If there was a single event that set in motion the story told by Grant and all the informants who came after him, it occurred on a hot afternoon in the late summer of 1970 at the Beverly Hills Hotel. Long before Coffey or any investigator became aware, Ricky Jacobs turned to his old Philadelphia friend, William Benjamin, and said, “I need tons of stock. I can use all you can get.”
Though Jacobs and Benjamin had known each other well for years, they had gone their separate ways. For his securities, Jacobs relied mainly on West Coast sources—his friend and sometime partner, the syndicate bigshot John Roselli; smalltime thieves who found themselves with paper they did not know what else to do with but turnover to Jacobs; others who had hot merchandise they knew he could market—and on syndicate leader Dominic Mantell and others in Florida. Though he had cultivated outlets all over the United States, customers who besieged him with demands for stock, he had more and more turned his attention to the international arena, particularly Europe and Latin America. There, the demand for American corporate and government securities, based as they were on the dollar (then still the world’s premier currency, the standard against which all others were measured and so the rock on which rested the economic stability of the Western world), was increasing at an astronomical rate. There, it was possible to operate with greater latitude, shielded by distance, by the time lag between the theft, its discovery and the arrival abroad of the hot sheet, by the seemingly more relaxed checking procedures of officials in banks and brokerage houses. Thus, the potential for profit with less risk was enormous in Europe and Latin America. Jacob’s international dealings were growing at a rapid rate as he developed contacts throughout the world, certain that he was the equal of the most accomplished and sophisticated confidence men anywhere. But as this empire grew, Jacobs had need for additional sources of supply. His bid to Benjamin, then, was an opening to the powers in the East, with whom he had rarely dealt before.
Benjamin was the right man to bring them together, as Jacobs well knew. He was a vital link in the eastern operation, in the chain that led from the acquisition of stolen and counterfeit securities to their ultimate disposition. He was middleman for the rulers of the eastern syndicate, and especially for Vincent Rizzo, who was becoming known within the clandestine securities business as the man who ran the syndicate’s operation. Rizzo and his associates had the means to amass limitless quantities of securities. But their existence within the heart of the Italian-dominated organized underworld made them essentially narrow and provincial, suspicious of outsiders they had not done business with over the years and could not control. Thus, they had never developed the contacts, outlets and means to broaden the distribution of their securities. For that, they relied on men like Benjamin who had been in the rackets for decades, knew everyone across the broad spectrum, and were not circumscribed in their dealings by Mafia traditions. They knew Benjamin was able to turn up the dealers who had the expertise, who knew how to move hot paper at great profit to themselves and the organization. And they trusted Benjamin to make the best arrangements and never hold out or try to cheat them. He was trusted because he seemed to know his place in the organization’s scheme, did not aspire to positions he could never attain and was willing to obey orders. But, then, Benjamin, like so many others, was terrified of Rizzo and what Rizzo was capable of doing if crossed, and so he rarely questioned Rizzo’s dictates (like registering Rizzo’s Mercedes in his own name in Pennsylvania yet never getting a ride in it unless invited). Still, he was certain that Rizzo would protect him when necessary, would provide him with regular employment and a good living moving stocks and doing other errands. And those were no small things. By the time he met with Ricky Jacobs, he had handled scores of stock deals involving millions of dollars.
Even while doing Rizzo’s bidding without murmur, somewhere deep inside Benjamin a resentment stirred. He might never voice it to Rizzo or anyone else in the syndicate, but to close friends he sometimes let those feelings seep through. He once lamented to Tony Grant: “Rizzo’s a member of a family, and he can get whatever he wants. I can’t be a part of a family, so I have to rely on what he wants to give me.” To friends (and a long time later, when he was sure he had no other choice but to turn informant and become a protected witness, to authorities) he complained that Rizzo, de Lorenzo and the others were forever taking advantage of him. When a deal was going, he said, they almost always insisted that he put up some of the front money before they gave him the stocks to deal, and then when the sale had been made and he had been paid, demanded the bulk of the profits and left him only a pittance.
It was just such an arrangement that, in a convoluted way, led to his reunion with Ricky Jacobs. In June 1970, he was in Jimmy’s Lounge with Rizzo, seeking a new supply of hot paper. Two of his better contacts, Los Angeles insurance brokers Paul King and Ted McGoey, had a profitable sideline dealing in stolen securities. No matter how much Benjamin gave them, they always insisted they could use more; they never quibbled about price, paid the moment they had made their sales and even cut Benjamin and his people in on a share of the profits. Now, Benjamin said, he was under considerable pressure from King to come up with some more good stuff. One of de Lorenzo’s partners, Tobias “Teddy” Cohen, was in the bar at the time, overheard the conversation and mentioned that perhaps he could help out. He had just come into two valuable pieces of paper, a $100,000 Consolidated Intermediate Credit Bank bond and a $100,000 United States Treasury note. He expected to realize at least $50,000 from them. He would be willing to turn them over to Benjamin on payment of $15,000 in front money and would not press for the other $35,000 until King and McGoey had paid for the bonds. Of course, Cohen added, he would also expect a share of anything over the $50,000 that happened Benjamin’s way.
Benjamin wanted those bonds. However, he explained to Cohen, he was a little short of ready cash.
That was too bad, Cohen said. While he had faith in Benjamin, based on past performance, still he had a hard-and-fast rule that he would never part with merchandise without cash up front.
Benjamin looked to Rizzo for help. Rizzo shook his head. But, then, Benjamin knew that it was only on very rare occasions that Rizzo ever dipped into his own pocket to back a deal. Rizzo, however, had a suggestion. Benjamin ought to go to see Peter Raia and cut him in on a share of his profits in exchange for the $15,000 advance. Benjamin had better do it right away, Rizzo added, and Cohen nodded agreement, because Cohen would want an answer before the day was out, otherwise he would find another way to dispose of those bonds.
Had there been an alternative, Benjamin would never have gone to Raia. But there was no alternative and, besides, he read Rizzo’s suggestion as an order. And so, with great reluctance, Benjamin made the trip uptown.
Then in his early forties, Peter Joseph Raia, who was also known as Peter Martell, Peter Martella, Joe Costanza, Jack Fassoulis and a lot of other names, was the owner of the J. Martello Shoe Concession at New York’s Park Sheraton Hotel and of a Seventh Avenue dress house. But they were merely fronts. Over the preceding twenty years, Raia had been arrested fourteen times, for crimes ranging from using the mails to defraud, to armed robbery and assault with a deadly weapon. He had served five terms of from one to three years in federal and state prisons. He was a hulking, dangerous thug—six feet four inches tall and two hundred seventy pounds. The only thing he loved more than money was battering to near death anyone who displeased him. A reputed killer named Michael “The Animal” Affinito was always at his side to do his errands. It was whispered that he was high up in one of the New York crime families, was a trusted confidant of the bosses. He was not. At best, he was a Mafia hanger-on, used by Rizzo and de Lorenzo and others because he had certain jealously guarded contacts and sources of supply for various goods. Because of his value to them, they worked with him now and then, threw him an occasional profitable bone. On this occasion, Benjamin and Teddy Cohen’s bonds were such a bone.
“Are you absolutely sure you can work the deal?” Raia demanded of Benjamin when the proposition was put to him.
“You know me,” Benjamin said. “Would I try to con you? I’m a hundred percent sure.”
“Okay,” Raia said. “I’ll get you the fifteen grand.”
That night, Raia’s money was put into Cohen’s hands, the bonds into Benjamin’s and by the next day, Benjamin was in Los Angeles turning them over to Paul King. True to his promise, Cohen waited patiently for his $35,000, certain that when King completed his end of the deal and paid Benjamin, he would get his due. But as time passed, Raia was not so patient. He called Benjamin daily, demanded news, demanded action, told Benjamin time was running out and if he didn’t get his money soon, he might have to send Affinito down to Philadelphia to pay Benjamin a visit.
Benjamin was petrified. He tried to reach King, was told King was out of town. He went to Rizzo for protection, was told he had nothing to worry about so long as King made the sale and Raia got his money. Of course, if something went wrong, Benjamin would have to watch out for himself. After all, it was he who had borrowed the money from Raia.
Raia grew more strident in his demands, more threatening, and Benjamin more desperate. Then, three weeks after he had carried the bonds to the West Coast, King finally called. He apologized for the silence and the delay, but he and his wife had been in Las Vegas for a short vacation. However, he had some good news. He had been able to combine his pleasure with some business, had managed to cash the bonds for their full face value. Benjamin could pick up his share of the $200,000 anytime.
Cohen was informed. Raia was informed. Benjamin boarded a plane for Los Angeles. Raia appeared, took the seat next to him. With the payoff at hand, Raia had no intention of being on a different coast, of permitting Benjamin to wander around loose with all that money. Besides, he told Benjamin during the flight, this gave him a good reason to visit his sister who lived in Los Angeles and whom Raia had not seen in several years.
When they landed, they were met by an old friend of Benjamin’s, Louis “Potatoes” Gittleman, a small-time gambler and bookmaker and, most recently, a courier for Rizzo and Benjamin, ferrying merchandise from California to New York and back again. Gittleman dropped Raia off at his sister’s home, then drove Benjamin to the Sportsmen’s Lodge on Ventura Boulevard. In the bar, Benjamin met King, had a drink with him, walked away with a heavy briefcase.
When Benjamin opened the door to his room, a suspicion was confirmed. Rizzo and Patty Marino were sitting on the bed. Though he had refused to put up any of the front money, had sent Benjamin to Raia for it, Rizzo was a full partner, had followed to Los Angeles to take possession of what was his and Cohen’s. He relieved Benjamin of the briefcase, checked to make sure it contained all he expected, and then informed Benjamin that he was taking it back to New York. The splits would be made there.
Benjamin was in a terrible quandary. He was only a little less terrified of Raia than he was of Rizzo. What would Raia do to him when he learned that the only thing he was getting out of his flight to California was a visit with his sister? Benjamin pleaded with Rizzo. If he couldn’t turn something over to the man, he said, Raia was very likely to make a lot of trouble. Rizzo knew what Raia was like. He laughed, opened the briefcase again, counted out $15,000, and told Benjamin to deliver it to Raia and say that Rizzo said he would get whatever else was coming to him when he got back to New York.
A few days later, Raia had his profits. Benjamin got enough to pay his expenses and keep him satisfied, but only a fraction of what should have come to him. He did not complain. His fortunes improved somewhat during this summer, as Rizzo kept dispatching him to King and McGoey in Los Angeles and to his contacts in other cities with more stocks and bonds. And there was one other thing to be grateful for: Raia was not involved in most of those deals.
Then, early in September, Raia had prime merchandise once more and Benjamin had no choice but to work with him. Some freelance thieves had made away with three $100,000 United States Treasury bills from the vaults of Manufacturers Hanover Trust Company in New York (it would be a considerable time before the bank discovered the loss). They had approached Raia and offered him the bills for $75,000. Raia was not about to put up that much money himself, especially since he did not have the outlets to market them. Remembering that Benjamin’s man on the West Coast had sold bonds at full value not long before, Raia approached Rizzo and Benjamin, offered to cut them in as full partners in exchange for $25,000 each. It was too good a deal to turn down, but Rizzo never bought anything without bargaining first. He told Raia that he and Benjamin were interested, but not at Raia’s price. The most they would kick in for the two-thirds Raia was willing to turn over to them was $20,000 each. If Raia wanted the deal to go through, wanted Benjamin’s contacts, he’d either have to put up $35,000 himself or chisel the thieves down to $60,000. Raia managed to do just that, and late one night in early September, at the Crazy Horse Bar on Manhattan’s Upper East Side, a fat envelope containing $60,000 was passed across a table in exchange for a thin one with three $100,000 treasury bills.
The next morning, Benjamin was on his way back to California. He checked into the Beverly Hills Hotel and called King, asked for a meeting. King went to the hotel, examined the bonds, sadly shook his head. They were beautiful, he told Benjamin. He would love to handle them. The thing was, he and McGoey were temporarily out of business. The federal government, he explained, had begun an investigation into the illegal securities business in Los Angeles and he was afraid they were getting close to his operation. Discretion dictated that he and McGoey do nothing but sell real estate until things cooled off. Still, King said, there was no reason for Benjamin to be concerned. One of their mutual friends had been after him for the last several months, trying to get his hands on good securities. Maybe if Benjamin called Ricky Jacobs, a deal could be struck.
And so, that late summer afternoon in 1970 at the Beverly Hills Hotel, Benjamin and Jacobs renewed acquaintance. When Jacobs departed he carried with him the three treasury bills and the assurance that this was only the beginning of a very profitable relationship, that Benjamin should return to New York and tell Rizzo and the others that with Ricky Jacobs as their guide and partner, they were about to discover the gold that lay across the oceans.
Jacobs knew exactly what to do with those bills. He flew to Munich, checked into the Bayerischer Hof Hotel and summoned Rudolf Schoppman, one of the prime movers of the ring that operated out of the Regina Hotel. When Schoppman examined the bills and waxed lyrical about their possibilities, Jacobs relaxed, certain it would be only a few days, perhaps even just hours, before he was on his way back to the United States flush with profits.
But for some unexplained reason, Schoppman dillied and dallied, kept telling Jacobs that he was on the verge of selling the bills at full price, that he needed just a little more time, that Jacobs should have patience. But as days passed with only Schoppman’s constant assurances, Jacobs grew increasingly irritated, ran out of patience and finally told Schoppman he was out of the deal, that Jacobs was taking the bills to Switzerland, where he knew people who could move with dispatch and without excuses.
Schoppman had blown the deal for himself. What he did not want was to blow the possibility of future deals. He tried to convince Jacobs that he had done his best. Of course, he said, he understood why Jacobs had become impatient, understood why Jacobs had made this decision. But, to show there were no hard feelings on his part, and to save the American the expense and inconvenience of going to Switzerland, he would like to introduce Jacobs to a very prominent man in Munich who would be able to accomplish precisely what was desired, and with great speed and circumspection.
The man Schoppman sent to the Bayerischer Hof the following day was Winfried Ense. Jacobs and Ense took to each other immediately. For Jacobs, Ense appeared a far more promising partner than Schoppman. After all, Schoppman was not exactly an unknown to the authorities and Jacobs had long been concerned that just being in Schoppman’s company in public places might arouse suspicion. Ense, however, still occupied a shadowy territory onto which official light had not yet been cast; he seemed on the surface the very model of probity and success. Ense examined the three treasury bills, expressed a cautious enthusiasm. He was, indeed; impressed with them, he said, but he would like to take a sample and do a little checking, see whether it was still clean and so could be sold openly or whether another way would have to be found.
Jacobs was dismayed. Was this to be a repetition of the Schoppman exercise, with delay and delay until time ran out?
Ense assured him it would be nothing of the kind. What he had in mind would take only a few hours, a day at most. Ense took the sample to the Bavarian Mortgage and Drafts Bank, showed it to an official with the request for an opinion on its authenticity, explaining that he had just met a rich American, a Mr. Jackson, who wanted to buy some jewelry and was offering the treasury bill as payment. The bank official looked closely at the bill, said it appeared to be legitimate, checked the hot sheet and found it was not listed. He told Ense the bill was obviously negotiable and the bank would certainly be willing to handle the sale if Ense desired. Ense said he was not sure he wanted to sell, that he might just decide to hold on to the bill. The same procedure was repeated, as a double-check, at the Otto Dierks Bank.
While Ense was very interested in disposing of the bill and receiving a commission, he had no intention of doing the trading personally, and certainly not in his native Munich, where it might be traced back to him. He proposed what seemed a safe alternative to Jacobs. Ense and a close friend, Dagobert Fayer, would take the three bills to Brussels, where Fayer had important corporate and financial connections. Once there, Fayer would make all the arrangements. Neither Ense nor Jacobs would appear publicly. When the bills had been sold, Ense would return to Munich with the money. The whole transaction should not take long if everything went without a hitch.
In Brussels, Fayer turned the three bills over for sale to a director he knew at the Belgian branch of Continental Illinois Trust Company. Though there was nothing suspicious about the securities, and they still had not appeared on the hot list, some European banks, and especially those with close links to the United States, had begun to grow a little apprehensive about accepting American paper without complete authentication. Fayer’s friend said that before the sale could be consummated, he would have to send the treasury bills to Chicago to be checked. Fayer brought the news to Ense. Ense checked with Jacobs in Munich. Though not happy with the idea, Jacobs decided to go along. But, he told Ense, only one of the three bills was to be sent to Chicago; the other two, were to be retained by Ense and Fayer so that if anything happened, they, at least, would not be lost and if Chicago approved the first, there was no reason why the other two could not be sold later without a check. And, he said, Fayer should emphasize the need for a quick response. Too much time had been lost already by Schoppman’s antics.
The emphasis on the need for speed came not only from Jacobs. He was under mounting pressure from his new partners in New York. He was getting telephone calls nearly every day from Benjamin, Vincent Rizzo and Peter Raia, demanding action. He had not previously met Rizzo or Raia, but he knew of them and their penchants from Benjamin and he knew of Rizzo, as well, by reputation. If Jacobs was the hotshot he was reputed to be, he was told, why hadn’t he moved the bills yet? Time was running out. Rizzo, Raia and Benjamin had $60,000 in this project and they wanted to earn their full profit on that investment. If they didn’t they would hold Jacobs responsible.
To force the issue, Jacobs flew to Brussels, confronted Ense at the Hilton Hotel. Ense was distressed, not merely over the sudden appearance of Jacobs but over the fact that he arrived without luggage and with only the clothes he was wearing. Ense worried that if they were seen together, suspicions might be aroused. That did not concern Jacobs. He had made the trip to see that something happened and he had no intention of leaving without either the cash for the sale of the bills or the three bills themselves. Ense tried to soothe him, advising a little more patience. Jacobs said that Schoppman had given him the same advice and it had resulted in nothing. He had been patient long enough.
While Jacobs and Ense were arguing, the phone in Ense’s room rang. It was Fayer. He had just heard from the Continental Bank. The treasury bill had been authenticated; it had been sold in Chicago, a certified check for $97,000 had been received and the money deposited in an account for Fayer. Further, the bank official told Fayer, if he wanted to sell the other two bills, the bank was prepared to do so immediately; there would be no delays and no further checking was necessary.
Jacobs decided not to press his luck. He told Ense and Fayer to forget about selling the other two bills, just to turn them back to him along with the $82,000 he had coming—Ense’s commission on the sale was 40,000 deutsche marks, or about $15,000.
Ense handed back the treasury bills. Then Fayer explained it would be a few days yet before Jacobs could have the cash, since it would take that long for the certified check to clear and allow him to withdraw cash from his account.
Jacobs said he couldn’t wait. He had to have the money then.
Fayer said in that case he would be willing to write a check for the amount due Jacobs on the account. By the time the check was cashed, the funds would be available.
Jacobs took Fayer’s check, though he was less than pleased not to have cash, flew back to Munich, collected his belongings and then was on his way back to Los Angeles. Since he had been only partly successful and had taken longer than expected, hardly an auspicious beginning to the new partnership, he had little appetite for a personal settling of accounts with Rizzo and Raia. Instead, he sent the two bills and the Fayer check to New York in the care of courier Louis Gittleman, instructing Gittleman to explain that Jacobs was so busy he couldn’t spare the time to fly east, knew Rizzo would understand and was sure Rizzo would send his cut back with Gittleman.
What Rizzo sent back was fury. He demanded that Jacobs appear in person or he’d send somebody out to bring Jacobs back. When Jacobs arrived in New York, Rizzo threw the check at him and, as he later told Ense, “I told him to stick it up his ass.” If Jacobs knew what was good for him, Rizzo said, he’d get on the first plane back to Germany and turn that check into cash. In fact, just to make sure there were no slipups, Rizzo was going along on that trip.
Only days after he had departed, Jacobs was back in Munich, back at the Bayerischer Hof, Rizzo in an adjoining room. Rizzo relaxed, went sight-seeing, stayed out of sight. He was there for just one reason—to collect his money. Jacobs called Ense, explained that there had been a little difficulty about payer’s check. Not that it had bounced, but only that the people in the United States did not like checks and would accept only cash.
Ense calmed him. There was nothing to be concerned about, he said. He understood the natural hesitation of Americans about checks in foreign currency. However, if cash was what was wanted, then they would simply convert the check into cash and all would be well.
In the morning, Ense and Jacobs flew to Frankfurt. While Jacobs waited outside in a cab, Ense went into Fayer’s bank, cashed the check, turned it into deutsche marks. Back in the cab on the way to the airport, he handed the package of German currency to Jacobs. It had been a simple matter, he said; there had been no difficulty, it had taken only a little time and not much inconvenience, and now everyone was satisfied; good faith and trust had been restored and should lead to more and better deals in the future.
Rizzo was waiting for Jacobs at the Bayerischer Hof, He took the package, counted the bills to make sure that everything was there. He put the package in his suitcase, told Jacobs he was going home in the morning and taking the whole bundle with him. The delays, the failure to sell the other two treasury bills, which had just been added to the hot sheet and so now had a sharply reduced value, were Jacobs’s fault. Jacobs had cost Rizzo and his partners plenty of money, and one thing Vincent Rizzo would not tolerate was to lose money. If Rizzo lost, everyone lost. Jacobs would not see one penny of what was in that package, not even to cover his expenses, unless he could con something out of Ense or his other German friends. Chalk it off to experience, Rizzo said. Maybe the next time Jacobs would know better than to play around with Rizzo’s property.
It had not been a happy beginning to what Jacobs had hoped would be a long and lucrative relationship. He was not used to being treated the way Rizzo had treated him, yet he realized that as long as he needed the supplies that Rizzo controlled, he would have to work with the man. But in the future he intended to take some precautions to protect himself and perhaps even play it cool for a while until Rizzo needed him enough to come to him again and so restore the balance.
Jacobs was hardly through the door of his home in Los Angeles when the phone rang. When he hung up, he knew he would have to go to Rizzo once more and without delay. He urgently needed stocks, and not hundreds of thousands of dollars’ worth, but millions.
Ever since that day at the Palace Hotel in Munich, the words that had passed between Rizzo, Ense and Barg had been indelibly etched in Coffey’s mind. He had listened to the tape and read the transcript so many times that it had become part of him—he knew it by heart, had underscored the sections he did not understand, the questions he could not answer. He was determined that before this case ended, he would understand all of it.
As Grant’s tale unfolded before him, he remembered the words spoken in Munich that past February. Rizzo had said to Ense, “When you cashed that bond. Ricky gave you three?”
Ense had replied, “Yes. You mean, the treasury bills?”
“Yes,” Rizzo had said. “Why couldn’t you cash the other two?”
Now Coffey understood the whole journey that had been taken by those treasury bills, understood who had supplied them, where they had gone, what had happened to them. He could write “solved” for the first time against one of the puzzles that had emerged that afternoon in Munich.