Mae Woods Bell

Mae Woods Bell

Con man walked away with millions

By Mae Woods Bell
Book Reviewer

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In an enthralling account of the life, times and crimes of Leo Koretz, author Dean Jobb brings to life the deeds of a master swindler, hedonist and womanizer against the backdrop of the Roaring Twenties in Chicago. If easy money was the goal, Chicago was the place to be with its hub for railroads and industry humming along, creating new wealth for many of its residents.

However, the Windy City had another, darker side. Chicago had become known across America as a wicked city rife with gangs, hoodlums, bootleggers, crooked politics, daily murders and the likes of Al Capone. In that milieu, Koretz was a different kind of crook – a con man who used his charm and his victims’ greed to bilk them out of millions of dollars as he built his “Empire of Deception” (Algonquin; $27.95). What makes Koretz’s most blatant scheme so amazing is that he was able to seduce a city and captivate the nation while keeping a $30 million gamble alive for almost 20 years.

The book reads like fiction, but it is a well-researched true story that gives a detailed account of several schemes Koretz ran as he swindled his closest friends and family, even his own mother and his mother-in-law. Jobb narrates how Koretz started his life of crime as a young lawyer selling bogus mortgages in a pyramid scheme. This was followed by luring investors into a rice-growing venture in Arkansas, giving certificates for shares in nonexistent farms he claimed to own. However, Koretz’s Panamanian deals, his most lucrative, led to his eventual downfall.

Jobb, a masterful storyteller, recounts how Koretz took his first “dip into dishonesty” in 1905 when a client went to his law office with money to invest. Koretz took the money and gave the client a fake mortgage in return. He began drawing up one phony mortgage after another.

At the same time, however, his eyesight was failing. Someone suggested the clean air in Arkansas might help his irritated eyes. Koretz arrived in Arkansas just as a farmer, William Fuller, pioneered a system for growing rice there. Rice production in the state created a land boom as speculators snapped up acreage.

Koretz found a partner, Henry Smith, who owned a large farm. The lawyer suggested they parcel out lots and sell shares in Smith’s farm, with Koretz as the salesman. Koretz spent most of his time back in Chicago running his law office and tending to his stable of bogus mortgages, but soon was selling shares in rice farms that did not exist to his Chicago friends and convincing still others to take mortgages – more fake ones – on the properties.

Then Koretz was victim of a scam himself when he went to the Bayano region of Panama to check out his investment there; he returned bitter and $1,000 poorer – but with a big idea. He would make his Bayano enterprise such a profitable and solid investment that no one would feel the need to travel south to take a look. He implied that he had made a killing in Arkansas and had moved on to making another killing in Panama with his Bayano River Syndicate. Koretz made stock certificates for the venture hard to get, which made people all the more desperate to invest. His high living demonstrated his success and made his lies appear even more believable.

At last, a group of investors in his Bayano River Syndicate’s lumber forests and oil decided it would be nice to experience the sights and sounds of their Central American holdings. It was then that Koretz skipped out before they could return from Panama realizing they had been victims of a massive swindle. Koretz left his wife and family, fled to Nova Scotia, assumed the name Lou Keyte, bought a lakeside lodge and said he was a writer and drama critic in search of a quiet place to work. It is there that his lifestyle aroused suspicions, and Koretz was extradited back to Chicago.

Koretz was indicted by a grand jury in November 1923, and he pleaded guilty. The trial eventually found Koretz sitting in the witness box and explaining how he had teased millions of dollars from the pocketbooks of hundreds of people. He described the inner workings of the great Bayano swindle. After a lifetime career of lying, Koretz discovered the truth came easily. The Arkansas rice farms had started out as a legitimate investment. Bayano, though, he admitted was a sham from the start.

When Koretz arrived at Joliet, Ill., to serve prison time, Dr. W.R. Fletcher, the prison’s physician, listed him as very ill from diabetes. As Koretz faced the bleak years ahead in prison, he had an escape plan no one suspected. Fletcher revealed that Koretz, gradually deteriorating from the ravages of diabetes, had somehow smuggled a 3-pound box of chocolates into prison and had finished them off in a suicide act. Koretz slipped into a coma and died Jan. 7, 1925.

The book includes photographs, cartoons, map of the areas of Koretz’s empire of deception, the cast of principal characters, an epilogue, acknowledgements, notes on sources, an author’s note and an index.

Dean Jobb is an award-winning writer and journalist whose work appears in major periodicals in the United States and Canada. He is a professor of journalism at the University of Kings College in Halifax, Nova Scotia.