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Mobsters and Crooks – The Green Goods Swindle
In the late 1800s, the “Green Goods Swindle” was the most successful scam in America. The beauty of the scam was that the victims were trying to commit a criminal act themselves, and hardly in any position to run to the police, crying they had been swindled.
The basis of the “Green Good Swindle” was that people from around the country would be lured to New York on the premise of buying counterfeit money at a mere fraction of face value. The swindle worked like this: Men called “Writers” sent out tens of thousands of circulars throughout the country to people who had bought tickets in lotteries. The feeling was that these were the type of people who were not always honest, and could be sucked into a scheme preying on their greed. The language in these circulars was intentionally vague, and could be taken to be perfectly harmless.
A typical green goods circular sounded something like: “I am dealing it articles, paper goods – ones, twos, fives, tens, and 20s – (do you understand?). I cannot be plainer until I know your heart is true to me. Then I will satisfy you that I can furnish you with with a fine, safe, and profitable article that can be used in any manner and for all purposes, and no danger.”
The green goods writer was careful not to mention the word “counterfeit.” Sometimes to misdirect a police official who might intercept one of these circulars, the green goods writer would pen something like, “These goods are a certain brand of cigar.”
Former Confederate soldiers were also likely targets for the “Green Goods Swindle.” New York City assistant district attorney Ambrose Purdy said, “Former Confederates were so emotionally embittered and economically indebted, that they viewed green goods as a good way to hurt the government. They became an easy prey of Northern sawdust men.”
One of the top green goods operators (bosses) was James McNally. McNally directed his writers to state on their circulars, “If you have been unsuccessful in your business, I can supply you with goods which you can pay off all your debts and you can start free and clear again.”
Some operators ordered their writers to be more specific in what they were doing, Even going as far as to mention the word “counterfeit.” One such circular read:
“Dear Sir, I will confide to you through this circular a secret by which you can make a speedy fortune. I have on hand a large amount of counterfeit notes of the following denominations: $1, $2, $5, $10, and $20. I guarantee every note to be perfect, as it is examined carefully by me as soon as finished, and if not strictly perfect it is immediately destroyed. Of course, it would be perfectly foolish to send out poor work. And it would not only get my customers into trouble, but would break up my business and ruin me. So for personal safety, I am compelled to issue nothing that will not compare with the genuine. I furnish you with my goods at the following low prices, which will be found as reasonable as the nature of my business will allow:
For $1200 in my goods (Assorted) I charge $100.
For $2500 in my goods (Assorted) I charge $200
For $5000 in my goods (Assorted) I charge $350
For $10,000 in my goods (Assorted) I charge $600.”
Once the out-of -town marks arrived in New York (either New York City, or somewhere in upstate New York), they were met at the railroad station by the middlemen called “steerers.” These steerers would take the marks to the operator, or “turning point,” who was waiting in a bogus storefront, ready to complete the old switcheroo, which would leave the mark devoid of this cash, and not in a very good mood.
The scam ran like this: As soon as the mark arrived, he was shown a stack of bills that looked genuine, which of course they were. Then, after taking the mark’s money, the “turning point” would fill the mark’s suitcase (a suitcase provided by the turning point himself) with the prescribed amount of money the mark had purchased. Then a diversion would take place, and in seconds, an identical suitcase, stuffed with newspaper or just plain sand, would be substituted, with the mark being none the wiser until much later.
The steerer would then tell the mark to follow him to the nearest railroad station, where the mark would board a train to take him to his hometown. The steerer would tell the mark not to speak to anyone on the streets, until he was safely on a train and headed back home. During the train ride (or when he arrived home), the mark would realize he had been swindled, but by then, he had little recourse, since what he had intended to do – buy counterfeit money – was against the law.
Sometimes as a safety precaution, a New York policeman, or detective, was in on the deal. These crooked cops would follow the mark and the steerer, and if by chance the mark opened the suitcase and discovered no counterfeit cash, before the mark could make a scene, the policeman would hustle the mark, by force if necessary, onto the train and quickly out-of-town. Almost always, instead of being taken to jail, the mark would decide that discretion was the better part of valor, and he would reluctantly hop on the train, with his tail between his legs, cursing to himself how utterly stupid he had been.
The chief operators in the “Green Good Swindle” had as many as half the New York City Police Department in their back pockets, sometimes paying the fuzz as much as 50% of their profits. Some cops were paid to look the other way, and others were paid handsomely, to chase the marks out of New York once they had been relieved of their cash.
One of the most prolific steerers was the famous pickpocket George Appo. Appo, half Irish and half Chinese, had been in out of jail so many times for pickpocketing and other street crimes, he decided the “Green Goods Swindle” was a step up on the totem pole of criminality. This decision almost cost Appo his life.
“I worked as a steerer for over eight years and was very successful,” Appo said, in his autobiography which was never published. “Everyone I steered to the ‘turning point’ always made the operator from $300 to $1000. I received only 10% of the money, while the writer and the man, who put up the bank roll of $20,000, each received 45% of the deal. The man who put up the bankroll would have as many as 15 writers on his staff, and each of these men would bring on at least one or two victims per day.”
Because most of the marks usually carried firearms, the steerers were sometimes in danger of being, shot and sometimes killed. George Appo was once sent to Poughkeepsie, New York to “steer” two marks who were coming in from North Carolina. After he arrived in Poughkeepsie, Appo went to a hotel and met Hiram Cassel and Ira Hogshead. Both men were 6’2″ tall, and they towered over the diminutive Appo, who was 5’4″ and barely 120 pounds. Appo handed the men an envelope which introduced him as a messenger and friend of the “Old Gentleman,” with whom they had been corresponding about the sale of the green goods. Appo told the two men that the “Old Gentleman” had instructed Appo to deliver the two men to Mott Haven, where they could examine the goods.
Appo took the men to the train station, telling them “I will get you your tickets, and after you are through with your business with the ‘Old Gentleman,’ I will see you safely aboard the train to your home. While we are walking to the depot, stay 10 feet behind me and don’t talk to, or ask questions of anybody, not even me. Remember the nature of our business. Don’t board the train until you see me get on board. Take a seat near me. When the train starts, I will hand you your tickets, and have a talk with you, and give you other instructions.”
Unfortunately for Appo, Hogshead was suspicious and did not heed Appo’s orders not to speak to anyone on their way to the train station. After the three men arrived at the train station, Appo, while he was standing with Cassel, spotted Hogshead in deep conversation with an Officer Morgan. Appo approached Hogshead and asked him why he had not boarded the train. Hogshead told Appo, “I don’t care to do business. I’ve changed my mind.”
Appo, trying very hard not to lose his mark and a very profitable payday to boot, told Hogshead that he would return to hotel with them and discuss why they had had such a change of heart. When they got the hotel, Appo joined Hogshead and Cassel in their hotel room. Hogshead began drinking heavily from a flask of whiskey, and was getting more belligerent by the minute. Appo told the two men he would go by himself to Mott Haven and tell the “Old Gentlemen” that two men did not want to do business. He’d also tell the “Old Gentleman” that “goods” should be brought here to the hotel for the two men to examine. And if the two men were not satisfied that the goods were as the “Old Gentleman” said they were, Appo would then give the two men expenses to and from their home in North Carolina. So what did they have to lose?
Mr. Cassel seemed pleased with Appo’s proposal, but Hogshead kept drinking from his flask of whiskey. Then Hogshead screamed at Appo, “I tell you! I know what I’m going. I’ve changed my mind and that settles it.”
Appo knew his little scheme had reached the end of the line, so he offered his hand to Hogshead and said, “You are leaving an opportunity of your life go by unneeded. So I will bid you goodbye.”
Whereas Hogshead refused to shake Appo’s hand, Cassel was happy to do so. As Cassel and Appo were shaking hands, Hogshead pulled out a Colt revolver and shot Appo in the right temple. Appo, severely wounded, spent several weeks in the hospital with a bullet lodged close to his brain (it remained there the rest of his life). In days, Appo’s right eye became severely infected, and as a result, it had to be removed.
However, although Hogshead and Cassel were arrested for shooting Appo, Appo was also arrested for running the “Green Goods Swindle” on the two men. Since Appo was a career criminal, and despite the fact he had only one eye, Appo was convicted and sentenced to three years and two months at hard labor. And fined $250.
After Appo had been sentenced, at Hogshead’s and Cassel’s trial, Hogshead maintained he shot Appo in self-defense because, “I was afraid of him. I didn’t mean to kill him.”
Being the standup “good fella” that he always claimed to be, Appo refused to testify against Hogshead and Cassel. In fact, Appo said he had not been in Poughkeepsie perpetrating any scheme, but was in fact looking for his long-lost father, who was reportedly in a lunatic asylum somewhere along the Hudson River. Due to the lack of evidence, and Appo’s refusal to testify against them, under the direction of Judge Guernsey, Hogshead and Cassel walked out of court free men.
The innocent verdicts of Hogshead and Cassel, and incarceration of Appo, were so outlandish, the Poughkeepsie Daily Eagle wrote in their editorial, “These acquittals and the incarceration of Mr. Appo is the most wretched farce we’ve ever seen in a court of justice. Cassel and Hogshead were not simply innocent victims; but rather both were ‘morally guilty.’ One gets his eye shot out, and his life put in serious danger at the hands of the other, and he gets three years in state prison. The other, who does the shooting, goes free on the payment of a $50 fine. That may be Judge Guernsey’s idea of justice. It certainly isn’t ours.”
Probably the most famous green goods dealer of his time was James McNally. McNally, who was born Lower East Side of Manhattan, was the declared “King of the Green Goods Men.” Famed New York City detective Thomas Byrnes described McNally as being “industrious, educated, self-assured, ingenious, and gifted, with a good knowledge of human nature.”
In 1890, McNally was considered not only the top green good ‘s operator in New York City, but also of the entire entire states of America. McNally’s scams even ventured into Canada. McNally had over 35 employees working for him, and they had 800 different aliases. McNally was so prolific at his job, his “writers”printed more than 2000 circulars at a time. And they sent out more than 15,000 circulars every day.
McNally was so proud of his green goods trade, he didn’t even consider it to be against the law. “There is nothing wrong with the green goods trade,” McNally said. “It does not hurt anybody. I meet all my men face-to-face, man-to-man, and if he loses his money, he certainly ought to, because he is a bigger crook then I am.”
McNally claimed that the”Green Goods Swindle” was “built upon the common desire in human nature to get something for nothing.” McNally’s green goods scams made him a millionaire. He claimed that he once made $48,000 in one day, and $250,000 in one month.
The downfall of McNally, and the “Green Goods Swindle” in particular, started in 1893 with an investigation by the Lexow committee. The Lexow committee was an offshoot of an anti-Tammany Hall campaign started by the Rev. Charles Parkhurst of the Madison Square Presbyterian Church. The Lexow committee consisted of seven state senators, and the chairman was Republican Clarence Lexow. This committee uncovered the incestuous relationship between the green goods operators, and the New York City Police Department. The Lexow Committee concluded that police officers were little more than “criminals in uniforms.”
As a result of the Lexow investigation, more than 30 police officials were indicted. The Democratic machine of Tammany Hall Was stripped of its power, and Republican William Strong was elected mayor. One of the Strong’s first moves as mayor was to appoint Republican Theodore Roosevelt as his Police Commissioner. Roosevelt, who would later become Governor of New York and then President of the United States, went full force against corrupt policeman, and the “Green Goods Swindle” in particular. All the main green goods operators were arrested, and basically put out of business. James McNally was particularly hit hard. In late 1894, McNally claimed that he was totally broke. McNally had bought a house in Connecticut in 1893 for $30,000, but he soon lost that house because he couldn’t make the mortgage payments.
McNally moved to Chicago and tried his “Green Goods Swindle” there. However, he was soon arrested for postal violations and sentenced to four years in the Joliet state prison. By 1905, McNally was impoverished and working as a waiter in a Coney Island restaurant. In 1907, McNally was homeless and living out on the street. He was so desperate for food and a roof over his head, McNally went to the Tombs Prison and begged to be admitted as an inmate.
By 1912, the “Green Goods Swindle” basically ceased to exist in New York City. Famed lawyer Arthur Brisbane said that Police Commissioner Roosevelt, using the postal inspectors as his allies, started treating the green goods operators as “a farmer treats weeds – root them out and prevent them from coming back again.”
Roosevelt was so successful in weeding out green goods operators, by 1914 the official police instruction manual no longer mentioned the “Green Good Swindle” as one of the most common confidence games perpetrated in New York City.
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