Evening Star Newspaper, September 22, 1935, Page 54

" F4 THE SUNDAY STAR, WASHINGTON, D. C, SEPTEMBER ea 29 sy 1935—PART FOUR. SCIENCE ENTERS MODERN COUNTERFEITING BUSINESS Secret Service Kept on the Jump W Tracking Do wn Expert En- gravers IWho Lent Their Tal- ~n ents to Outlazv “Bum” Bills O By Mae POST-MORTEM examination, L of a s of its re-| ning dregs, shows that despite the fact it is legally buried, the slimy traces it 10t be rubbed out for many kidnaping, robbery eiting, we now learn, were fostered under this amendment. True, perhaps, r of this would not have had there been .no bootleg- here was. In stating that e of counterfeiting has a| relation to bootlegging the d States Secret Service bases opinion on some well-founded conclusions. Doubtlessly, a measur- | able share of the increase can be at- | tributed to depression, since all crime | tends to increase along with non- | Gangs Passing ver the Counter. Joseph. purchased. In true business fashion the maker, the jobber, the wholesaler and the retailer have their places in the production and consumption of counterfeit money. The maker gets his per cent of profit (in real money) and so does each man who forms a link in the chain. The task of the Secret Service is more difficult today, since present counterfeit money is more deceptive than the old. There are no mis- spelled words or wrong spacings, as the first plates are done by photography. Even genuine paper is used in making notes of large denomination. This is obtained by bleaching, with chemical process, all the print from the note leaving the paper clear and white, and upon this paper the larger figure is v held up to the light it gave a convinc- | one and lettering in a 10 is still em- | agents they took $1,214,000 in coun- ing resemblance to genuine bills. How- ever, in our new small bills the silk | threads are scattered throughout the note. FXGURES of the Secret Service show that the practice of raising notes has decreased, so that in the fiscal year of 1934 they were only one-third of what they totaled in 1931. There is a definite reason for this—the issu- ance of the new, small notes. In fact, one of the chief reasons for the change in size of bills was to make it Frusmrom times, but an insight into|printed. In the days when the larger | safer for the public. The Government he workings of the bootlegging racket | bills served as United States currency | saw that there were too many differ- pla; became a natural sideline. nefarious occupation and in the months of May, June, July and August | of this vear huge counterfeit gangs | have been rounded up and convicted. | tween and paste them together. When | To begin with, bootleggers were | soon confronted with the necessity of concocting their own compounds when old whiskey stocks ran out.-and, sim- ilarly, to affix fake labels to give them | the genuine appearancé, With boot- legging proving so profitable, the con- | spirators could well afford to pay big | prices, which proved too great a | temptation for printers and engravers | who heretofore had no reason or de- | sire to be law-breakers. Looking back and remembering how people were | either so easily deceived or else so eager to believe in the deception, one | can readily imagine swindlers being encouraged to contrive further ideas ! for growing rich on so naive a public. ‘The result was that many a person + ot only handed over legitimate money | for fake liquor, but in addition received | counterfeit money in change. The | {fact that most of such transactions | were carried on under cover of dark | made the whole thing a simple matter. T THE time of prohibition repeal, in 1932, counterfeit cases had risen to 2,139 as compared to 663 cases in 1925. By this year the figure has| «reached 3,003. The United States Becret Service Bureau of the Treasury Department, charged with the duty of combating counterfeiting, points out that tois continued increase is due to the fact that many persons engaged in bootlegging were thrown out of work at the time of repeal and so con- eentrated their efforts on counterfeit- ing. Records of the bureau showing that a great percentage of counter- feiters have a past record for illegal 11quor operations substantiate this con- clusion. Joseph E. Murphy, acting chief of the Secret Service, went fur- ther and gave an example of how in New York City alone approximately | 200,000 men were thrown out of jobs when speakeasies were closed. “Many of these were young men,” continued ‘Mr. Murphy, “and they had become accustomed to this easy way of making money, so that when they suddenly had no employment naturally they awvould be seeking another easy means to get money.” ‘Smith, Boyd, White and Ulrich, with fheir steel engraving methods, and | stuch old artists as Jim the Penman, | who worked by hand, soon became small-timers as compared with this new crop of swindlers, who made & bustling business out of the racket. In today'’s methods, photo-mechanical processes are employed. Expert me- chanics are hired, expensive equipment including fine printing presses, photo- electric plates, dies, die-stamps, cost- $& many thousands of dollars, are A a bill on one side of a thin piece of paper, the back plate on another piece and then place the silk threads be- inly shows how counterfeiting first | two heavy lines of silk thread appeared | ent kinds of old bills, so that it was n Now it has | in them. Then it was easy for coun- | not strange if a person overlooked a assumed the position of a full-time | terfeiters to print the front plate of bogus bill. At the same time, it was also decided to make certain portraits peculiar to one denomination only. Since the practice of pasting “10" | corners on $1 bills or painting out a ployed, it is wise to learn to associate the portrait with the bill it appears on ‘You might make note of this: All $1 bills bear Washington's portrait, all $2 bills bear Jefferson's, $5 bills bear Lincoln’s, $10 bills bear Hamilton's, $20 bills Jackson's, $50 bills Grant's, $100 bills Franklin's, $500 bills Mc- | Kinley’s, $1,000 bills Cleveland’s, | $5,000 bills Madison’s, and $10,000 bills bear Chase’s portrait. | To the credit of the United States | Secret Service, with its small personnel | consisting of only several hundred | agents (exclusive of those who guard the President, for this is another duty with which this bureau is charged) it has been able to keep pace in con- victions with the increase in the num- | ber of counterfeiters. In 1928 agents seized $140,000 in counterfeit notes and in 1934 (fiscal year, ending June | 30, 1935) with the same number of | terfeit notes. In many cases Secret Service agents have been able to catch counter- feiters before they have sent any notes into circulation. In June of this year they succeeded in apprehending a would-be swindler before he had even produced a single note. This man's hideout was in Fostoria, Ohio, where his complete counterfeit plant was captured, together with negatives, zinc and copper plates and several proofs printed from plates making $5 United States notes, $5 silver certificates and $5 notes on the Federal Reserve Bank of Cleveland, Ohio. This offender was sentenced to two years' imprisonment, but was put on probation. “7HAT was proabbly the most im- portant counterfeit arrest of the past year pccurred on May 10, when a nine-year trail of the internationally famed “Count” ended at a dusty locker in the Times Square, New York City, subway station. In view of Victor (“the Count”) Lustig's colorful past his capture was noticeably lacking in drama for a grand finale, but he was too slippery for agents to employ any ordinary methods of apprehension Federal agents had been watching him closely for seven months before the capture, but the watchword was “Don’t pinch him too soon,” lest a premature arrest might find his pockets devoid of evidence. The “Count” never passed any spurious money himself. He merely printed as much as he wanted and sold it to “passers” at the rate of $5 in fake money for $1 in genuine currency. Lustig paid all his hotel bills and shop bills with real money. Agents re- ported that he was very frugal with his money, never making showy splurges, that he never was known Upper, left: House near Ossining, N. Y., where Federal agents seized a counterfeiting plant last March which they believed had been flooding the country with spurious “tens” and “twenties.” Top, center: Where the real money is made . . . workers sorting newly printed bills at the Bureau of Engraving and Printing. Upper, right: The United States Treasury, headquarters of the Secret Service (Harris & Ewing). Robert L. Godby, head of the Syracuse office of right: Center row, from left to the United States Secret Service, questioning three alleged counterfeiters; Capt. Thomas Callaghan of the Chicago Secret Service unit with a money seized in his area; a half million dollars of fake money-printing plant seized near New York City; bringing “honest” silver dollars to the United States Treasury Lower, left: vaults (Wide World photo). Capt. William H. Houghton, newly ap- pointed head of the Secret Service in Philadelphia. Lower, right: as the proverbial hand-kissing bogus “Count.” but instead assumed the role of a quiet, reserved nobleman. Lustig was trailed by agents to breakf: lunch and dinner, to theater and ni club and many times to the finest Park avenue homes. In fact, he had at least a bowing acquaintance wit the best people. Agents merely cor tinued to observe, until one day evi- cently the “Count” became suspicious and hastily packed his belongings and left the hotel. He was trailed to a cigar store. There his grips were seized and on examination revealed nothing but silk underwear, fine shirts and other expensive apparel. In hi only $75 in genuine money was fot but there they also found the I key which finally led the investiga- tors to the locker box in the subway and the $50,000 in bogus bills. Agents were greatly relieved to learn that here was the originator of the bills that had caused much apprehension be- JOHN Ll.gmuvm » ATRe A SEPT-24-~ 804:] ¢ EMEMGER HOW HARD )\ SCHROOL HOME WOrR HOW MELANCHOLY YOL WERE FOR SEVERAL DAYS TRYING TO THOSE WERE THE HAPPY DAYS! DOGGONE" “THIS TIME LAST WEEK | O\'ONT CARE HuRRY WITH Your LES “SONS, ELMER ANYTHING ABOOT PINTS, QRULARTS OR GALLONS, ALL | HADA DO WAS SWIM, PLAY BALL AND GETOP WHEN \ Gov READY S/ " WAS To GET YooR MIND ON YOUR FIRST W AND FIGURE OLT —THE SQUARE ROOT IN SOMETHING O HOW MANY GILLS IN A QLUART ,AND “THEN EVERY ~THING BECAME CLEAR TO YOU AN LY CHOOL DAYS WERE HAPPYDAYS AGAI ¢ -—/:&w;as <O BE =7 (CEMEMBERS = ( WHEN LIFES SER-! =100 TRAGEDY —\ SENT HOME EROM SCROO! For ANOTE 1 0 0 N > N?@ TA S k > TALLAODET gogfl()S s 05( \ié‘o e@e X \ A e ENTRANCE ACRDEM ; WHAT DO YOU REMEMBER “The Melancholy Ones” '—By DiCk ManSfield THE Leve ,, To SEE “The oAoTo AT 20N S > QNSWER YO LAST WEEKS QRUESTION HERE IN WASHINGTON WAS SCOTLAND SITUATED 7 JARD ONCE ONSWER, TRACTOF LAND SUST, NORTH | OF TAE O.5.CAPITOL OWANED ) G CAPT. ROBERT, “T(ROOPE. PHEARY A fully equipped counterfeiting plant raided in Toledo, Ohio (Photos by A. P.). cause they were an almost exact re- on of genuine ones, even to ik thread that is so difficult t ng to ager the best counterfeits ever made in the United States. been practiced in the last few for other frauds rior to that he al fortunes with a achine which took in the greedy of both upper and lower stratas of society. One of his victims was an Italian fruit peddler who paid $10.000 for the marvelous device. The money-making machine was supposed to turn out two “perfect counterfeits” for every real bill fed into it. In demonstrating it the “Count” used real, fresh money. He placed one bill in a secret com- partment of the machine before begin- ning its demonstration and it would come rolling out before the amazed eye of the buyer. So cleverly was this managed that even a group of New York gamblers paid $46,000 for one of the machines. Again in Texas a sheriff and the county tax collector bought one of the machines. In addi- tion to the counterfeiting charge. Lustig has more charges against him than seem possible for one man, it is said. Since 1908 he has been ar- rested 38 times (almost once a year for his 45 years of age). His record began in Europe and makes a trail through the leading cities of France, Austria, Germany and England, where he was arrested for embezzlement forgery, theft, fraud games and numerous other crimes. Three de- portation warrants are against him. In the United States he has similar charges; he escaped from Crown Point Jail (the same one from which Dil- linger escaped with a wooden pistol) while awaiting trial for grand larceny He was wanted under various names for questioning in the Nicky Arnstein case, in the shooting of Jack Dia- mond and & double murder in Queens. A number of Lustig’s gang were also located and convicted at the time of his arrest. etting their man” the Secret | Service has even empiloyed the true detective story idea. In July of this year an agent spent three months posing as an ex-convict to gain the confidence of a counterfeit band who were turning out fake $20 bills. The | agent bought $400 worth of the bills, | using marked money. The transaction occurred in a restaurant and several other agents sat at an adjoining table and watched the gang man and the | agent close the deal. were ha had made s money-making 'HIEF WILLIAM H. MORAN of the Secret Service is a fair-minded man. He dislikes to talk over past cases. He finishes one and says, “Get | the next man,” but he also says. “I always give a man his chance. If he’s done his time and starts straight, give him a break.” However, once he | sets out for a man he allows no rest- ing until the offender has been taken. And when the chief, in referring to Richard W. Adams, said “Get him,” he meant it. Called No. 1 counter- feiter by the United States Secret Service, Adams was described by Chief | Moran as “one of the type we have | to keep in jail,” because “whenever he is free he is making trouble for other people.” One hundred agents were set upon | the trail of Adams. They watched bank windows, dark alleys and sus- picious haunts, they questioned thou= “(Continued on Page 10, Column 2.) A A