League of Gentlemen Scandal

The League of Gentlemen Scandal

The Industrial Savings Bank circa 1920s

They Were No Gentlemen

Inside the warm and welcoming mahogany paneled confines of the Flint Industrial Savings Bank, the dapper bank executives crowded around an impressive heavy conference table. Outside, the autumn winds were blowing that October of 1929, and soon a seismic change across America and the world would blow in, as well. Inside the conference room, though, the executives’ designer leather shoes were as dry as their afternoon martinis, while the smiling visage of the Chairman of the Board of Directors, Charles Stewart Mott, looked down on the assemblage, from his portrait, hung with care in the room.

But, this was no ordinary bank meeting. Rather, this was a conclave of the “League of Gentlemen”, the ironic and secret moniker the group had selected to identify themselves. No one from the outside could know…because this group was no ordinary group of bankers. They were, in fact, in the very middle of perpetrating the biggest bank fraud the United States of America had ever witnessed. Together, they would steal the 2021 equivalent of nearly 58 million dollars.

An Industrial Savings Bank deposit book, 1931

With minimum rules of engagement, and tactics that would soon be deemed illegal and usury in the 1930’s, millions of people worldwide were riding the rolling wave of irrational and careless exuberance. They made easy targets. By using a series of strategies, The League of Gentlemen had been systematically stealing depositors’ cash, to speculate in the wild Roaring 20’s stock market roller coaster.

They leveraged the old school “fake note” scheme, which required tight teamwork and skillful forgery. Another scam was to obtain bills and drafts destined for other banks and just filch them. They’d write out an IOU in the name of some local celebrity type, lying that those folks owned the shares, and claiming they were on deposit at the Flint bank. Then they’d attach the share certificates to the promissory notes as proof. The finishing touch was a forged signature. Then, the bank would loan money to the other “Gentlemen”--not the folks whose names they’d forged. The gang had become so brazen they were even using Mr. Mott as one of their celebrity victims, forging his name freely.

Along with Mott, they forged GM and Chevrolet founder William C. “Billy” Durant’s name. When they ran out of local luminaries, they started going outside of Flint. Sticking with their auto industry theme, they faked Henry Ford documents, too. Sometimes, they’d simply rob safe deposit boxes, stealing the money like convenience store thugs--albeit in very nice suits and matching ties and shoes. They were gentlemen after all.

Top Auto Industrialists Who Were Victims of the Forgers

Charles Steward Mott; credit C. S. Mott Foundation

William C. Durant

Henry Ford; image credit The Henry Ford

Who were the league of Gentlemen?

In Flint, the League of Gentlemen had formed because they were surrounded by OPM (Other People’s Money) amidst the roiling stock market. Every day in the Vehicle City, more money poured in to the ascending automobile industry. Buick, Chevrolet, AC Spark Plug, Dupont, and General Motors were growing by leaps and bounds. Millionaires were minted on the regular. New homes rose on Circle Drive, Woodlawn Park Drive, and swanky neighborhoods on Miller Road. It seemed everyone was getting rich. The League of Gentlemen wanted their taste, and they had no intention of waiting around for a measly raise or promotion. No, they were just going to take it. In a most gentlemanly fashion, of course.

Frank Montague, bank Vice President, didn’t even think of it as stealing. He called it “borrowing money without approval.” Better to ask for forgiveness rather than permission in his mind. His pal in the gang, Milton Pollock, was a handsome 39-year-old, and also a Vice President on the rise. Pollock had a sick wife at home. Health care and drugs were very expensive. This seemed like a solution.

Next to them was Ivan Christensen, the bank’s assistant cashier. He was pilfering because, well, he liked money! Plus, he was building a new home in Flint for $75,000 ($1,141,000 in 2021 dollars). He was hoping no one would question how he was pulling it off on an assistant cashier’s salary. He was early to the game, at it for two years now.

Settling into the rest of the heavily cushioned seats were lower-level conspirators, as well. Sipping their hot coffees the balance of the League included: James Barron, George Woodhouse, Russell Runyon, Clifford Plumb, Mark Kelly, David McGregor, Arthur Schlosser, Robert McDonald, Elton Graham, and Farrell Thompson. Also, notable amongst them was Robert Brown, the 28-year-old son of the Flint Industrial Savings Bank President, Grant Brown. Dad was supposedly clueless about Junior’s gangster double-life, and he aimed to keep it that way.

Six of the Twelve Embezzling "Gentlemen"

Milton Pollack

John DeCamp

Ivan P. Christensen

Elton D. Graham

Mark H. Kelly

Russell A. Runyon

Brown Jr. was particularly wary of getting caught. His dad, Grant, was a high-profile big hitter. The Brown family was called a “Flint First Family” based on their “strong moral foundation”. Brown senior had been a bank examiner, catching crooks including embezzlers like the League of Gentlemen. He ran the bank based on “Strong Christian principles”, as he put it.

One person who admired the Brown family was the man sitting at the top of the table, John de Camp, the bank’s Senior Vice President. He was a church deacon, often introduced to others as a “Pillar of The Church”. His ornate home on Woodlawn Park Drive, off of Court Street, hosted the elite of Flint in lavish parties that included some of the city’s most wealthy and influential citizens. Nattily dressed, with the requisite gold banker’s pocket watch, spectacles and tie clip, he brought the meeting to order. Here, The League could begin their business of lying, cheating, and stealing in an organized and always classy fashion.

In truth, the League had only organized as a team when members started discovering that there were others embezzling. As it happened, the bank was literally filled with crooks. It was like finding out that there are a group of sports enthusiasts and athletes in your office all at once. But instead of forming a bowling league or fantasy baseball league, the office sport was larceny. So, they formed their own kind of league. Instead of goofing off by playing video games or surfing the web as some might do today, they focused their efforts on thievery – and really bad investment decisions.

What Could Possibly Go Wrong?

One of the many challenges that The League faced was their almost impossible ineptitude at investing. Given their unique access to information and capital, in a rising market, they still managed to sustain crippling losses. Were it not for the unlimited access to OPM only the most prideful and belligerently stubborn gambler would have continued. But then again, it wasn’t their hard-earned money. Yet, still they remained optimistic.

The key driver of their high hopes was that they all expected the stock market to surge forward to hit a new, all-time high at the end of October 1929. After all, the esteemed professor Dr. Irving Fisher, the first ever Yale PhD in economics, had recently commented on the stock market by saying that “Stock market prices have reached what looks like a permanently high plateau.” What could go wrong?

On Tuesday, October 29th, 1929 the answer was pretty much everything.

When It All CAme Crashing Down

An unprecedented meltdown in the overheated, unregulated, and raucous market crushed millions of personal fortunes, and in so doing, brought down the League of Gentlemen and their wild Ponzi scheme. An emergency meeting was held in the same conference room that only a few weeks earlier had hosted their optimistic cabal. The mood this time was decidedly less rosy. Realizing that their losses would not, and likely could not, be recouped, they decided it was time to come clean. Several members refused to acquiesce, but when others insisted, threatening to go public, the holdouts packed it in.

By the afternoon of the 29th, Frank Montague added up The League’s losses, estimating that they owed the bank about 3.8 million (58 million in 2021 dollars). He had no choice but to go to see Grant Brown. Together they summoned the rest of The League to their usual positions in the board room where the plot had been hatched and carried out over so many late-night League meetings. One by one they confessed, until Brown’s son, Robert, entered the room. “You, too Robert?” Brown asked. Head hung, tears flowing, the young man confessed. Finally, John de Camp, Brown Sr.’s right hand man arrived. The stone-faced Bank chief stared a hole through him. As events would unfold, it’s highly likely that Browns reaction may have been an act.

In a final plot twist, Grant Brown would also be charged with embezzlement and falsification of a bank statement. His involvement as a member of the League remains unclear. Without question he was, at a bare minimum, asleep at the wheel.

Mott's Motorcade of Money

Charles Stewart Mott

Brown picked up a phone to call Charles Stewart Mott at the General Motors Building, in Detroit. After explaining the situation, Mott said “Mr. Brown, I’ll be with you in no time.”
Mott headed to Flint to be at the Bank the next morning, meeting with the League at 5:00 am in the boardroom, where they had spent the night. After demanding each man’s resignation, he placed a call to Genesee County Prosecutor Charles Beagle. There remains some controversy as to what transpired in that call. Some say Mott asked Beagle not to prosecute, to avoid the bad publicity that would result. According to “The Day The Bubble Burst”, authors Max Morgan- Witts and Gordon Thomas claim that Beagle’s son John believed that his father refused to bend to this request. Conversely, Mott’s son, Harding, maintained that his father did not request such an intervention.

Regardless of what was to come, Mott knew he had to act quickly to quell any panic, and in a dramatic move straight out of a Hollywood scene, Mott lined up three armored cars, then withdrew the modern-day equivalent of 58 million from his own personal bank account, in Detroit. Then, leading the motorcade from Detroit to Flint, he took the exact amount of stolen investor assets and physically replaced them at the bank. There was no Federal Deposit Insurance Corporation protection in those days. Mott’s actions were heroic in the extreme. He did so with no written agreements as to how, or even if, he would be remunerated.

from the bank vault to the prison cell

The call-out to Prosecutor Beagle to get the show on the road by the "Flint Saturday Night" newspaper

"...the greatest amalgamation of thieves that the country has ever known.” --Flint Saturday Night

Meanwhile, Prosecutor Beagle took his time preparing his cases, waiting to make any arrests. Pressure mounted for him to move on the perpetrators. Beagle explained the delay saying, “It has been found advisable to prepare cases against the men that will not involve the testimony of any of the others. With a dozen men gone from the employ of the bank, it has meant extensive work to prepare such cases.” In the end, he promised that “They will be tried on cases arising out of other transactions until I get a jury that will convict or until they are acquitted on all counts.” The bottom line is that it was a very complicated case involving complex and often opaque transactions. Beagle needed some time, and assistance to prepare his case.

On November 16, 1929, warrants were issued and arrests made. Pleading guilty were Graham, Montague, Pollock, Christiansen, Runyon, Kelly, Barron, and Plumb. Choosing to stand trial were Robert Brown, McDonald, Thompson, Woodhouse, and McGregor.

By January of 1930 the verdicts were in. DeCamp was sentenced to 10 to 20 years, Graham, Pollock, Kelly, and Runyon received 5-20 years. Christensen got 7 to 20, Montague received a 3.5 to 20 years, while McDonald, Brown Jr. and Plumb got six months to 20 years.

An editorial in “Flint Saturday Night” opined:

“Ali Baba and his forty thieves were the mildest sort of lambs as compared with the contemptible dirty dozen who pilfered and robbed this bank. Grant J. Brown was its president. A short time ago, we praised him as a wizard of finance. We have no reason to change our mind. A wizard he surely was--either a fool or a knave to have permitted such a state of affairs in his bank for a period of two years. A wizard in that he headed an institution with the greatest amalgamation of thieves that the country has ever known.”

Flint, and the nation was soon immersed deeply into the Great Depression, a decade of deprivation that only ended with the outbreak of World War 2. In the intervening years, the Sit-Down Strike in Flint established the United Auto Workers as a major power. General Motors came out of both the Depression and the war on top of the manufacturing world, unopposed, as America was the only country on the globe with an intact manufacturing structure. Those two outcomes propelled Flint to a surge of prosperity and growth that led to the city topping 200,000 residents, and having the highest per capita income in America for many years to come. The party lasted for nearly 40 years after the war. With all of Flint’s booms and busts, The League of Gentlemen was completely forgotten. Despite this, it remains one of the most prolific American bank heists of all time.

Postscript

In prison the League of Gentlemen were allowed adjoining cells. In a scenario ripped right out of The Shawshank Redemption, they worked together to straighten out the prison’s financial records. Later, seven of them returned to Flint to work until retirement – in local banks.

Frank Montague was interviewed in his trailer living outside of Flint, in 1978, and maintained that he was “exploited by the others.”

The Building

The Industrial Savings Bank was moved to the current home of the Mott Foundation Building. The original building later became known as The Northbank Center. It is now part of the University of Michigan complex.

Vertical Divider

C.S. Mott later purchased the Industrial Savings Bank building, renaming it the Mott Foundation Building. Michigan National Bank was housed there for many years as well. It remains the home of the Mott Foundation and other businesses to this day.

Sources:
New York Times, February 2, 1930
Wall Street Journal, November 30, 1929
Chicago Daily Tribune, November 11, 1929
Flint Saturday Night, November 16, 1929
The Day The Bubble Burst, 1979, by Gordon Thomas and Max Morgan -Witts
The Life of Charles Stewart Mott, 2019, by Edward Renehan

Image Attributions:
Leather Texture: "Close-up of black fake leather texture" by Horia Varlan is licensed under CC BY 2.0

Written by: Gary L. Fisher

About Gary: A man of many talents, Gary runs a wealth advisory office in downtown Flint, he is a Flint historian, the radio host of Fish & the Flint Chronicles, and Vice President Genesee County Historical Society.

On a personal note, Fisher and his wife held their wedding reception in the ballroom of the Northbank Center. Mr. Fisher's financial advisory practice is also located in the Mott Foundation Building.