Rothstein_ The Life, Times, And Murder Of The Criminal Genius Part 15

On Tuesday afternoon, June 12, 1922 twenty-seven-year-old motion picture actress Nellie Black arrived unannounced at the lower Broadway offices of E. M. Fuller & Co. Elegantly dressed, she wore perhaps $15,000 to $20,000 worth of jewelry. More importantly, she was almost hysterically irate. For an hour, she screamed to see the firm's senior partner, Edward Markel Fuller. Fuller, and his counsel Michael Delagi, a protege of Tammany chieftain "Big Tom" Foley, called police, claiming that Black threatened Fuller's life.

Miss Black carried no weapons, but Magistrate Charles Oberwager ordered her held without bail in the Tombs. In court Black told a story that began in 1915, when she met Fuller at the Knickerbocker Hotel cafe. Six years later, she sued him for breach of promise, seeking $30,000 in damages. On June 6, 1921, she met with Arnold Rothstein, who gave her $5,000 and promised $5,000 more-if she dropped her suit. She never received the second installment.

Judge Oberw.a.n.ger found Miss Black guilty of disorderly conduct and returned her to the Tombs, again without bail. She now finally grasped the power of Messrs. Fuller and Rothstein. Two days later, she again appeared before Oberwager. She vowed contritely never to annoy Fuller again. Oberwager suspended her sentence.

Nellie Black went away. Edward Fuller and Arnold Rothstein's troubles didn't.

E. M. Fuller & Co. had over a hundred employees in 1922, 10,000 clients (down from a recent peak of 16,000), offices in New York, Chicago, Cleveland, Boston, and Uniontown, Pennsylvania-and two known partners in Fuller and W. Frank McGee. McGee's major claim to fame was his recent marriage to Broadway musical comedy star, Louise Groody.

"Ed Fuller and Frank McGee . . ." observed Arthur Garfield Hays, one of their attorneys, "were a well-balanced but strangely a.s.sorted pair, with nothing in common except their strewing of largess, their love of gambling, and their partnership. To me they were likable roughnecks. Lacking in all moral scruples, they were ready to handle any racket which would bring in 'jack.' They completely ignored the suffering that might result from their activities; as long as they dealt with numbers on their books, rather than with people known to them."

Stated bluntly, Fuller and McGee were crooks. They were also very close a.s.sociates of Arnold Rothstein.

The pair had formed E. M. Fuller & Co. in 1914. In June 1920, federal authorities indicted them for mail fraud regarding stock in the California-based Crown Oil Company. In 1921 a new United States Attorney took office and never bothered to prosecute the case. Remarkably, E. M. Fuller not only survived, but prospered.

The market was good. America quickly recovered from the depression of 1919-20, and Wall Street initiated its wild ride through the 1920s. Fuller and McGee might have contented themselves with selling stocks in normal fashion, collecting commissions, and living moderately prosperous lives.

But that was no fun.

They specialized in deliberately selling bad stocks to good but greedy people, but not actually selling bad stocks. True, they dutifully placed orders and took checks, but they never bothered purchasing the securities in question. Instead, they pocketed their customers' cash and prayed as hard as such men could that their stocks decreased in value.

Ninety percent of the time, they guessed right-and when they guessed wrong, they had enough margin to cover mistakes. Brokerage houses, operating in this fashion-"bucket shops"-were not uncommon. Most belonged not to the New York Stock Exchange, but to the rival Consolidated Stock Exchange ("The "Little Board"). E. M. Fuller was the Consolidated's biggest house.

As long as the market behaved predictably, bucket shops had little to fear. But in 1922, the market unexpectedly enjoyed a very good year, and dozens of stocks Fuller picked to fail increased in value.

On June 26, 1922, nine days after Nellie Black's sentencing, E. M. Fuller & Co. unceremoniously collapsed-one of the biggest brokerage house failures of the postwar era. Gullible investors lost a total of $5 million. Numerous other shady firms, the Consolidated Exchange itself, and the entire bucket shop system collapsed in its wake.

The system had operated with the suffrage of the authorities, the authorities being, as usual, Tammany Hall, and the authorities being aided as usual, by Arnold Rothstein. "Big Tom" FoleyWilliam Randolph Hearst's old enemy-was the man to see at Tammany Hall. Hearst ordered New York American editor Victor Watson to have his top muckracking reporter, Nat Ferber, investigate Foley, Rothstein, et al.

Ferber had his work cut out for him. Save for bulging bank accounts, crooked politicians normally leave no paper trail. Neither would Ferber enjoy cooperation from Manhattan's new district attorney, Joab H. Banton, who owed his election to Foley. Banton wasn't particularly interested in pursuing Fuller and McGee-an investigation that could lead only to Foley.

Ferdinand Pecora served as Banton's first a.s.sistant. Pecora's family had immigrated from Sicily when he was five. He abandoned distinctly non-Sicilian plans to become an Episcopalian minister, out of consideration for his family's tenuous finances. Working his way through City College and New York Law School, he joined the prosecutor's office in 1919, becoming Banton's first a.s.sistant in 1922. Ferdinand Pecora was the jewel in the district attorney office crown-but Banton didn't like being reminded of it. Before Ferber approached Banton, he convinced his editor Watson to editorialize glowingly about Pecora-and how Pecora ran Banton's office. Only then did Ferber request access to E. M. Fuller's records. Normally, Banton would consult Pecora-and in this case, prudence dictated denying Ferber's request. But stewing over Pecora's favorable publicity, Banton blurted his a.s.sent.

Banton wasn't risking much. E. M. Fuller's records consisted largely of buy-and-sell orders, and Ferber's chances of finding anything significant were infinitesimal. Banton also knew that his staff had already picked the best stuff clean, depositing it in a locked file cabinet. Unfortunately, they had marked that drawer-ever so faintly-"District Attorney." Ferber spied the notation patiently, waited until he alone was in the room, and jimmied the file. He discovered dozens of checks from Fuller payable to fellow bucket shop owner Charles Stoneham, huge checks to Arnold Rothstein and, most amazingly of all, a $10,000 check to Tom Foley.

Foley tried talking his way out of it. n.o.body believed his story, but it had a nice ring to it. Generous soul that he was, Big Tom claimed to have lent the firm $10,000, out of friendship for Bill McGee's wife, who had grown up in his election district. "I didn't know the partners very well," Foley swore. "I am a fool, and I've been a d.a.m.ned fool all my life. But I was asked for help by McGee's wife. I have known her since girlhood.... I don't know the difference between bucket-shop, the Curb, or the Big Exchange. I only knew McGee's wife, Nellie Sheehan, and that she needed help."

Foley faced other questions: Why had he loaned E. M. Fuller & Co. an additional $15,000 when it began going under, and why had he never even bothered to receive a formal note in exchange? ("What the h.e.l.l good is a note? If you pull out, all right. If not, put it down as a bad bet.") He also needed to explain why and how he cajoled Charles Stoneham into pumping $147,500 of his money into the failing operation.

Nonetheless, Foley, battered and embarra.s.sed to be implicated in the swindle of thousands of families, escaped scot-free. He was too high-up, and Tammany remained powerful enough to save him. Hearst and Watson and Ferber realized that and went looking for other targets: Fuller, McGee, Stoneham, and Rothstein District Attorney Banton reluctantly indicted Fuller and McGee, who went into hiding, with accommodations provided by Arnold Rothstein. As it developed, Stoneham was a secret partner in E. M. Fuller and, in September 1923, was indicted for perjury for denying it.

Between August 1, 1916 and September 30, 1921, Rothstein collected $336,768 from sixty checks drawn on E. M. Fuller's accounts. Were they payoffs for services rendered with Tom Foley and Tammany? That would be hard-if not impossible-to prove. Or were they what Rothstein said they were-gambling debts?

Attorneys for E. M. Fuller's creditors took A. R. at his wordaware of his reputation as a "sure-thing" bettor. If they could prove Rothstein had cheated Eddie Fuller to win that money, it would be ordered returned to the firm's list of a.s.sets.

Some said that Arnold had, in fact, cheated Fuller with a variant of his old dollar-bill serial-number scan. Rothstein and Fuller would loiter outside Lindy's. Someone would suggest betting "odds" or "evens" on the license plate of the next Cadillac or Hupmobile to turn the corner. A. R. had a small fleet of vehicles-even a Mack truck-nearby, waiting to be summoned by prearranged signal.

But their big bets had been on baseball, and investigators were particularly curious about the 1919 World Series. In October 1923, attorney William M. Chadbourne, representing E. M. Fuller's creditors, grilled Rothstein regarding the Black Sox fix. Chadbourne asked a lot of questions and obviously had a lot of the answers. We will never know for sure which questions had real meaning-and which were mere fishing expeditions. But the resulting exchanges are A. R.'s most direct and detailed comments regarding the scandal. They are also the most authentic, surviving accounts of the Rothstein mind at work, of his att.i.tudes and arrogance. They bear listening to.

The double-crossing that began in 1919 continued long after the World Series ended. Not only did the Black Sox double-cross their fans, Attell and Sullivan and Rothstein double-crossed the Black Sox. Not only did Attell and Zelser and the Black Sox double-cross Bill Burns and Billy Maharg, Arnold Rothstein double-crossed Sport Sullivan. And Sullivan and Boston attorney William J. Kelly gained revenge by blackmailing Rothstein.

In their fascinating but little-known 1940 work, Gang Rule in New York, crime reporters Craig Thomson and Allen Raymond shed additional light regarding Rothstein's testimony. Among the many incriminating papers A. R. left behind were doc.u.ments relating to the World Series fix. Thompson and Raymond revealed: In a file marked "William Kelly" the delving authorities found papers showing that a Boston lawyer of that name had come into possession of four affidavits dealing with the Black Sox affair, and promptly filed a bill with Rothstein for $53,000. The four affidavits were by Abe Attell . . . , Fallon ... , Eugene McGee, Fallon's partner, and a Joseph Sullivan. Lawyer Kelly asked Rothstein for $53,000 for "legal services rendered." Rothstein paid him off, and got an unconditional release from Kelly, who later was indicted in Boston for blackmail in some other enterprise. Rothstein also regained the affidavits which told of his bribing the "Black Sox," and left them in his files.

That information goes a long way toward explaining otherwisemystifying exchanges between Referee Chadbourne and A. R. Chadbourne wanted to know. Their sparring began on general terms, but soon escalated to specifics. "Did Fuller or McGee put a bet on the World Series with you in 1919?" Chadbourne wanted to know.

"I do not recall," Rothstein responded blandly.

"Is that your answer?"

Again A. R. could not recollect, but later he answered quite astoundingly, "The only bet I made with Fuller on the World Series I lost." Chadbourne wanted to know if Rothstein honored that wager.

"Certainly-I pay my bets."

"I wouldn't be so sure about that," Chadbourne countered. "I've been looking up your record for some time ... "

"Well," A. R. counterattacked, "I've been looking up yours, too, and I'll stack up against you. So we're even at that."

Later, Carl J. Austrian (no known relation to Alfred Austrian), an attorney representing many creditors of these failed bucket shops, expressed chagrin at Rothstein's supercilious behavior: "Nothing is more outrageous than what we believed happened, and the conduct of witnesses in this proceeding."

"This baseball thing has been the sore spot in my career," Rothstein responded self-righteously. "I faced the Cook County Grand Jury in Chicago and got vindication."

Referee Chadbourne demanded to know: "Do you know a man in Boston named William J. Kelly?"

Rothstein wouldn't talk, didn't want to talk about Kelly. "What's that got to do with this case?" he snapped.

Chadbourne retorted that a witness couldn't pick-and-choose what questions to answer.

"Do I know him?" A. R. sneered. "Yes, I know him."

"He's an attorney, isn't he?"

"I know him as something different," said A. R. "I think he's a blackmailer, to tell you the facts."

"Did you engage W. J. Kelly to represent you in the Grand jury proceedings over the World Series in 1919?"

"You ought to be ashamed to ask me that," Rothstein spat back. "This is no place to ask that kind of question. You ought be ashamed. Before I'd be a tool like you are I'd jump into the Hudson River."

Despite such insults, Chadbourne bore on: "Did you have any conversation with W. J. Kelly with respect to the Chicago-Cincinnati series of 1919?"

"I never had any conversation with Mr. Kelly regarding those games," A. R. lied. (He later admitted that he had met him in Chicago in 1921 and had once spoken to him on the phone.) "I never spoke to him but once in my life. That ought to stop all your silly questioning."

The sparring continued as A. R. commented superciliously, "I am just answering those questions to please you. How can a man refrain? It's an absolute outrage."

Q-"Did Fuller place any bets with you on the world's series in 1919?

A-I don't remember whether he did or not....

Q-And do you know J. J. Sullivan of Boston, commonly called "Sport" Sullivan?

A-Yes, I know him too.

Q-Now don't you know you had a conversation with Kelly about representing you and Attell and Sullivan during the Chicago investigation?

A-Absolutely not.

Q-Did you have any conversation with William J. Fallon regarding his representing Sullivan, Attell, and yourself?

A-Absolutely not, I'm not going to answer any more such questions.

Q-Isn't it a fact that you paid William J. Fallon $26,000 to represent you in those proceedings?

A-No, positively no.

Q-Sullivan is known as one of the great handicappers in racing circles in this country, is he not?

A-He wants me to tell him something, is that it? [The referee ruled Rothstein did not have to answer questions about Sullivan being a handicapper.]

Q-You actually did place bets, including one with Fuller, didn't you?

A-That hasn't anything to do with this case, and I refuse to answer it.

Q-What do you know about a handicapper?

A-I'm not going to answer. I don't know anything about it. I'm in the insurance business. I'm not a gambler.

Q-You seem pretty well informed.

A-Yes, and you do too.

Q-I've been following your career pretty closely.

A-And I've been following yours, too.

Q-Do you not know that Sullivan doped out percentages on races, c.r.a.p games, etc.?

A-I refuse to answer. What has that to do with this case?

Q-Did you bet with Fuller on the result of the world series in 1919?

A-Yes, I had one bet, and Fuller won that.

Q-[By Referee Coffin]: Did he get his money?

A-Sure he did. I always pay my bets.

Q-[By Chadbourne]: Didn't you consult Sullivan regarding the world's series of 1919 with respect to the various games so as to be in a position to determine what odds should be placed?

A-I don't remember. That's too far back. It's a silly question.

Q-You refuse to answer?

A-Yes, on the ground that it has no bearing on the case.

Q-Didn't you consult "Sport" Sullivan as to the way bets should be placed on the World Series?

A-You don't know what you're talking about. What's that got to do with the case of Fuller a.s.sets whether I consulted him or not?

Q-As a matter of fact, you were represented at the hearing [the Cook County Grand Jury] by William J. Fallon and Kelly?

A-I have no attorney.

Q-Isn't it a fact that you had a conversation with Sullivan prior to the series of 1919 with respect to that series?

Again, Rothstein didn't want to answer. Referee Coffin instructed him to. He still refused: A-I wouldn't answer at all, as it has no bearing on the case.

Q-Did you have a talk with Attell about seeing Sullivan regarding the series of 1919?

A-No.

Q-Did Attell report to you any conversation he had with Sullivan regarding that series?

A-Absolutely not. I really shouldn't answer those questions and only do it to please you, Mr. Chadbourne.

Q-I want to be fair with you.

A-You don't want to be fair with me. That's the last thing in your mind. You wouldn't know how to be fair if you tried.

Q-Didn't Attell report to you that because of the nationwide [sic] interest in that series the results would be determined and millions might be made?

A-[Angrily] I'm not going to say "yes," or "no." This has got to be a joke.

Again Referee Coffin demanded that A. R. answer Chadbourne's questioning. Again Rothstein refused, saying it had no relevance: Q-Did Abe Attell in 1919, prior to the world's series, repeat any conversation with Sullivan?

A-No sir.

Q-Did you know Bill Burns, a former ballplayer?

A-He knows whether I do.

Chadbourne repeated his question, and Rothstein deigned to answer. "He introduced himself to me one night and I insulted him by telling him I did not want to know him, if you call that knowing him. I'd like to know who's paying you to ask me these questions."

Chadbourne ignored the jibe, now demanding to know if A. R. could recall "another meeting in the Hotel Astor in 1919 with Abe Attell and Sullivan to discuss the world's series."

"I'm not going to answer that either because it hasn't anything to do with the case."

"Isn't it a fact," Chadbourne continued, "that at that conference proper percentages on bets on the world series were doped out?"

"I'm not going to answer because it has no bearing on the case."