would. The Customs people were courteous. Mrs. Schmidbauer’s luggage
was examined by Inspector Abe Pokress. He did not ask to see the
contents of her handbag after she told him it contained only personal
belongings. And he inquired amiably about her voyage.
“It was a wonderful trip,” Mrs. Schmidbauer said, watching Pokress’
hands move swiftly through her belongings.
She was immensely relieved when Pokress told her she could close her
luggage. She quickly strapped the bags shut. The luggage was placed on
a handcart by a porter and Mrs. Schmidbauer thanked Inspector Pokress
for his courtesy.
But when the handcart was rolled beside an electronic detection device,
Pokress saw a warning light begin to blink. The light indicated
the luggage contained a quantity of metal--and Mrs. Schmidbauer’s
declaration did not list any metal objects, nor had the casual
examination revealed any.
Pokress ordered the luggage returned to his station. He asked Mrs.
Schmidbauer to open the bags once more.
“What is wrong?” Mrs. Schmidbauer demanded. “You have inspected the
suitcases. Why am I being detained like this?”
“You aren’t being detained,” Pokress said. “But I’m afraid we must take
another look at your luggage.”
Pokress began to make a thorough examination of the contents of the
smaller of the two suitcases. He was unable to find anything which
could have caused the electronic device to trigger the alarm signal.
Mrs. Schmidbauer stood watching the search with tears welling in her
eyes. She made no further protest as Pokress removed the clothing
from the bag and began to measure the inside depth of the suitcase
against its outside depth. The measurement disclosed a discrepancy of
approximately three-quarters of an inch.
Pokress was reasonably certain the suitcase had a false bottom. He
placed the suitcase on a small platform between two metal cabinets
standing nearby. The cabinets housed an X-ray device called an
inspectroscope, which Customs inspectors and agents frequently used in
peering into luggage and boxes suspected of containing contraband made
of metal.
Pokress opened the door of one of the cabinets and squeezed into a seat
before a small screen similar to a fluoroscope. He turned a few dials
and switched on the X-ray. And then on the screen appeared in clear
outline the metal fastenings, screws and other hardware used in the
construction of the suitcase. In addition the screen showed several
rectangular metal objects in the bottom of the suitcase.
Pokress switched off the inspectroscope and emerged from the cabinet.
He had Mrs. Schmidbauer taken to an inspection room. And there
inspectors discovered that both her suitcases had false bottoms which
concealed several thin tin containers. The containers were packed with
759 Swiss watch movements.
A woman inspector led the weeping Mrs. Schmidbauer into a room where
she was searched. It was found that she had 167 watch movements
sewn into her corset and 26 movements in her handbag. The 952 watch
movements were estimated to have a wholesale value of more than $10,000.
Mrs. Schmidbauer tearfully told Customs agents of being approached by
Moritz in Munich. She told them of his offer to pay her fare to the
United States if she would bring the watch parts through Customs hidden
on her person. She said that he told her he had put something in the
suitcases but he did not tell her what it was and she did not know that
there were watch movements hidden in false bottoms of the luggage. She
also told of the arrangement whereby she was to send a message to her
husband if all went well.
It was obvious to agents that Mrs. Schmidbauer was only a dupe in the
smuggling plot. Mrs. Schmidbauer was asked to cooperate in trapping
Moritz’s accomplice. She quickly agreed.
Mrs. Schmidbauer dispatched a cable to her husband saying, “Gut
angekommen.” Then two agents, Harold F. Smith and Abraham Eisenberg,
accompanied Mrs. Schmidbauer and Mrs. Obermaier to Mrs. Obermaier’s
apartment to await the call from Moritz’s accomplice.
They did not have to wait long. Mrs. Obermaier received a call from a
man who identified himself as Hans Berger. Berger said, “I understand
Mrs. Schmidbauer is visiting you and that she has something for me.”
Mrs. Obermaier said that Mrs. Schmidbauer was ill and could not talk to
the caller herself. She added that she did have something for him if he
would call at the apartment the next morning at ten o’clock.
The agents were hidden in the apartment the following morning when a
knock came on the Obermaiers’ door. Mrs. Obermaier opened the door and
a man stepped in.
“You are Hans Berger? You called yesterday?” she asked.
The caller said, “Yes. May I see Mrs. Schmidbauer?”
Mrs. Obermaier invited him into the living room. She asked him what he
came for and who had sent him.
Berger said he was sent by “Moritz.” He handed her a slip of paper
which said, “Dear Mrs. Schmidbauer--I hope you arrive safely in New
York. I beg you to be kind enough when you receive this piece of paper
to turn over the things. Best regards, Your Moritz.”
At this point the agents stepped from hiding. Questioning of Berger
convinced the agents that he had called to pick up two suitcases and a
package from Mrs. Schmidbauer without any knowledge that he was getting
involved in a smuggling plot. He thought he was merely doing a favor
for his friend, Moritz, who would show up later to claim them.
But Moritz never showed up in New York. Berger was not prosecuted, and
Mrs. Schmidbauer was given a six-months suspended sentence.
* * * * *
One of the largest smuggling rings dealing in Swiss watch movements
was broken up by customs agents in 1956 on a tip received from customs
officials in Germany. This ring involved a foreign shipping firm
working with an American importer, an American shipping official, and a
dishonest customs broker in New York.
This case began to develop when four packing cases of roughly the
same dimensions arrived in the foreign trade zone in Germany from
Switzerland. Two of the cases, documented as containing camera tripods,
were consigned to a firm in the United States. The other two cases were
documented as containing 4,488 Swiss watch movements.
A German customs officer became suspicious when he saw two men
transferring the watch movements from their original cases into the
cases marked as camera tripods. The Customs officer made no move at
that time to interfere with the transfer of the merchandise, but he
notified his superiors and an investigation was begun. The Germans at
that time believed that it was an effort to avoid payment of German
customs. When they realized that the transfer was being made as part
of a scheme to violate American customs laws, the U.S. Customs agent
stationed in Bremen was informed of the facts in the case. These facts
were forwarded to agents in New York, who were alerted to be on the
lookout for the arrival of the boxes labelled as carrying “camera
tripods.” Several days later a German customs official advised the
Customs agent in Bremen that the two suspect boxes, marked IH74 and
IH75, were being shipped aboard the SS _Black Falcon_ manifested as
camera tripods valued at $200.
The SS _Black Falcon_ arrived at the port of New York on January 23,
1956, and docked at the Smith Street Pier in Brooklyn. Customs agents
kept the two boxes under surveillance. They were watching as the boxes
were moved from the pier by a trucker to a warehouse. Agents hidden in
the warehouse saw the trucker and the broker switch the watches from
the cases and replace them with camera tripods.
Had this scheme succeeded, the chiselers would have paid duty on camera
tripods valued at $200 rather than on watch movements valued at more
than $50,000.
* * * * *
Stephen Schrieber of New York City was one of the cleverest of the
chiselers. He was a tall, thin, balding man in his middle years who was
engaged in the import-export business. Customs had no reason to suspect
Schrieber of wrongdoing until agents got a tip that he was smuggling
gold out of the United States, selling it on Europe’s black market, and
then smuggling diamonds into this country.
On April 29, 1952, Customs agents learned that Schrieber was preparing
to make another trip outside the country and that he had booked passage
for Cherbourg, France, aboard the SS _Queen Mary_. Schrieber also had
arranged to export a car on the _Queen Mary_ as “accompanying baggage.”
After Schrieber delivered his car to the pier to be taken aboard the
liner, agents made arrangements to examine the vehicle, a 1949 Pontiac.
The examination began at approximately 4 P.M. They searched the car for
ninety minutes without finding any contraband.
At last one of the agents said, “Why don’t we weigh the car and
check its weight against the Blue Book weight that is listed by the
manufacturer.”
With the cooperation of Customs inspectors and Cunard Line officials,
the car was removed from Pier 90 to the scale house at Pier 84. The
automobile Blue Book listed the Pontiac as weighing 3375 pounds. But
when it was put on the scales, it registered 3840 pounds. There was
a discrepancy between the listed weight and the actual weight of 465
pounds. It was obvious that something was concealed somewhere on the
vehicle and that the hiding place had not been discovered.
The car was then moved back to Pier 90 and driven to a service station
at the corner of 51st Street and Eleventh Avenue. It was run over a
grease pit in order that the searchers could take a better look at
the underside. One of the searchers began tapping the gas tank of the
Pontiac and then tapping gas tanks on other automobiles in the station
to compare the sound. He called to an agent, “There’s something wrong
with this gas tank. It doesn’t sound like these other gas tanks when I
tap on it.”
With the help of service station personnel, the searchers removed the
gas tank. As soon as it was loosened from its fastenings, they knew
that they had discovered hidden contraband: the gas tank was so heavy
that it took the combined efforts of four men to lift it out of the
grease pit. It was specially built of heavy steel.
Inside the gas tank, the searchers found a cleverly concealed
compartment which contained thirty-three individually wrapped packages
of gold bullion, valued at $110,000.
Apparently Schrieber became suspicious that he was suspect or he was
tipped that the gold hoard had been discovered. At any rate, he did not
show up as a passenger before the Cunard liner sailed. He was reported
to have fled from the United States on a phony passport. After that, he
was reported variously in Canada, in South America, and in Europe.
* * * * *
Saul Chabot of New York City was also one of the chiselers. Chabot was
a slender, middle-aged man with graying sandy hair and bushy eyebrows
who had built up a large-scale business in used rags. But the profits
from his rag business weren’t enough for Chabot--and he decided to
expand his operations into gold smuggling.
Chabot might well have smuggled a fortune in gold from the country had
it not been for the alertness of Matthew Jake Berckman of Jersey City,
New Jersey. Berckman had joined the Cunard Line’s police force in 1937
and he had remained on this job until 1947, when he was employed as a
pier checker, checking automobiles to be shipped abroad.
On February 15, 1951, a 1950 Buick sedan bearing a New York license
drove up to the pier where Berckman was checking the cars to be taken
aboard the _Queen Elizabeth_, which was sailing for Cherbourg. The
driver of the car identified himself as Saul Chabot. He showed Berckman
his contract receipt for shipment of the car aboard the liner. He
turned over his keys to Berckman, who assured him that the automobile
would be handled carefully.
Berckman told Chabot to remove the cigarette lighter and the contents
of the glove compartment and to lock the articles in the automobile’s
luggage compartment. When Chabot opened the compartment, Berckman saw
there was nothing inside except tools and a spare tire.
He also noticed that although the compartment was virtually empty, the
car looked as though it were heavily loaded because it sat low in the
rear.
As they were talking, there was a banging from underneath the car. A
longshoreman was having difficulty removing the tap from the gasoline
tank. Chabot seemed extremely nervous and said, “What’s the matter?
What is he doing?”
Berckman replied, “He’s loosening the tap on the gas tank. We can’t
take a car aboard the ship until the gas tank is empty.” Then he added,
“This is a very heavy car, isn’t it?”
Chabot said, “Yes, these Buicks are very heavy.”
Berckman gave Chabot his receipt. He told him that he would look after
his car and he need have no further worry. But Chabot said, “Well, I’ll
stay and see that he gets the gas out all right.”
Chabot remained until the gas had been drained from the car and then
he walked across the street. Berckman noticed that Chabot hung around
for another fifteen or twenty minutes watching his automobile. It was
Chabot’s nervousness which aroused Berckman’s suspicions. He decided to
inspect the other cars and to show no further interest in Chabot’s car
as long as he was around.
After lunch, Berckman went back to Chabot’s automobile to look at it
more closely. He saw what appeared to him to be a new welding on the
inside of the trunk near the rear fenders. The welding was odd because
the car did not look as though it had been in a collision. There was
no sign of any damage to the front or rear of the car and the original
paint was unmarred.
Berckman went to the office of Customs Inspector Howard Walter and
reported his suspicion that the car had been tampered with and that it
might be loaded with contraband. Inspector Walter dispatched Inspector
Mario Cozzi and James P. Dalton, along with three port patrol officers,
to investigate.
The preliminary examination revealed nothing unusual about the car
except that it did seem to sag heavily on the rear springs and there
was no apparent explanation for the welding near the rear fenders.
Cozzi began rapping on the sides of the car with his knuckles. It
seemed solid enough until he rapped on the body just above the rear
fenders--and then the rapping gave forth a hollow sound.
“Let’s unbolt one of these fenders and take a look,” Cozzi said.
Three bolts were loosened near the left rear door post. The fender
was pried away from the body far enough to reveal a piece of gray
cardboard. When Cozzi poked into the cardboard with a screwdriver, he
could see it covered a package wrapped in heavy black cloth.
The fender was removed and the searchers found that it concealed a
secret compartment containing several parcels--all of them packed with
sheets of gold. Two secret compartments yielded eighty-two packages of
gold valued at $171,197.
Customs agents were alerted. They kept Chabot’s apartment under
surveillance. They were following when he and Mrs. Chabot left the
apartment at 9:30 A.M. enroute to Pier 90. The couple boarded the
_Queen Elizabeth_ and went to their cabin, D291. And it was there that
agents questioned Chabot.
Chabot protested that he knew nothing of any gold hidden in the
automobile. He claimed that two weeks earlier a man he knew only as
“Carl” had given him $1,900 and told him to go to a used car lot and
buy a certain automobile. Chabot said he bought the car for $1,750 and
that he turned it over to Carl. Then Carl had brought the car back to
him and he had delivered it to the steamship line without any knowledge
that the gold had been hidden behind the fenders.
Chabot’s story was not very convincing. He was tried and found guilty
on a charge of smuggling and was sentenced to five years in prison.
As for Matthew Jake Berckman, the car checker whose suspicions led to
the gold seizure, he was given a reward of $16,119 by the government
for his alertness.
* * * * *
Unfortunately, the chiselers sometimes have been found in the
ranks of Customs employees. The bad ones have been the exception,
but occasionally there have been those who were tempted to make a
racket of their places of trust. In one such case an importer of
Italian-made men’s wear built up a booming business with smuggled
merchandise--acting on the advice and with the connivance of Customs
inspectors who drifted into a conspiracy which wrecked their careers.
Giuseppe Battaglia, an enterprising merchant of Milan, Italy, had not
the slightest intention of entering into a smuggling operation when he
first arrived in the United States in 1952 seeking a market for silk
ties, robes, sweaters, pajamas, shirts, scarves, and other men’s wear
and accessories.
Battaglia operated a retail haberdashery in Milan which was popular
with American tourists, Hollywood movie celebrities, and businessmen
who liked the distinctive and expensive Italian styling. Business was
so good that the darkly handsome Battaglia decided the time was ripe to
develop outlets for Italian-made merchandise in the United States.
He arrived in New York in February, 1952, after making arrangements
to act as sales agent for three firms manufacturing ties, gloves and
scarves. He was to pay all expenses and receive a straight 15 per cent
commission on sales in the United States.
Battaglia had no difficulty in finding a market for his merchandise.
Sales of Italian-made clothing and accessories were increasing
throughout the country. Business was so promising, in fact, that he
expanded his line of men’s wear and became agent for such respected
and well-known Italian houses as Galliene, Ratti, Salterio, Longhi and
Caelli. He opened an office in the Empire State Building (later moved
to 15 West 37th Street) and took a partner, Domenico Guarna, into the
business. The partnership arrangement permitted Battaglia to travel
throughout the country calling on retail outlets. He also was able to
return to Italy on buying trips while Guarna looked after the New York
end of the business.
On each return trip from Italy, Battaglia listed on his declaration the
samples of silk materials and other merchandise he was carrying with
him. He paid the required duty without question.
The partnership of Battaglia and Guarna operated honestly and
aboveboard, Customs files show, until January 18, 1954. On that day,
Battaglia arrived in New York harbor aboard the SS _Vulcania_. He
handed over his declaration to Inspector Benjamin Danis, who was
a short, pudgy man who soon impressed Battaglia as an extremely
courteous and helpful officer. Danis made only a casual inspection
of Battaglia’s trunks and luggage, which was not unusual on this
particular day because the inspectors’ instructions were to make only a
spot check of travellers’ baggage.
After clearing all the baggage, Danis hinted amicably that if Battaglia
had not listed the samples of merchandise on his declaration, he could
very easily have overlooked them and there would have been no need to
pay the duty.
“Is that so?” Battaglia said in surprise. “I was told to list
everything.”
Danis grinned. “It’s simple if you know the right people.”
Battaglia reached into his pocket and pulled out a business card. “Take
this card and drop around to see me at my place of business,” he said
to Danis. “And would you give me your name and address? I would like to
send you a few Italian ties as a gift. You have been very courteous.”
Danis gave Battaglia his name and address. “I’ll be around to see you,”
he said. “I can give you some tips that will help you in clearing
Customs.”
A few days later, Danis visited the shop of Battaglia and Guarna and
chatted with the partners for several minutes about the problems of
Customs clearances. Battaglia asked him to take his choice of several
expensive Italian ties. But after Danis selected them Battaglia
realized that Danis expected more than a gift of ties. He handed him a
$20 bill, which Danis accepted.
As he stuffed the bill into his pocket, Danis said, “Let’s get down
to business. If you will let me know in advance when you or your
representatives are arriving from Europe, I can arrange to handle the
inspection of your baggage. I won’t ask any questions if all your
merchandise is not listed on the declarations.”
Battaglia said, “But what if we arrive and you are sick--or for some
reason can’t handle the inspection?”
“That’s no problem,” Danis said. “If I can’t handle the inspection
myself, then I’ll arrange for someone else to do it.”
“What if we’re caught bringing in merchandise which is not on the
declaration?” Battaglia asked.
Danis laughed. “The worst that will happen to you is that you’ll have
to pay the duty. So what have you got to lose?”
It seemed so simple to the partners that they decided to give it a
try on the next trip that Battaglia made to Italy. If Danis could
arrange the clearance of sample merchandise so easily, then it was
reasonable to assume he would have no difficulty with larger shipments
of merchandise as well. If they could save the payment of duties, then
the partnership’s profits would rise in spectacular fashion.
A few days after this conversation, Danis returned to the office of
Battaglia and Guarna, accompanied by Customs Inspector William Lev, a
tall, fat man with a swarthy complexion. Danis advised the partners
that Lev was a man they could trust. He said in the event one of them
should arrive in New York and he, Danis, was not available to help them
through Customs, then they could depend on Lev to help them just as
they could depend on him.
Battaglia returned to Italy in June, 1954, on another of his buying
trips. He remained there until January 17, 1955, when he returned to
the United States aboard the SS _Andrea Doria_. Prior to his arrival,
Guarna telephoned Inspector Danis and advised him of the time of
Battaglia’s arrival.
Danis was on the pier when Battaglia walked from the ship, and he
handled the examination of his baggage. The examination and clearance
proceeded smoothly. None of the samples which Battaglia brought from
Italy was listed on his declaration. And there was no reason why Danis’
perfunctory inspection should have aroused the suspicion of any other
inspector because again that day the inspectors had orders to make only
a spot check of the travellers’ luggage. On some days, the inspectors
were required to inspect all luggage. On other days only spot checks
were ordered.
In testing the scheme proposed by Danis, Battaglia carried merchandise
valued at something over $1,000, on which the duty would not have
been more than $300 even had he declared the imports. He took the
merchandise from the pier to the office on West 37th Street, and
shortly thereafter Danis appeared to receive his payment. Battaglia
gave him $100 in cash.
Both Battaglia and Guarna were elated over the discovery that they
could bring merchandise into the country so simply without the payment
of duties. They began planning to bring even greater quantities of
merchandise from Italy on future trips.
In the months that followed, Battaglia and Guarna brought from Italy
trunks packed with expensive men’s wear which they were able to slip
through Customs without the payment of duty. When unable to make a trip
themselves, they arranged to have acquaintances and relatives bring the
merchandise. In each case, there were prearranged inspections, with Lev
having taken over the inspection end of the operation.
Inspector Theodore Rider, a tall, long-nosed, sallow-faced man, became
involved in the operation quite by accident. On one of his many
trips, Battaglia was standing on the pier waiting for Lev to make an
inspection of his baggage when Rider approached and asked if he could
help with his clearance.
“Thanks,” Battaglia said, “but Inspector William Lev is a good friend
of mine and I’m waiting for him to handle the clearance. He’ll be along
shortly.”
Rider said, “Whatever Lev can do, I can do.”
“Well,” Battaglia said, “go easy on the examination, will you?”
Rider took only a casual look at a couple of small suitcases and then
stamped all the baggage for clearance. For their cooperation in this
case, Rider received $100 and Lev was paid $300. Battaglia and Guarna
saved $6,185 in duties.