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From train robbers to embezzlement: Lake County has seen it all
BY TONY GORDON Daily Herald Staff Writer In 1924, train robbers stole $3 million - aided by insider information from the postal inspector. Then there was the sailor in the '40s who tried to bluff his way out of the Navy. Whether involving the powerful or pitiful, tales of corruption and fraud fill Lake County lore. There were gangsters in the '30s, loan fraud in the '50s, alleged kickbacks in the '70s and embezzlement in the '80s. Here's a recap of misdeeds through the decades: Robbery and corruption: One of the most shocking instances of public corruption came in the wake of the 1924 robbery of $3 million from a train in Rondout. Four west Texas safecracking brothers - Joe, Willis, Doc and Jess Newton - were convicted of the robbery and sentenced to prison terms ranging from four to 12 years. But the longest sentence was meted out to U.S. Postal Inspector William Feahy of Chicago, who got 14 years for giving the Newtons inside information on the robbery. Gangster moonshine: On Sept. 8, 1932, federal Treasury agents from Chicago swept down on a sleepy farm on Loon Lake near Antioch and discovered an illegal brewery operation owned by the notorious gangster George "Bugs" Moran. Although Moran himself was not present for the raid, the agents did arrest four of his henchmen and destroy more than 10,000 gallons of illegally brewed brew. Fraud gone AWOL: Valentine Lauer of St. Paul, Minn., found unexpected fame in March 1947 when he was jailed for fraud for attempting to bluff his way out of the U. S. Navy. Lauer, then 29, showed his commanders at Great Lakes a telegram purporting to be from two Minneapolis attorneys informing Lauer he had inherited $570,000 from a recently deceased uncle and was needed at home to administer the estate. Navy officials did some checking and discovered there was no such money, uncle or need for Lauer at home. He did receive the discharge he sought, although it was a dishonorable one awarded after he completed six months of hard labor in the stockade. Loan scam: Berthold Goodman and James Rogers were highly regarded businessmen with a great loan package, or so 31 homeowners throughout the county believed in June 1959. The pair offered combination debt consolidation and home improvement loans financed through local banks, with the remodeling projects to be done by Bailey Construction, a contracting outfit they personally guaranteed. But when the loans went through and the contractors never showed up, the homeowners went to the police. They found that Goodman and Rogers had absconded with half of the total value of the loans, the money which was to go for home improvements, leaving the victims on the hook for the entire balances. Goodman was caught and sentenced to six years in prison; police never located Rogers. Total loss to the victimized homeowners was in excess of $100,000. Club extras: Orville "Pat" Clavey gained a reputation as a no-nonsense lawman in the early 1970s but had already left office as sheriff when the federal government struck in April 1975. Clavey and former County Board Chairman Ronald Coles of Lake Villa were indicted for accepting payments from the operators of nude dance clubs in the county. Clavey was eventually found guilty of tax evasion and perjury and sentenced to three years in prison. Coles received three years' probation for attempting to conceal payments from the club owners as campaign contributions. Law and order embezzlement: As director of the Lake County Court Services Department, George Gallaugher was nationally recognized for several innovations he brought to the field of managing criminals on probation. However, he was also recognized by the county's state's attorneys office in September 1988 as someone who had taken close to $20,000 of county funds for his personal use. After pleading guilty to official misconduct in March of the following year, Gallaugher was ordered to pay the money back and serve 30 months' probation. License office arrests: In March 1993, seven people were charged in a scheme prosecutors said exchanged 927 drivers licenses for bribes at the Libertyville office of the secretary of state. An employee of the facility and six people linked to the scheme to get false identification for illegal aliens through a Chicago driving school all pleaded guilty to charges against them in that case. In addition, the Libertyville incident is said to be under review by federal investigators currently probing the possible sale of drivers licenses from other facilities.
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