Part 46

Duncan, Smith and Zamosky followed the Falkenstein car out of Montreal. When it was evident the couple intended to cross the border at Champlain, New York, Duncan radioed a request to the Champlain Customs station asking that the Falkensteins be detained.

Julius and Ann Falkenstein were seated in an inspector’s office when Duncan and his aides walked in and closed the door.

Falkenstein came out of his chair with a display of outraged innocence. “What is the meaning of this?” he shouted. “Why are we being held here?”

Duncan said, “We happen to think you went to Montreal to pick up a shipment of diamonds.”

“We have no diamonds,” Falkenstein said. “Go ahead and search us.”

“That’s what we intend to do, Mr. Falkenstein,” Duncan said.

A search of their persons revealed nothing. Duncan ordered their automobile and luggage searched. Nothing was found.

Duncan felt certain that Falkenstein had gone to Montreal to pick up the diamonds. There must have been a hitch which prevented delivery. He questioned the couple at length. And then reluctantly, late in the afternoon, he told them they could go.

It was during this questioning that Captain Deppe was sitting in his room at the Henry Hudson Hotel listening to the telephone ring in the apartment of the Falkensteins.

* * * * *

When Duncan returned to his office the next morning, he found a cable from Beers congratulating him on the “seizure” of the diamonds. A telephone call to Antwerp cleared up the mystery of the cable: rumors were afloat in the diamond market underworld that a shipment of diamonds to the United States had not been acknowledged--and the diamonds were presumed to have been seized by Customs agents. There were reports, too, that Falkenstein was “in trouble.”

The following day, Beers advised New York that Falkenstein was supposed to have received one shipment of diamonds in Montreal on July 11 and another shipment in New York on July 12. The shipment to Montreal had been delayed--but the shipment had arrived in New York and presumably was “safe.”

Duncan could not know that the New York shipment at that moment was lying in a shoe box on a shelf at the Sabena Airlines baggage room. On the day of Captain Deppe’s arrival, the room had been turned upside down in a search for contraband, with no one noticing the box. Duncan later said ruefully, “The box was in plain view, just sitting there. I suppose that’s why it was never opened. It was too obvious.”

A few days later another Sabena pilot would casually enter the baggage room, pick up the box, and deliver it to Mr. X--completing the job which Deppe had started.

At this point Duncan decided to drop the searches at the airport and to take another tack. A good starting point seemed to be the Henry Hudson Hotel. Agents Smith and Moseley were ordered to obtain from the hotel all records of outgoing telephone calls made by Sabena personnel over a period of several months. Hotels normally keep such records for as long as four or five years--or until there is no further need for them in verifying accounts.

The checking of the telephone calls was slow, tedious work. At last one of the agents came up with the record of two interesting calls--both made to Trafalgar 3-8682, the telephone of Julius Falkenstein. The calls had been placed from the room occupied at the time by Capt. Robert Edmund Deppe. “I think we had better keep a check on this gentleman,” Duncan said.

From that day forward, each time Captain Deppe arrived in New York he was under surveillance by Customs agents. They checked him in and out of the hotel, in and out of restaurants, and in and out of movies, cabs and subways. Wherever he went, he had an agent as a shadow.

It was a boring surveillance. Captain Deppe was a methodical and unimaginative man who stayed pretty much to himself. He made few outside calls, and the incoming calls usually were those from the airline’s flight operations office relaying routine instructions.

At last Deppe strayed from his normal routine. After bringing his plane into Idlewild International Airport on September 27 he left the airport and headed for the Henry Hudson Hotel, followed as usual by the Customs agents. When he arrived at the hotel he did not go directly to his room as he customarily did. He slipped into a lobby telephone booth and made a brief call. Then he went to his room to change into civilian dress.

A short time later, Deppe left the hotel. He walked to the subway and took a train to Columbus Circle. He changed trains and rode into the Bronx, where he left the subway and strolled to an apartment building on Bennett Avenue. He was reaching for the pushbutton at the door of Apartment 1A when the agents closed in on him.

“We are U.S. Treasury agents,” Smith said. “We want to talk to you.” He asked Deppe why he had come to this particular apartment.

Deppe made no pretense of innocence or outrage. He said calmly, “I came here to deliver a package.” He reached into his pockets and pulled out two envelopes. Inside each of them was a package containing dozens of diamonds whose value was later appraised at $233,230.

“Go ahead and ring the bell,” Smith said. “Give this package to the person who opens the door and don’t try any tricks.”

The agents stepped to one side and Deppe rang the doorbell. The door was opened by Mrs. Julia Michelson, a dark-haired, plump woman whose husband operated two neighborhood grocery stores.

“Here is the package I was to deliver to you,” Deppe said.

Mrs. Michelson accepted the package with a nod of thanks and started to close the door. At this moment the agents moved quickly to block the closing of the door.

“We’re Treasury agents, ma’am,” Smith said. “We would like to talk to you about this package.”

While Deppe was being taken to headquarters for questioning, Mrs. Michelson explained that her brother-in-law in Paris had written to her asking that she accept a package from a friend who would deliver it to her apartment. She was to hold it until someone else called for it.