On a freezing afternoon in the middle of February 1971, three travelers arrived in Zurich. The first two, from Los Angeles, were Ricky Jacobs and his wife, Evelyn, with a large collection of expensive luggage in tow; he had much business to do and he was planning to stay on for at least six weeks. An hour later, the third, Ernest Shinwell, hurried through the gate into the terminal. For him, Zurich was only a brief stopover on his way from Panama to London. He spotted Jacobs waiting just beyond the gate, waved a warm greeting. Jacobs responded with a cold nod. When they came together, Shinwell handed him a heavy attaché case, offered to share a cab into the city, where he had some business to transact at his bank before going on to London. Jacobs, holding tightly to the attaché case, rejected the offer. They went their separate ways.
A little later that afternoon, Jacobs and his wife checked into the luxurious Hotel Eden au Lac, overlooking Lake Zurich. He was welcomed with the courtesy and friendliness merited by an old and frequent guest. The Eden au Lac was a particular favorite of Jacobs, and he had specifically requested it when an old friend, Richard Meyer, president of Karminex-Handels, a small but seemingly respectable company in Zurich, had offered to make the hotel reservations a few days before.
Once in his room, Jacobs carefully set the attaché case on the bed and checked the contents. He gave a deep sigh of relief. Everything was there, everything was in order. Shinwell had kept one promise at least: he’d returned all the shares of Coca-Cola Bottling Company of Los Angeles, Occidental Petroleum and Norton Simon. Jacobs then opened one of his suitcases and looked with satisfaction on the millions of dollars in stocks it held—the shares that had once been tendered to Shinwell, as well as IBM, IT&T, Xerox, Unishops and a lot more, some stolen from the vaults of Merrill, Lynch some months earlier, some stolen from the registered mails.
Jacobs felt a return of the confidence that had been shaken in recent months by the affairs in Germany and Panama. He was looking over a potential fortune and he was sure he was just the man who could realize it. He intended to move those shares until his pockets and everyone else’s were overflowing with cash.
But he had little time to lose. And that realization was reinforced within a day, for his phone rang and he was ordered to get on the first available plane to London and appear at the Churchill Hotel.
Waiting in London were Benjamin, Peter Raia and his ever-present enforcer, Mike Affinito. With Rizzo’s blessings, they had come to retrieve their stock from Jacobs and do their own trading. Jacobs might have shown them the glitter of the foreign markets, but so far he had come up with only fool’s gold, and had screwed up two major deals. They were convinced that anything Jacobs could do, they could do better, including making the right contacts.
Raia had been given the name of someone who knew all the angles, and within hours of their arrival, he was on the phone to John Michael Devereaux de la Pena, American born but for most of his adult life a resident of England and the Continent and an expert in trading hot securities. De la Pena was, indeed, interested in taking on the Jacobs cache. He suggested that while they waited for Jacobs to arrive, they have a night on the town. He said they should meet at the Victorian Sporting Club, an exclusive gambling establishment, where he was well known. “The manager will make all the arrangements,” he said. “We’ll have a drink, I’ll get somebody to take you into the rooms, and then we’ll do the town.” The man who met them at the club, who provided them entrée and showed them that night on the town, was Hyman “Tony” Grant.
By the time Jacobs arrived two days later, de la Pena had convinced Raia that he was just the man to turn a tidy profit in the stolen securities. Raia’s first words to Jacobs when they met at the Churchill were, “I want twenty-five percent of what those stocks are worth. I want it on the table right now, or I want that paper back. I got a guy here just dyin’ to get his hands on them.”
That ultimatum was precisely what Jacobs had expected, and feared. He couldn’t comply, he told Raia. The stocks were back in his hotel in Zurich, and, of course, he was not carrying that kind of cash around with him. Raia ordered him to go back to Zurich immediately and return with the stock. Jacobs said he couldn’t do that. He was on the point of making a dozen deals himself for those shares, deals that were better than any de la Pena could make. All Raia needed was a little more patience and he would discover just how a master operated.
For three days in that hotel suite, hot words and arguments and threats resounded between Raia and Jacobs. At last, Raia relented just a little and told Jacobs he would give him one more chance. But if it didn’t pay off, he’d do well to start watching his back because Affinito or even Raia himself would be on the way to pay him a visit.
Jacobs was on the spot and he knew it. If he was to remove the doubts, he had to start pulling in big money. Back in Zurich, he set out his lines, certain the fish would swim toward that beautiful bait the moment they knew it was there. When they bit, he would pull in the lines hard, would not be gentle this time. He would insist on cash up front, cash on delivery, or, at the very least, an ironbound agreement that would have to be fulfilled. And he made a decision to deal piecemeal this time. The big buyers, those who offered to take millions of dollars in stocks, always seemed to have some excuse to avoid payment, were always begging for more time. If he dealt in amounts of no more than a million or a million and a half, nobody would be able to plead difficulty in raising the necessary down payments.
The selling, trading, bartering began within a day after his return to Zurich from those difficult sessions with Raia. His old Munich friend, Rudolf Schoppman, and Schoppman’s American-born partner, Stanley Myron McCabe, heard that Jacobs was back with a trunk full of the best-quality merchandise. They rushed to Zurich, argued about paying cash up front, finally agreed to put up a down payment when Jacobs adamantly refused to relent, and went off with shares worth several hundred thousand dollars.
Jacobs then turned to an old friend and associate, Jacques Suesans from Amsterdam, with whom he had done much dealing in the past. (Coming across that name, the reels of the Munich tape spun in Coffey’s mind once more, stopped at Rizzo saying to Ense, “I told Ricky whatever I do with Jacques, he gets something out it.” Another identification had been made, another mystery cleared away.)
Suesans, as it happened, was in Zurich only because Jacobs was there. He was in a room just down the hall at the Eden au Lac, reserved for him at the same time the reservation for Jacobs had been made by their mutual friend, Richard Meyer, whose Karminex-Handels had a very close relationship with Suesans’s own company, Karminex, of Zug, Switzerland. Suesans dropped by Jacobs’s room, looked over the stocks, chose a few certificates, took them down to a Zurich bank and offered them as collateral for a personal loan. The offer was accepted with few questions asked. Convinced that Jacobs was, indeed, in possession of very valuable merchandise, Suesans summoned some of his friends to share in this golden opportunity, confident they would accept, that they would have their own ways of making a killing.
Over the next days and weeks, the Jacobs cache was steadily depleted, the stocks pouring out to those who could peddle them across Europe, into Africa, the Middle East and elsewhere. Among the deals that later came to light (and then there were others about which nobody ever spoke) were these:
•More than $1.5 million were funneled by a Swiss businessman, Enrico Friedlander, through a French journalist and onetime counterfeiter, Sylvaire Galardi, to a group of businessmen in Lebanon who intended to use them as collateral for loans to set up a company that would sell arms to the warring factions in the Middle East.
•A couple of hundred thousand dollars’ worth were bought by a Swedish businessman, Bertling Nordling, who had customers in Africa who dearly wanted American corporate securities and were willing to pay high prices for them, no questions asked.
•About $30,000 worth of Coca-Cola shares wound up in the hands of the Royal Canadian Mounted Police in Vancouver, British Columbia, when a naturalized Canadian of Dutch origin, Hendrik Jacobus Offers, turned them in and claimed a reward. He had gotten them, he said, from a Swiss business associate named George Konig in exchange for new Nigerian pounds, only to learn that the stocks were stolen and were on the American hot list. He did not get his expected reward. Both American and Canadian authorities theorized that “Offers may be nearer the source of those documents than what has appeared up to this time … it is possible Offers and/or his ‘business associates’ may have arranged the ‘surrender’ of the stolen certificates in Vancouver as a test to learn whether a safe manner of financial gain had been developed from those stolen certificates.”
•Another $250,000 from the Jacobs cache, this time in shares of IBM, appeared at the Swiss Israel Trading Bank in Zurich, offered as collateral for a loan sought by Franz Visney, a commercial traveler for an East German textile firm. He explained, when questioned, that he had bought them at a large discount from some casual acquaintances he met at the Hotel Jolly in Milan. (These “acquaintances” were never identified.)
•Another four thousand shares of Coca-Cola were offered for sale in Switzerland at the Union Bank of Lugano by a surveyor from Milan named Edoardo Cattaneo. They were, he said, part of the estate of his recently deceased father. When Swiss authorities sought to ask him some embarrassing questions, he hurried across the border back into Italy. The Italian police refused to act on a Swiss request that he be picked up for attempted swindle.
But of all the friends and associates Jacobs and Suesans dealt with during those weeks when they were operating out of the Eden au Lac, none was more important or crucial to the scheme than these three men: Winfried Ense of Munich; Maurice Ajzen, born in Paris, living a tenuous existence in Munich as an illegal immigrant, survivor of Hitler’s concentration camps, sometime wine salesman, sometime dealer in metals, old and close friend of Ense, always on the lookout for but rarely finding the big money and the important deal; and Rudolph Guschall, a middle-aged, not very successful lawyer and notary from Frankfurt who, despite an innate timidity and cowardice, steered a treacherous course along the borders of illegality that forever placed him in peril of disbarment or worse.
Never one to miss any opportunity, Jacobs, despite the experience of the previous autumn, saw in Ense another potential customer for all those securities that filled his Zurich hotel room. And Ense, the moment he learned what Jacobs had, was determined to share in the gold. He called and in his most winning manner said that if only his friend Ricky would journey to Munich, they might be able to strike a very profitable arrangement.
Jacobs went to Munich to meet with Ense, and was introduced to Ajzen. Both Ense and Ajzen were sure they knew just the right way to handle at least a million dollars’ worth of those stocks, perhaps even more. But they would have to work cautiously and a bit deviously to bring about the best deal. Ajzen’s friend, Rudolph Guschall, had clients who invariably needed some means to raise capital or to create the appearance of solidity and worth. Guschall, however, was an easily frightened rabbit. If a deal were presented to him that smelled of illegality, he would run for the nearest hole. But if it were presented with just a slight veneer of propriety, he could be swayed. The important thing was the pretense, so that later, if anything happened, Guschall would be able to plead that he had been taken, had not known he was dealing with thieves.
With Jacobs’s blessing, Ajzen went to work on Guschall. Learning that the Frankfurt lawyer was about to go to Paris, Ajzen arranged to be there at the same time; to run into him by chance at a bar, to mention over drinks that he had become close to an American who was staying in Munich. The American, named Mr. Evans, was in Europe representing some other Americans who had just come into a large inheritance. He was in need of the advice and assistance of a lawyer and notary. Having run into his friend, Ajzen said, it occurred to him that Guschall might be just the man to recommend to Mr. Evans. If Guschall was interested, Ajzen would bring Mr. Evans to Guschall’s office in Frankfurt when they were both back in Germany.
A few days later, Ajzen appeared in Frankfurt with Mr. Evans (who was in fact, as Guschall would soon learn, Ricky Jacobs). Jacobs spread the net. His American clients, he explained, had inherited large blocks of stock in several American companies and they wished to use them in Europe somehow to avoid the heavy American taxes. But he was uncertain how to go about it, and so he was seeking advice and ideas.
Guschall rushed into the net without hesitation. He was sure, he said, that he knew just the man who could help Mr. Evans with those securities and would be helped in turn. He had a client named Alfred Barg, and Barg was an important officer in a large Swiss firm, Finag Akhiengeselschaft, and several of Finag’s subsidiaries. Right at that moment, Guschall said, he knew that Barg was in need of a substantial infusion of funds of one kind or another to assist him in the completion of a land deal in southern France. It was very likely, then, that Mr. Evans had arrived at a most propitious moment. Guschall would arrange to bring them together and would work out the details of how to proceed should they agree on a deal.
Guschall was, of course, right. Barg was desperate for funds. The negotiations had come to an impasse between Finag, Finag’s subsidiary, Ferienstadt Bel Air, and the French government and French banks for permission to purchase more than a million and a half acres near Montpellier and build there five thousand expensive vacation homes. What was holding them up were some questions about Finag’s, and Bel Air’s, financial structure and, thus, its ability to carry forward the project should it be approved. The project was to be financed with the proceeds of a major bond issue Barg and Finag intended to float, but until the French had approved the sale of the land and the construction, the bond issue could not be floated. Thus, Barg was caught in a vicious circle and was searching frantically for some way to break out.
Guschall brought Barg and Mr. Evans together, and the pretenses were quickly dropped—Ricky Jacobs resumed his true identity. With Guschall working out the legal language of a contract to satisfy both Jacobs and Barg, the two negotiated the deal. Jacobs turned over to Barg shares worth between $900,000 and $1 million—stock in Coca-Cola Bottling of Los Angeles, Occidental Petroleum, Norton Simon, First Union, General Portland Cement, Unishops, Capital Holding Corporation, Beneficial Finance Company, National Aviation Corporation, American Hospital Supply Corporation and California Computer Products. In return, Barg agreed to pay a fee of forty percent, or $350,000, for the right to use those shares for three years for whatever purpose he desired, the only limitations being that he could not collect any dividends, could not sell them, could not return them to the United States. At the end of the three-year lease, Jacobs would buy the stock back for $250,000. His profit, then, would be $100,000, and he would once more be in possession of the securities and once more be able to deal them to someone else for more profits.
The terms agreed to, the contract signed, Jacobs turned the shares over to Guschall, and gave Guschall his fee for arranging the deal and handling the paperwork—a one-hundred-share certificate of IBM stock. Guschall took the stocks to Barg and then with Barg and another Finag officer, Werner Kalin, journeyed to Glarus, Switzerland, where Finag had its headquarters. At the Glarner Bank, in front of a bank official, Guschall wrote down a list of the stocks and their serial numbers, placed them in large orange envelopes that he handed to the bank official who then deposited them in the Glarner safekeeping accounts and entered them into the books of Finag as assets of the company.
That was exactly the use, and the only use, that Barg intended for them. Finag’s balance sheet took on a rosier hue. The French government, seeing that sudden injection of nearly a million dollars in assets, withdrew its objections and approved the land purchase and gave the go-ahead to the construction of the homes. With that, Finag was able to obtain major financing from French banks and more financing through the successful sale of the bond issue that had until then been held back. At Montpellier, ground was broken, the homes began to rise, and customers began to appear. And all the time, the stolen stocks rested in the bank vault in Glarus, never examined by anyone, never sold, serving only the purpose of improving the look of a corporate balance sheet.
Because he had a contract, and thus a legal agreement, Jacobs had broken his promise to himself: he had not demanded that Barg make at least a downpayment on the rental fee for those stocks. He had assumed that Barg, supposedly a reputable businessman, had every intention of honoring that contract. He had assumed that Barg’s trip to Switzerland with the stocks had been for the purpose of using them as collateral for a major loan at his company’s bank, and that as soon as the loan went through, he would pay the $350,000 rental fee, or at least a large portion of it with the balance in regular installments. A loan, of course, was the farthest thing from Barg’s mind, and nearly as far was any intention of paying Jacobs. There was no way, he reasoned, that a swindler could sue if a contract was violated, and so he was safe.
As weeks passed and there was no payment from Barg, Jacobs began to worry. He called Barg and asked for his money.
Barg hedged, said he would pay soon.
When Barg still did not pay, Jacobs called again, demanded his money.
Barg resisted, said he was working on it.
Jacobs insisted he pay immediately.
Barg said, not yet, soon.
Jacobs asked when.
Barg said later.
Jacobs began to wonder whether all the Germans he dealt with weren’t swindlers and if Barg weren’t the most accomplished of them all. Jacobs took the next step. He began to threaten Barg.
But Barg was still not concerned. He continued to make excuses.
Jacobs’s threats took on a strident tone.
Barg decided that perhaps he ought to do something to soothe Jacobs and stop those phone calls. He offered to cut Jacobs in on the profits from the sale of the homes in Montpellier, up to $750,000.
Jacobs said that was very nice and generous and he would, of course, accept the offer. But there was still the outstanding question of the rental money Barg had signed a contract agreeing to pay.
Barg claimed he was having difficulty raising that much cash all at once. The demands on him and his company, because of the building project, were heavy and cash could not be diverted.
Jacobs said that Barg had better try to raise it. And now he raised the specter of sinister, vengeful and powerful Americans behind him who were becoming very impatient for their money (which, of course, Rizzo and Raia were), men who might do something quite drastic if they didn’t get it. He was a gentleman, but if Barg didn’t pay up immediately, the next people who came to see him might not be gentlemen.
Barg considered that, decided that perhaps the time had come to relent just a little and forestall any such visits. He made a payment to Jacobs of $67,000, and promised that he would henceforth pay regular installments until the balance had been paid in full.
That promise was worthless. Barg had no intention of making any further payments. When Jacobs realized that, he knew he had no choice but to seek help, to dispatch others to call on Barg. He sent his son, Jerry Marc, but Jerry Marc Jacobs was not one to inspire fear. He departed with nothing more than other vague promises.
Realizing he would get nothing from Barg unless drastic measures were taken, Jacobs at last turned to Rizzo. Rizzo listened, sneered at Jacobs, told him he should have come sooner. Rizzo would get the matter settled the right way. Rizzo sent Benjamin to see Barg. But Benjamin did not impress the German. He gave Benjamin his expenses and a few more worthless promises. But Benjamin had been told what to say should that happen. As he was leaving, he told Barg that a very big mistake had been made. It was inevitable now that the next callers would be those Jacobs had threatened him with, men Barg would not enjoy meeting. And then Benjamin said something that sent an icy wave of terror streaming through Barg. He said it would be well for Barg to remember what had happened to Kurt Huber.
Barg’s memory did not have to be prodded. A native of Zurich, Kurt Huber had been an employee of Finag. He had also been involved in spreading stolen and counterfeit currency and securities around Europe. There had been some rumors that he was holding out on the profits. One fall morning, he stepped out of his Zurich home to go to the Finag offices, got into his car, turned on the ignition, and the neighborhood quiet was shattered by a tremendous explosion. What remained of Huber’s body was scraped from the wreckage.
So, Barg waited with growing terror for the next arrival from America. He still resisted paying the rental fee, and now he could no longer even return the stocks he had rented. With the French government’s approval of the land purchase and construction, and with the success in gaining French bank financing and in selling Finag’s bonds, Barg had no further need of the shares he had rented from Jacobs. In late October 1971, he had journeyed to Glarus once more, accompanied by Guschall and Ajzen. At the Glarner Bank, he had retrieved the stocks from the safekeeping account, had turned the envelopes over to Guschall, saying with relief that he was glad to be rid of them and hoped never to see or hear of them again. Guschall had passed the envelopes on to Ajzen, and then all had gone their separate ways.
But now Barg understood that he could not dismiss those stocks, nor his obligation for them, quite so easily. He worried and wondered what to do, talked with his friend Winfried Ense, who advised calm, who said perhaps it would all pass.
And then one day in February 1972, Vincent Rizzo was in Munich and Barg and Ense knew it would not pass. Rizzo so terrified Barg that once the American had departed, Barg never traveled alone anywhere, was constantly on the alert for potential assassins, and he reluctantly came to the conclusion that he had to give Rizzo something. And thus he opened the bank account at Otto Dierks Bank, and thus he signed the agreement cutting Rizzo and de Lorenzo in on the profits of Bel Air. He knew that all he was doing was playing desperately for time, praying to be rescued through some divine intervention. Had he dared, he would have gone to the authorities for protection. But that would have meant public exposure and disgrace, for his part in the affair would have come to light, and he could not face that. He did not know that the intervention he was praying for was on the way.
For, as Barg and Ense were confronted for the first time by Rizzo and his threats and demands that winter day in Munich in 1972, Joe Coffey was two rooms down the hall, listening to it all. He learned of the deal between the American mobster and the Germans that day. He heard about Coca-Cola and was soon following those stocks on their long and tangled trail backward to Panama and before. What he heard not only confirmed his hunches but provided the answer to Barg’s prayers.
What happened to the shares that Barg rented, or at least most of them, remains a mystery. Ricky Jacobs maintained that he never saw them again after he put them into Guschall’s hands when the deal was made with Barg in Frankfurt. Barg maintained he never saw them again after he gave them to Guschall at the Glarner Bank in Glarus on that October morning in 1971. Guschall maintained that he never saw them again after handing them to Ajzen later the same day. Ajzen said nothing, only smiled.
That was the last that was ever heard or seen of the stocks that had traveled that long and twisted road from Security Pacific Bank in Los Angeles and Union Trust Company in Saint Louis and Merrill, Lynch, Pierce, Fenner and Smith in New York, to Peter Raia and Vincent Rizzo, on to Ricky Jacobs and then to Panama and Ernest Shinwell, and then back to Jacobs in Zurich, and on to Guschall in Frankfurt, to Barg in Munich, to the bank in Glarus, Switzerland, and then to Maurice Ajzen.
But all that was later. In the spring of 1971, when Jacobs was striking that deal with Barg, he had no premonition that he was about to be taken by his European friends. His overdeveloped ego led him to assume that he was dealing with honest swindlers who would live up to their bargain. He carried that assurance back to the United States, to Benjamin, Raia and Rizzo, and for a time they believed him, especially in light of the success he had had dealing all those other securities, in light of the hundreds of thousands of dollars he had put into their pockets with that success.
Besides, there was something else to think about during that spring of 1971. Something more important. Dr. Leopold Ledl of Vienna had just come to Jacobs with an unbelievable proposition.