Before that trip to prison, however, Leo spent most of the summer doing two things; fencing property for the Schultz gang and running his own separate operation against the city of Louisville. Due to the influence of the high profile criminals in town Leo understood that he probably should not be running any unsanctioned operations, especially ones that were directed at the city. Some of those gangsters, including Schultz, had arrangements with various local officials to look the other way in regard to their illegal activities. Those agreements came with the implicit understanding that these criminals would go easy on the city itself. Unfortunately for Leo, his usual sense of independence and desire to increase his own standing in the criminal world made it almost impossible to work solely under the direction of Dutch’s operatives. Instead, he applied for and was swiftly hired into a job at the Louisville city manager’s office (also under the name Robert O’Hara) as an engineer, his falsified degree from Duke apparently never being looked into very closely. Leo quickly learned the ropes of the operation and within weeks he was diverting newly purchased construction equipment to his own fencing operation and selling it to local contractors. Things rolled merrily along for him through June and July as Leo made the rounds at the Seelbach’s evening social hour, escorted a rotating cast of women around town and piled up a good amount of cash. Those funds he kept inside lock boxes in his room and at various other places around town.
Then on Monday August 13, 1928 he stepped out into a rather cold summer morning and was met on the steps of the hotel by a police officer and city detective. Leo was arrested for converting stolen property relating to the work he was doing for the Schultz gang and promptly brought to the city jail. He languished there for several days before an attorney, dispatched by Dutch, arrived and spoke to Leo. As it turned out, the detective who arrested him was new to the force and not quite familiar with all of the local arrangements in regard to the illegal enterprises being run in the city. It would have been simple enough to get the whole thing thrown out expect for the fact that there was also new pressure from the city council to clean up some aspects of the criminal element in the city. That basically meant that Leo was going to have to do some time although it would be a short sentence, just enough to mollify the council. The attorney encouraged him to, “think of it as a little vacation,” and informed him that all his legal bills were being taken care of by Schultz.
Leo, of course, did not view the situation as any kind of a vacation. He was focused on making money and improving his reputation and the sentence, one month in city jail, was going to hamper his efforts. After a day or two of sitting silently in his cell though, Leo’s mood improved and he spent the rest of his time writing letters to women, another to Olivia (that did not mention his location or current situation) and reading up on Duke University. One of those letters was written to Ginny Mayburn, an auburn-haired local socialite whom Leo spent more time with than any of his other paramours, and highlights his state of mind at the time.
As you’ve surely heard I have landed in the local slammer for a spell – can’t say I enjoy the place much! Looks like my lucky steak is over but I needed some more time in anyway – it helps make me stand up better with the fellas. I’m sure I’ll be right back to it next month.
Free up some time for me around the 20th – I should be out and your company will be just the thing to make me happy. I’ll be thinking about the night you wore the red satin as I while away my hours in here.
In what would perhaps be a further reflection that Leo’s luck had gotten thin, during the month that he was incarcerated in Louisville his scheme against the city was exposed. It only took a few days after he failed to appear for work at the city manager’s office before a new person was hired to replace him. That man discovered the irregularities (which Leo had not covered up very well anyway), reported them up the chain-of-command and eventually Dutch Shultz became aware of them. Needless to say, both he and the city officials were not happy that such an operation was being run, and things were put into action to deal with the situation.
It was yet another unusually cold summer day when Leo was released from the jail. As he was recovering his personal property he mentioned to the officer on duty how good it felt to be back in, “my proper shirt and suit,” after which he counted the money returned to him three times before signing for it. He scoffed at the comment made by the officer as he walked away, “see ya soon Bob,” although he would later regret not heeding those words.
Leo was determined to get back into the swing of things quickly, heading straight for the Seelbach after his release. He was met in the lobby by the hotel’s general manager, an aging man with slicked-back grey hair and a constant smile, who seemed to have been waiting for him. The man informed Leo that due to his extended absence and unpaid bill his belongings had been removed from the room he previously occupied, a statement Leo reacted to with indignation. The man proved unmoved by the protest and further informed him that he was no longer welcome, although the outstanding bill had been, “taken care of by an interested party.” After a few more minutes of ineffective protesting Leo stormed out of the Seelbach and walked to the house of a woman named Lucy seven blocks away.
She at least seemed happy to see him and Leo, spooked by what had happened at the hotel, laid low in her house for the next two days after sending her back to collect his belongings from the manager. He also contacted two other women, with whom he had secreted other items, and arranged for Lucy to retrieve them. Once all of it was back at her house Leo packed it into a large trunk, locking it and making her promise to always keep it safe. It was a calm couple of days, with Leo and her spending much time wrapped up in each others arms. Then, as evening fell on September 23rd, Leo felt safe enough to venture out on a walk after eating dinner. He made it two blocks before a police vehicle pulled up behind him and he was arrested again, this time for embezzlement and obtaining goods under false pretenses.
…to be continued