-haired, young-looking man who maintains a remarkably detached
view toward the treasures that are spread before him each week. In
the past ten years, Pipino has appraised diamonds worth more than $1
billion.
Soon after joining the Customs Service in the mid-Thirties, Pipino was
assigned as an under clerk to the diamond office. As he watched the
flow of gems arrive from abroad and as he listened to the discussions
of their good and bad points, he became fascinated with the trade in
precious stones.
Pipino began to read all he could about gems in New York City’s
libraries. He learned much from the Customs Bureau’s own experts and
each day’s work was an education in itself. At night he attended
Columbia University to take courses on gems and gemology, and often he
talked to some of the country’s leading experts, learning from them.
Pipino advanced to the post of assistant appraiser during the war
years, and then in 1949 he was appointed chief examiner. In the
handling of so impressive a fortune in jewels, one might expect to find
him in the elegant surroundings of a Tiffany showroom. But in Pipino’s
rather drab-looking workshop, the gems are spread irreverently on a
battered table for examination. Around the room are laboratory aids
commonly used by gemologists--the diamondscope, a binocular microscope
with a special attachment for controlling light source; a dichroscope
which reveals color variances in stones; a refractometer for measuring
light rays; equipment to test the hardness of stone; and the most-used
instrument of all, a ten-power microscope.
Ninety-five per cent of all the diamonds coming into the United States
pass through the port of New York and are brought to Pipino’s office
for examination. Most of them come from Europe, South Africa, Israel or
Brazil. They are weighed and their value is appraised. If there is no
discrepancy between the weights and the values listed on the importer’s
invoices, the gems are released to Customs brokers for delivery to the
persons or firms to which they were shipped.
In this small room also are made the examinations of the modern gold
and platinum jewelry and all the antique jewelry. The cut and polished
diamonds are subject to a 10 per cent duty. Rough diamonds arrive
duty-free. Diamonds which have been incorporated into industrial tools
or processed for industrial use are dutiable at 15 per cent of their
value. There is no duty required on antique jewelry.
Antwerp is the largest diamond-cutting center in the world, and has
been for many years. Most of the cutting of small diamonds is done by
the Antwerp craftsmen, although in recent years Israel has developed
into an important diamond-cutting center.
The birth of the Israeli diamond industry was part of the chain
reaction of the Nazi invasion of the Lowlands in World War II. Many of
the best diamond cutters in Europe were Jews. When the invasion came,
they fled from Belgium and from Holland. As Hitler’s persecution of the
Jews became more and more oppressive, reaching further and further,
they scattered across the world to places of asylum. Many of these
wanderers later went to the new state of Israel and with their skills
they founded an industry that has been growing steadily in importance.
Diamonds--like gold--are sensitive to economic and political
instability. There is a constant shifting of these treasures about the
world, seeking havens of safety or places of the greatest profits.
Leroy Pipino and his associates didn’t even have to read the newspaper
headlines back in 1938–1939 to know that trouble was brewing in Europe.
They could read the warnings in the increasing volume of diamonds
and other precious stones which were being imported into the United
States. The flight of jewelry from Europe was a measure of the fears of
millions of people.
Most of the jewels arriving in New York at that time were carried by
refugees fleeing before the threat of the Nazis. Families brought with
them their treasured and often priceless heirlooms. Many had converted
their property and life savings to the currency of diamonds.
As non-residents, the alien refugees were permitted by law to bring all
of their personal jewelry into the country without paying a customs
duty. But if they intended to sell any of the jewelry within a period
of three years from the date of their arrival, then the jewelry had to
be declared and duty paid on it.
There was, and still is, a provision in the law which allowed these
people to manipulate their jewelry and to take advantage of the lowest
customs rate in cases where they intended to sell the gems. They could
do this by removing the stones from their settings.
Gems imported in their settings automatically become subject to a 30
per cent duty, based on the total value of the gems and the settings.
But if the stones were separated from the mountings, then the importer
paid only a 10 per cent tax on the stones and a 30 per cent tax on
the mountings. Since most of the value of jewelry was in the stones,
the refugees were able to reduce the duty roughly 20 per cent by this
manipulation.
Americans travelling abroad today may take advantage of this law when
they bring home a fine piece of jewelry. They are permitted to separate
gems from setting and then have them appraised separately.
The flight of jewelry to the United States from Europe was great before
the war, but it was even greater in the years immediately following the
conflict. Pipino’s office handled a record-breaking 10,000 packages of
gems in 1947. And the rise in diamond shipments was a gauge of Europe’s
economic desperation.
In the postwar years, Europe’s economy was shattered. Factories were
in ruins. People were digging out of the debris of war to repair the
ravages of the long struggle. They needed money not only to rebuild,
but to survive.
Men and women took their gems from vaults, cupboards, and from secret
burial places and forwarded them to the United States to exchange them
for U.S. dollars. The demand for diamonds and other precious stones
was strong in the United States and prices were high. The flow of gems
became a flood.
The weakness of Britain’s pound sterling in the postwar years also had
a strong influence on the movement of diamonds. Countries with a large
accumulation of sterling were willing to give discounts of up to 10 per
cent on diamonds if the purchasers agreed to pay for them in dollars.
And in this juggling of currencies and discounts, diamonds were moving
about the world in strange patterns.
Diamond shipments would leave South Africa and go to Holland, for
example. There they would be re-addressed and shipped to the United
States so that payment could be made to Holland. Holland would accept
dollars in payment and transfer pounds sterling to South Africa. The
same thing was happening in Japan and other countries in the Far East
where the currencies were weak.
Black market operators also found ways to evade currency controls.
Some of them shipped their diamonds to Switzerland and then used that
country as their base of operations to take advantage of Switzerland’s
total secrecy in banking operations. In this manner they were able to
mask the origin of the diamonds.
Through the postwar years, the United States was the financial magnet
drawing jewels from all parts of the world. But as the economies of the
European countries improved with the support of American foreign aid
programs, the tide began to turn in the 1950s. The purchasing power
of the West Germans, British, French and Italians had improved to the
point where the flight of jewelry was from the United States to Europe.
The time had come when the baubles were more important to the buyers
than American dollars.
Despite the ebb and flow of the diamond trade, diamonds remain
one of the most tightly controlled commodities in the world. Each
diamond-producing country tries to police the production to maintain
price stability--since diamonds are an important means of earning
dollar exchange.
The Diamond Syndicate, based in London, each month allots the rough
diamond material to buyers in Belgium, Holland, Israel and the United
States. Each country’s share depends on the Syndicate’s appraisal
of what the world market will absorb without disturbing the price
structure. The list of dealers permitted to purchase the rough stones
remains relatively constant and there is rarely room for new members.
The tight monopoly held by the Syndicate has created a black market
supported by dealers who look to sources other than the Syndicate for
their merchandise. This market is called, in polite terms, the “open
market.” It also is the market of the underworld, operating illicitly
and in defiance of the Syndicate controls.
Liberia in recent years has become an important source of diamonds
for the “open market.” It is whispered in the diamond trade that all
of the diamonds which come from Liberia actually were stolen from
the neighboring diamond-producing country of Sierra Leone where the
production is controlled by the Syndicate. There are some who claim
these diamonds were mined on Liberian soil near the Sierra Leone border.
One enterprising European dealer years ago started a mail-order
business with individual diamond miners who would smuggle diamonds
from the mines and mail them to him at various post office boxes. From
a small beginning, these shipments reached the point where a $50,000
shipment was not uncommon.
This flow of bootleg diamonds has created a problem for Customs. The
illicit material cannot be officially acknowledged by the merchants
and no record can be made by the cutters in those countries where the
production is carefully policed. The result is that these diamonds find
their way into the hands of smugglers, who constantly are seeking ways
to slip them past Customs without payment of duty.
With the rise in popularity of the marquise and teardrop diamonds, the
demand for the emerald-cut diamond has waned. Cutters look for rough
material which can be shaped into the marquise, teardrop, or the round
diamond. The round stone has never lost its popularity and continued
year after year among the fashion leaders. The oval diamond fell from
popularity for a period of time but it, also, has staged a comeback.