Gambling with Gangsters

Large amounts of money have been found cleverly concealed about the persons of J. J. Kellogg and J. MacDonald, held here for questioning. The men were arrested Wednesday as suspicious characters.

— The Daily Times (Davenport, Iowa), October 12, 1931

Nothing says “crook” quite like cash concealed in your clothing. One man had $1400* ($23,172) in hundred dollar bills sewn in the lining of his coat sleeve. His pal had $560 ($9,269) in hidden compartments in the instep and heel of his shoe.

They were spotted hanging around the downtown streets of Washington, Iowa, on the evening of October 8, 1931. Earlier in the day they’d checked into the Colenso Hotel on the town’s main drag. The coat cash man said his name was J. J. Kellogg and James McDonald was who the shoe cash man claimed to be. After the pair booked into the hotel, they’d inquired about what time the local banks opened their doors.

Naturally the cops wanted to know who they were and what they were up to.

J. J. Kellogg, who looked like he walked out of central casting for the role of a two-bit gangster in an Edward G. Robinson film, stuck out like a sore thumb in Washington where most of the townsfolk were farmers. With the fedora, cigar, lean, hungry face and suspicious eyes — he might as well have had “gangster” tattoed on his forehead.

He was taken into custody for having false license plates on his car. The police then discovered that one of the many names he used was Riley Gaffigan. They suspected that Riley and his buddy James had been part of a gambling con pulled the previous January in Springfield, Illinois.

The victim of that con was Myrtle Tanner Blacklidge, the tax collector for the second wealthiest district in the United States — the northern part of Illinois, which included Chicago. Myrtle went to the Hotel Abraham Lincoln in Springfield on January 22, 1931. There she played the card game faro with three men in a hotel room. The men told Myrtle she’d won $207,000 ($3,426,258) but they claimed her win was “on paper.” They wanted Myrtle to fork over $50,000 ($827,598) cash to replace a check she’d provided to get into the game. Only then, they said, could they give her the winnings.

Though she had a well-paying job, Myrtle had expensive tastes and was desperate for cash. She’d lost both her adult son and her husband to illness within weeks of each other the previous year. She borrowed the $50,000 in $1000 bills from a friend — defeated Chicago mayoral candidate, Edward Litsinger. Of course Litsinger, like any Chicago pol worth his salt, expected something in return for the loan. Myrtle promised him $10,000 ($165,519) of her winnings.

She rejoined the card players and handed over the $50,000 cash, but she was unable to resist a little more gambling. She lost the whole $50,000 but figured she still had $157,000  ($2,598,659) coming to her. The men told her to wait in the room while they went to get the remainder of her winnings. They never reappeared. “I realized I had been duped,” she later commented.

Litsinger said Myrtle lied to him about why she needed the money, telling him it was to complete a “business deal,” not to gamble. He promised to sue her. Then it was revealed that it was actually Litsinger’s nephew, Fred Litsinger, the tax reviewer for northern Illinois, who’d handed over his uncle’s cash. Fred had done a bit of gambling himself at the time. Hoping to avoid bad publicity for his family, Edward dropped the lawsuit.

Myrtle resigned from her tax revenue job due to the scandal.

George Perry, known in Chicago as “Big George” Parker, was shot to death in his home in South Bend, Indiana, a few months later. Myrtle identified him as one of the three men who’d taken her in the faro game.

The authorities thought they’d found the remaining two men when the Iowa police arrested Riley and James. In addition to the cash hidden in their clothes and shoes the men carried a substantial number of used cashier’s checks with the details erased out. Police believed their current racket was to start poker games with local farmers, paying out their losses with the bogus checks.

Not wanting to personally confront the gangsters, Myrtle and Fred were unwilling to go to Iowa to identify the men. Myrtle looked at photos of Riley and James and said she thought they weren’t the ones. The men each paid hefty $500 ($8,275) fines for driving with illegal license plates on their car and were released. They melted into the criminal underworld and weren’t heard from again under the names they’d used in Washington, Iowa.

No one was ever arrested for the faro game con.

Myrtle’s troubles continued when the wife of a policeman sued her for $100,000 ($1,837,537) in 1934, claiming Myrtle had stolen the affections of her husband. Torrid love letters from Myrtle to “Denny, Darling” were produced in court as evidence. The jury awarded $7,500 ($140,815) to the wife, and Myrtle, unable to pay, was sent to jail. Ironically the policeman’s wife was required to pay Myrtle’s jail boarding fees — 50 cents ($9) per day!

In her last years Myrtle lived in a Chicago nursing home, where she wrote for the monthly newspaper, “The Optimist.” She died at the home in 1958, aged 79.

*Note: U.S. dollars were converted to 2018 values using an inflation calculator and are listed in parentheses.

Featured photos: mugshots (?) identified on the reverse as “James J. Kellog, alias Billie Gafney, Laferty.” Collection of the author.