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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. 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,

Jacob Bernoff, Taylor, and Lichtenstein. He is well known as a labor racketeer, along with the others.

Mr. KENNEDY. How many convictions does he have

Mr. WILLSE. He has two convictions, and one for coercion and conspiracy, which is in connection with the milk racket of 1935, with Edward Taylor; and then the 1941 conspiracy and extortion, and he got 71/2 to 15 in the State prison, and that was again with Taylor, and also the one in which Lichtenstein and Jewey Bernoff were involved.

Mr. KENNEDY. What about Jewey Bernoff; what is his background, this witness's brother?

Mr. WILLSE. Well, for years he has been regarded as one of the top associates of both Dutch Schultz and the Lepke-Gurrah mob. That is Louis Buchalter and Jacob Shapiro, who were the starters or originators of extortion and terrorizing in the garment area.

Jacob Bernoff, aside from his association with them, has been closely connected with many of the leading mobsters, particularly in the New York area; back as far as 1936 he was arrested with two men, one of them George Uffner who, through the years, has been very closely associated with Frank Costello.

Mr. KENNEDY. He is a major racket figure in New York City; is that right?

Mr. WILLSE. He is.
Mr. KENNEDY. He died in prison last year?

Mr. WILLSE. He died, I believe, in February of 1958, while serving a sentence on a Federal narcotics conspiracy.

Mr. KENNEDY. He has been convicted nine times !

Mr. WILLSE. He has had 12 arrests, and I don't have the convictions enumerated here.

Mr. KENNEDY. I believe that is there.
Mr. WILLSE. It is true-nine times.

The CHAIRMAN. Mr. Counsel, this list has been made an exhibit. It is now in evidence. It can be referred to from time to time as you interrogate witnesses. I do not know whether you want to go over all of it at this time or not.

Mr. KENNEDY. Jacob Bernoff was also indicted in connection with the candy kickback racket?

Mr. WILLSE. Yes. He was not indicted at that time. He was picked up for violation of parole in connection with it, and he was the head of the racket. He had set up a woman in Local 1115-C, Amusement Clerks and Concessionaire Employees Union, AFL, which was composed of 1,000 members.

They operated in this way: There were 17 charge men from whom they extorted money. The charge man operated the candy counter concession in grind movies, which are movies that play almost 24 hours a day. The grind men, in turn, had their aisle salesmen.

In some cases, the grind men had to kick back as much as 60 percent of their gross sales. The woman who Jake Bernoff said was his front in the union put the names of persons on the book of the union book who weren't actually members of the union. Most of them existed. In fact, there were 50 of them who were known bookmakers and gamblers and they willingly allowed their names to be used as they could use their names, in turn, as employment, if they were picked up for vagrancy or some other charge.

Mr. KENNEDY. These were the people who were the originators and the starters of this juke box operation?

Mr. WLLLSE. Yes.

Mr. KENNEDY. At the same time, early in 1940, did Mr. Charles Bernoff, with the help and assistance of certain other individuals, begin loaning money out on a more intensified basis?

Mr. WILLSE. Yes, in the early 1940's.

Mr. KENNEDY. What companies were formed in order to handle that?

Mr. WILLSE. Well, the legitimate operations were the Regal Amusement Corp., which was started on June 6 of 1947 for the purpose of handling slot machines, cigarette machines, automatic vending machines and amusement machines and devices, was then changed in June of 1948 to the Admiral Trading Corp.

They changed the name and changed the operation. The Admiral Trading Corp. was being used as a factoring company to make loans.

Mr. KENNEDY. Who was treasurer of this Admiral Trading Corp.

Mr. WILLSE. Actually, the treasurer was Helen Mishel. She was acting as a front for Irving Mishel.

Mr. KENNEDY. Who was the president!
Mr. WILLSE. Bernard Linn was the president.
Mr. KENNEDY. L-i-n-n; is that right?
Mr. WILLSE. Right.

Mr. KENNEDY. Ånd Charles Bernoff was the secretary-treasurer and a director; is that right?

Mr, WILLSE. Correct.
Mr. KENNEDY. And they made loans, did they not?

Mr. WILLSE. They made loans mainly to locations where their jukeboxes and game machines were placed.

Mr. KENNEDY. Do we have information that they also were making loans to major racketeers and hoodlums!

Mr. WILLSE. We have.

Mr. KENNEDY. That gives just the brief background, Mr. Chairman. Now I would like to call another witness in connection with the loans that were made.

I would like to have Mr. Bernoff step down and call another witness in his place.

The CHAIRMAN. Just a moment.
Do you want to make any comments on this testimony so far?

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

The CHAIRMAN. You think if you discussed it, it might incriminate you?

Mr. BERNOFF. It may.
The CHAIRMAN. All right. Stand aside for the present.
Call the next witness.
Mr. KENNEDY. Mr. Irving Mishel.
The CHAIRMAN. Come forward, please.

Do you solemnly swear 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. MISHEL. I do, sir.

36751-59-pt. 46-

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