This is the first in a series of inside stories of cases prosecuted by the office of the United States Attorney, Southern District of New York, where Mr. Dailey was head of the Criminal Division and chief assistant before his recent resignation to become Special Assistant to the Attorney General of the United States.
When the liner Europa docked in Manhattan from Germany on September 28, 1935, Customs Guard Morris Jacobs noticed a steward standing at the foot of the crew gangway, holding a violin case. The steward was deep in conversation with a tall, finely tailored man of military mien who cast frequent furtive glances about him.
The combination, in that particular spot, looked somewhat suspicious. As the customs guard approached, the tall man saw him and said loudly, with a heavy Teutonic accent, to the steward:
"Very well. Now just declare the violin to the customs authorities, and I'll get it when the duty is paid. It is very nice indeed."
Guard Jacobs seized the violin case and opened it, only to find it empty. Then, thinking that the steward must have smuggled something out of it, he turned to the tall man, whose clothing yielded an interesting-looking envelope, large and heavy, on which were the words, "For Berlin."
"So this is what was in the violin case — or about to be put there?" said the guard. "You'd better come along with me." The steward meanwhile had vanished up the gangplank.
Thus it happened that the curtain was raised on the activities of the Nazi spy ring — and on a case which, as to both importance and interest, was typical of the front-page crimes now prosecuted by United States Attorneys throughout the country. There was a time when prohibition and contraband-smuggling cases made up the bulk of the work. But today, due in part to the ever-increasing use of the mail-fraud statutes and to recent Congressional legislation widening the scope of the federal statutes, United States Attorneys are bearing down heavily on criminals who heretofore found themselves subject only to state laws — laws which, unfortunately, were all too vulnerable to evasion.
During my recently ended term as chief assistant to the United States Attorney for the Southern District of New York, and before that, when I was chief of the Criminal Division of the same office, there passed over my desk the details of crimes engineered by some of the most cunning malefactors with whom the country has ever been cursed. In order that these offenses might be brought into our office for prosecution by my superior, my associates, and myself, some outstanding detective accomplishments — definitely ranking with the fine work of the G-men — were turned in by agents of the State, Post Office, and Treasury Departments, ever alert investigators about whom the general public knows little.
Johanna Hofmann, hairdresser, whose story implicated the whole spy ring.
As I recite details of some of the outstanding cases of the past five years, I hope to make it clear, among other things, that the bigger they are the harder they fall when Uncle Sam goes after 'em.
And now for the mystery that developed following the discovery of the envelope in connection with the violin case:
In the office of Supervising Customs Agent John W. Roberts, the envelope was found to contain a large number of tiny photographic negatives. The camera had apparently been focused on diagrams or plans of some sort. It would take an expert to make head or tail of them. Accompanying each negative was a page of description written in German. When hastily translated, this was dry technical stuff, except for one passage reading:
With reference to a previous report about velocity ammunition I was to have received from an officer, the officer has already contacted Von Papen.
Von Papen! Could that have been Franz Von Papen, who at the time was Hitler's representative in Austria?
The suspect, who gave the name of William Lonkowski, said he was a piano tuner. A quick check in places where he said he had tuned pianos bore him out.
These films? Why, he explained simply and humbly, they were pictures of airplane designs, copied from American technical publications. He wrote for aviation magazines in Germany on the side, he said, and this Von Papen was merely the editor of one of them.
And the steward? Well, Lonkowski said, he had just been trying to save heavy postage by arranging with the steward to deliver the envelope for him abroad.
Unfortunately, there was no solid basis for holding Lonkowski, at least not for any length of time, There was no proof that he had violated any major statute. And so he was released.
The negatives were retained, and Major Stanley Grogan of G-2, the Army Intelligence, was called in. One look at one negative, and he said it appeared to be a highly secret plan for a new streamlined landing gear then being built for pursuit planes by the Seversky Aircraft Company at Farmingdale, Long Island.
When greatly enlarged prints of the films were made; Major Grogan's impression proved correct. Not only that, but many of the other negatives were found to show closely guarded designs, including those of an automatic machine-gun sight for navy planes and of a new navy scout bomber being manufactured by the Curtiss-Wright aircraft plant in Buffalo.
Inquiry at the address Lonkowski had given disclosed that he had never lived there. By this time, too, the Europa had gone back to Germany, and with it the steward with the violin case. Who the steward was couldn't now be ascertained, because Lonkowski had attributed to him a name that was not on the crew list, and the customs guard hadn't obtained a detailed description of him.
Notification of this episode came to me as head of the Criminal Division of the office of the United States Attorney, Southern District of New York. It was up to the United States Attorney's office to keep an eye on whatever investigation was made, with a view to seeing that the kind of evidence obtained would stand up in court.
The Army Intelligence Service decided to scrutinize every German-born worker in both the Seversky and Curtiss-Wright aircraft plants.
Obviously the Nazi espionage system had for some time been desperately at work in this country. No one had realized that a plot of the magnitude suggested by the Lonkowski seizure had been afoot.
Now, it was the rule that only American-born or naturalized citizens were permitted to work in the aircraft factories engaged on United States government orders. It was learned that in both the Seversky and Curtiss-Wright plants there were some employees who had been born in Germany but who had later become American citizens. Two such emerged immediately as suspects.
One was Otto Hermann Voss, a big man with gold-rimmed glasses who worked in the experimental or "dream department" of the Seversky plant. That was where ideas were cooked up, and those employed in the department in question could, conceivably have business in any part of the huge establishment. Moreover, the Army Intelligence, in checking up on Voss, learned that the was prominent in Nazi activities on Long Island.
Then, in Buffalo, at the Curtiss-Wright plant, there was employed, in the key position of foreman of the metal cowling division, a man with a square, closely cropped head, by name Werner George Gudenberg. He lived at 252 Victoria Boulevard and seemed to spend a great deal of time home. Voss, likewise, was seldom observed to leave his little flat at 225 Jericho Turnpike, Floral Park, Long Island, except to go to near-by Farmingdale to work or to attend a Nazi meeting.
It was learned that both men had been aviators for their Fatherland during the World War. So had Lonkowski, investigation in Germany disclosed; and he proved to be back in Germany now. Further information from the other side was to the effect that he had held no less a post than chief of aviation espionage for Germany in the United States!
It was arranged that both Voss and Gudenberg should be carefully watched for any untoward move. But almost a year passed and no such move was made. Voss, however, was becoming more active than ever in the Nazi movement, and Gudenberg had left Curtiss-Wright to take a responsible position with the Hall Aluminum and Aircraft Company at Bristol, Pennsylvania, which was turning out a certain type of bomber for the navy. Moreover, he had put in a bid for a job in of all places, the United States Navy Aircraft Plant at Philadelphia!
One night Voss was trailed to a Nazi meeting a few miles from his home, and seen to meet and talk with a well dressed man wearing hornrimmed glasses. The two went to Voss' flat, where the caller remained until the early hours of the morning. Then he was trailed to Manhattan. He turned out to be Dr. Ignatz Griebl, a prosperous physician who specialized in women's disorders.
Dr. Griebl, we learned, had been a German artillery officer in the World War. After the armistice he had come to New York, attended Long Island Medical College, meanwhile becoming a naturalized American, and then put an M. D. sign outside his door. Brilliant, and with quite a way with the ladies, he soon prospered handsomely. Later on he got into the United States army as lieutenant in the Medical Reserve Corps.
He was known to be one of the chief Nazi leaders in the United States, being the president of the Friends of New Germany — later to become the German-American Bund. Nor was he a stranger to the United States Attorney's office. We had questioned him when the State Department had learned that he had offered asylum to a personal press agent of Hitler when Washington was trying to locate the agent to ascertain the why and wherefore of his presence in this country.
And this was the man who was a reserve officer in the United States army! What had been the reason for his long conference with Voss, the aircraft worker, after dark in the Jericho Turnpike flat? It certainly didn't seem to us that it could have been about the activities of the Friends of New Germany, for Voss was not an important person in that organization.
So a watch was placed on Dr. Griebl's home and office at 56 East Eighty-seventh Street — a swank neighborhood. His patients, for the most part, were wealthy women. His personal callers were mostly men, from middle-class to the seamy side, and they showed up after office hours.
Any visitor who looked like a good bet was trailed. The most that we got on such individuals was that they attended Heil Hitler meetings in beer stubes in the German section of York-ville, which was not far from Dr. Griebl's place. One night, however, a furtive-looking man came shortly after eleven o'clock. He had been trailed from the Jericho Turnpike flat. He stayed in Griebl's only a short while, and then left to board a midnight train for Philadelphia.
He was trailed to the lobby of a shoddy hotel on the fringe of Philadelphia's Chinatown. There, in the early hours of the morning, he met none other than Gudenberg, now working in the Bristol establishment that was filling United States orders.
Here was the first direct link between Gudenberg and Voss, the Long Island aircraft worker, for this furtive figure had gone from the Voss flat to Dr. Griebl's. Though it was impossible to ascertain the nature of the hotel-lobby conference, this turn of events was encouraging.
Then came another standstill. Watchers simply couldn't get anything on either Voss or Gudenberg — or Dr. Griebl — except that their pro-Nazi leanings were apparently becoming stronger than ever, and you can't send a man to jail for that.
At length two solid years had elapsed since the episode at the Europa gangplank. Spies had been picked up here and there throughout the country, some of them being sent to prison for violation of the National Espionage Act; but they were small fry. We wanted to get to the core of this sinister business.
Then, along toward the end of 1937, things began to happen in various places simultaneously. A bulletheaded visitor to Dr. Griebl's place was trailed one night straight back to the Europa, which had docked only that morning. He was found to be a steward named Karl Schlueter, and he answered in a general way the description of the man with the violin case. Two men whom Gudenberg was seen to meet in Philadelphia turned out to be Europa stewards also. Their names were Karl Eitel and Herbert Haenichen.
At the same time Voss was trailed to a midtown New York hotel, and there seen talking in the lobby with an attractive young redhead. This girl was trailed back to the Europa, dresser on the liner and that her name was Johanna Hofmann.
Nothing developed that would warrant an arrest. But it was clear that something of moment was being planned. Stewart Schlueter seemed to be the head man of the crowd from the liner, as it was always he who called at Dr. Griebl's. So he was checked up on in Germany, where it appeared that he was very close to high official circles in Berlin — rather lofty company for a ship's steward.
It was while the situation was getting increasingly interesting in New York that a singular thing happened in Scotland. Up in Dundee there was under suspicion of the British authorities a certain Mrs. Jordan, the Scottish-born widow of a German World War officer. She had been observed lingering in the vicinity of British fortifications time and time again. Shortly after being put under surveillance, she was observed going to Berlin and visiting official quarters.
The British authorities put a watch on her mail. Late in January, 1938, they intercepted a letter from New York. The envelope, addressed of course to her, bore no return address. Inside it was another envelope, left blank. Inside this was a message, printed by hand in German and signed "Crown."
This message detailed an amazing plan which Crown was to carry out on January 28 in New York. On what he proposed to do. Crown was reporting to an unnamed superior, obviously the person whose name Mrs. Jordan was to put on the plain envelope. The plan was this:
Crown, on the morning of the 28th — a Friday — was to telephone from a public booth in midtown New York to Colonel Henry Eglin, commanding officer at Fort Totten, New York — location of the world's finest mobile antiaircraft regiment — and was to say that he was Major General Malin Craig, chief of staff of the United States army. As General Craig, he was to inform Colonel Eglin that an emergency staff meeting was being called at the Hotel McAlpin at 12.30 P. M. He was to instruct the colonel to arrive at the hotel at that hour, alone and in civilian clothes, bringing with him all mobilization and coast-defense charts and maps. He was to tell the colonel to wait in the lobby until he heard a Mr. Thomas W. Conway being paged, and then to speak up as Mr. Conway.
Having done so, Colonel Eglin was to be led to a room where Crown would be waiting. Just outside the room, on a window ledge, there was to be another spy, working as a window washer. If Crown was not successful in overpowering Colonel Eglin and taking from him the vitally important plans, the window washer was to jump in and put into play a fountain pen filled with a deadly gas! Near the unconscious form of Colonel Eglin there was to be left a copy of the Daily Worker, a Communist organ, to tie the crime to Moscow!
You can imagine our feeling when news of this astonishing letter was cabled to the United States! The Federal Bureau of Investigation was immediately called in, as it was time for action now, and Director J. Edgar Hoover dispatched several of his best men to the New York area. At this time I had been assigned to the post of chief assistant to United States Attorney Lamar Hardy, and from now on it was my duty to keep acquainted with every move made by the G-men, working in co-operation with the Army Intelligence.
Long before the hour when Crown was to phone Colonel Eglin, proper preparations were completed. Radio cars of the New York Police Department were ready to speed to whatever place the phone call was made from. The idea was that Colonel Eglin was to play dumb, pretend to be deceived, and hold Crown on the wire until it could be ascertained where the call was coming from.
But the call never came.
Meanwhile the British authorities had sealed up that letter and let it trickle through to Mrs. Jordan. They wanted to know to whom she was going to readdress it. They found out. She sent it to one Spielman in Berlin and secret information there indicated that Spielman was none other than the noted Dr. Pfeiffer, head of the entire German espionage service!
With a high official like Dr. Pfeiffer involved, the situation might well border on a dangerous international incident. And so the known facts were laid before President Roosevelt. He issued instructions that the investigation be carried forward, no matter whom it involved.
One day early in February. 1938, after the Europa had docked, the bulletheaded steward Schlueter and the redheaded hairdresser Johanna Hofmann were trailed to a Brooklyn apartment that had not previously figured in the picture.
It was learned that the apartment was occupied by two former soldiers in the United States army, one a deserter, the other with an honorable discharge.
The deserter, an F. B. I. probe disclosed — and how that F. B. I. can find things out! — was one Guenther Gustave Rumrich, twenty-seven-year-old member of an old and illustrious Austro-Hungarian family. Rumrich had been born in Chicago, where his father had been secretary to the Austro-Hungarian consulate. Raised in Germany, he had come back to this country and enlisted in the army, serving in Panama in the Medical Corps until he deserted in 1936.
Rumrich lived with a fellow about his own age named Erich Glaser, who had been born in Germany, had been naturalized over here, and had joined the army. The two had served in Panama at the same time. For some time before the visit of the steward and the hairdresser, neither Rumrich nor Glaser had had any apparent means of support.
It was while these two young men were on the surveillance list that a letter mailed in New York was received by Ensign William Butler Brown of the aircraft carrier Saratoga, stationed at San Pedro, California. It read:
An enterprising young man can always make his way without much trouble. Why don't you wise up to yourself and make some money? If you are open for contact, insert the following advertisement in the N. Y. Times. The ad should read: "Brownie. Okay for contact. W. B."
If you pass this on to Naval Intell., you will suffer dire consequences. If you play ball, you will benefit.
Almost simultaneously with the arrival in New York of this letter, forwarded by navy officials to whom Brown had turned it over, a corporal at the base hospital at Fort Hamilton, New York, received a phone call.
"This is Major Milton speaking," said the caller, representing himself as a prominent officer of Fort Hamilton. "I'm on my way to give a lecture on a certain disease and forgot to bring along my report. I want it immediately — the report on that disease for tins area. Please send it immediately by taxi." He designated a point in Brooklyn only thirty cents distant from Fort Hamilton.
The unsuspecting corporal sent a soldier with the report. A man who seemed youngish for a major met the cab, gave the soldier a dollar to pay for the ride, and got the report.
When this came to our attention, we figured that some one linked with the spy ring had done the job, for the report would indicate the strength of the army man power in the area in question, since the number of cases of such disease is invariably a certain small percentage of any large group of soldiers.
Here was our tip-off on the lengths to which the spies would go to get information. The F. B. I. immediately took steps to have all army posts very much on guard in the future.
Meanwhile the soldier who had delivered the report so described the "major" to whom he had given it that we figured the man might have been Guenther Rumrich!
By this time, Rumrich was being tied up in more ways than one. Samples of his handwriting were obtained from army records, and experts decided that he might well have written both the Crown and the Brownie communications. But he wasn't falling into any traps just yet. An advertisement was placed in the New York Times, as per instructions to Ensign Brown, but there was no answer.
Over in Scotland, Mrs. Jordan was still getting mail from Crown in New York. The latest communication to be intercepted disclosed that certain unidentified associates of Crown had succeeded in obtaining a replica of White House stationery, and that duplicating the stationery and forging President Roosevelt's signature to "important documents" was regarded as" simple matter."
We figured that it would be but a question of time until one of the spies would make a slip. We wanted to wait until that moment; for then, if we nailed one of them under the most incriminating of circumstances, the chances were good that he would break and confess, implicating others. Then more confessions might be forthcoming.
On the morning of February 14, 1938, a call came into the Passport Bureau of the Subtreasury Building on Wall Street. "I'm calling for Mr. Hull, Secretary of State," said a man's voice. "I wish you would send fifty passport application blanks to me at the Hotel Taft. This is Mr. Weston, Undersecretary of State."
The clerk pretended to fall for the scheme — obviously phony, for there was no Mr. Weston in the State Department. This looked pretty hot, for passport application blanks aren't handed out indiscriminately. The government wants to know who has them. Was it possible that the Nazi spy crowd was going to use these blanks as a first step toward obtaining, somehow, fifty fraudulent passports?
The Hotel Taft was thick with sleuths when a dummy package was delivered. No Mr. Weston was registered, but a man giving that name had phoned and requested that a package be held for him. A Western Union boy called for the package. It now developed that Mr. Weston would call for it at a midtown Western Union office.
Sleuths waited at the telegraph office all night — in vain. Next morning a boy from another Western Union office, in the Greenwich Village section, came in and picked up the package. Mr. Weston, it appeared, had now made arrangements to pick it up at that office.
He did not show up there, either. But a call came through instructing that the package be delivered at a tavern on near-by Houston Street. At the tavern it was learned that a Mr. Weston had phoned, asking them to hold a package for him.
And now another Western Union boy appeared. He was to get it and deliver it to Mr. Weston — who was right down the street, waiting.
The rest was easy. The moment Mr. Weston took the package from the boy, sleuths pounced upon him.
He was Rumrich, the army deserter. Brought down to our office in the United States Courthouse on Foley Square, he quickly confessed to Mr. Hardy and several others of us that he had been the mysterious Crown who had written, via Mrs. Jordan, to Dr. Pfeiffer, head of the German espionage service. He said, too, that he had written the letter to Ensign Brown.
Rumrich, who implicated his pal Glaser, who was also picked up and who corroborated his story, said that he had been employed by Schlueter, the Europa steward. Schlueter, both Rumrich and Glaser said, had directly represented Dr. Pfeiffer, and had constantly urged the two men to cultivate army acquaintances and try to find some way of obtaining secret defense plans. Rumrich admitted that he had phoned for the disease report and obtained it from the Fort Hamilton soldier.
We had now to get stories that would incriminate individuals higher and higher in the espionage set-up. Schlueter wasn't on the Europa when it landed in New York next time. He had been tipped off, no doubt. But Johanna Hofmann, the hairdresser, was, and Johanna quickly implicated everybody from Dr. Pfeiffer and Lonkowski down to Dr. Griebl, the American Nazi leader.
The hairdresser's story corroborated everything we had known or suspected. A gigantic spy network, extending into the very heart of the nation's state and industrial affairs, was well under way — just in case of emergency. Nothing even approaching it had ever before existed in this country in peacetime. The ways were greased for the theft of every important military or naval secret and every important defense plan. The plot had not really reached its full flower, fortunately.
Dr. Griebl and Voss and Gudenberg were picked up. Griebl laid everything to the German government and the vanished Lonkowski, and expressed every desire to co-operate with us. Gudenberg did likewise. But, while the grand jury was probing the case, both Griebl and Gudenberg slipped back to Germany! Once there, they were out of our jurisdiction.
The grand jury handed up indictments for violation of the National Espionage Act against every one involved, from Dr. Pfeiffer down to Rumrich and Glaser. But all the indicted persons except Johanna Hofmann, Voss, Rumrich, and Glaser were beyond our jurisdiction when the trial opened in October, 1938. The quartet were found guilty after a brilliant presentation of the case by Assistant United States Attorney Lester C. Dunnigan. The hairdresser got four years, Voss six, and Rumrich and Glaser two each. Meanwhile, over in Scotland, Mrs. Jordan was sentenced to four years at hard labor.
Thus, while the really big shots of the ring escaped actual punishment, their craven work was thwarted — forever, we hope — and President Roosevelt himself expressed great satisfaction at the smashing of the ring.
* This incident is recounted by Charles Nordhoff and James Norman Hall himself in their Knights of the Blue, which appeared last summer in Liberty and came out as a book with the title Falcons of France. They attribute the misadventure to Charles Selden, the imaginary pilot who tells their composite true story
Publication Date: September 2, 1939