Julius Falkenstein was arrested at his place of business and taken to headquarters on Varick Street to be questioned. He confessed his smuggling role. He admitted he had gone to Canada in July to receive a shipment of diamonds. Something had gone wrong and the diamonds were never delivered to him. He had been hurrying back to New York to meet Captain Deppe when he was halted at the border. It was this delay which had prevented him from meeting Deppe and reporting to Antwerp the safe arrival of the diamonds. After the experience at the border, he had been afraid to try to get in touch with Deppe.
Deppe also confessed. He told agents he had carried diamonds into the United States on six occasions. He told them of the diamonds hidden in the shoe box which he had left in the Sabena baggage room. He was supposed to have delivered it to Falkenstein as he had the others—but when he found the Customs agents searching crew members he made no effort to retrieve the box. Later, he said, he had asked another Sabena pilot to pick up the box and make the delivery to Mr. X.
Deppe was deported for his role in the smuggling operation and turned over to Belgian authorities who were investigating the smuggling ring. Julius Falkenstein and Samuel Liberman were fined $2,500 each and sentenced to one year in prison. The sentences were suspended because of their cooperation with Customs agents.
Before the investigation ended, others involved in the United States and Belgium included a chauffeur with the French Consulate in New York, a French Diplomatic courier, an employee in the French Foreign Office, and an officer in the Belgian air force.
As for Mr. X, Customs agents know that he was successful in smuggling three shipments of diamonds into the United States even though they have no proof other than the word of informers. Mr. X is on their list, and one day, they are certain, he will make a false move that will land him in prison.
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Diamond smuggling is one of the most lucrative of the illicit operations because diamonds are so easy to dispose of and so easy to conceal. Diamonds are found hidden in hollowed-out heels of shoes, in the running boards of automobiles, in rubber contraceptives inserted into body cavities, in false bottoms of suitcases, in fountain pens, in hollowed-out books, in women’s corsets and brassieres, and in toy animals. They come by plane and they come by ship. Communications between the contact man in the United States and the syndicate in Europe is so swift that often the syndicate knows within minutes what has happened to a shipment.
Such was the case when the Racket Squad began a surveillance of Reginald John Morfett of Rainham, England, who was the purser and chief steward of the liner Assyria. Morfett was fifty-eight years old and looked more like a Bond Street merchant than an inveterate smuggler. He was a slender man with thin, black, wavy hair brushed back from a high forehead. He wore his clothes well.
Agents were watching Morfett when he left the Assyria early in the evening of October 16, 1955, and stepped onto the North River pier at 95th Street. An informer in London had reported that Morfett was carrying eighteen pieces of platinum and gold jewelry, set with diamonds, rubies, sapphires and jade, in addition to 34.41 carats of cut and polished diamonds. The jewelry had a total value of $48,135. Delivery was to be made to two brothers in a hotel room in New York City.
Morfett rode buses from 95th Street to Seventh Avenue and 50th Street, where he left the bus and walked to the Taft Hotel. He went into a drug store to a public telephone booth and made a telephone call.