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promotion, talent and connections necessary to turn the hotel resort and casino into a major success. Chesler, as a
British subject, was allowed to operate the casino, but Groves forced him out and replaced him with a Bahamian. It was reported that Chesler, a proven and successful promoter, had showed up in 1960 with $ 12 million to invest. He brought in "a retinue of jet-set friends and satraps and a go-go attitude." Chesler's surreptitious funneling of $ 11 million to the Lucayan project caused the collapse of
129:
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Hotel became well-known and its casino, the Monte Carlo Room, attracted U.S. high-rollers. Reports in the 1960s were that the hotel was struggling, but the casino was exceptionally profitable, and the skim was transferred to the Miami mob. Groves's businesses could not, by statute, be audited in the
Bahamas. Groves was also affiliated with the mob-owned
22:
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casinos in 1978. Among objections to this move were listed that "the M.C.P.C….engaged in the purchase of
Bahamian real estate with individuals of unsuitable character and nature, specifically Wallace Groves, a convicted swindler, and Louis Chesler, an associate of criminals….The M.C.P.C. entered into
315:
In 1963, after internal self-government was granted to the
Bahamas, Groves further secured the right to operate gambling establishments at Freeport, using the services of Stafford Sands. At the same time, Sands and other high government officials received payments exceeding $ 1,000,000 from the Grand
195:
In 1931, Groves obtained control of Chain and
General Equities by underwriting an offering to the stockholders of additional stock and then caused the election of officers of his choice to the board of directors, according to the SEC. Groves then sold to the company "642,517 shares of common stock of
433:
of Canada in a major scandal, 15 June 1965. At the same time in 1965, a number of "undesirable" Americans and
Italians were ejected from the islands. However, investigators reported that Chesler and his associates still controlled the gambling operations. Chesler testified to the Royal Commission of
311:
from paying taxes, tolls, and excises for 25 years (since extended to 2054), and exempted it from other
Bahamian laws, notably immigration laws. By 1965, 416 companies operated under license to the main exempted company. The zone gradually became the most modern, well-run, and prosperous part of the
204:
Two other companies, Interstate
Equities of New York and Yosemite Holding of Detroit, also came under the control of Groves's Equity Corporation, by December 1932, netting Groves the market value of these companies "with the expenditure of very small amount of money." Stockholders filed suit against
364:
One source (Valentine, 2004) holds that Groves had fronted for Lansky "since 1951, when he sold valuable Key
Biscayne property" for him, but another (Block, 1998) holds that Louis Chesler (see below) moved Groves into the Lansky orbit in 1961. The American public came to know first of the situation
394:
The
Freeport development, complete with a first-rate airport, became very successful and created a prosperous enclave catering primarily to American tourists, including cruise ship passengers, and to expatriate Americans choosing to live in stylish comfort close to U.S. shores. The Lucayan Beach
428:
and many of his family members, worked for Groves in the Bahamas. Chesler, a Canadian, operated the Freeport gambling resort for a number of years. Chesler's criminal associations and work for Groves are detailed in Block (below). In 1965, it was reported that it was Mr. Chesler who brought the
486:
The activities of Wallace Groves attracted the considerable attention of numerous chroniclers of transnational financial crime on account of his extensive connections with the top names of the financial underworld. The following is a sampling:
261:
The case attracted considerable attention in financial circles, where Groves was socially prominent. After lengthy, contested proceedings, on 21 February 1941, the two Groves brothers were convicted. Wallace got two years in federal prison at
442:
It appeared that after the end of UBP monopoly on power in the Bahamas, Groves's influence was on the wane. The Freeport complex, which was deemed very successful, continued in operation, and in 1968 a new Groves casino complex was opened on
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with the colonial government, ceding to him 211 square miles of Grand Bahama Island upon which to develop a free-trade industrial and resort zone. (Groves obtained supplemental agreements in 1960 and 1966.) The agreement freed the
466:
33 miles off Nassau. He ruled his concession in monarchial fashion, known as "King Wallace"... "esidents and employees often complained that the authority which had broad power to expel, ran the island in police-state fashion."
229:, Whelan Drug Stores and other companies. By 1936, Groves revealed that he, as sole owner of offshore Company Montana of Panama, could carry out transactions through it without incurring taxes. This and other uses of foreign
186:
In 1931, Groves began to assemble a collection of investment trusts and other companies through complex transactions, which came to follow a certain pattern. At the time, he was reported to have a net worth of $ 19 million.
237:
to report Groves, de Ronde and others to the Congressional Joint Committee to Investigate Income Tax Avoidance and Evasion, alleging "financial legerdemain". Groves then also owned Nassau Securities, Ltd, a Bahamian
209:(SEC), and from 1933 until his imprisonment in 1941, he was frequently in the news for legal or regulatory matters. Numerous other suspect transactions of similar nature were revealed to the public by the SEC.
361:, the Groves domains were merely the most lucrative component of a complex network of state-sanctioned criminal activities centered on off-shore companies, including money laundering and insurance fraud.
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noted that Groves's "silent partner in all three gambling salons and spokesman for the Syndicate is Lansky." The mob's take from the casinos were then estimated over a million dollars a year.
434:
Inquiry in 1967 that the American underworld had "absolutely no" connection with the Freeport casinos, and that he merely consulted Meyer Lansky for "advice on the staffing of the casino."
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On 1 December 1938, the United States indicted Wallace Groves, his brother George S. Groves, Ernest B. Warriner (fugitive in Canada) and de Ronde (fugitive in France) on fifteen counts of
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near Nassau. It was run by Eddie Cellini. In 1968 and 1978 he sold off parts of his business empire for large sums ($ 80 and $ 38 million, respectively). He sold his GBPA interest to Sir
424:
partnership with Mr. Groves's wife and staffed one of its casinos after a company official had visited Mr. Lansky." Numerous mob-affiliated gambling experts, including
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and other mob kingpins were present, and the hotel architect had included a central interior 9,000 sqft "squash ball court" which became the casino. According to
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Groves controlled his company both directly and through various partners. His wife Georgette was part owner, as was a British subject Keith Gonsalves. But
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81 miles off the Florida coast. He used the Abaco Lumber Co. as the springboard for further business ventures. Grand Bahama was deforested in the process.
930:
221:
Corp., with Philip de Ronde, chairman, and Walter S. Mack, Jr., vice-president. This company acquired control of, among others, the South Coast Co., the
179:. He was "a young, flashy, and successful investor, he was involved in several businesses and had controlling interests in several others, including the
225:
Co., and Allied Products. Corp. Groves acquired Phoenix through a hostile take-over in 1931. Phoenix then obtained control of Autocar, United Cigar,
234:
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Interstate Equities Corp. for appr. $ 1,325,000 with a gross profit of $ 369,000 to said Wallace Groves." The stock had "little or no asset value."
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Groves first became interested in running a real business in the Bahamas through a lumber and sawmill operation on the largely undeveloped
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He moved to New York from Baltimore, where he was a bond salesman. Groves made an early career in complex financial transactions on
58:
349:, 3 February 1967. It was later reported that the decision to operate the casinos was taken in Miami Beach in 1961, at the mob-run
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These payments were subject to investigation by the 1967 Commission of Inquiry. They were also detailed in an extensive exposé in
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Wallace Groves was associated with numerous companies, most significantly the well-known Mary Carter Paint Co., which became
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served as Wallace Groves's lawyer and helped pave the way for his business interests. In 1955, Groves secured the seminal
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Groves and his associates. In 1933, Groves sold his control of Equity Corp. His transactions caught the attention of the
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Groves lived in grand style in Freeport in a large, blue-green tiled home, and spent his leisure on his private island,
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308:
266:, Connecticut. George got eight months. They were each fined $ 22,000. After his release, Wallace Groves moved to the
242:; de Ronde owned a similar shell. The Bahamian companies served as depositories for funds drained from U.S. companies
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of a stroke at age 86. He was survived by three sons, and two daughters. His wife had died the previous September.
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written by Alan Witver, a former employee of Groves, had been bought up and repressed by Sands.
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published a detailed exposé of the trades involving Groves, Sands, Lansky and others. The
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328:" - the white elite who controlled the Bahamas government - was detailed by the
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and fraudster, who, after his release from federal prison in 1944, moved to the
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97:. He is credited with being a driving force in the development of the modern
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Investigators of U.S. organized crime considered that he had links with the
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Wallace Groves was born in Norfolk, Virginia on 20 March 1900. He attended
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Immigrants to former British colonies and protectorates in the Americas
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82:
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The Strength of the Wolf: The Secret History of America's War on Drugs
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of 1967. The payments from the three casinos (a third was built near
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Masters of Paradise: Organized Crime and the IRS in the Bahamas
641:"Wallace Groves Is Dead at 86; Developer of Resort in Bahamas"
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colony, although it was described as only nominally Bahamian.
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15:
518:
Islanders in the Stream: A History of the Bahamian People
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403:. He promoted the development in the 1960s on behalf of
140:
572:. United States Passport Applications, 1795-1925. 1922
89:, resort, and casino development at what would become
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181:United Cigar Store and the Whelan Drug Store chain
324:The complex system of continuing payoffs to the "
951:American people convicted of mail and wire fraud
889:"Father of Freeport, Wallace Groves, dead at 86"
77:(20 March 1900–30 January 1988) was a prominent
167:and was admitted to the Maryland Bar in 1925.
635:
633:
609:. London, England. 3 February 1988. p. 14
375:also wrote that an unpublished tell-all book,
8:
520:. Vol II. University of Georgia Press, 1998.
513:. NJ: Transaction Publishers, 1998 (pb edn).
365:in the Bahamas on 5 October 1966, when the
532:Mr. Mob: The Life and Crimes of Moe Dalitz
459:Groves married Georgette Cusson in 1940.
112:syndicate operating offshore casinos from
541:. Toronto: James Lorimer & Co., 1980.
295:From 1946, Bahamian finance minister and
59:Learn how and when to remove this message
516:Michael Craton and Gail Saunders-Smith,
340:(UBP) lost power in the 1967 elections.
926:American casino industry businesspeople
809:
807:
805:
803:
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71:American financier based in the Bahamas
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482:Allegations of underworld association
217:In 1936, Groves was president of the
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941:Businesspeople from New York (state)
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593:
591:
589:
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527:, Robert Hale & Company, 1971.
470:Groves died on 20 January 1988 in
207:Securities and Exchange Commission
31:tone or style may not reflect the
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931:American emigrants to the Bahamas
761:, 2 December 1938, 28 April 1940.
274:Post-war interests in the Bahamas
534:. NC: McFarland & Co., 2007.
127:
85:where he founded and operated a
41:guide to writing better articles
20:
431:Atlantic Acceptance Corporation
291:Hawksbill Bill Creek agreement
1:
896:. 1 February 1988. p. 10
494:, 1 February 1988 (obituary).
946:Businesspeople from Virginia
419:before beginning to operate
407:, and was a frequent guest.
500:, 3 February 1967 (expose).
330:Royal Commission of Inquiry
309:Grand Bahama Port Authority
258:and conspiracy to defraud.
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837:Newton, pp. 180, 206, 239.
602:"Obituary: Wallace Groves"
566:"Entry for Wallace Groves"
506:, 5 October 1966 (report).
191:Chain and General Equities
858:Can. Aspects detailed in
749:, 19 June 1937, 8 May 37.
421:Atlantic City, New Jersey
316:Bahamas Port Authority.
304:Hawksbill Creek Agreement
120:Early life and education
455:Personal life and death
35:used on Knowledge (XXG)
894:St. Lucie News Tribune
336:) continued until the
39:See Knowledge (XXG)'s
417:Resorts International
397:La Costa Country Club
338:United Bahamian Party
227:Certain-Teed Products
165:Georgetown University
297:Member of Parliament
936:American financiers
874:, 2 September 1967.
849:, 10 December 1978.
826:Wall Street Journal
788:, 15 February 1965.
773:, 25 February 1941.
737:, 19 November 1936.
668:, 11 November 1931.
607:The Daily Telegraph
544:Douglas Valentine,
504:Wall Street Journal
368:Wall Street Journal
351:Hotel Fontainebleau
285:Grand Bahama Island
235:Treasury Department
816:, 3 February 1967.
537:Catherine Wismer,
377:The Ugly Bahamian,
219:Phoenix Securities
213:Phoenix Securities
139:. You can help by
828:, 5 October 1966.
701:NYT, 14 June 1933
647:. 1 February 1988
171:Pre-war financier
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33:encyclopedic tone
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464:Little Whale Cay
438:Waning influence
401:San Diego County
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103:offshore banking
99:Bahamian economy
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445:Paradise Island
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326:Bay Street Boys
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279:Abaco Lumber Co
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137:needs expansion
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87:free trade zone
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645:New York Times
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548:, Verso, 2004.
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523:Hank Messick,
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492:New York Times
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320:Investigations
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300:Stafford Sands
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75:Wallace Groves
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148:February 2024
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956:1900s births
898:. Retrieved
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574:. Retrieved
570:FamilySearch
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509:Alan Block,
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497:
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472:Coral Gables
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461:
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426:Dino Cellini
414:
411:Associations
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366:
363:
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355:Meyer Lansky
344:
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314:
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244:in the orbit
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141:adding to it
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110:Meyer Lansky
107:
95:Grand Bahama
74:
73:
55:
46:
30:
921:1988 deaths
900:8 September
860:Sweethearts
613:7 September
576:8 September
539:Sweethearts
246:of Groves.
233:caused the
177:Wall Street
114:Miami Beach
49:August 2024
915:Categories
553:References
405:Moe Dalitz
256:mail fraud
231:tax havens
200:Suspicions
353:at which
79:financier
862:, below.
390:Freeport
91:Freeport
373:Journal
268:Bahamas
264:Danbury
223:Celotex
83:Bahamas
651:18 May
525:Lansky
334:Nassau
797:Block
476:Miami
902:2024
814:Life
653:2013
615:2024
578:2024
498:Life
384:Life
359:Life
163:and
872:NYT
847:NYT
786:NYT
771:NYT
759:NYT
747:NYT
735:NYT
723:NYT
711:NYT
690:NYT
678:NYT
666:NYT
451:.
399:in
183:."
143:.
105:.
101:of
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879:^
802:^
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632:^
605:.
586:^
568:.
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93:,
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146:(
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56:(
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47:(
37:.
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