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INVESTIGATION OF IMPROPER ACTIVITIES IN THE

LABOR OR MANAGEMENT FIELD

WEDNESDAY, FEBRUARY 18, 1959

UNITED STATES SENATE,

SELECT COMMITTEE ON IMPROPER ACTIVITIES
IN THE LABOR OR MANAGEMENT FIELD,
Washington, D.C.

The select committee met at 10:30 a.m., pursuant to Senate Resolution 44, agreed to February 2, 1959, in the caucus room, Senate Office Building, Senator John L. McClellan (chairman of the select committee) presiding.

Present: Senator John L. McClellan, Democrat, Arkansas; Senator Sam J. Ervin, Jr., Democrat, North Carolina; Senator Carl T. Curtis, Republican, Nebraska.

Also present: Robert F. Kennedy, chief counsel; John P. Constandy, assistant counsel; Arthur G. Kaplan, assistant counsel; Walter R. May, investigator; Sherman S. Willse, investigator; Walter de Vaughn, investigator; Ruth Y. Watt, chief clerk.

The CHAIRMAN. The committee will be in order.

(Members of the select committee present at the convening of the session were Senators McClellan and Ervin.)

The CHAIRMAN. Call the next witness.

Mr. KENNEDY. Mr. Chairman, this morning we are going into a new phase of the investigation, which involves New York City. It is in connection with the loading or factoring companies, and the first witness I would like to call in that connection is Mr. Charles Bernoff.

The CHAIRMAN. You do solemnly swear that the evidence you shall give before this Senate select committee shall be the truth, the whole truth, and nothing but the truth, so help you God?

Mr. BERNOFF. I do.

TESTIMONY OF CHARLES BERNOFF, ACCOMPANIED BY COUNSEL, JACOB W. FRIEDMAN AND ABRAHAM POLLOCK

The CHAIRMAN. State your name, your place of residence, and your business or occupation.

Mr. BERNOFF. Charles Bernoff, 666 West End Avenue, New York. I am in the jukebox business.

The CHAIRMAN. Do you have counsel, Mr. Bernoff?

Mr. BERNOFF. I do.

The CHAIRMAN. Counsel, will you identify yourself, please.

Mr. FRIEDMAN. Jacob W. Friedman, 170 Broadway, New York.

Mr. POLLOCK. Abraham Pollock, 450 Seventh Avenue, New York. The CHAIRMAN. All right. Proceed.

Mr. KENNEDY. Mr. Bernoff, you served as vice president of the Automatic Music Operators Association, known now as the Music Operators of New York?

Mr. BERNOFF. I respectfully decline to answer on the ground that I sincerely believe my answer may tend to incriminate me.

Mr. KENNEDY. You are president and sole stockholder of the Regal Music Co., Inc.?

Mr. BERNOFF. I respectfully decline to answer on the same ground previously stated.

Mr. KENNEDY. And Mr. Bernoff, you have run and operated a factoring company which makes loans? is that right?

Mr. BERNOFF. I respectfully decline to answer on the same ground previously stated.

Mr. KENNEDY. Now you are the third largest jukebox operator in New York City, are you not?

Mr. BERNOFF. I respectfully decline to answer on the same ground previously stated.

The CHAIRMAN. State your grounds, please.

Mr. BERNOFF. I respectfully decline to answer on the ground that I sincerely believe my answer may tend to incriminate me.

The CHAIRMAN. All right.

Mr. KENNEDY. Mr. Miniacci, who is Mr. Frank Costello's friend, is No. 1; Mr. Breheney, about whom we have had testimony, is No. 2; and you are No. 3; is that not correct?

Mr. BERNOFF. I respectfully decline to answer on the same ground as previously stated.

Mr. KENNEDY. Mr. Chairman, in order to expedite the hearings, I would like to put the information that we have regarding Mr. Bernoff's background which leads up to the important situations that we will be going into this morning, and I would like to call a member of the staff as a witness.

The CHAIRMAN. All right.

Will you come around, please. Mr. Bernoff will remain on the witness stand and hear this testimony and the information we have against the witness, and his actions and conduct. He will be given the opportunity to deny it if he wants to deny it or if he wants to leave the record that he can't answer with respect to it except at the risk of possible self-incrimination, then, of course, he can leave the record that way.

All right, bring around your testimony.

Has this witness been sworn?

Mr. KENNEDY. No, Mr. Chairman.

The CHAIRMAN. Will you be sworn?

You do solemnly swear that the evidence you shall give before this Senate select committee shall be the truth, the whole truth, and nothing but the truth, so help you God?

Mr. WILLSE. I do.

TESTIMONY OF SHERMAN S. WILLSE

The CHAIRMAN. State your name, your place of residence, and your present employment.

Mr. WILLSE. My name is Sherman Willse. I reside in Long Island, New York City, and I am a member of the staff of this committee. The CHAIRMAN. How long have you been a member of the staff, Mr. Willse?

Mr. WILLSE. Since June 4, 1957.

The CHAIRMAN. Proceed.

Mr. KENNEDY. Let us get from Mr. Willse the background of Mr. Bernoff.

First, the businesses which Mr. Bernoff is interested in; would you give us that?

Mr. WILLSE. At the present time, Charles Bernoff is president of the Regal Music Co., Inc., operators of jukeboxes and game machines. He is also secretary-treasurer and a director of the Admiral Trading Corp., which is the factoring operation.

Mr. KENNEDY. The factoring operation is a group that makes loans; is that correct?

Mr. WILLSE. That is correct.

Mr. KENNEDY. He has also had an interest in the Belmont Factors, Inc.?

Mr. WILLSE. Yes, from 1949 to 1956, which was also a factoring company making the same type of loans as the Admiral Trading Corp. Mr. KENNEDY. And the Vernon Hills Estates, Inc.

Mr. WILLSE. Yes; that was chartered in 1950, and it was engaged in the construction of private homes and real estate holdings, and it has been reported dormant since 1957.

Mr. KENNEDY. And the Broad Street Hickory Grill Corp.?

Mr. WILLSE. That was an operation of a bar and grill on Broad Street, Newark.

Mr. KENNEDY. Now, Mr. Chairman, we have an index to the various people who will be mentioned this morning, and it is rather an involved hearing and it gets into a great number of names. So we have made up an index that gives a little bit of background on each individual we will mention.

Could we have that placed in the record?

The CHAIRMAN. Have you prepared this list?

Mr. WILLSE. I did, sir.

The CHAIRMAN. Have you checked the information that you give after each name?

Mr. WILLSE. I have.

The CHAIRMAN. For the information of the committee and for reference, this list may be made exhibit No. 42.

(List referred to was marked "Exhibit No. 42" for reference and may be found in the files of the select committee.)

The CHAIRMAN. All right, Mr. Kennedy, you may proceed.

Mr. KENNEDY. Now, I want to trace with you, Mr. Willse, the establishment of the jukebox business and the establishment of these factoring companies, and what do we find as the background of this jukebox distributorship that is owned and operated by Mr. Bernoff?

Mr. WILLSE. From our information, back during prohibition, the brother of Charles Bernoff, known as Jacob Bernoff or Jewey Cohen, with Dutch Goldberg, who has aliases of Henry Shomberg and Louie Pops; and Abraham Lichtenstein, better known as Augie, were engaged in a beer distributing business at the location very close to where the Regal Music Co., Inc., now is situated.

Mr. KENNEDY. That is L-i-c-h-t-e-n-s-t-e-i-n; is that right?
Mr. WILLSE. Yes, sir.

Mr. KENNEDY. And is also known as Augie?

Mr. WILLSE. Yes. At that time, Jacob Bernoff and Augie Lichtenstein were close associates of Dutch Schultz. They were handling his beer in the distribution and getting it from the Yonkers Brewery, which was run by Schultz.

With repeal they continued the distribution of beer through legitimate companies for some period of time, and then finally the jukebox operation was started.

Mr. KENNEDY. At the same location?

Mr. WILLSE. In that same neighborhood.

: Mr. KENNEDY. Was it the same place?

Mr. WILLSE. That I can't say. It was around the corner, I believe. Mr. KENNEDY. And what was the name of that company?

Mr. WILLSE. The New Yorker Beer Co.

Mr. KENNEDY. What was the jukebox operation called?

Mr. WILLSE. Well, subsequently it came to be known as the Greater New York Amusement Co.

Mr. KENNEDY. Prior to that it was known as the New Yorker Beer Co.?

Mr. WILLSE. Yes, sir.

Mr. KENNEDY. They were distributing jukeboxes?

Mr. WILLSE. The Greater New York Amusement Co.

Mr. KENNEDY. What was the New Yorker Beer Co.? It was handling the beer, and then they changed and became the Greater New York Amusement Corp., which was operating jukeboxes; is that right? Mr. WILLSE. That is correct.

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Mr. KENNEDY. You mentioned Dutch Goldberg. Who was Dutch Goldberg?

Mr. WILLSE. He was a top mobster in New York connected with Dutch Schultz, and eventually the Lepke-Gurrah mob in the garment industry.

He has been arrested three times grand larceny, homicide with dangerous weapon, and homicide.

Mr. KENNEDY. Did he have any convictions?

Mr. WILLSE. We don't have any convictions.

Mr. KENNEDY. Who were his associates?

Mr. WILLSE. His associates were Jacob Bernoff, Augie Lichtenstein, and others connected with the Dutch Schultz mob.

Mr. KENNEDY. And Abe Chait?

Mr. WILLSE. I believe he was.

Mr. KENNEDY. And Joe Adonis?

Mr. WILLSE. Yes; all of those.

Mr. KENNEDY. And Frank Costello?

Mr. WILLSE. The top mobsters in New York.

Mr. KENNEDY. And Meyer Lansky, also!

Mr. WILLSE. Yes, sir.

Mr. KENNEDY. What is his present occupation?

Mr. WILLSE. I don't know.

Mr. KENNEDY. He is a big influence in the garment industry?
Mr. WILLSE. That is our information; yes.

Mr. KENNEDY. On July 21, 1937, the Greater New York Amusement Co. had, according to our information, jukeboxes on a contract basis with approximately 100 bars and grills in New York City. Mr. WILLSE. Yes, sir.

Mr. KENNEDY. That was then bought out and registered in the name of the Regal Music Co., Inc.; is that right?

Mr. WILLSE. Yes; on August 31, 1937.

Mr. KENNEDY. Who were the ones who formed the Regal Music Co., Inc.?

Mr. WILLSE. Charles Bernoff, Lillian Gabaeff, and Jean Taylor. Mr. KENNEDY. Lillian and Jean were there for their husbands; is that right?

Mr. WILLSE. That is right for Murray Gabaeff and Edward Taylor.

Mr. KENNEDY. Who was Edward Taylor?

Mr. WILLSE. Edward Taylor, at the time of the formation of Regal Music Co., Inc., had several arrests, as did Gabaeff. His record at the present time consists of nine arrests. He has been connected with the operations of the Lepke-Gurrah mob, and Jacob Bernoff, who was one of the principals in that gang, and he was convicted with Gabaeff and Bernoff and Lichtenstein in a milk extortion racket in 1941.

Mr. KENNEDY. He has also been convicted of conspiracy, and he has been convicted of a conspiracy and extortion which I believe is the one you just mentioned; is that right?

Mr. WILLSE. Those two conspiracies, the first one was also a milk racket, and the second one was a racket where they extorted $2.5 million in 5 years, in collusion with the Teamster officials of two locals in the area, in which they threatened to stop the delivery of milk in the metropolitan area.

Mr. KENNEDY. How much money were they supposed to have gotten out of that?

Mr. WILLSE. I believe it was $2.5 million.

Mr. KENNEDY. Also involved in that was Jacob Bernoff?

Mr. WILLSE. Yes, sir.

Mr. KENNEDY. And Jacob Bernoff is the brother of Charles Bernoff. Mr. WILLSE. That is correct.

Mr. KENNEDY. And also Augie Lichtenstein, who was mentioned earlier?

Mr. WILLSE. Yes, sir.

Mr. KENNEDY. They were all convicted, were they?

Mr. WILLSE. They were.

Mr. KENNEDY. As well as some Teamster officials?

Mr. WILLSE. Yes; except that Lichtenstein's conviction was subsequently reversed.

Mr. KENNEDY. Who was Gabaeff?

Mr. WILLSE. Murray Gabaeff has a record of four arrests, and he was one of the starters of the jukebox operation along with Bernoff,

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