Two Fraud Cases
JahnsenWell, to give you an illustration of what I'm referring to regarding taking statements or confessions, we had a fraud case that involved the state department of education. It involved a school board down in San Luis Obispo, and it involved state and county people.
King
This must be later when you were in the attorney general's office?
Jahnsen
Yes, it was in the attorney general's office.
The incident where it occurred was, some woman had come into the district attorney's office in Oakland and was referred to Inspector Chester Flint. This woman owned a boarding house out in north Oakland. At that time she was suspicious of a young man who had resided there over a period of time, and would stay a day or two and then go away. But usually during the period of time he was there, she would find envelopes addressed to different people under different names, under different post office boxes, torn up in little bits. When she cleaned the room up after he left she found these, and she became curious. She was suspicious of his actions. It's odd for a young man to come into a rooming house for just a couple of days, you see, and then come back after a certain period of time, say every thirty days.
So she came to the district attorney's office and talked to Flint. Flint sent her up to the Oakland police department to talk to some of the police inspectors with regard to her suspicions and findings. They were not interested in her story. She later returned and Inspector Flint sent her to see the attorney general and his investigative staff. We made an investigation to determine who this young man was and what he was up to. She thought that this boy was peddling dope, or fooling with narcotics, or something. She didn't think it was legitimate.
When she told her story--but she just didn't know the ways of the underworld--she was a very fine woman, and her imagination could run away with her.
Inspector Flint listened to the story. He called me on the phone. He said, "I think I have a statewide fraud or something here in this thing. I don't know, but this woman
He gave me all the information he had and we went and talked to the woman, and she told me what had happened. We advised her, "Well, when he comes again, if he does again, save all the papers." She had saved some and we said, "Well, okay, you let us know, and we'll trail the fellow. We'll shadow him." So she did.
We shadowed this fellow. He would go around to a post office box and get an envelope out, he would go to another post office box and get an envelope, he'd go to some other place and pick up an envelope, and he'd get all these things. He'd sit in there and keep the envelopes, but he was taking something out of them. It appeared to be that he was taking out checks. But the fellow who was shadowing him--we had a very good shadow man--he couldn't tell exactly what this fellow was doing.
Prior to this I had investigated a fraud involving the rebate for gasoline tax for other than highway purposes, and we investigated it and caught the fellows. This seemed to be a similar type of offense. The Butz boys were their names.
What they were doing was, they would go up and down the state, all over. They had a little stamp pad set with all the little letters in it, that you used to take out with a little pair of forceps and put in it and make a stamp. They had little sales slips or tabs, and they would use the little print set on the slips to print up, like "Lakeside Oil Company," or "Eureka Fish Company," or whatever it might be. They'd get the name of the gas station or market, etc., but it would be a fictitious name; it wouldn't be exactly the same. They would say "so many gallons of fuel for boats or for farm tractors for off-highway purposes." Then they would file for the remission of tax, so the tax would come back.
They would go down the state on one highway and return up the other highway and they'd send it out for the refund. They had to fill out a form. The State Bureau of Criminal Identification
All these fellows would do was to pick up the checks on the way down and send in more bills for payment as they went along. They would stay at different rooming houses, and then they would say to the clerk or operator, "If any mail comes for me, hold it. I'll be back in a few weeks." Then they would go to post office boxes, too, and pick up this mail, and they had rented a number of post office boxes and would pick up the checks from them. They would fill out a very simple form, and all one had to do was attach the receipts.
Of course the volume in this field was so great nobody ever stopped to look at them, and it just had to be by fluke that they found it and thought there was something wrong with it, and gave it to the state bureau to investigate. Owen Kessel, a state bureau investigator, come in one evening about quarter to five. He said, "I'm not getting very far with this case and need help." (I am not getting away from this other story, but I'll come back to it.)
So he came around, and he said, "I've got something here. I'd like to work with you fellows on it. I think it's a fraud case--I don't know." He started to tell me the story, and I said to the other inspectors, "Well fellows, don't go home; we got a job." I wouldn't let anybody go. He said, "Well, let's do it tomorrow." And I said, "No. Why wait til tomorrow?" Because he told me about hotels that he thought these checks were in. I said, "In the meantime, the fellow may come to these hotels. Let's just go and see if they're there. We'll take you out to dinner." So he said, "Okay."
We went over to Eighth and Webster Streets; there's a corner hotel there. We walked up the stairs, and when we got up to the stairs, this day clerk was rooming this man. We looked up in the box--these little pidgeon-hole boxes--and we could see an envelope in there was identical with this one which was coming from the controller's office. The state controller was paying this money, refund.
So, just about this time--we didn't even have a chance to ask the clerk about this--a fellow come up the stairs, and he says, "Hi! Is there any mail for me?" The desk clerk said, "Yeah, here's the letter for you." He took the envelope we were
I said, "Say, fella, I'd like to ask a question." He looked, and he says, "This isn't my envelope," and he was going to take it back. I said, "Oh, yes it is. It's your envelope all right. And you're our man!"
I took him into custody and held him for investigation, but his brother was sitting across the street in a car. The minute we went down, we saw the fellow across in the car. We got him just before he got to the door. Our car was there, and he, the arrested man, waved to his brother to give him a sign, and we stopped him and arrested him. When we searched them, here they had many of these checks. So we locked them up in the county jail.
One brother wouldn't talk at all. We took the other brother out to the place in Berkeley, on the pretext now--again, psychological, in order to get the facts and the evidence. He wanted to phone his wife. I said, "Don't worry about that, where do you live?" He said, "I live out in Berkeley." "Oh, well hell, we probably aren't going to hold you very long anyway. If you want to go and tell your wife, we have to go to Berkeley, so we'll take you out and let you say what you want to her." We wanted to find out where he lived.
We went out there, and he went and talked to his wife, and he told her something. In the meantime--it was his home, and he was a criminal under arrest, and he took us in. We searched his home and got all the stamp pads and everything else, got all the evidence, you see?
Well, this was one of the cases that when this other boy was being shadowed that I mentioned, I figured it was the same kind of a deal. Now, it involved a fellow who was a professor in a high school in Oroville. It involved some people in the department of education and in the controller's office who handled the rebates, as I remember.
King
So it was another very similar type of fraud?
Jahnsen
Yes. A similar type. What had happened was that these fellows had got together and figured out a way how they could defraud the state out of unemployment insurance. Then, if anything went
They set up one, and they had this here superintendent of schools in San Luis Obispo, they had this boy who was doing the collecting who was related to him, they had this professor in this school--I think it was Oroville--and they had these two people in the state unemployment insurance group.
What they did was, they filed with the state a company certificate showing all the employees listed under a phony company. They set up these phony companies, and then they would file a list of employees--like the ABC Coal Company I think was one of them, and several other companies. Then they would pay into the fund the amount of money that was due for taxes, unemployment income tax. I think it was employment insurance tax--
King
The employer's contribution.
Jahnsen
Their contribution--they would file this amount of money with the state. They did this two or three months. They had to have a little capital to start.
Then, all of a sudden, the company would go broke. All these phony employees, then, when they went broke, would file for unemployment insurance. Then the money would come in checks, and they had all these lists, and everyone--if there was twenty on the list, there'd be twenty employees filing--it ran into many thousands of dollars--and they would continue filing for this insurance money. This money would then go to these various post office boxes and this young man was going around picking up all these envelopes, and all these checks would go into their pockets.
Now, in getting back to the original thought: how did you get the confessions and how did Earl Warren stand for it? Well, in this case, after the arrests were made, with the cooperation of the district attorney of San Luis Obispo County--and we trailed these fellows, too, a long way. At a certain prescribed hour we wanted to arrest all these people at one time. We had a number of places in the state that we had to make the arrests. We had to get this young fellow--trail him--so we wouldn't lose him.
This superintendent of instruction down there in San Luis Obispo, he was also grafting on getting supplies to the schools.
King
I see. He was a busy man.
Jahnsen
Putting in supplies, and he was cutting back on this thing.
When the arrests were made, we took them all in, picked them all up and drove them into Alameda County, booked them and interrogated them. We had deputies all lined up, set it up so that each one would interview these fellows, and they were briefed on the case in advance. This one boy wouldn't talk. He wouldn't talk. You couldn't do anything with him.
King
Were there any rules about how long you could interview them, or anything like that? I mean, could you keep on--
Jahnsen
A reasonable length of time.
So anyway, in this case Mr. Warren wanted to talk to this boy, so I sat in there with him, and he wouldn't say yes or no or anything. He just wouldn't talk to anybody. This is in the attorney general's office. We finally brought him back into my office and sat down.
One of these fellows was his uncle, his mother's brother. We got talking about families, and again applying psychology on him--families and one thing and another. I said to him, "Gee, aren't you going to be ashamed and feel pretty bad-won't your mother be all broken up about this thing?" Really got down underneath the kid a little bit with a little warm talk and affection, and so forth, and, "Gee it's a shame--your life, going ahead, and you're just a youngster here--" and one thing and another, so gradually I got the kid around to where he'd talk.
Then we took him out to dinner, and after talking with him a little longer, I said, "Now, Mr. Warren's a very nice man, he has a family, and I would think that-- After all, you don't want to go to the penintentiary or anything else. What's it going to do to your family and your future life," and went on with him, and finally he agreed to tell us the story. He told us what his job was, to go out and pick all this money up. One of these fellows later committed suicide, the fellow up in Oroville or wherever it was.
A similar thing happened in the ship murder case, and I can cover that when we come to it. This was no force, it was just ordinary reasoning--letting the truth bear upon the mind of the individual. Give them a light so they could see; so they could understand. Taking away the fear from them, you see?
Courtesy of Regional Oral History Office, University of California, Berkeley
http://content.cdlib.org/view?docId=ft0000023x&brand=oac4
Title: Oscar J. Jahnsen
Contributing Institution: Regional Oral History Office, University of California, Berkeley
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