On May 17, 1900, Sullivan was admitted as a member of the Consolidated Stock and Petroleum Exchange of New York and under the firm name of Sullivan & Sullivan advertised extensively and had a system of wires through New England. It was noticed that his business on the exchange was very small and upon the complaint of a customer his trading methods were investigated, with the result that on the 11th of October he was adjudged guilty of obvious fraud or false pretenses and expelled from membership in the exchange. He made some threats of a suit against the exchange, but the firm of Sullivan & Sullivan failed in November and nothing was heard of him in New York. His customers and correspondents never received any statements of their accounts and Sullivan fled the state.
He seems to have come direct to Chicago, and was employed for several months by bucketshops and private-wire houses as a telegraph operator.
In the fall of 1901 he associated himself with E. F. Rowland, ostensibly to do a commission business in stocks, grain and cotton. His methods of advertising were extremely lurid, and he flooded the country with literature and letters printed in red ink. The employee, Sullivan, soon forced Rowland out of business and continued under the name of Rowland until the first of January, 1903, when by degrees he had worked the name of Sullivan into prominence and the name of Rowland had gradually been eliminated from his signs and literature.
Reasons Which Caused Investigation, Raid and Arrest.
The raid by Detective C. R. Wooldridge on the Lincoln Commission Company, a race track scheme, in the Portland Block, 115 Dearborn street, May 14, 1903, developed the peculiar relations between this concern and Sullivan, and the police department was somewhat astounded to find among the papers of the Lincoln Commission Company conclusive evidence, in the shape of telegrams and correspondence, proving that Sullivan's agents on his private wires were acting as the agents of the turf scheme, and that the employees and private wires of the Sullivan concern were used in common by the Lincoln Commission Company with the consent and approval of Sullivan.
More than twenty of Sullivan's agents were posting in his various offices the tips sent out by the Lincoln Commission Company and accepting bets which were transmitted over Sullivan's wires to be placed ostensibly by the Lincoln Commission Company on the horses which they tipped off as sure winners.
The mixing up of a turf scheme with a so-called grain and stock business was something new to the police, and Detective Wooldridge prosecuted the investigation, and, upon becoming fully acquainted with Sullivan's methods, concluded that he was not only running a bucketshop, but was interested in the turf scheme to a greater extent.
The evidence gathered in the raid on the Lincoln Commission Company fully established the fact. The Cook County Grand Jury was in session at the time and the evidence was presented to them. Detective Wooldridge was ordered to make a full investigation and report to them, which he did.
The Grand Jury instructed Wooldridge to lay the matter before the General Superintendent of Police, Francis O'Neill, and say: "The Grand Jury requested immediate action should be taken by the police to enforce the state law, which was being violated."
Wooldridge submitted the case to Chief O'Neill. He asked if Wooldridge had secured the necessary evidence to prove that Sullivan was conducting an illegitimate business. He was answered in the affirmative.