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"Four Are Held Here In High-Grade Gold Smuggling Case," Windsor Star. February 22, 1943. Page 3 & 6. ---- Canadian and U.S. Police Co-Operate ---- SPRING TRAP AFTER TWO MONTHS OF WORK THOUSANDS IN PRECIOUS METAL IS RECOVERED --- By ANGUS MUNRO Bail of $5,000 cash or $10,000 property was fixed here this morning for each of four men charged with being members of a powerful gang of alleged high-grade gold smugglers.

The gang was rounded up and taken into custody after weeks of skilfully planned. perfectly executed police work on the part of federal authorities in Windsor, Toronto, Hamilton and Detroit.

Hunt Fifth Man Another member of the gang Windsor woman, wife of one of the men, is not being held now her identity rinsed by police. A fifth man is being sought in Detroit. Those held are:

Marke Lakich, 35, 1111 Albert

Michael Bich, 41, 775 81. Lake

George Birash. 47. 1366 Hickory

Sam Matijevich. 47, allas Sam Matheson, Hamilton.

All were arraigned before Magistrate J. Arthur Hanrahan in city police court this morning charged with at- tempting to export, or aiding and abetting the export of property from Canada to the United States without A licence from the Foreign Exchange

Bail Is Fixed

Only Malijevich was represented by counsel. Major J. Ernest Zeron, his lawyer, asked the court if bail could be allowed and after consultation with police, it was fixed at $5,000 cash or $10,000 property. The four were remanded a week. Purpose of the remand is to complete further investigations that are being made by the Royal Canadian Mounted Police and Foreign Exchange and A. W. Anderson, RCMP whe appeared in court this morning along with Inspector W. Morphet of the Windsor office of the Foreign Exchange Ctrl Board, intimated that more serious charges are likey to be laid involving alleged conspiracy.

The four were locked up pending bail arrangements.

Industrial Workers The three Windsor men are on the payroll of industrial plants here while Matijevich has no known occupation. Matijevich was arrested by Hamilton authorities and brought to Windsor while the remaining three were taken into custody a week ago in an Ouelette avenue rooming-house where the police trap was sprung without a hitch. All are being detained in a downtown hotel under guard.

Not since the old rum-running days on the border have international enforcement officers worked more lovely nor more dramatically. For two months, night and day. movements of the gang have been carefully watched and records made of their every move and word. This was possible through one of the oldest yet most audacious forms of sleuthing known in police.

In constant touch with the gang and successfully passing himself off as one of them wan an unidentified special agent of the United States Treasury Department. Customs Division, who was known to the rest of the gang as Bill Brown. He it was who flashed thick rolls of bills in the faces of the gang and who met with them in hotel rooms and other points of rendezvous without once arousing their suspicions.

Perfect Come-on He was a perfect come-on. He cultivated the friendship of the gold handlers. He won their trust and led them, sheep-like, into the trap which ended their activities and may send them to prison.

Authorities here believe Windsor was about to become one of the main new channels for the export of high-grade,, about $3,000.800 worth of which is estimated to be taken illegally from the country annually after being stolen by miners of Ontario's gold mining north country. All the men taken here are known to have formerly lived in the north or have been employed by mining companies. The dramatic story of the grand round-up in Windsor was given to The Star by Inspector W. M. Morphet of the Windsor inspectorate of the Foreign Exchange Control board. It was confirmed by Staff-Sergeant A. W Anderson of the Royal Canadian Mounted Police. The entire staff of both these offices have been devoted to the single purpose of gathering evidence, shadowing, trailing and checking movements of the men, watching trains hotel rooms, prate residences rooming houses, tunnel buses to Detroit, private cars and SW and A. buses. The gang and the Mounties in plain clothes moved in and with the city shopping crowds unnoticed.

Separate Rooms So careful were the authorities in avoiding publicity that separate rooms were engaged at the hotel where the men were kept under observation. No telephone calls were permitted to get through and only enforcement officers were permitted to visit the rooms.

The grand finale in the combined activities of United States and Canadian authorities came last Monday, February 13 when the actual gold was to be turned over in the Ouellette avenue rooming house in the men who were to smuggle it across to Detroit.

Gold sells for $38.50 an ounce in Canadian money in Detroit. On that basis the haul made last Monday amounted to nearly $3.000. A previous captured of gold was made in Detroit after it had left Canada. Ia value was $1.36732

While other gold seizures have been made in Canada's wartime history, they have been made only after the gold was out of the country and authorities had to work backwards from the U.S. side after the evidence had been seized by authorities there. Last Monday's climactic seizure was made before the gold left Canada. Here's how it happened.

Story of Seizure While the owners of the rooming-house and members of the family locked themselves in in upstairs room lest there be any shooting or roughhouse tactics, authorities engaged adjacent rooms on the ground floor of the house . In one of these the deal was to take place and the money passed over. In the other room were to be Inspector Morphet, Corporal R. L. Woodhouse and Constable J. M. Gallinger of the R.C.M.P. Allowing sufficient time for the money to produced and handed ever, the offices were at a given signal to enter and make the arrest. The plan worked perfectly.

The gang moved with caution. One of their number came on ahead to the house to scout the layout, Bill Brown, who was to buy the gold, posing as a member of the gang, said everything was okay.

Shortly after, the officers say, along came Lekich, Billich and Birush, one of them carrying the gold. (Matijevich was not in on this deal, but had been picked up in Hamilton on evidence arising from an earlier transaction.)

The gang talked for a while and finnally a deal was agreed on. Lekich and Birush were to take the gold w and Brown was to await a telephone call from Detroit stating that the gold had arrived before he would pay over the money. In "Button" Form The gold was in the form of a "button" or thick heavy slab the shape of the bottom of a small crucible. There were two of the one large one weighing 76 ounces and one small weighing eight ounces. They fitted tote a suit pocket without difficulty. Assays since given the seized gold proclaim it to be the equal of the finest produced in this country.

It was planned that the smuggling should be done in a car but the car wouldn't start and Birush returned to the rooming house while Lekich and the look-out man who had scouted the rooming-house made the trip in the tunnel en route to Detroit.

At the tunnel, both Leklch and the unidentified man were search ed. The gold was dienvered in Lekich's pin but as nothing was found on the other man, he was permitted to continue on through

Constable John T. Townsend and, Constable Walton Routledge. who picked Lekich up at the tunnel explained that they waited until he had passed the customs inspection and had declared himself not to have in his possession any property which should be declared. He was arrested just as he about to step in the Detroit bound bus.

Awaited Call Back at the rooming house, Brown and the others were awaiting the call from Detroit. This name but not from Detroit. This came but not from Detroit. Constable Townsend telephoned Brown from the F.E.C.B. office, stating that Lekich was in custody. This was according to plan. When Brown heard Townsend's voice he knew everything had gone as sched- suled, so he turned to the others and said that the gold had arrived in Detroit and that he was now about to pay them. He began to count out the bills. This was the signal for the others in the adjacent room. A minute or two elapsed until Bijlich and Birush had picked up handfuls of the bills. Then Inspector Morphet and the two officers stepped in through a communicating door and swiftly and efficiently Corporal Woodhouse snapped on the cuffs.

The gang had demanded to see the color of Brown's money before they would deal, so it was necessary to get $3,000 in Canadian funds to be used as come-on money. Authority was given to borrow it from a Windsor bank for this purpose, but it was an anxious time for Inspector Morphet and Staff-Sergeant Anderson while the money was in the hands of the gang. They were considerably relieved when it was taken back from Bijlich and Birush.

Throughout the entire period the assistance rendered by Brown was invaluable to authorities here. It was Brown who figured in an earlier deal 6 in which $1,000 of U. S. money was used to purchase gold in Windsor. The bills were marked and their numbers watched for in Windsor banks.

Wanted Bigger Game It was this deal which Lekich first figured in also. Because it involved a small amount, it was permitted to pass without interference, although under supervision because the authorities wanted bigger game.

Brown at that time flashed a roll of bills and said that he was not interested in "peanuts," he wanted "big stuff." At the sight of the money, he was promised a shipment of 300 ounces. The haul last week was far from that, but it was the largest so far attempted by the gang. It is belleved now that their scheme is nipped in the bud, although investigations are continuing and others may be shortly involved.

R. C. M. P. offices and Foreign Exchange authorities in half a dozen Ontario centres must be given a share of the credit for rounding up the gang. These offices are still hot on the trail. Two men are at present being held in Northern Ontario and others under suspicion. Their parts in the widespread, newly-organized ring, may be revealed within days if present investigations are successful.

More Important Even more important than these developments is the possibility that arising out of the present investigations may come evidence which will be strong enough to show conspiracy to commit an indictable offence. Under the charge now pending there are penalties provided rising to as much as $5,000 fine or five years in prison or both, upon conviction.

Breaking the gang and scattering its members before they even got going has been possible only through the most tenacious type of police work. The Windsor detachment, R.C.M.P., the largest in Canada, by the way, has employed all its members. A small army of officialdom and staff members of other federal agencies from top men down to stenographers have played their parts.

Particularly active have been Inspector Morphet, whose days and nights for the past eight weeks have been full of the details of the investigation, often incurring the duty of remaining up an entire night or working far into the small hours of the morning. Supervising the widely spread police net, Staff-Sergeant Anderson has had his finger on all the multiple duties of his men besides carefully watching the procedure of the case investigations in other centres. A tremendous share of the R. C. M. P. work has devolved upon Constable John T. Townsend and his chief paid tribute to him and his fellow officers in announcing the part the force has played in the case.

Praises Constable "They have devoted themselves unstintingly to their jobs," he said. "I cannot commend them too highly. I believe that Constable Townsend has done an especially good job."

Both department heads-Inspector Morphet and Staff Sergeant Anderson -were lavish in their tribute to the United States authorities.

"It was the most encouraging example we have ever had of international co-operation," Mr. Morphet sald in speaking of the parts played by U. S. officers. He mentioned United States customs supervising agent Charles Wyatt, U. S. Secret Service chief George Boos, Captain Joseph O'Rourke of the U. S. customs border patrol and their staffs. In the work on the Canadian side he spoke of the co-operation given by collector of customs Thomas Clark in Windsor and Inspector William McKee, special investigator of the F.EC.B. in Toronto.

Names Officers To the entire staff of R.C.M.P. officers here, he paid sincere tribute,naming: Constables C. A. Lazelle, Walton Routledge, J. M. Gallinger, D. C. McCannell, Corporal R. L. Woodhouse, his own enforcement inspector George McGonigal and Corporal W. E. L. McElhone, attached to the F. E. C. B. in Toronto, He also had a word for the girls who have worked nights and Sundays preparing the necessary documents in connection with the case. Two of those he especially mentioned are Mrs. Margaret Campbell and Miss Winifred Hubbard.

The men rounded up, with two exceptions, have no known criminal records, but all have formerly been connected in some way with mining and are familiar with the process of high-grading. Matijevich faced a charge of unlawfully wounding another man in February 1940, but the case was dismissed for lack of evidence. Bijlich, according to police, has served two years for high-grading.

The crime is as old as mining itself.Ever since man has dug in the ground for precious minerals, the temptation to get some of the easy wealth for himself has been present. The episode on the Windsor border is the end of a long trail that leads back to the mines of the north country.

Big Profit in Racket The immense profit in the racket is what causes an ever-increasing number of men who labor in the mines to take the chance of sneaking out a spare piece of ore. It must be an especially rare bit or it isn't worth the risk, but many such pieces are found in Ontario's rich gold country.

While following his ordinary job, a miner will suddenly come upon a chunk of ore that has the unmistakable signs of gold in large quantities. Despite all the precautions taken for years by mining companies, high grade ore continues to get out. This is difficult to understand when it is explain-ed that men working in shafts where the vein is believed to be rich, must undress before entering the mine and put on other clothes from the skin out. When they come off duty, these are removed and the street clothes donned again. Yet the $3,000,000 annually lost is a conservative estimate, according to mining men.

Once smuggled out of the mine, the gold is passed to a crude smelter. This agent pays probably $5 to $8 an ounce for what he believes there is of pure gold in the ore. He then takes it to a secret crucible somewhere - an ordinary Quebec heater has been known to serve - and with a few crude bits of equipment, renders it down to a molten state. Tossing in a handful of flux he is able to separate the gold from the unwanted ore and the whole is allowed to cool off. Then it is chipped from the crucible.

After this, it must be further refined in another crucible and chipped out. This is what is known as a button, one of which was found here weighing 76 ounces. This is sold to a runner who takes the responsibility of getting it to a buyer in the United States where the price is $35 an ounce, U.S. funds or $38.50 in Canadian funds. It is generally handled in lots up to 300 ounces. It is difficult to dispose of it in Canada because of the stricter supervision exercised over refiners. --- Image Caption

Officers Responsible for Arrests and Those Accused in Gold Case An international police trap, that clicked as smoothly as a well-rehearsed movie, has broken up what is believed to have been the beginning of a powerful gang of high-grade gold smugglers. More than $4.000 worth of the precious metal has been recovered and is being held as evidence. Four members of the gang are shown in the pictures on the upper right and in the group below. On the upper left, Foreign Exchange Control Board and RCMP officers are shown with the seized gold, part of one of the shipments. Left to right in the group on the upper left are: Inspector W. M. Morphet, of the Windsor office of the FEC.B: Constable J. T. Townsend, of the Windsor Detachment of the RCMP: Inspector George McGonigal, of the FECB; and Constable W. W. Routledge, of the RCMP. On the upper right is Marko Lekich of Windsor. who was arrested at the Windsor side of the tunnel with $3,000 worth of the gold in his possession. Below, left to right. are: George Birush of Windsor. Sam Matijevich of Hamilton, and Michael "Big Mike" Bijlich of Windsor, all members of the gang and former residents of Northern Ontario, from where the gold is believed to have come.

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