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Federal Lawdog Engages in Fishy Behavior



By Fred Reed, Bank Note Reporter
December 28, 2009

On June 10, 1867, a federal grand jury in U.S. District Court Judge William D. Shipman?s New York City courtroom indicted Charles Ulrich, Charles O. Brockway, and Nathaniel Oakley for ?making counterfeit currency.?(1) We have discussed Dutch Charley Ulrich here before. He was a player caught up in Col. William P. Wood?s major fractional currency counterfeiting bust on Staten Island in July 1866 (see Part 53).

Last installment we described how Wood then went to bat for Ulrich at a federal hearing in late April 1867, attempting to talk up Ulrich to the judge to smooth over and mitigate Charley?s part in the crime. Although Wood believed Dutch Charley was responsible for the very dangerous $100 Compound Interest Treasury Notes in circulation (see Parts 37 and 53), the top T-man went to bat for the felon. Wood?s tantalizing performance before U.S. Commissioner John A. Osborn was worthy of a pole dancer, and got the forger a reduced bail. But ultimately Wood?s shenanigans didn?t work. He was castigated by the federal judge, who then swore out a warrant on Ulrich (see Part 54), and referred the matter to a federal grand jury. The grand jury indicted Ulrich six weeks later.

This installment we?ll look at Long Bill Brockway, another serial counterfeiter and forger credited as the ?King of Counterfeiters,? with whom Wood had a curiously symbiotic relationship for many years. According to the May 22, 1867, article in the New York Times, Brockway ?the notorious counterfeiter? had been ?arrested some time since for being engaged in extensive operations peculiar to his profession.?(2) The bust occurred in November 1866, although the exact date of this particular arrest is unknown to the present writer.(3)

According to the Times report, the previous day Brockway?s attorney William F. Howe had appeared before U.S. Commissioner for the Southern District of New York Osborn seeking a reduction in his client?s bail. This was the same court room and federal official as in the Ulrich case. Howe wanted Osborn to reduce Brockway?s bail ?from $5,000 to a more reasonable sum.? The U.S. District Attorney opposed the request. According to prosecutor S.G. Courtney, new developments regarding Brockway had caused the ?Government to wish for an increase rather than decrease in surety.?

The new developments in the Brockway case were developed by Col. William P. Wood. Wood testified before Osborn on June 7, 1867. Courtney called the Secret Service chief to the stand ?with a view to showing the gravity of the charge against Brockaway (sic), and the consequent propriety of asking sufficient security against his escape from justice,? the report in the newspaper the following day said. ?Brockaway, (sic) the Alleged Counterfeiter,? New York Times, June 8, 1867.) ?The testimony was very important,? the account continued, ?but from prudential motives it is not deemed best to make it known to the public at this time,? it added cryptically. After hearing Wood?s incendiary testimony, Osborn doubled Brockway?s bail to $10,000, in default of which he recommitted the counterfeiter for trial.(4)

As the first chief of the U.S. Secret Service, Wood was charged with reducing if not eradicating the menace counterfeiting posed to the newly introduced federalized currency. His first year at the helm of the policing branch set up to achieve this end produced mixed results. Arrests were made in a showy fashion, but convictions proved few.

Because the feds had chased competing state-chartered bank currency out of circulation, its own species of paper money with standardized designs had proved to be an inviting target?just as compromised, if not more so. Midnight presses zeroed in on faking the greenbacks, the fractionals, and increasingly the national currency, to the new federal bureau?s embarrassment.

Now the cesspool of fraudulent issues of currency was getting no better; in fact it was worsening. The unreported details of Wood?s testimony linked Brockway to the counterfeiting of U.S. $1,000 7.30 Treasury Notes, which were about to send New York City?s financial district off the proverbial lemmings? cliff. Setting their sights on even bigger targets, fakers like Ulrich and Brockway had marched out fake Compound Interest Treasury Notes and now even investment-grade, high value U.S. bonds.

Wood?s bosses should have expected a better game plan from the Secret Service chief, but apparently nothing was done to light a fire under the public servant. However, Wood was taking heat, nonetheless. Fires were being lit under the chief?s operations, but the heat was self-inflicted, stemming increasingly from Wood?s compromised policies and actions.

The Secret Service chief?s controversial game plan of taking the wind and deferring the kick off to the second half by rolling up underlings in the hope of capturing the king pins was just not working. Wood and the feds were on the defense, and their defense was flagging. The koniackers were on the offense charging up and down the field making a mockery of the federal lawdog?s growl but no bite approach. Counterfeiting was still abundant.

In the meantime, Wood had antagonized federal prosecutors, judges on the bench in federal courts, and local officials over whom he had generally run roughshod.

Last month we saw the stew pot coming to a boil over sales of counterfeit notes by one of Wood?s own agents, for goodness sake. New York?s finest had cuffed a federal operative, and a federal commissioner (Osborn) had openly questioned Wood?s anti-counterfeiting tactics from the bench. However, Wood?s problems did not fade when the Hyer case was deep-sixed.

Wood typically reserved the best cases for himself personally. He cut deals with the felons, and ?arranged handsome rewards for himself,? viewing his position as one offering great personal aggrandizement, according to an historian of the Secret Service.(5) Wood was, according to author Murray Teigh Bloom?s articulate and colorful discernment, ?a corrupt and mendacious (i.e. given to lying) schemer. A crook, in fact.?(6)

One of the choicest plums in the underworld pie was Charles O. Brockway, and Wood had a ravenous appetite for such delectable morsels. Wood figured Brockway for the most dangerous counterfeiting enterprises, and willingly overlooked his ?minor? scrapes with the law. In pursuing such a course, Wood proved his own worst enemy. His actions infuriated members of the federal judiciary.

The matter came to a head in open court and spilled out graphically into the nation?s press, where the general citizenry became aware of the dark details of the federal law enforcement efforts.

Events began unraveling for Col. Wood in U.S. Circuit Court June 25, 1867, before Judge William D. Shipman and a jury.(7) Shipman was the U.S. District Judge for Connecticut, holding forth in the U.S. Southern District of New York Circuit Court in the absence of Judge Samuel Nelson, who as an associate justice of the U.S. Supreme Court was away on business.(8) Following the federal grand jury indictment, United States vs. Charles O. Brockway charged Brockway with counterfeiting fractional currency, a separate indictment from the Staten Island fractional currency offense the previous year.

According to the prosecutor, Assistant U.S. District Attorney Joseph Bell, Brockway was the kingpin in the bogus fractional currency ring, which he characterized as ?one of the most extensive counterfeiting establishments ever to set on foot in this country.?(9) Brockway was said to have secured the fake plates, superintended printing of same, and ?was the prime mover and principal actor in the scheme to defraud the Government.?

Brockway operated out of his residence at Mount Vernon, N.Y., in a home owned by the prisoner Brockway or his wife. At the Westchester County site, detectives had found ?counterfeiting apparatus, printing press, &c., together with a large quantity of the counterfeit money? at the time of the bust Nov. 14, 1866 by private detectives?not federal marshals, nor members of the Secret Service, nor local police. Details of the bust are vivid in the newspaper account.

When detectives burst into the house on an informer?s tip, they found Brockway upstairs clipping fake notes with scissors. He dropped the shears, ran to the front of the house, and escaped out the second-story window by jumping into a bush. Detectives rounded up a man, and a youth in the house, and impounded an amazing array of apparatus, bogus fractionals in various states of preparation that were said to cover the attic floor, a trunk of banknote paper and sundry items. Evidence and the two men seized were turned over to the U.S. Marshal Robert Murray.

Although not involved in the bust, Col. Wood was present at the trial. Brockway was represented by three lawyers, ex-Recorder James M. Smith, ex-Judge Sidney H. Stuart, and William Howe. The government witness, detective John R. Savage, was then cross-examined by defense counsel Smith.

During the course of this cross examination, Wood ?sat beside the prisoner?s counsel, acting as a promptor, which gave rise to much comment in the Court-room,? according to the reporter?s account.(10) Wood?s activity consisted of prodding defense counsel at various points in an attempt to impeach the government witness, private detective Savage. On questioning, Savage testified he didn?t think he had told Wood that he could not identify Brockway, and couldn?t recollect telling Wood that Brockway had escaped with the plates.

After a recess, precipitated it seems by commotion attendant to Wood?s collusion on the side of the accused, the grilling of the Savage continued. Savage stated he had never seen Brockway after he jumped out the window before he saw him in court. He also said that he had met Col. Wood at U.S. Marshal Robert Murray?s office in the interim, on which occasion ?Col. Wood said he knew where Brockway was and could get him.?

On redirect, Savage told the court that Wood had since paid him $250, issued a letter to him stating ?that I should be appointed on the secret service, and asked me to make out my papers and the Marshal and District Attorney would sign them.? Savage said further that he understood that he would receive his government appointment in New York, ?but I never got it,? he added. He confessed ignorance why that would be.

The woman in the house at the time of the bust, Margaret Atkinson, identified herself as the wife of Jonas Atkinson, whom Brockway had commissioned to engrave the plates for the fake 50-cent Spinner fractional notes for $150. She said she had known the accused for more than a year, and that he had often been to her house during the six weeks it took her husband to finish the plates. She identified the plates in evidence, and added that a man named Reason had engraved the head of Spinner on them. Brockway had also furnished the money to pay Reason.

Further, Brockway had purchased the house in Mount Vernon, and had invited her and her husband to work there printing counterfeit fractional currency. ?My husband worked at the printing of the currency and Brockway put on the bronze; they had a boy named Clogson (Brockway?s half brother) to turn the press.? She also said that on or about Dec. 18, Brockway attempted to stall her testimony against him. He ?asked me if I thought I would do my husband any good by swearing against him,? she said.(11)

On cross-examination, the woman told the court that Col. Wood had returned some of the genuine money in her husband?s possession at the time of his arrest, but not all of it. She testified that she was 26, and didn?t know the age of her husband, but guessed it to be about ?60 or 65.?

Several other witnesses were called by the DA to corroborate testimony already given. One said that Brockway had robbed him of $2,200 in 1864, and that he had previously caused Brockway?s arrest on that charge, but that he knew nothing of the counterfeiting racket. After which, court adjourned.

The following day when the trial resumed U.S. Marshal Robert Murray was on the stand.(12) He stated that on Nov. 15, 1866, detective Savage had brought him two prisoners, and a trunk containing articles seized at Mount Vernon, which were now in evidence before the court. ?Four or five days afterward Brockway was brought to my office in charge of one of Mr. Wood?s men as a prisoner; he was not delivered into my custody, and I had no conversation with him at that (first) time; he was at my office almost every day for two or three weeks,? Murray continued.

During this time, Brockway identified a coat in evidence having green ink on the sleeves and lapel as being his. He also identified some of the bogus fractional notes in the Marshal?s custody as having been made by him. ?There is some of my stuff, and it is the best thing of the kind that was ever got up,? Murray quoted Brockway as stating. Murray also said that the counterfeiter had said ?what a shame that they interfered with him for he would have had all the money he wanted in three or four months.?(13)

On cross-examination by Brockway?s counsel Smith, Murray said that these statements had been made by the accused voluntarily and ?without reserve.? ?I did not arrest him when he made this admission; there was no restraint upon the prisoner at that time so far as I was concerned,? Murray testified. During the course of these visits Murray was also unaware ?that Brockway was at that time acting for the Government in connection with Mr. Newcomb?then in the employ of Mr. Wood in the Secret Service,? he added. Murray said he also saw Newcomb pay Brockway money.

?If you had not known that Brockway was in the employ of Col. Wood, he never would have got out of your office after making that admission, would he?? defense counsel Smith asked the U.S. Marshal.

?Well, I don?t know about that,? Murray drawled, ?there have been some very queer things in my office with regard to these counterfeiters, [but] had this been a case that was exclusively under my management he never would have got out of my office,? he added. On redirect, Murray stated flat out that he had had ?nothing to do with bringing Brockway to my office or inviting him there.?

A broker then testified that the ?counterfeits were very well executed.? Then W.L. Ormsby, chief of the Transfer Department of the Continental Bank Note Co., examined the plates and the currency seized in the Mount Vernon bust and testified ?there was no doubt whatever that the currency was printed from the plates found with it.? With that the prosecution rested.

It was time for the defense to put on their case, and who did Smith call to the stand but Col. William P. Wood, himself. Wood testified that he had known Brockway personally for about two years, but had known him from his reputation before that.

Wood told the court that Brockway had been employed as ?an assistant to an appointed officer of the Secret Service since Jan. 1, 1867. ?He acted as an assistant to Newcomb up to the time of his arrest, about two months ago. I knew of the charge against Brockway at the time I authorized Newcomb to employ him. I was authorized to employ such persons as Brockway to aid in the ferreting out counterfeiters,? Wood stated. He had done so at Newcomb?s request, he replied.

However, Wood said also he had ?procured the present arrest of Brockway.? ?Why did you procure the arrest of Brockway after using him?? Smith asked. When the DA objected, the defense counsel intimated that this had been done because Wood had learned that Brockway and others had received kickbacks from counterfeiters ?for letting them escape.? Judge Shipman refused to allow the question.

The DA then attempted to introduce an affidavit by Wood into evidence, but it was ruled out by the judge. On cross-examination Wood stated he had discharged (released) several fellow accomplices of Brockway, but the judge also tossed this statement out, saying it was irrelevant. Wood then testified that he had had repeated conversations with Brockway since his arrest two months earlier in April.

One of individuals who had accompanied private detective Savage to the Mount Vernon bust, William Spike, then testified that he had received $202 of the genuine money taken from Atkinson during the bust (presumably by or through Wood). A convicted counterfeiter, himself, Spike had served a two-year stint at Sing Sing state prison. Wood had convinced him to be a witness for the defense, he said.

Spike had met Wood at Taylor?s Hotel in Jersey City. One has to understand the geography of the place. Taylor?s Hotel was right across from lower Manhattan. A couple blocks to the ferry and a short half-mile boat ride deposited passengers at its doorstep. This made it very convenient for New Yorkers to slip away from Gotham and set up shop ?across the river.? This was the perfect setup for assignations of every kind. Taylor?s Hotel was notorious as a rendezvous for illicit affairs, and all kinds of skullduggery sheltered away from watchful New York City eyes.

It became the ?what happens in Jersey stays in Jersey? syndrome of its time. The first chief of the U.S. Secret Service Col. William P. Wood found this arrangement very convenient for his purposes. He frequently interrogated suspects at rooms of Taylor?s Hotel. Woods would bust felons in New York and rush them over to Taylor?s to interrogate them in clandestine skull sessions. A thorough bully, Wood would frequently intimidate, coerce, and cajole informants behind closed doors at the hotel.

Hayden Clark (a.k.a. Wm. H. Newcomb), another participant in the Mount Vernon bust, then testified for the defense. He said that he had accompanied the crew on the train to Mount Vernon expecting to profit from the caper, ?but did not go to the house? with them. Clark also said that Atkinson?s genuine money had been ?equally divided between Savage, Hickey, Spike and myself.?

On cross-examination by the DA, Clark testified that he had been arrested the previous November by Secret Service officer Newcomb on counterfeiting charges. A week before the trial he had also been convinced by Col. Wood to testify for the defense in Brockway?s trial at another meeting at Taylor?s Hotel in Jersey City. His take on the bust was that they would roust the counterfeiters but ?we should not arrest the counterfeiters if we could avoid it; we expected to make money out of it by making them pay us to let them off.?(14)

The defense then rested its case. After a half hour recess, defense counsel Smith gave his summation. He admitted his client was a crook (i.e., had been guilty of counterfeiting at Mount Vernon), but pleaded that this bust had been trumped up by confederates to silence his client. ?Here was a party indicted who had been in the service of the Government and a companion of one of its chief officers for five months, and was then arrested at the instigation of Col. Wood himself, who had appointed him,? Smith began.(15)

All the evidence upon which he is being tried ?were fully known to the government officers BEFORE (emphasis added) Brockway was appointed, and the inference was irresistible that his present arrest arose from other causes, and was done for other objects than to punish him for the Mount Vernon offense,? he continued.(16)

?Col. Wood?s motive in procuring the arrest of Brockway was to bring out on his trial the rascality of certain subordinates in the employ of the Government; but the motive that instigated the present prosecution for the Mount Vernon offense was to get Brockway out of the way, to seal his lips, so that the misconduct of these subordinates should not be exposed.? Smith claimed ?that the Government was bound by every principle of honor to refrain from prosecuting a man for an offense after having taken him into its employ, with the full knowledge that the offense had been committed.?

The government?s entire evidence against his client consisted of testimony by the wife of an old counterfeiter to shield her husband, and admissions made by Brockway to Marshal Murray ?in a bantering way, in no serious mood,? and ?not to be taken as the sober confessions of a criminal,? Smith contended.

The government prosecutor, District Attorney S.G. Courtney, agreed with defense counsel that the court had witnessed an ?extraordinary proceeding.? ?He was willing to accord honest and honorable motives to Col. Wood, the chief of the Government Secret Service; but it was certainly a very extraordinary spectacle to see that gentleman sitting by the counsel for the defense?suggesting and propounding questions with a view, as he had a right to conclude, to break down this prosecution and induce the jury to acquit the prisoner.

?If Col. Wood had any quarrel with his fellow officers in the Government employ, there was a proper place to carry on that quarrel; if any of his subordinates had been guilty of malfeasance, and he would bring the evidence to him (the District Attorney), he would promptly take measures to prosecute them for the offense; but no good object could be gained and no interests of the Government promoted, by coming here and attempting to shield a notorious counterfeiter on trial in one of the Government Courts,? the prosecutor charged.

?Who gave Col. Wood?who gave Marshal Murray?who gave Newcomb, or any other Government official?authority to discharge the prisoner Brockway when he was first arrested for the crime?? Courtney pleaded to the jury.

It seemed Brockway had been arrested, but there was no evidence just how he had been released. ?All we know was that he next turns up as a detective officer in the employ of the Government?this deep dyed criminal and expert counterfeiter, steeped to the eyes in crime, is taken into the employ of the great and powerful Government of the United States to help detect counterfeiters,? he concluded before resting his case.(17)

To be continued?

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