He shuffled among his stacked up papers and tossed Maury a couple of booklets similar to the one he had seen on Dr. Rheinemann’s desk.
“Race track touts,” T.T. continued. “Bird dogs for gambling houses. Solicitors who want to sell you stock by long distance phone in some Canadian uranium mine that will make you millions. They’re investment counselors, all, dear boy.
“Lycoming does it on a higher scale, that’s all. Read what he says on the inside cover: ‘The material in our weekly letter is developed from information which we consider reliable. It is sent to our subscribers for a regular fee, in the hope that it may assist them in their appraisal of the market. Our estimate of the underlying value of individual securities does not constitute an offer to sell, or a solicitation of an offer to buy any particular shares or bonds.’ ”
“How many of those things do you think he distributes, Tom?”
“Somewhere around twenty-five thousand subscribers at a dollar a week a throw. Wasn’t it Cesare Lombroso who said: ‘The appearance of a single great genius is more than equivalent to the birth of a hundred mediocrities’?”
“I wouldn’t know.”
“Well, twenty-five thousand bucks a week, in anybody’s money, is a lot of dough. I thought of going into that racket once, myself, but I’m not the type. Too shy and retiring. Too upright, scrupulous, full of high principles, honesty, and integrity. Besides that, back at the time I thought of it, I didn’t have the necessary capital, y’know. Costs a lot to get one of those wire service form sheets started, and to really clean up on one properly—well, you should have a million or so.”
“What do you mean by cleaning up on one?”
T.T. gave forth with a smoky sigh. “Thine ignorance of thine ignorance is thy fiercest foe, thy deadliest bane.”
Maury said, “I grasp the general idea, old boy, but please explain.”
“Lycoming’s Leads. That’s more than just a tipster sheet, Maury. I’ve been watching it with my little spyglass for some time now, checking its cagey operations with my keen financial brain. With more than twenty-five thousand moneyed suckers hanging on his every printed work, and waiting breathlessly for his telegrams—he sends wires, too, for an extra fee—to make a fast buck, our laddie Lycoming has the power in many cases to make a stock go up and down.”
“Like what?”
“Like a yo-yo. A year ago it was Albatross Press, a dormant, over-the-counter item selling at nine. It was the week of the 18th of last November, as I recall. Albatross was moving four or five hundred shares a day, around nine and nine and three-eighths. Then Lycoming’s wire service went out, predicting big earnings and great potential values, with recommendations to buy.”
T.T.’s pipe began to gurgle and he operated on it again. “Albatross jumped to ten and seven-eighths, and moved 6300 shares in one day, and 7300 the next. Then the booklet hit the twenty-five thousand fish. Albatross jumped to 12½ and sold thirty thousand shares the following day. On Friday, November 22nd, it was up to 14½ and sold eighty-seven thousand nine hundred shares.”
“That sounds like it was making money for all.”
“Not quite all. Turned out that ten thousand shares had been bought through a Swiss bank in Zurich, and ten thousand more through a bank in Beirut. The margin required in Switzerland and Lebanon is 5%, against the 70% required here by the Securities and Exchange Commission.
“The dealers who handled those transactions here were Metzger, Montross & Stoane. Monday, November 25th, an official of the Albatross Press challenged Lycoming’s statements and earning predictions, and said the true value of the company didn’t warrant such strong recommendations. Metzger, Montross & Stoane had already unloaded for their lucky foreign clients, who had turned over a neat little profit of 5½ points on 20,000 shares.”
“And what then?”
“The yo-yo went down. The stock took a nose dive back to normal, but forty-two thousand shares of it had been sold at 14½ in one day.”
“Who got the profit?” Maury asked.
T.T. shrugged and lit his pipe again. “Khrushchev. Tito. Molotov. Who am I to say. Who has the dough in those numbered accounts in Switzerland, South America, Lebanon? I can tell you who took the rap on the forty-five thousand shares that were left holding the bag—the difference between 87,000 and 42,000, if you’d like to hear.”
“I’ve already offered to wine and dine you.”
“I’ve already accepted, dear boy. John Q. American Public took the rap, and the United States Department of Internal Revenue, who had to stand the income tax losses that were claimed.”
“And you mean that nothing was done about this, Tom?”
“Plenty was done. The New York Attorney General’s office jumped Lycoming, but they couldn’t make it stick. He hadn’t bought or sold any stocks. He had some wrong information, that was all. Doesn’t his booklet state that it doesn’t constitute an offer to sell, or a solicitation to buy?
“Then Metzger, Montross & Stoane got a going over from the Security Exchange Commission. So what? They were only doing the same as a thousand other brokers and dealers—handling accounts for U.S. banks, who were handling accounts for foreign banks, who were handling accounts for numbered accounts that the laws of their countries forbade them to reveal. Hell, Maury, the S.E.C. has to issue a subpoena to get an American bank to reveal the identity of a client.”
“What do you know about Crescent Valves, Inc., T.T.? It’s a manufacturing plant on Long Island.”
“What do you?” T.T. asked him slowly. “It happens to be one of about a dozen plants that this lad, Lycoming, started messing around. His predictions about a top secret contract from the Navy going to Crescent started a proxy fight about six months ago.
“When the smoke had cleared, old man Jason Philips, who started Crescent, found he had lost control. He still holds the title of Chairman of the Board, but the truth is he has nothing much to say about the management in general.”
“Don’t they have an Industrial Security Clearance from the Department of Defense—I mean, aren’t all officers and employees investigated when a plant starts making top-secret weapons?”
“Surest thing you know.” T.T. was having ignition trouble again. He got it repaired, and said, “Crescent has been cleared. They’re manufacturing parts for missiles. Of course, Los Alamos was cleared when Sergeant Greenglass worked there.”
“I get the general idea,” said Maury. “Could foreign interests get control of a plant like Crescent by acquiring a large percentage of its stock through those numbered accounts abroad?”
“Why not? That’s one of the things that’s been eating on the Senatorial subcommittee investigating the administration of the Internal Security Act. Haven’t you heard of hot Red money?”
“Hal Gow gave me an assignment about it a month ago, that’s why I’m bothering you. So far I’ve discovered that Russia has a fifteen billion dollar gold reserve. I thought they were poor. Where does all the gold come from?”
“They mine it,” T.T. told him. “Cheaply, with slave labor, and they don’t use it for money as we do. They use it for economic penetration of their satellite countries, and for getting control of British and American industries. That control is useful if you want to plant a few spies here and there—like in Crescent Valves, let’s say.”
“But surely a plant under foreign control couldn’t get clearance to manufacture top secret stuff. What about the Federal Reserve, the Office of Personnel Security of the Assistant Secretary of Defense, and the S.E.C.?”
T.T. searched his desk top and pulled out a booklet. “Let me read you something from the sworn testimony of the Director of the Office of Personnel Security: ‘If a company seeks to be eligible for a facility clearance, the Department of Defense insists upon looking at its books, and corporate structure. If the books reveal that there is a block of stock held by undisclosed principals, or nominees, we insist upon the corporation telling us who owns that stock. If they either decline to tell, or
are at all difficult about it, we simply stop the processing right there, and will carry it no further.
“‘If they disclose that the stock in question is held by a foreign interest, we then probe further in the matter, as I’ve outlined in my statement.’ Now hear this, Maury!” T.T. adjusted his pince-nez more firmly on his nose. “‘It is fair to say, however, that not infrequently the corporate records will not disclose, nor will the corporation itself know necessarily, that a component of stock is held by foreign nationals.’ ” T.T. slapped the booklet down on his desk. “If a corporation can’t find out the ownership of its own stock, how is it going to give the department of defense the identity of all its stockholders? Hell, Maury, don’t be silly!”
“Okay,” Maury said, “I won’t. Who do you think owns the biggest bite of Crescent Valves right now?”
“If the Department of Defense can’t find out, why ask me? Maybe I can make a guess as to who controls it, in trust, of course, or as a fiduciary.”
“Who?”
“A broker named Max Rheinemann—and I’ll make another guess about something else he controls, Maury.”
“What’s that?”
“The brokerage house of Metzger, Montross & Stoane, but I’ll deny it vigorously if you quote me.”
“Thanks, Tom. If Sunday evening suits you the drinks and the dinner at the hut are sure on me.”
Chapter Eight
Special Agent Leonard Ducro, as agents went, was a comparative newcomer to the ranks of the FBI.
Of the more than six thousand Special Agents working under the strictest discipline, constant supervision, and unending requirements of top performance, two thousand, or better, had been with the FBI for ten years or more.
Smooth, polished, blond-haired Ed Waters, who as S.A.C.—initials denoting “Special Agent in Charge”—of the New York office was Lennie’s boss, had been eighteen years with the Bureau.
To Len Ducro, who was 33, eighteen years was a stretch of time too long to comprehend. Len had worked in the New York office for two years and liked to think of himself as an old-timer.
He was born in Jamaica, Long Island, where his father, Julian Ducro, owned a sporting goods store. Len had graduated from the public schools, and from the time he could shoot a toy bow-and-arrow, or see over a counter, had helped his father in the store.
It was full of adventure and excitement to the growing boy—tackle that spoke of mountain streams and sail-fish fighting and leaping high, rifles that could down a buck or a towering grizzly bear, shotguns that spoke mutely of fields, whirring pheasants, and coveys of quail.
Yet Len Ducro’s trips to field and stream were confined to shooting a .22 in the basement of the store, and always, as his aim grew better and better, he was mowing down some enemy of society—a Junior G-man, sturdily carrying out the secret orders of Jimmy Cagney, to Len the best known G-man of them all.
Len learned much more than marksmanship in his father’s store. Although Julian Ducro wasn’t wealthy in money, he and his wife, Emma, were God-fearing people, rich in probity. Strict by most standards, they were fair and affectionate and determined not to spoil their only son.
Julian despised game and fish hogs, as he detested any violators of his country’s laws. He pounded those tenets into his son. He and his wife were normally moderate drinkers, with a rare judgment of fine wines inherited from Julian’s French ancestors. Yet Leonard, born in 1925, during prohibition, could never remember the matter of liquor being discussed between his father and mother, nor was it tolerated in his home until after repeal.
Bootleggers and their gangster fringe were lawbreakers and never heroes to the impressionable Leonard. Neither he nor his parents could realize that, even before the age of ten, Len Ducro was being moulded not only into a first class citizen, but into first class material to become a special agent of the FBI.
He was an excellent student, but on his eighteenth birthday, in 1943, the Army tapped him and delayed his entry into New York University until 1945. By then he had a Purple Heart from the Battle of the Bulge, and a lot of experience that he disliked discussing with anyone.
In 1949, Len married Connie Bagley, a girl he had met in high school. That same year he graduated with an A.B. degree and entered the School of Law. He acquired a son, Buddy, along with an LL.B. degree in 1951.
For four years Lennie Ducro worked successfully, and most unhappily, in the offices of a large New York firm of corporation lawyers. He was thirty when Connie had her second baby, Cissy.
Thirty! He was a success! His employers were interested, pushing him along. Salary $7500 a year. A nice apartment in Forest Hills. A wife whom he worshiped. Two of the world’s finest youngsters. A two-toned Olds convertible. A membership in a conservative Long Island golf club. Parents and in-laws all in good health, reasonably well-to-do, and devoted to both him and Connie.
His health was tops. His war wounds forgotten. His physical condition prime.
So, he was as pleasant to his family as a sore-tailed polar bear! He hated the details of corporate law from mergers down to tax evasions. From nine to five, Monday through Friday, his life was buried in fine print clauses concerning the validation of contracts, charters, stocks and bonds, and fiduciaries. Never a murder. Not even a decent embezzlement. He could sum it all up in three horrible words: dull—dull—dull!
A few days after Christmas, 1955, stimulated to action by an extra Martini and luncheon at the Lawyer’s Club with a particularly obnoxious client who felt that Lennie’s firm should be able, for a sufficient fee, to overthrow a ruling of the New York Attorney General’s office against the client’s company, Lennie returned to the office and personally typed a letter of resignation effective in thirty days.
Happy in his ignorance of the fact that only seven out of every hundred applicants made the grade, he typed another letter applying for a position as a Special Agent in the FBI.
Excitement! Intrigue! Danger! Service to his country! Efforts that were really worthwhile in an organization he could really be proud of!
He was riding on air instead of the subway when he caught the train home to Forest Hills to break the glorious news to Connie.
She took it big, too. He had been impossible for a year and was getting worse. She didn’t want to be married to a stuffy millionaire. So there might be less money—and it might mean a smaller car. So what? Len would be a hero to Buddy and Cissy and happy doing work he really wanted to do.
They hired a sitter and went out to dinner and a show.
It was March before Len went up for his physical tests and preliminary examinations. Then there were investigations concerning his background, character, loyalty, and personal integrity. Once past those hurdles he found the grueling work was really about to begin.
If he hoped to be rid of paperwork, he couldn’t have been more wrong. For three months at the training center at Quantico, Virginia, and at the FBI headquarters, in Washington, he was grilled in the details of crime investigation until he decided it would be featherbedding to go back in the army again.
He ate, lived, and dreamed preservation of evidence, away from and at the scene of a crime, accuracy of observation, how to write reports—plus the necessity of turning them in, and a thousand other minute details considered essential for an agent of the FBI. He also mastered new techniques in handling weapons—rifle, pistol, shotgun, and submachine gun.
Under the tutelage of the firearms instructor for the Bureau, Attorney Leonard Ducro mastered a draw that would have sent Wyatt Earp, and Paladin with him, to graves on Boot Hill. The inflexible FBI rule is: Never point a gun unless you’re ready to kill. When you fire, fire to kill only, not to disable. Split-second timing—getting the bullet there first—rather than precision bull’s-eye shooting, is the objective.
After his training Lennie could draw and fire five rounds into a man’s size target in about three seconds. After practice during his first year as an agent, he could do it under two. He’d been taught to practice the
quick draw before a full-sized mirror. Perfection, the New York instructor had told him, was achieved only when he could outdraw his own reflection.
On Wednesday morning—July 9th to be exact—two days after Maury Morel had been cracked on the head, Len Ducro walked into the familiar building that housed the New York FBI at 201 E. 69th Street, gave a good-morning to the two colored officers on duty and automatically checked his watch with the grandfather’s clock that stood at the back of the lobby.
It was ten minutes to eight.
He had wondered much about that clock and how it got there—a beautiful antique nearly eight feet tall, yet somehow seeming to blend in strange harmony with the modernistic walls and white squared composition floor. He had inquired about its history, but apparently even Ed Waters, the Special Agent in Charge, didn’t know.
An elevator shot him up to the tenth floor. He got off in the reception room, done in light green with comfortable green leather chairs, and nodded to the receptionist on duty. Len had learned the hard way that you were always on duty when you worked for the FBI. In addition to his starting salary of $5915, he had been paid nearly $800 for overtime during the past year. Connie swore it was all he could make, because he’d put in twenty-four hours a day since leaving the law firm.
He went inside, signed the register, and noted the hour—a compulsory detail every time you left or entered the office, no matter what city that office was in. In addition while on duty he checked with the office every three hours by telephone, reporting where he was and where he was going. By checking any agent’s card in the communications section at any time, the S.A.C. knew instantly where that agent was and what case he was working on.
Len had cleaned up a violation of the bankruptcy laws the day before, uncovering in a month of persistent inquiry some hundred and twenty-five thousand dollars of fraudulently concealed assets. It had been exciting, involving a brush with a couple of goons in charge of a warehouse where part of an inventory had been concealed.
Hot Red Money Page 6