Part 44

Soon after his arrival, he had called a business acquaintance in the Antwerp diamond trade and asked him to dinner at his hotel. He had met the Belgian in New York City and the Belgian had insisted that they should get together on his first trip to Antwerp. The friend had arrived at the hotel and they had enjoyed an excellent dinner that evening. Over a brandy, they had discussed business. Mr. X had confided that the next day he intended to purchase $200,000 worth of diamonds in the market. And then he had complained of the customs duties and the taxes that he would have to pay on the profits.

After several more brandies, his friend had said to him: “Listen to me. It is silly for you to pay such taxes when it is unnecessary. Let me tell you how you can avoid the taxes. Tomorrow, go to any of the regular diamond houses, any that you prefer, and make discreet purchases. After you have selected the stones, go to the coffeehouse on the corner of (and he named the street). Order a cup of coffee and then tell the waiter that you wish to speak to the manager. When the manager comes to your table, ask him to have a cup of coffee with you. Tell him that you have purchased some merchandise and you wish to contact someone who will deliver the merchandise to you in New York City. The manager, quite naturally, will say he knows nothing of such affairs, but in a short time you will be approached by a stranger. This man will say he understands you wish the delivery of certain merchandise to the United States. He will ask you, ‘How do you wish to pay for this?’ And you say, ‘By cash.’”

Mr. X had interrupted to say, “Can you give me the name of this man who will approach me?”

His friend had shaken his head. “No. You will never know his name--and you will never know the names of anyone with whom you deal. You must trust these men because they are reliable. They have to be reliable to stay in business.”

“Now,” he had continued, “the man who approaches you will take you to an appraiser’s office somewhere in the city. You carry your diamonds with you to be appraised. When the value of the stones is confirmed, you will be asked for a cash payment of six or seven per cent of the stones’ value as insurance which guarantees their safe delivery to you in New York. The insurance rate varies from six to ten per cent depending on circumstances. I think it now is about six or seven. After you pay the fee, you leave the diamonds with the gentlemen. They will tell you when to expect delivery.”

Mr. X remembered his amazement. He had exclaimed, “Do they give me a receipt for the diamonds? Do I just walk out the door with nothing--not even knowing the names of the men I’m dealing with?”

His friend had said, “You get nothing. Believe me, this is the way the syndicates operate. It is done every week. You understand they cannot have a record of these transactions.”

Then his friend had explained the syndicates. In Antwerp there were many wealthy businessmen who could not break into the tightly controlled, legitimate diamond business, which was in the hands of five old-line diamond clubs. Closed out of this market, they had turned to the only diamond business open to them--the insuring of diamonds smuggled into the United States and other countries. They had formed loose syndicates and had organized rings of men and women to act as carriers.

Members of these shadowy syndicates frequented certain coffeehouses in and near the diamond market. When advised that someone had prepared a shipment of diamonds, and wished insurance, the group would meet to prorate the risk. One man would take $20,000, another $30,000, and so on, until the full value of the diamonds was covered. They would agree to pay the appraised value of the stones if the stones were lost, stolen, or seized by Customs officers.

Mr. X had lain awake for hours after the conversation with his friend, trying to decide whether he should make such a gamble. He had decided finally that the risk was worth it. The next day he had gone to the diamond market, purchased the stones, and then gone to the coffeehouse as his friend had suggested. He had talked to the manager. The stranger had approached him. He had been taken to an office in a part of the city which he could never find again. His gems had been appraised. He had paid the insurance fee--seven per cent of the appraised value--and had walked out of the office with nothing to show for any of the transaction.

Before he left the office one of the men had asked him, “When are you leaving for the United States?” He had said that he intended to leave the next day, which was Saturday. Then the man had said, “We will deliver the stones to you on Tuesday night next. You will receive a phone call at your home and be given further instructions.”

Mr. X had returned to New York City and had waited at his home for the expected call on Tuesday night. The call came, finally, at 10 P.M. A voice had said, “Mr. X? Were you expecting delivery of a package?” Mr. X had eagerly assured the caller that he was expecting a delivery. The voice had said, “Can you be on the corner of 57th Street and Third Avenue at 11 P.M.?” Mr. X had told the caller that he would be there. Then the voice had said, “So that I will not make any mistakes, please stand on the southwest corner of the street and have a copy of the Chicago Tribune under your left arm.”

Mr. X had taken a cab to the corner of 57th Street and Third Avenue. He had purchased a copy of the Chicago Tribune at a newsstand selling out-of-town papers, and he folded it under his left arm. As he stood on the corner, a man walked up and said, “Mr. X?” And he had replied, “Yes, I am Mr. X.” The man had said, “Here is your package.” Then he had walked away.

Mr. X had taken the diamonds back to his apartment. He had ripped the paper from the box and had opened it to find every gem that he had purchased in Antwerp and turned over to the syndicate representatives. It was as simple as that. There was not a scrap of paper on record anywhere showing that he was liable for taxes.

The second time he had made the trip to Antwerp he had followed the same procedure, although he had dealt with different men. The second delivery had been made safely also. And now he was ready for the syndicate to make its third delivery. All he had to do was wait....

After Mr. X’s return from his third trip to Antwerp--on July 12, 1953--a Belgian Sabena Airlines plane glided to a landing at Idlewild International Airport in New York City with Capt. Robert Edmund Deppe at the controls.

The passengers debarked. Members of the plane’s crew came down the gangway with Deppe bringing up the rear. Deppe carried in his hand a shoe box tied with a string. He saw one of the airline clerks near the ship and he tossed the box to him.

“Hold this for me, Joe,” he said. “It’s a little gift I brought over for a friend. He’ll be calling for it.”

The clerk said, “Sure, Captain. I’ll put it in the crews’ baggage room.” No one paid any attention to the incident nor did anyone later give a second look at the shoe box when the clerk tossed it onto a shelf in the baggage room.

There was considerable excitement in the terminal when the crew checked in. “What’s going on?” Captain Deppe asked. An airline employee replied, “The Customs people are searching everyone again. You might as well get in line yourself.”

Deppe got in line. He watched the agents and inspectors go through his luggage and then one of them ran his hands lightly over his clothing.

“What is it all about this time?” he asked.

The inspector grinned. “Just another one of those routine checks, Captain. I’ll admit it’s getting monotonous.”

But it was more than merely another routine check. Several weeks earlier Tom Duncan, chief of the Customs Service’s Racket Squad, had received a tip from an informer in Antwerp that diamonds were being smuggled into the United States by crew members of a trans-Atlantic airline. The informer didn’t know which airline was involved. All he knew was that the carriers were airline employees. The chances were, however, that the carriers were employees of the Belgian airline, Sabena.

Duncan called in several agents and told them the story. “Let’s start shaking down the crew members on those Sabena planes,” he said. “We can’t search them on every flight. But we can make it so rough maybe somebody will crack.”

The searches had been underway for more than a month when Duncan received a telephone call from a Sabena representative.

“What can I do for you?” Duncan asked.

“We’re pretty upset about these searches,” the caller said. “One of our crew members is in my office now. He wants to talk to you. He believes he has some information that may be helpful. Will you see him?”