"Quartet Sentenced To Prison For Smuggling of Gold," Windsor Star. April 20, 1943. Page 5 & 6. --- Three Get Long Terms For Offences ---- Confess to Ten Charges in Taking Highgrade Valued at $3,000 Across Border ---- Three men who confessed to conspiracy and other charges, ten in all, in the smuggling of $3,000 worth of gold to the United States were sentenced to two and a half years in Portsmouth penitentiary and a fourth to two years less a day in reformatory by Judge J. J. Coughlin in County Judges' Criminal Court late yesterday afternoon.
Those receiving the prison sentences were Sam Matijevich, 42, alias Sam Matheson of Hamilton, referred to in court as "apparently the ringleader of the whole plot" [TOP]; Marko Lekrich, 35, of 1117½ Albert road [MIDDLE], and Michael Bijlich, 41, of 775 St. Luke road [BOTTOM].
WITHDRAWN AGAINST ONE The lighter reformatory term was drawn by George Birush, 42, of 1564 Hickory road. Charges against a fifth man, Joja Pejnovick of Larder Lake, were withdrawn when Stanley L. Springsteen, K.C., special prosecutor for the Foreign Exchange Control Board, said that investigation had not linked him with the cases before the court.
After an array of charges which included illegal export of gold, illegal possession of ore, infractions of the Foreign Exchange Control Regulations and aiding and abetting in the commission of these offences, Mr. Springsteen agreed with the defence counsel, Hon. James H. Clark, K.C., M.P.P., that the charges arose from two sets of circumstances concerning shipments of gold made on December 29 last and on February 15. The men then pleaded guilty in turn.
In passing sentence, Judge Coughlin told the men he was taking into full consideration a plea by Mr. Clark that they saved the county considerable expense in court costs by readily admitting their offences.
SERIOUS CHARGE "I am taking into account the fact that you have co-operated with the crown to the extent of pleading guilty," His Honor told the four accused, as they stood at. the front of the courtroom awaiting passing of sentence.
"The fact remains, however, that the offences you have comimitted are serious. You must know that the government exacts heavy duty from gold and that when you assist in the perpetration of a crime of this kind you are committing a fraud against every man and woman in the country who has to carry the added load from his taxation."
His Honor said that he was considering the suggestion of Mr. Springsteen in giving the shorter sentence to Birush who was said to have been less lightly involved. Two of the others, Matijevich and Bijlich, had previous records. Matijevich was sentenced to 12 months definite and three indefinite in reformatory on July 12, 1940, for having gold illegally and was paroled May 20, 1941. Bijlich was given two years in Portsmouth for fraud at Sudbury December 4, 1935. Lekich and Birush were both first offenders.
In reporting details of the case to the court, Mr. Springsteen disclosed that police investigation is continuing wtih a man whom he referred to as a "Mr. Milford Blackburn" still being sought by U. S. authorities. Black- burn was alleged to have been involv- ed in making a deal for the gold shipments in Detroit.
Beyond consenting to waive their. right to be tried by a jury and plead- ing guilty, none of the men made any statement to the court and how they obtained possession of the gold re- mains unexplained. Mr. Clark told the court that some of the men had been miners, but that he had been advised that they were not so en- gaged at the time of their arrest. A plea that the sentence of the men be dated back to the time of their capture was rejected by His Honor.
DARING POLICE WORK The court case followed one of the most daring bits of police work in the annals of the border, culminating in the arrest of the four men February 15.
After they had been trailed for several weeks by R.C.M.P. and Foreign Exchange Control Board officers, the pay-off came in a rooming house on Ouellette avenue. It was then that the unhappy smugglers learned that one of their number was a United States Secret Service operative, known to them only as Bill Brown. His real name has been withheld by the authorities. It was Brown who arranged for the meeting at the Ouellette avenue address and who led his "companions" unsuspectingly into the police trap.
The actual sale of a gold "button" (the term used to describe hi-grade after it has been smelted) was permitted to take place. Two of the smugglers were allowed to leave the house after the deal had been started. They were to take the gold to the proper address in Detroit. When they arrived on the American side they were to telephone to the Ouellette avenue house and say everything was okay and then the money was to be paid over. All this went on under the eyes of officers trailing the smugglers.
The two men carrying the gold to Detroit were picked up immediately after they had passed the Canadian customs officer stating that they had nothing to declare. However, the phone call actually was made to the house by police so that no suspicions would be aroused in the minds of the remaining smugglers who were to collect for the gold. The bogus Bill Brown got the call. He turned from the phone and said: "Okay boys, everything went as planned. Here's your money. He began to count out $100 bills. This was the signal for the "pinch" and officers concealed in other rooms marched in and snapped handcuffs on the smugglers.
The smugglers had been kept under observation in downtown hotel rooms, at railway depots, in private homes and their every move recorded until just the right moment arrived when they could be apprehended with the "goods."
Staff Sergeant A. W. Anderson, R.C.M.P., his entire staff, particularly Constable Jack Townsend, worked long and arduous hours and weeks on the job. W. M. Morphet, F.E.C.B. inspector here, seldom let a day or night pass that he or one of his staff were not on the job with the officers.
The collection of the facts, the details of the final showdown and the liaison between the board and the police, kept the F.E.C.B. staff at work seven days a week and often throughout the night watching, shadowing. recording and deducing the evidence. which finally netted the haul of the four men.
VALUED AT $3,000 Total value of the gold seized was about $3,000 but the value of running down the source of the smuggling is considered to be worth much more than can be measured in a few thousands of dollars. The latest figures released by the government indicate that $3,000,000 annually is lost to Canada by the illegal export of high-grade ore from gold mines.
Police here feel that one of the most active rings has been broken or at least badly disrupted. Numerous others are under observation as a result of last February's disclosures.
[AL: All the men in the smuggling ring were Yugoslav immigrants and had worked as miners or worked near mines in Northern Ontario. Matijevich was 43, single, naturalized in 1932, and Greek Orthodox - he claimed to have 'never worked' when processed at the penitentiary. He was convict #7283 at Kingston Penitentiary and worked in the excavation crew. Lekich was 35, married, a machine operator, and had been naturalized in 1936. He was convict #7282 and worked in the blacksmith and machine shop at Kingston. Bijlich was 33 years, single, a hotel bartender and short order cook, naturalized in 1933, and had one previous penitentiary term (that he served only a year of before being paroled). He was convict #7281 and worked in the blacksmith shop with Lekish. All three men were transferred between June and August 1943 to the low security Collin's Bay Penitentiary, and were all released by late 1944 to early 1945.]