History Still Holds Its Lessons: The Dachis Case
FIRE INVESTIGATION
Lieutenant Teddy Beliakoff and the crew of Engine-1 were still “chewing the fat” even though it was after midnight, July 29, 1929. It was too hot to sleep and the mosquitoes were attacking in full force. Thus they were on the wagon and out the door almost instantly when Box 653 at Seventh Avenue and 27th Street hit. They were first-due.
The company, located in the heart of New York City’s famed fur district, had been plagued with a series of what were obviously commercial arson fires. However, they were so expertly set that destruction was complete and evidence was non-existent.
Beliakoff made up his mind to cut off the next fire before all the evidence was gone. And he didn’t have long to wait before testing his change in tactics.
As Engine-1 turned left into 27th Street, they could see fire and heavy smoke pouring from a fourstory loft building on the north side of the street. Here was Beliakoff’s chance to put his plan into operation before the battalion chief arrived and ordered conventional tactics.
Beliakoff’s plan had the beauty of simplicity. He threw both of the lines into the deck pipe, put the wagon up on the sidewalk in front of the fire building, and “belted it.” Even though the fire went to a second alarm with several explosions, Beliakoff’s tactic had saved enough evidence that a most remarkable arson case could be successfully prosecuted.
Enter Chief Fire Marshal Thomas P. Brophy. Brophy hated arsonists with a passion and devoted his life to putting them in jail.
The purpose of commercial arson is to defraud the insurance company. Although it may not be possible to prove arson, if the fire involves merchandise, there is usually a paper trail that, if successfully followed, will disclose any fraud. And if fraud can be proven, often a case can be made of “using the mails to defraud.”
The Dachis Case (as the 27th Street fire came to be known) was a classic example of meticulous investigation, surefooted legal work, and textbook cooperation among the National Board of Fire Underwriters, the police, the U.S. Attorney (federal), the district attorney, and the fire marshal’s office.
Louis Dachis, an illiterate immigrant from Russia, was a minor operator on the fringes of New York’s rich fur trade. He had heavy gambling losses and needed cash. Despite his illiteracy, Dachis was able to concoct an elaborate scheme to conceal the fact that valuable furs were being sold “under the table.”
The insurance claim submitted by Dachis for loss of furs in the fire totaled $140,250 (over a million dollars at today’s values). He even presented invoices to show purchases adding up to this amount. Yet, evidence left from the fire on July 29 revealed only junk furs in stock.
Dachis was tough, apparently sure that his scheme was airtight. Even Brophy, a master psychologist, couldn’t get him to talk. Dachis’ bookkeeper and other associates, often the weak members of a conspiracy, were fanatically loyal. However, by dogged investigation and an accounting reconstruction, which involved the examination of over 10,000 documents, the case was broken.
The real breakthrough came with the examination of the books of Dachis’ brother Jacob.
The name of Mandel Weiniger, a fur merchant in Chicago, was found in Jacob Dachis’ ledger as having purchased some badgers, rats, and squirrels two months after the fire. After intense questioning, Weiniger admitted that he had bought 260 beaver pelts at $30 apiece. Dachis’ books revealed that he himself had bought 260 beavers from the highly reputable Revillion Freres only four days before the fiTe. (The Dachis brothers’ books were audited by accountants who “took their word” that the listed inventory was actually on hand. Based on such “audited” financial statements, they were able to obtain shipments of valuable furs on credit.)
Weiniger had been told that he would get delivery of the furs at a machine shop. He also told how he had been driven around the city, naming landmarks north of the fur district. Machine shops in New York are located south of the fur district. Dachis’ books revealed that he had advanced money to a Meyer Jawitz, a machine shop owner, whose shop Weiniger identified to Brophy.
A traffic policeman stationed nearby used to store his raincoat and boots in Jawitz’s shop. On one occasion, the officer pushed a “heavy” crate to get his gear. The crate toppled over. Obviously, it did not contain machinery.
Jawitz was asked to give a list of the trucking companies that he used, and the traffic policeman was asked to check the list for any trucks he had noticed that were not on that list. The firm the officer named was the trucking company that had moved the furs.
The fraud was crystal clear. Valuable furs were purchased just before the fire, removed, and stored at a strange location. The purchaser was deliberately deceived as to the location and given (with his consent) false invoices. The furs were on the “proof of loss” filed by Louis Dachis.
With this story in hand, Brophy’s accountants (paid by the National Board of Fire Underwriters) went to work. As evidence of other fraudulent transactions was uncovered (such as skins invoiced at $9,500 were actually worth $400; concealing sales of good furs; furs sold were marked on invoices torn from the back of the book; etc.), investigators received the often unwilling cooperation of those who were involved in the complicated skein of deceptive transactions Dachis had created.
The trail was astounding. Dachis had a firm of accountants open a new set of books as of December 1, 1928, months before the fire. All previous books were secreted or destroyed. A new and very favorable financial statement was prepared. (Remember that the accountants took Dachis’ word for his assets.) On this basis, Dachis obtained the credit to buy inventory from reputable firms. A number of interlocking and secret bank accounts were set up. The investigation covered such diverse locations as Philadelphia; Chicago; Montreal; Winnipeg; Fallsburg, NY; Virginia; Connecticut; and New Jersey. Over 1,000 documents were examined.
The authorities began conducting intensive legal maneuvers that centered around the account books. These proceedings convinced the Dachis brothers that they were in real trouble. Their counsel put a proposition to the prosecutors: If the brothers pleaded guilty, would the government permit one to be at liberty to support both families while the other went to jail?
The government demanded the name and present whereabouts of the “torch,” a complete story of the case, and any other crimes in which they were involved.
The Dachis brothers caved in.
Their insurance fraud scheme was rather ingenious. The first step was to rent part of the Dachis building to a relative who was alleged to be a chemist. This was to cover the introduction of the flammable liquids into the building. Apparently, Dachis’ first idea was to set the fire himself.
About four months before the fire, Louis Dachis was introduced to the torch, Joseph Eisenstein, by a Philadelphia furrier. Eisenstein was known as the “doctor,” possibly for his efficacious cures of “sick” businesses.
Eisenstein was an experienced arsonist who usually achieved the total destruction necessary to eliminate any evidence of merchandise, substituted or removed. He planned a delayed ignition, with the fire starting 3 hours and 12 minutes after lighting the fuse. Unfortunately for him and his coconspirators, that night he ran afoul of a fire officer with imagination and daring, who cut off the fire and preserved the evidence.
Joe Eisenstein was hiding out in Urbanna,VA, then a sleepy town 81 miles east of Richmond. Two New York police detectives, an interpreter, and Louis Dachis headed south, joined by a Virginia state trooper.
Eisenstein was told that the Dachis brothers had confessed, and after quite some discussion, he agreed to accompany the detectives back to New York.
The defendants were charged with both the federal crime of “using the mails to defraud” and the state crime of arson. The facts in both cases were the same. For only the second time in the history of New York State, the state and federal court sat on the same bench to try the cases simultaneously.
The defendants pleaded guilty.
Eisenstein was sentenced to 12 1/2 to 25 years. The Dachis brothers each received a year and a day in recognition of their assistance in apprehending the torch.
The court publicly took notice of the work of Fire Marshal Brophy and the attorneys for the Underwriters, Abraham Kaplan and Samuel Berger, who directed the investigation of the records.
