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The Mark Inside

The $1,000,000 Bunco Ring.

 

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Rocky Mountain News, February 9, 1947

$1,000,000 Bunco Ring
By Frances Melrose
Neighbors in the vicinity of the First Universalist Church at E. Colfax ave. and Lafayette st. would have found cause for speculation had they been keeping a vigil at their windows on Aug. 25, 1922.
Lacking a minister, the church had been closed for several months, but on that August day, car after car drove up to the rear entrance of the building and discharged an unusual cargo of handcuffed men. The neighbors, along with the newspaper and Denver police, were unaware of what was taking place, but they were to learn the next day that Denver's fighting district attorney, Philip S. Van Cise, was making a wholesale cleanup of Denver's "million-dollar bunco ring." The church made a strange jail, but it served a valuable purpose.
For four years the international band of 150 confidence men had been conducting large-scale operations in Denver during the summer, with a take of from one to three million dollars each season. When fall came, they moved elsewhere for rich pickings, particularly to Florida.
Scores of persons were painlessly amputated from thousands of dollars by the smooth crooks, and few of the victims ever squawked. E. Nitsche, a florist of Dallas, Texas, lost $25,000 to the gang in 1919. In February, 1921, Denver papers reported that a minister of Goshen, Ind., had committed suicide as a result of a shortage of church trust funds. He had been mulcted of the money in Denver. George Kanavuts of Sapulpa, Okla., theater owner, in the latter part of August, 1921, was bilked of $25,000 in Denver. S. Puch of New Jersey was swindled out of $60,000 by the gang in Florida. The outstanding record of all was turned in by Jackie French, third in command of the Denver gang, who took $120,000 from P.R. Nicholson of Ohio, $200,000 from George Pohling, Philadelphia brewer, and $25,000 from John G. Scott, an Englishman, during one busy week in Florida.

Con men who made Denver their summer headquarters in 1922 had worked out a virtually infallible scheme for taking their rich suckers, and they used the plan time after time with scarcely any changes. Their mode of operation was perfectly demonstrated in the case of Herbert J. Gray of Exeter, England.
Gray had come to Denver in 1921, seeking a business connection. While watching a fly-casting contest, an agreeable stranger, a man named Webb, engaged him in conversation. Webb later took Gray on motor trips, provided him with entertainment and introduced him to a man named Clark. Clark shortly pointed out a third man named Reynolds, who was reputed to have made $25,000 by stock operations in a few minutes in Kansas City.
"You're Mr. Reynolds, friend of Judge Graham of Kansas City, aren't you?" Clark accosted the stranger.
Reynolds, at first appearing reluctant to talk to strangers, finally became friendly with them and before long agreed to help Gray and Clark make a few investments on the stock exchange. Leading the sucker up to the trimming, the con men let Gray start with $20, and in a short time returned with $40 as his winnings. The transaction took place in the Denham Bldg. in a "stock exchange" which appeared real enough but actually was a "dummy" rigged up by the swindlers as an appropriate backdrop.
As Gray's winnings increased, the swindlers closed in for the kill. Reynolds suggested that they buy a large block of oil stock, to which Gray agreed, and Webb made the purchase. The stock was sold at a profit, and the trio went to the stock exchange to collect their $75,000 winnings. The swindlers went so far as actually to place the money in Gray's hands.
As Gray was preparing to depart with his new wealth, the manager of the stock exchange told him that since he had been buying on credit, before he could take the money he must first prove that he could have put up the original amount if necessary. Gray was given time in which to return to England and get $25,000.

When Gray returned with the cash, he and Reynolds reported to the stock exchange, and while they were waiting for papers to be signed, Reynolds made another "investment" whereby the entire winnings were wiped out in less than four hours.
Reynolds said he would repay Gray, but that he would have to make a trip out of town to obtain the money. Pretending fear that his employer would learn of the transaction, Reynolds suggested that Gray return to London and wait for him there. After a wait of several months, with no word from Reynolds, Gray realized that he had been tricked, and notified Denver's district attorney.
The evil genius behind Denver's lucrative swindling racket was Lou Blonger. This affable French-Canadian had come to Denver in his youth and gradually worked himself into the saloon and dance hall business.
He early learned the value of paying the police for protection, and by the late '80s had achieved the desirable eminence of a "fixer," who could determined which protected crooks would be allowed to operate in the town. He secured his position by getting something on the majority of persons holding or aspiring for public office.

As more and more police and officials came under Blonger's baleful influence, receiving commissions for keeping their eyes, ears and mouths shut, many kinds of confidence games sprang up in Denver. Salted mines, fake horse and foot races and wire-tapping all had their vogue.
But in each of these swindles, the victim himself was engaged in shady business. When he started to holler that he had been duped, the swindlers laughed at him and told him he was a crook himself to have been involved in such a deal.
This was a lucrative business, but the con men wanted some way to hook the really big fish, the honest but gullible or careless men who might be interested in investing large sums on what appeared to be a sure thing.
Denver con men's ambition to branch out to larger prey was realized when Adolph W. Duff, underworld leader in Colorado Springs, transferred his operations to Denver and became Blonger's right-hand man. With their lieutenants, Blonger and Duff developed the "pay off" game which took in millionaires, bankers, wealthy farmers - but no one worth less than $5000, on the stock market swindle.
By 1922, Denver was an airtight city for criminals, largely con men. The wolves ranged 17th st., plying their trade unmolested, and the sucker who cried wolf when his pocketbook had been drained received only a pretense of help from the police.
Blonger and Duff had offices in the American National Bank Bldg., and one of the fake stock exchanges was located in the Denham Bldg. The "lookout," where a spieler could watch the street for a signal from a con man who was angling for a sucker, was located in the Rolnick Bldg. at 17th and Curtis sts.

This was the picture of Denver's underworld in 1920 when Philip S. Van Cise, lawyer and war veteran, was elected district attorney on a split Republican ticket.
Police Chief Hamilton Armstrong, one of remaining "square" officers on the force, sent for the young district attorney, told him the names of local officers and politicians he could trust and those he would have to beware of, and saw that he made a tour of the city's underworld. On this tour, the district attorney learned that gambling, prostitution and bootlegging were rife in the city, and that all raids were tipped off in advance by two detectives who actually were Blonger's hirelings.
Van Cise first realized Blonger's role in the city's flourishing confidence games when he came across a charge against Robert Ballard, accused of obtaining $25,000 from E. Nitsche in Denver in 1919. The man was arrested in Colorado Springs, Blonger put up a $2500 bond, and Ballard went about his business again, considering the bond an allowable percentage of the "take."
Van Cise determined to "bust" Blonger and clean up the town.
His first step was to line up the men he could confide in and those who would have to work with him on a campaign which could succeed only if it were kept secret.
Men in whom Van Cise placed his trust included Rowland Goddard, head of the U.S. Secret Service; Roy Sampson, former division superintendent of the U.S. Bureau of Investigation; Harry Williamson, division superintendent of the Federal Narcotics Department, and all post-office inspectors. For help in his office, the district attorney chose a young deputy, Kenneth Robinson, and two detectives, Arch Cooper, who posed as an underworld figure, bringing the district attorney inside information, and Andrew Koehn, who kept a constant watch on the gang's headquarters and the activities of Blonger.

Through adroit maneuvering, the district attorney arranged to be notified of all mail Blonger received, to see his telegrams before the crook could read them, to tap his telephone wires and install a dictaphone in his office. He even worked out an arrangement with the janitor in Blonger's building, whereby he received the contents of the confidence man's waste basket each day. To insure success in his campaign, Van Cise also called upon a number of outsiders who could be trusted. Several Denver citizens provided the prosecutor with $15,000 to carry on his work and, when the time came, they helped him arrest and hold criminals.
The district attorney had planned the smash climax to his campaign for more than a year, and he saw that it was finished as carefully as it was begun.
Blonger and Duff were among the first arrested so they could not tip off the others. The First Universalist Church was chosen for a "jail" because word of the arrests could too easily leak out around the City Jail.
Cars of rangers and private citizens making the arrests were ordered to report only one-at-a-time at the church to avoid suspicion. News of the plotted raid was kept carefully from the daily papers. By nightfall, 32 of the town's reported 75 con men had been arrested, and more were gathered in by the district attorney's men the next day. Jackie French, the gang's third ranking leader, was captured in Estes Park where he was vacationing.

All of the con men were released on bonds, the highest price being paid by Blonger and Duff, who were valued at $50,000 each. The trial was set for the following January.
The con men attempted to escape justice in a number of ways. Their first maneuver was to try to pay off witnesses being brought in by the district attorney. Next they tried to buy off Les Randle, a con man who was turning state's evidence, then threatened to "take him for a ride."
When all else failed, they brought a beautiful woman to Denver and attempted to lure the district attorney into a compromising situation, the old badger game. But this scheme failed when the lovely lady left town with the con men's money and without seeing Van Cise.
After a lengthy trial, the case was turned over to the jury. The jury stayed out a record 100 hours, a circumstance later attributed to three jurors who had been "fixed" by the con men. But when the jury finally reached a verdict, it was "guilty."
Blonger, Duff and nine others were sentenced to seven years in the state penitentiary, and the rest received three-year sentences.
Blonger died in the penitentiary five months later. Duff lived to get out of Cañon City, but committed suicide after his wife divorced him and he lost his money.
Prosecutor Philip S. Van Cise served out a successful term of office as one of the three district attorneys in the United States to break up a bunco ring.

NOTE: A shorter version of this article appeared in Rocky Mountain News on Jan. 29, 1989.
 

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