When Alan Greenspan decides to create new money, which he seems to do as regularly as the sun rises in the morning, he does it through open market operations and interest rate manipulation. But under the right market conditions, the job of actually printing the cash falls to the United States Bureau of Engraving and Printing (BEP).
This installation is where every Federal Reserve Note is printed and shipped out and is, we’re told, one of the most secure facilities in the entire country, if not the world. But there is something bureaucrats can’t plan for: the ingenuity of the inside job.
One day in 1953, an employee of the BEP--a WWII veteran, decorated with the Purple Heart and Bronze Star--with a distinguished ten-year employment record and a wife and two young sons, decided to become a thief. And working at the bureau for the government showed him how he could do it.
When the BEP printed new twenties, they were piled in stacks of 4,000 bills and then placed between two wooden blocks equal in size to the bills. The stack was then squeezed together under hydraulic pressure and wrapped with two steel bands, forming what was called a “brick.” This brick was then machine-wrapped in heavy brown paper and affixed with a Treasury seal on one end and a label on the other that detailed the bills’ serial number sequence, the packer’s initials, and the date. Each brick of twenties was worth $80,000.
And each day in his job with the BEP, Jim Landis would watch over the production of these crisp, new $20 bills and would transfer them from the vault to the packing machines.
Jim decided to relieve Uncle Sam of some of these ill-gotten gains, but Jim wasn’t all that unpatriotic: he only planned to swipe two bricks--or $160,000 in 1953 dollars. Even then, that was chump change for Uncle Sam.
Because of Jim’s years on the job, he knew the exact routine of production and knew how to time the entire operation down to the minute. But first, he needed to prepare. So, each day, Jim would slip leftover scraps of brown wrapping paper or a wooden block into his pockets, and it wasn’t long before he had all the material he needed to make a homemade “brick.” To simulate the bills, Jim cut paper into the exact size of the twenties and found that he could produce at home a money brick nearly identical to the Fed’s bricks.
After conducting these tests, Jim decided December 30 would be his D day. The first stage involved overcoming the security procedures to enter the building. Jim arrived bright and early, at 7:30 a.m., with his two homemade money bricks tucked away in a small gym bag. The bureau’s regulations banned any bags or parcels from entering the building, and Jim knew that if he failed to elude the guards, he would have to check his bag at the counter and try his luck again another day. But the more relaxed atmosphere of Christmas gave Jim an advantage. As he approached the check-in counter, the guard on duty took his eyes off Jim to greet and chat with other employees, and Jim was able to make it past the counter and into the elevator.
Up on the third floor, Jim stashed his bag in the men’s room wastebasket and returned to the first floor to change for work. Throughout the day, Jim carried on his normal routine of transferring bills from the binding machine to the wrapping machine. Between wrapping bricks and restocking the wrapper with new bills, Jim knew that he had twenty minutes to spare.
Waiting for the right moment, Jim struck early in the morning: he picked up two bricks from the pallet of finished bricks and headed to a little-used storeroom. Jim carefully trimmed the labels in order to reuse them, removed the brown wrapping, and twisted off the steel bands with a pair of pliers. Out spilt $160,000 in freshly printed $20 bills.
The next step was to conceal the cash, and Jim had prepared for this too. He stuffed the bills into two innocuous brown paper bags he’d brought along, and discreetly hid the bags in the storeroom. Jim then nonchalantly made it back to his workstation in exactly twenty minutes. He then waited until his break at 10:40 a.m to begin step three of his plan.
On his break, Jim returned to the men’s room on the third floor with the wrappers from the Fed’s two bricks in his pockets. Using hot water, Jim was able to separate the labels from the wrappers and then to dry them with heat from the radiator. Next, Jim retrieved the two homemade bricks and affixed the real labels with glue he had brought along. Fifteen minutes later and back downstairs, Jim deposited his homemade bricks on a nearby stack and went back to work.
At the end of the workday, Jim had to pull off the most important step. He changed into his street clothes and made his way back to the storeroom and his waiting stash of cash. But Jim encountered an unplanned for problem: the loot wouldn’t all fit into his gym bag. Jim had planned to stuff all the cash into the bag and then place his work clothes over them, but the bag wouldn’t hold all the cash and his clothes, too. So, Jim returned the $32,000 in one of the paper bags to its hiding place, then placed the rest--$128,000--into the gym bag, followed by his workclothes placed on top.
Next came Jim’s most daring move: getting out of the building. As Jim approached the door, a guard moved to intercept him. Jim expected this, as every guard had strict orders to search anyone with a bag or package. As the guard approached, Jim shot him a smile and reached into the bag and pulled out a pants leg. The guard returned the smile and waived Jim right on through. So much for government security.
Jim was then home free. And the key to his plan was that, as a BEP employee, he knew how and when new money was regularly distributed out into the banking system. Usually, newly printed money sat around the bureau for a few months before it was shipped out to the regional Federal Reserve member banks. Then it would sit there for a month or two before being distributed out to the local banks, where the bricks would only be opened when they were needed.
Knowing this pattern, Jim figured he might have six months before his homemade bricks were discovered by some bank clerk who opened one up only to find white cut-up paper. Jim’s plan was to unload the twenties for other denominations, thinking it shouldn’t be too difficult since only he knew the money was stolen. You just know, of course, after he spent so much time planning how he would steal the money, Jim never got around to planning what he would do with the money.
If you were Jim, and you had just skunked the government out of $128,000 in 1953, what might be your first action? Why, you’d want to brag about it wouldn’t you?
And that’s exactly what Jim did. He called up his good friend Charlie Nelson and told him the whole story-even showed him the loot. Jim needed help in laundering the money, and Charlie jumped right in. Even assuming that he had six months, and even with Charlie’s help, Jim would need to pass thirty-six bills, or $720, every day for nearly six months, just to get rid of the twenties before the crime was discovered. Daunted by this, Jim opted to bring in more people: his two cousins, Edith Chase and Roger Patterson, and another friend, William Giles.
Jim explained the arrangement like this: Everyone would make small purchases, and the smaller denominations they all received would be put into a central pot to be divided up later.
For four days, things seemed to be going as planned. But on January 4-just five days after Jim’s heist-the phony bricks were discovered by a coworker who picked up the two bricks and noticed the difference in weight. Jim had matched the size, but he had forgotten all about the weight, especially of a paper-filled homemade brick without steel bands. The coworker informed his superior, and within an hour, the Secret Service was on the trail.
It so happens that the Secret Service was tipped to a report of two men and a woman who were, that very day, buying half-pints of whisky and paying with $20 bills. One of the men even lit a cigar with a crisp, new twenty. The Secret Service swooped down and arrested all three, who then promptly gave up the names of Charlie Nelson and Jim Landis.
With nothing else to do, Jim led the agents to the $32,000 still stashed in the storeroom. When Secret Service agents searched the perpetrators’ homes, they found $95,000 in new twenties and about $6,000 in smaller bills. In four days, Jim’s gang had spent about $27,000. Roger Patterson even admitted to losing $6,000 in a crap game.
After their trials, Jim’s three male cronies received prison sentences from twenty months to three years. Edith Chase was given probation. And Jim Landis, the ringleader, the only man ever to successfully steal from the Bureau of Engraving and Printing? After pleading guilty in June 1954, Jim Landis was sentenced to prison term of three to nine years.
The lesson is clear. Anyone who tries to steal freshly printed money the old-fashioned way will be caught and prosecuted. As for stealing the purchasing power of the money itself, that is a job reserved for the Federal Reserve.
