A short time later, Morfett was joined in the lobby of the Taft by an attractive, black-haired woman who greeted him warmly. He took her into a bar where they had a drink, and then they left the Taft and began strolling up Seventh Avenue.
Agent John Rainey, a ten-year veteran with Customs, was in charge of the surveillance. It had become apparent to him that Morfett did not intend to make delivery of the diamonds on this night. He would not be walking around the streets carrying gems worth more than $48,000. He reasoned that the jewelry was still aboard the Assyria.
“Let’s grab him,” he said, and he signalled to other agents nearby.
Morfett’s frightened companion was released when agents were satisfied that she was only his date for the night. Morfett was taken back to the Assyria, where the agents began a search of his quarters and the other places aboard the vessel to which he had easy access.
Throughout the night the agents searched without finding the gems. The next day a fresh squad took over the search, which was continued in relays until a short time before the Assyria sailed for Baltimore in the early morning hours of October 18.
The Assyria was hardly three hours out when the New York Customs office received a trans-Atlantic call from London. The Customs representative in London said his undercover source had advised him that the search of the Assyria had failed—and that the gems were still aboard the vessel.
The Assyria returned to New York on October 27 and docked at Pier 90 on the North River. Racket Squad Chief Tom Duncan led a squad of agents aboard to continue the search—they knew this was their last chance because the ship was due to sail at 7 o’clock that evening.
The search was continued until late in the afternoon. Duncan finally said wearily, “It’s no use. We might as well knock it off.” He asked one of the agents to call Tom Rainey and tell him to drop the surveillance of the brothers to whom Morfett was supposed to deliver the jewels.
“Tell Rainey we’ll wait for him here,” Duncan said. “Then we’ll all go to dinner together.”
It was 6:30 P.M. when Rainey walked into Morfett’s quarters. Morfett sat in a chair looking bored with the whole proceedings. Duncan said, “The ship sails in thirty minutes. Let’s go and get something to eat.”