Davidson, Bill.The Mafia:
Shadow of Evil on an Island in the Sun
SE Post Feb 25, 1967 vol 204 issue 4 p. 27 - 37
The changes in the Bahamas during the past few years involve three remarkably
contrasting men. One is Sir Stafford Sands, C.B.E., knighted by the Queen,
a cabinet minister in the former government of the United Bahamian Party,
a man so powerful in the islands that he has been know as King Stafford
I. The second is Wallace Groves, a brilliant American promoter, a multimillionaire,
and a man who has served two years in a federal penitentiary for fraud.
And the third, of course, is Meyer Lansky himself.
Meyer Lansky, now 65, was born Maier Suchowljansky of Jewish parents in
Poland. He first came to prominence in the crime world when he and the
late Bugsy Seigel formed the so-called Bug and Meyer Mob, which according
to Kefauver Committee testimony, was the "enforcement branch"
for Mafia gambling czar frank Costello in New York and Louisiana. The
Kefauver testimony reveals that Siegel and Lansky performed head-breaking
and execution duties for Costello's people on the East Coast in the early
1930's when gamblers failed to make good on their losses.
Later, Lansky worked with Louis (Lepke) Buchalter, Jacob (Gurrah) Shapiro
and Albert Anastasia in the notorious Italian-Jewish organization called
Murder, Inc. Joe Valacchi testified to the McClellan Committee that Lansky
was a close associate of Vito Gevonese, now in prison on a narcotics conviction
but then the boss of bosses of all the Mafia families in the United States.
As recently as last September, a Lansky associate, Florida Mafia underboss
Santo Trafficante, was among 13 men arrested at a "Little Appalachian"
meeting of Mafia leaders convened in a restaurant located in the Queens
section of New York City.
During all this time Lansky was arrested seven times on various charges
ranging up to murder, but he was never convicted. Witnesses have a habit
of changing their testimony when Lansky is involved. In 1926, for example,
a man named John Barrett was taken for a gangland ride, shot in the head
and tossed out of the car. He miraculously survived and named Lansky as
his would-be assassin. But then someone tried to poison Barrett with strychnine
as he lay in his hospital bed, and he clammed up. He flatly refused to
sign the complaint against Lansky, and the case eventually had to be dropped.
In 1946 Bugsy Siegel opened Las Vegas to gambling, and Lansky, his old
partner, got a piece of the action. In 1955 the Nevada Tax Commission
charged that Lansky had a hidden ownership in the Thunderbird Hotel in
Las Vegas through his/ brother, Jake, and a lieutenant named George Sadlo.
The Commission suspended the Thunderbird's gambling license. The decision
was reversed on a technicality by the Nevada Supreme Court, but ever since
then Lansky has been on a list of 11 notorious persons whose very presence
in a Nevada gambling casino is cause for the revocation of its license.
Long before he moved into Los Angeles, Lansky began to colonize the Caribbean
for mafia gambling interests. He operated in Havana, until the fall of
his friend, Cuban dictator Fulgencion Batista, and he ran profitable illegal
casinos in the Colonial Inn and the Club Boheme in the Miami area. With
Batista's return to power in 1952, Lansky moved back into Havana in a
big way. He determined to make Havana the Las Vegas of the Caribbean and
Using Mafia money, he directed the building and operation of the $14 million
Riviera Hotel and casino in Havana. He installed brother Jake as manager
of the competing casino in the Hotel Nacional. The Las Vegas of the Caribbean
boomed not only not only from its gambling business but also from the
inevitable Mafia subsidiary enterprises—prostitution, narcotics,
extortion. Federal agents estimate that at least a million dollars a month
flowed back to the Mafia in the United States through Lansky. The Mafia
investors, especially those in the Cleveland family, got quite a return
on their money, which, as the FBI knows, was then used for their other
traditional investments, such as the purchase of heroin.
Lansky built up a first-class organization in his Havana operation. He
had Dusty Peters, the courier par excellence, shuttling the money back
and forth from Cuba to Miami. He had George Sadlo, his old Las Vegas partner.
He had Dino and Edward Cellini, both wizards at designing casinos. He
had Frank Ritter, Max Courtney and Charles Brudner, who have been indicted
as three of the biggest sports bookmakers in the United States, with casino
experience at an illegal gambling palace in Saratoga, N.Y. He had a whole
corps of expert casino "floor men" in Hickey Kamm, Al Jacobs,
Dave Geiger, Abe Schwartz, Tony Tabasso, Roy Bell, Jim Baker, Jack Metler
and Ricky Ricardo.
The bubble burst in 1959 when Fidel Castro took over the Cuban government
and abolished the casinos. The Bahamian government called it a coincidence,
but four years later, when it granted an exemption to its anti-gambling
laws to the Bahamas Amusements. Ltd., to operate gambling casinos in the
islands, who should show up among the employees? Dusty Peters, George
Sadlo, Dino Cellini, Edward Cellini, plus Ritter, Courtney, Brudner, Kamm,
Jacobs, Geiger, Schwartz, Tabasso, Bell, Baker, Metler and Ricky Ricardo.
The story of how gambling came to the Bahamas involves Sir Stafford Sands,
54, the ex-minister of finance and tourism. Tough, profane, and brilliant,
Sands is right out of an Ian Fleming novel, a huge mountain of a man who
weighs more that 300 pounds, and whose left eye is glass (the result of
a childhood accident). Like many other white Bahamians, he is descended
from the Tories who left the American mainland during the years after
George Washington won the Revolutionary War, and his enemies in the U.S.
Justice Department sometimes refer to him as "King George's revenge."
The son of a grocer, Sands did not graduate from college but he still
managed to become a lawyer. He did so well in politics that he was the
principle strategist behind the ingenious and complex electoral system
that enabled the predominately white Untied Bahamian Party to control
the Negroes. Sands owes much of his wealth to the convenient fact that
the Bahamas has no conflict-of-interest law. As a lawyer, he was constantly
involved in litigation with the government, which, since he was minister
of finance, was often himself. Sands lives in a magnificent—called
Waterloo—and he owns one of the finest collections of antique paperweights
in the world. His favorite sport is shooting pigeons.
In the 1940's Sands joined forces with an American named Wallace Groves.
Now 65 year old, bald and portly, Groves was a dashing figure on Wall
Street in the pre-World War II period. A Virginian with two law degrees
from Georgetown University, he was deemed a bit too dashing in his financial
manipulations by the U.S. Justice Department. In 1941 he was convicted
of mail fraud in Federal District Court in New York and sentenced to two
years in the penitentiary, with two additional years suspended. Hill &
Knowlton propagandists in the Bahamas used to discount this blemish on
Groves' career as a youthful escapade, and they told reporters that "the
Government just made an example of him for doing what everyone else was
doing on Wall Street."
The record does not bear out this contention, and, in fact, The United
States vs. Groves is so celebrated a case that it is still studied by
students in American law schools. Groves was charged with trying to defraud
the General Investment Corporation pf some three quarters of a million
dollars. As a "front man," he used the company's president,
who later turned state's evidence and escaped punishment. Grove's scheme
involved stock manipulation and the collection of rakeoffs on commissions
unnecessarily paid to one of his henchmen for deals in South America.
The U.S. Second Circuit Court of Appeals, which reviewed the case, noted,
in upholding his conviction, that the "front man" was necessary
to the plans because Groves "had a bad reputation on Wall Street."
While the appeal was under consideration, the trial judge John W. Clancy,
deemed it necessary to hold Groves in $125,000 bail, then a record for
federal courts in the United States.
When he emerged from the penitentiary in 1943, Groves gravitated to the
Bahamas (he had built a home on a private island, Little Whale Cay, before
his debacle), and went into the lumber business on Grand Bahama, one of
the northernmost of the islands and then pretty much uninhabited./
Except for a few native fishermen and Groves's lumberjacks, no white had
lived there since the days when it was an important exchange point for
smuggled whiskey during prohibition. However, as Groves poked around the
island, he began to realize Grand Bahama's commercial possibilities. Unlike
most of the Bahama Islands, there was plenty of fresh water just below
the coral-limestone surface. Another factor, unusual for the Bahamas,
was deep water offshore that could accommodate the largest ships.
As he began to develop his plans, Groves naturally wanted the best lawyer
in the islands, and, naturally, he ended up with Stafford Sands, who had
not yet been knighted, but who was already a powerful figure as the boss
of the controlling political party and a member of the government's Executive
Council. Sands became engrossed in Groves's plans to develop Grand Bahama
and helped mightily to guide through the legislature the Hawksbill Creek
Act of 1955 (named after a body of water which bisects the island), one
of the most peculiar agreements ever concluded between a government and
a private individual.
The Hawksbill Creek Act virtually made Groves the Emperor of Grand Bahama,
empowered to do much as he wished with 211 square miles of the 430 square
miles which comprise the island He was required only to build a deep-water
port and to bring in industrial and commercial enterprises. The government
sold him 150,000 acres of land at $2.80 an acre, many of which he alter
sold for as much as $50,000 an acre. His enclave was given freedom from
Bahamian taxes until 1990; he was given total power to levy license fees
on anyone who wanted to do business in his domain; and he was given a
strong say in banishing anyone who displeased him, through the use of
the Bahamian government's no-questions-asked deportation procedures.
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