Saturday, April 16, 2016

Chicago’s Charles Klyman: The Defrauder Defrauded

Call it poetic justice when someone who defrauds the public is himself defrauded by a member of that same public.  So it was with Charles Klyman, a Chicago liquor dealer, who regularly was selling brand-name liquor that, in fact, he had concocted in the back room of his establishment.  Klyman was taken in by a slick-talking 21-year-old with a bundle of phony checks in his back pocket.  That flimflam, however, was only the beginning of Klyman’s problems.  
Charles Klyman was born in Illinois in July 1860.  His father had come from New Hampshire; his mother was a French Canadian.  He first entered the public record at the age of 28 in 1888 when he began a wholesale liquor company in Chicago at 232 East Kinzie Street.  After struggling along at that location for five years, he changed the name of his company to “The Dr. Ancker Bitters Company,” advertising as “manufacturers and bottlers of fine cordials, bitters blended, whiskies, gins & brandies.”

The Dr. Ancker name and the picture of the anchor on Klyman’s letterhead suggest reasons for the change.  Bitters, although highly alcoholic, were not taxed as much as liquor since they were considered to have medicinal benefits.  One nostrum that had gained a national customer base was Dr. Dunlap’s  Anchor Bitters.  Although their label presentations differed, a casual buyer might mistake Dr. Ancker’s bitters with Dr. Dunlap’s bitters, the label shown left.  Given Klyman’s predilections, that likely was his intention.  

Klyman had been doing business as Dr. Ancker for two years when he was defrauded.  A young man named Clarence Mayer came to Chicago from New York with a woman in tow described as an “actress” and settled in rooms on Dearborn Street.  The scion of a retired wealthy New York manufacturer, Mayer had been a traveling salesman for a wholesale liquor dealer.  Approaching Klyman, whom he likely knew, Mayer bought $50 worth of merchandise and proffered a $100 check, the balance going to Mayer in cash.

The Chicago liquor dealer was cautious.  He took both the check and Mayer to the Lincoln National Bank where the cashier pronounced the check good and accepted it.  When it  subsequently was sent forward to New York, however, the check was declared a forgery and worthless.  Out his liquor and $50 in cash, Klyman went looking for Mayer.

When he found the young man, rather than calling the police, Klyman inveigled him into coming to a judge’s office where he intended to swear out an arrest warrant.  When Mayer figured out the plan, he bolted, was chased down the street by bystanders, captured and turned over to Klyman who vowed to take him to a nearby police station.  Somehow the pair never got there as Mayer “sweet talked” his release from Klyman’s clutches.

By this time, however, the young man’s checks were bouncing all over Chicago. It did not take the local cops much time to find him.  In Mayer’s room, along with the actress, they found a pile of certified checks ready to be signed.  Mayer was charged with forgery and jailed.  It is unlikely that Klyman ever got his money or his merchandise back.

But Klyman’s troubles were just beginning.  In cahoots with at least two other Chicago wholesalers he was putting counterfeit labels of well-known brands on bottles, their contents cooked up on site, and then selling them to retail outlets.  Law officers had tumbled to the scheme when a few downtown Chicago stores were found selling name brand liquor at cut-rate prices.  

A coordinated raid on three premises in February 1897 yielded the evidence.  The Chicago Tribune reported that on the second floor of the Kinzie Street establishment run by Klyman, authorities caught men and women “operatives” filling bottles of Angostura bitters, as well as other brands.  “Old labels were being washed off Angostura bottles and fifty clean and empty bottles of the same shape of Angostura were standing in a row, ready for filling,”  The raiders also found cases of bottles awaiting shipping.

The Tribune reported that fraudulent caps and packages for Hennessy French cognac also were discovered.  A company watermark of the James Hennessy Co. was copied poorly, it said, as were the labels for Martell French brandy, the latter facsimiles so poor “as to look like a palpable fraud to any used to the goods….”  Legitimate labels for Angostura and Hennessy are shown here.  The raid was not without its humorous aspects when one of the investigators began to rummage in a package that he thought might contain labels.  When one of the women claimed that the parcel held her under clothing, the probing stopped.

Although Klyman and the others faced criminal charges in Illinois, it is unlikely that the French distilleries brought suit.  Trademark laws still were relatively weak and seeking legal recourse in the U.S. often was futile.  Angostura was made in Trinidad and did not seek trademark protection in the U.S. until 1907.  A major exception was Hiram Walker & Sons of Canada.  That distiller was especially aggressive in insuring that counterfeiting or tampering with its primary brand, Canadian Club, was hazardous to anyone who tried.  Walker, shown here, had detectives regularly patrol retail outlets looking for frauds on his brands.  It may have been their sleuthing that tipped off the Chicago authorities and occasioned the raid.

Among the bottles and labels seized from Klyman were some bearing faux Canadian Club identification.  Hiram went hard after the Chicago whiskey man and literally brought him to his knees.   As a result of a plea agreement Klyman was forced to write out “A Confession” shown below. Dated June 3, 1898, it appeared in Chicago newspapers and in selected periodicals, such as the American Druggist and Pharmaceutical Record.  In his confession Klyman pleaded that “my wife has appealed to you to take into consideration her unhappy position and that of our young children.”

To summarize his confession:  Klyman accepted the two conditions Walker demanded:  1) That “in the public interest” he would plead guilty under the Illinois Trademark Act and take his punishment, and 2) that he would never, never again be “a party to the imitation of any goods whatever, whether yours or those of others.”  By this abject admission of wrongdoing Klyman apparently warded off further legal action by Walker that likely would have bankrupted him.
As a local businessman garnering any respect, however, Klyman clearly was finished.  He and his family traded the wind, rain, and shame of Chicago for the cold, snow and virtual anonymity of Buffalo, New York.  His occupation in the 1900 census in Buffalo was given as “liquor dealer.”  A city directory of the same year listed him as a “distiller.”  Klyman had re-emerged, seemingly working once again at the liquor trade.  

In Buffalo the Klyman family was recorded living at the Fillmore Hotel, shown here.  This hostelry had once been the Buffalo home of Millard Fillmore, the 13th President of the United States, a man often listed among the least of the country’s chief executives.  By 1900, Fillmore’s mansion had become a residential hotel and it was there that Klyman and his family had fetched up. 

Klyman’s attempt to insert himself into the crowded liquor scene in Buffalo apparently did not go well.  The next time he showed up in city directories was 1912 when his occupation was given as “commercial traveler,” possibly working as a salesman for one of the many Buffalo wholesale whiskey dealers.  By this time the Klyman family had moved from the Fillmore Hotel to 99 Elmwood Avenue, an apartment in a commercial district.

At this point Charles Klyman fades into the mists of time.  I cannot find any record of his death or burial site.  His story continues to intrigue me, particularly one point of curiosity:  Was the merchandise Klyman sold to the forger Clarence Mayer his fraudulent liquor?  Could this be a case of a defrauded fraud defrauding his defrauder?  The mind reels.  

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