Part 19

Immediately after this meeting with Customs agents, Durant and Captain Nash drove from Chicago to Washington, D. C. Durant hurried to the home of his brother in Falls Church. After nightfall, the brothers drove to a spot on a country road halfway between Lee Highway and Route 50.

They parked the car and walked into a woods to a large oak tree. At the base of the tree, Durant buried an ink bottle which contained fifty small diamonds and two large emerald-cut diamonds--together with a roll of gold wire which weighed 8 ounces.

“For God’s sake, don’t forget where we buried this stuff,” Durant said to his brother. And then the two returned to the car and headed back to Falls Church. A few days later, Colonel Durant began his terminal leave prior to being mustered out of the armed services.

Less than a month later, on May 18, Colonel Durant drove into Washington accompanied by Kathleen Nash. They went to a hotel and that night Durant again visited his brother James in Falls Church. Again the brothers drove to the woods on Lee Highway, where they walked to the big oak tree. Durant took a large jar from a leather handbag and buried it at the base of the tree. The jar contained loose amethysts and white envelopes which Durant told his brother contained loose diamonds.

As they drove from the woods, Durant said, “Don’t forget where we buried the jars. There’s enough in them to set us up for life. If anything happens, I want you to have what’s there.” The next day, Durant and Captain Nash left Washington and headed for Chicago.

Now the net was tightening and Durant sensed it. He had heard the disturbing news in Washington that his terminal leave might be cancelled--and this could mean only one thing: the Army didn’t want to lose its hold on him. Then he and Kathleen learned that she, too, might have difficulty in getting out of the Army.

Two weeks after burying the large jar in the woods, Durant telephoned his brother from Chicago.

“Listen, Jim,” he said. “Go to the big tree and get the large glass jar. Bring it to me in Chicago. It’s urgent.”

James Durant went to the woods and searched for the tree. But this night they all looked alike. He called his brother. “I can’t find it,” he said. “I can’t even find the tree.”

Jack Durant cursed softly. “I’ve got to have that jar,” he said. “I’ll have to get it myself.”

Durant caught a late plane from Chicago, arriving at the Washington International Airport at 4 A.M. He took a taxi to his brother’s home, awakened him, and they drove to the woods, where the colonel walked unerringly to the tree and unearthed the jar. Then he returned to the airport and bought a ticket for the 8 A.M. flight to Chicago. But before he left, he gave his brother two small packages containing $28,000 in cash--with instructions to place the money in a sealed jar and bury it at a place he wouldn’t forget. The brother buried the money that same afternoon.

During this frantic activity, the War Department cancelled the unexpired part of the colonel’s terminal leave and ordered him back on active duty. Similar orders went forth for Kathleen Nash.

It was after they received these orders that Colonel Durant and Captain Nash were married. Some cynics suggested later that the colonel married her because once the marriage vows were said, she could not be made to testify against him. But there was nothing in the record to indicate that the two were not in love and had not planned marriage all along.

Early in June, Army and Customs agents began questioning the couple in Chicago. For several days Durant maintained a stubborn silence, but finally he broke. He told of the gems and the money hidden near Falls Church--and he took full responsibility, clearing his brother of any complicity.

Agents found the hiding place in the woods. They dug up the money and the gems--but these were only a part of the treasure taken from Kronberg Castle. Durant was pressed to tell what had happened to the other gems.

“The situation is complicated,” he parried. “I might be able to get the stuff back if you will let me make some telephone calls--in private.”

Durant was permitted to make the calls. After each call he made excuses and talked vaguely of “complications.” He refused to disclose with whom he had talked.

On Friday, June 7, the agents permitted Durant to see his bride alone. What they discussed no one except themselves ever knew. When Durant came from this meeting he told the agents, “I’m sorry. I haven’t been trying to get the jewels. I’ve been stalling for time. But now I’ll try to get them for you.”

“Where are the jewels,” he was asked.

“They are in the hands of a fence. I think I can get them--but it will take some more telephoning. This time I’m not fooling.” He continued to insist that the calls had to be unmonitored.

Durant was permitted to make telephone calls from a public pay station--and to wait for a return call. The return call came within a few minutes, and when he had hung up the receiver, Durant said, “Everything looks all right. I think we can get the stuff this evening.”

That evening the colonel’s mysterious contact called for him at the pay station. This time Durant said, “We can get the jewels any time we wish. They’re at the Illinois Railroad Station.”

Two agents accompanied Durant to the station. He walked to an electric wall fixture near the luggage lockers, reached up, and removed a key from the fixture. He opened a nearby locker and removed a package which he handed over to the agents. The package contained a large number of emeralds, sapphires, pearls, rubies and other stones.

Durant counted the gems carefully and then exclaimed, “Some of the stuff is missing. Let me make another telephone call.” Again he called his contact and this time he reported, “We can’t get the stuff until Monday.”

On the following Monday, June 10, Durant again called his unknown contact. This time he told agents the remainder of the jewels were checked at the North Western Railroad and the claim check was hidden in a telephone booth across from the parcel room.

When Durant and the agents reached the station, Durant searched the telephone booths without finding a claim check. “It doesn’t matter,” Durant said. “I got the number of the check in case anything should go wrong. It’s number 110.”

But there was no parcel numbered 110 at the North Western Station. Durant hurried to a phone booth and placed another call to his contact man. When he completed the call, he said, “I misunderstood the instructions. We should have gone to the LaSalle Street Station.”

At the LaSalle Street Station, Durant went to the sixth telephone booth and took from behind the instrument panel a slip of paper. He read it and handed it over to the agents. On the paper was a handwritten note which said: “Too bad. My hat knocked your ticket off. Guess I have a right to keep the baggage.”

An inquiry at the check room disclosed that a parcel had been left there the day before under the number 110--but it had been removed that morning by a man who had presented the proper claim check.

“I don’t remember what the guy looked like,” the attendant said. “I didn’t pay any attention. All I know is the guy had the right check and I gave him the package.”

At this point, Durant refused any further cooperation. He insisted that his mysterious contact had nothing to do with the missing jewels--and he refused to disclose the name of the contact or to make any further effort to locate the jewels.

The investigators had better luck with Kathleen Nash Durant. She admitted to officers the agreement in Germany between herself, Colonel Durant and Major Watson. She told of removing the numerous stones from their settings and sending a large number of them to her sister’s home in Wisconsin, concealed in boxes. Her sister was instructed not to release the boxes to anyone unless she heard or read the code word “Cemetery.” She turned over to Army officers the following note:

June 3, 1946

To Eileen, Jack, or David,

I have confessed to having the box of jewels, Bibles and fan that I hid in the attic. Will you please give same to officer presenting you this note, Major John D. Salb, our code “cemetery”--goes--sorry to cause you so much grief and I don’t deserve you to worry over me anymore.

Love, _Vonie_ (_Kathleen B. Durant_)

When agents flew to Hudson, Wisconsin, and presented the note to Mrs. Lonergan, she readily turned over the boxes hidden in the attic.

Kathleen Nash Durant and her husband were sentenced by a military court martial to fifteen years in prison. Major Watson was sentenced to three years for his smaller role in the conspiracy.

Most all the jewels of the Hesse treasury found in old Kronberg Castle were returned to their rightful owners. But some of the priceless pieces still are missing. The settings--many of them fashioned by Europe’s greatest artisans--were lost forever. They had been cut to pieces and melted into gold wire.

16

THE CHISELERS

Chiselers are constantly seeking ways to avoid paying customs duties. And the female of the species is just as clever and persistent as the male--or, as is more often the case, just as dumb. In the early 1930s, the chiselers found it extremely profitable to smuggle watch movements into the United States from Switzerland. Smuggling reached such proportions that it helped to virtually destroy the American watch industry. The situation became so grave that the Federal government appealed to the Swiss government to cooperate in a program to control the illegal traffic in watch parts. An agreement finally was reached on a treaty whereby the Swiss devised a system of numbering the watch parts and assigning code numbers to importers as a means of discouraging illegal imports.

The treaty helped to wipe out much of the commercial smuggling of watch parts. Despite these efforts the traffic continued through the years to be a profitable venture for smuggling gangs who often persuaded housewives, businessmen, and tourists to act as carriers.

Mrs. Elizabeth Schmidbauer, the plump, middle-aged wife of a restaurant owner in Munich, Germany, was one of those who became a dupe for a watch smuggling gang in 1954. And her trip to the United States to visit a relative--a trip for which she had planned so eagerly and for so long--became a nightmare for her and her family.

The nightmare began in Munich when Mrs. Schmidbauer told friends at her husband’s restaurant that she was going to America with an aunt, Mrs. Anna Obermaier, who was then visiting in Germany. She talked of the clothes she would need and her intention of buying two new suitcases for the trip. Among those in the restaurant who listened with interest to Mrs. Schmidbauer’s excited chatter was a regular customer named Moritz, with whom the Schmidbauers had been on friendly terms for many years.

Two days before her departure from Munich, Mrs. Schmidbauer answered a knock at her door and found that the caller was Moritz, who was carrying two new suitcases. “I heard you say you needed luggage for your trip,” he said, “and here it is.”

Mrs. Schmidbauer invited Moritz into the living room. Over coffee and cakes he told her that he was willing to pay her fare to the United States if she would do him a favor: deliver the suitcases to a friend in New York along with a small parcel.

“What is in the parcel?” Mrs. Schmidbauer asked.

“Watch movements,” Mortiz said. “If you will take them through customs it will save quite a bit of money. I am ready to pay your fare to the United States if you will do this favor for me.”

“But what about the police and the American Customs?” Mrs. Schmidbauer exclaimed. “I may get into trouble if I do this thing.”

“Nonsense,” Mortiz said. “Nothing can happen to you. All you have to do is sew the watch parts into your corset and no one will be the wiser.”

The lure of free passage to the United States was too great a temptation. Mrs. Schmidbauer agreed to the scheme. That night she obtained strips of cloth and sewed most of the watch movements into her corset. The others she placed in her large handbag.

Mrs. Schmidbauer felt that Moritz was telling the truth when he said that she would have no difficulty. If he thought there would be any trouble, then he would not take such a risk himself.

The plan was very simple. When she arrived in New York and was safely through customs, she was to send a cable to her husband saying, “Gut angekommen,” indicating that all was well. Mortiz would keep in touch with her husband. After the receipt of the message, he would cable his friend in New York and instruct him to pick up the suitcases and the watch movements. Once the delivery was made, then she would receive payment for her fare to New York.

Mrs. Schmidbauer left Munich with her aunt, Mrs. Obermaier, and travelled to Southhampton, England, where she boarded the SS _Queen Elizabeth_ for the Atlantic crossing. The big liner reached New York harbor on December 14, 1954, and docked at Pier 90 on the North River at 8:15 A.M.

On the pier everything seemed to go as smoothly as Moritz said it 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.

* * * * *