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Lebman Cash Hoard Coming to Auction

It was recently announced that the first-ever offering of Fr. 2100-K* 1928 Dallas $50 is being featured in Heritage Auctions' Platinum Night Session, Jan. 9. But how did they acquire this note?


Heritage Auctions received a most unusual time capsule—a trove of bills untouched since the darkest days of the Great Depression, mysteriously divided nearly equally between currency native to its southern Texas discovery and others from nearly 1,000 miles away in Minnesota, with no bills from the various districts in between. The collection was introduced to the experts at Heritage with no hint of the intrigue that would surface, the text of the consignor’s email reading simply, “We cleaned out the Lebman's Western Store bank box, where some banknotes from my grandfather have laid there since 1934, and we would like to bring in these banknotes for evaluation.”

The cash was stored from 1934 to the 1990s in the bank box for Hyman S. Lebman’s business. Hymie Lebman was an accomplished tradesman from San Antonio, specializing in leather works and gunsmithing. His store operated for over six decades at 111 S. Flores, less than a mile from the famed Alamo Mission. His saddles, belts, and gun holsters are prized by collectors for their high quality and artistry. But the Lebman name carried a decidedly different association for federal law enforcement officials tracking Public Enemy Number One, the notorious gangster Baby Face Nelson.

During that Golden Age of gangsters that flourished in the decade leading up to the Second World War, Lebman’s San Antonio hometown had gained a well-deserved reputation as an organized crime laundromat for stolen cash, its banks amenable to those transactions requiring a unique standard of discretion. Lebman, meanwhile, had come to the attention of those criminal enterprises as a main expert in the modification of firearms in an age when the infamous Thompson Machine Gun turned automatic weaponry into an essential tool of the trade.

The most famous of Mr. Lebman’s personal creations resides for eternity in the FBI Museum, a 1911 Colt .38 Special handgun modified with a forward grip, an extended magazine and, most importantly, fully-automatic firing capabilities. The weapon’s serial number tracks its history through Lebman’s shop to Nelson’s hands and the rain of fire on federal officers raiding the Little Bohemia Lodge in northern Wisconsin in April 1934, one of the most notorious gun battles of the decade.

This paper trail to Lebman resulted in the shock of the gunsmith’s life when federal agents raided his shop, as he professed ignorance to the identity of his client. Nonetheless, Lebman would be sentenced to five years in the Texas State Penitentiary for violations of the National Firearms Act (NFA) of 1934 and the Texas State Machine Gun Law, but those convictions were ultimately reversed on appeal.

Lebman’s son Marvin granted an interview to Man At Arms magazine in 2009, saying of his father, “He told me many stories about the customers who he later found out were John Dillinger and Baby Face Nelson. He thought they were charming, wealthy oilmen who were interested in guns, and even invited them to his house for his wife to make them dinner when I was about three or four. Our shop had a firing range in the basement, and when he was experimenting with a Model 1911 on full automatic, the third or fourth round went off directly overhead, through the floor, and I was visiting above at the time. It scared him so much that he invented and installed a compensator on the muzzle to control the recoil.”

This weapons transaction in the waning days of November 1933 came just a month after Nelson and his gang famously held up the First National Bank of Brainerd, Minn. on Oct. 23, making off with some $32,000 in cash. After days on the lamb—carousing and gambling among the underworld characters of Minneapolis-St. Paul, the robbers would flee the area, heading south to Texas with their ill-gotten gains, anxious to launder the cash and secure an arsenal for future crimes. It’s hard not to imagine that the Minnesota bills in Lebman’s lockbox found their way to San Antonio by way of the Nelson gang’s infamous southbound journey.

It is particularly intriguing that Lebman’s hidden treasure was transported to the Heritage offices in a $1,000 bank bag from the Commercial National Bank of San Antonio, with many of the $100 denomination notes wrapped in bank straps bearing its name despite the fact that no notes issued by the bank appear in the hoard. That particular financial institution was well-known to cops and robbers alike for its participation in the laundering of illicit, underworld cash.

In the same month that Nelson and his gang were operating in San Antonio, the FBI came down on Z.D. Bonner, President of the Commercial National Bank and attorney John H. Cunningham. They were arrested on Dec. 21, in connection with a brazen daytime mail robbery a year earlier. The Dec. 6, 1932 robbery netted a Chicago gang $250,000, mostly in government bonds.

At the time of their arrest, Bonner and Cunningham were in possession of $75,000 worth of the bonds traced to the Chicago robbery, $47,100 of which was in bank boxes in the Commercial National Bank. During their trial, prosecutors brought evidence forward that even more United States Bonds from a large heist in New York were also washed through the San Antonio bank and more from mail heists in Minneapolis. A total of five separate offenses of embezzlement were brought against the pair.

In a summary of Bonner v. United States, the manner in which the bonds were embezzled is made clear, “Appellants agree that on March 1, Cunningham and Morrow came to the bank and before the first bond was delivered Bonner had the cashier make out a bank draft on a branch Federal Reserve Bank in San Antonio for $100,000, and that amount of money was delivered to Bonner by the cashier in the presence of Cunningham and Morrow. After this was done, Bonner sent the bond over to the Federal Reserve and borrowed $100,000 on it. The other bonds were handled in practically the same way, except that the drafts on the Federal Reserve were for $92,500 each, although the full amount of $100,000 was borrowed on each. The cash proceeds of each draft were taken in $50 and $100 bills.” They further elaborated on the operation, “During these several bond transactions, Bonner and Cunningham each placed in safety deposit boxes over $30,000 in $50 and $100 bills.”

The Chicago and Minneapolis robberies were later connected to Roger “Tommy” Touhy, who was using Bonner, Cunningham and the Commercial National Bank of San Antonio to help launder his cash and bonds. It was under Touhy’s tutelage that Baby Face Nelson got his start. After troublesome adolescence, Nelson was hired by Touhy to help guard liquor shipments in San Francisco.

As the heat of the San Antonio investigations intensified, Lebman supplied the Feds with whatever details he could, short of the existence of this far-flung cash hoard. Just before he was executed in Ohio in 1934, Harry Pierpont, who was said to be Dillinger’s mentor, insisted that it was Lebman's testimony that had brought the gang down. On Nov. 27, 1934, Baby Face Nelson was killed by federal agents in Langendorf Park, in what was dubbed the Battle of Barrington (Illinois).

The Cash

The approximately $16,000 in face value cash is central to a timeline of 20th-century criminal activity that changed the United States forever from firearms control to the repealing of prohibition. The timeline of the bank box being locked up in late 1933 or early 1934 is supported by the notes themselves. Not a single note in the group was from series or banknote deliveries that could have fallen after 1934. Most cash hoards are nothing exciting, providing quantities of notes, rather than quality or rarity. That is not the case here.

The first small-size National Bank Note from Moore, Texas was also buried in this safety deposit box for the last eighty-five years. Scarce $100s are reported from Texas, a Type II from Dallas, and a Type I from Vermont. More notes are classified as scarce, and some are common in comparison to normal notes absent the pedigree. Each of the notes traced to Nelson will be offered without an estimate, while the Hyman S. Lebman Cash Hoard is being offered with estimates aligned with unpedigreed notes. The premium for the story here is unknown, left to the market to price this historic offering. Additional Lebman notes are included in their Internet Session of this auction to conclude on Monday, Jan. 13.

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