One high-profile gangster to own a Model J Duesenberg was Jake Factor, or how he was known in the criminal world, “The Barber.”
Jake “The Barber” Factor was born on October 8, 1892. With his older half-brother Max Factor, who later became known for his Hollywood makeovers and signature looks, Jake trained as an actual barber in Chicago, Illinois and worked at a small barber shop on Halsted Street. To make extra money to support his parents, Jake Factor also worked at the Morrison Hotel as a barber. The hotel was frequented by the rich and powerful, and Factor used his time there to make important contacts. It was during this time that he would become known as Jake “The Barber”, a name that would follow him for the rest of his life.
When exactly Factor began his extensive criminal career is not known, but in 1919 at the age of 27 he was indicted under a federal warrant for stock fraud.
Stock scams were a favorite of Factor. He would convince financiers to invest in worthless companies that he held stocks in, which would then artificially raise the price of the companies’ value, making a profit for Factor when he sold his share. Another con Factor engaged in was convincing investors to give him money under the guise he would invest it in the stock market, when instead he would pocket the money.
In 1923, Factor successfully executed a series of gold stock swindles in Canada and Rhodesia. He managed to legally retain the money from his scams by narrowly beating the charges brought against him in court. Factor could have retired a very rich man, but less than a year after his near arrest, he put in motion the plan that would successfully perpetrate the single largest stock scam in European history.
In late 1923, Factor convinced New York's master criminal, Arnold "the Brain" Rothstein, the gambling boss who fixed the 1919 World Series, to grant him an initial fund of $50,000 to begin his European scamming tour. Factor began in London, England in early 1924 by selling worthless penny stocks to gullible British investors with great success.
He created the Tyler Wilson and Company stock brokerage firm in 1925 to sell stocks in fabricated companies to the elite of English society. Not even the wealthiest people of English society were safe from his schemes, including members of the British royal family and the chief of Scotland Yard. In less than a year, Factor had managed to scam a grand total of $8 million, which adjusted for inflation is about $115 million.
Factor’s scams were able to affect so many people because many of the investors from the affluent English families did not want to admit that they had been conned by Factor. By the time the victims were willing to come forward, Factor had already fled to France.
In France, he created a crime syndicate to rig the tables at the Monte Carlo Casino, which took so much money from the casino that it “broke the bank”. Factor eventually snuck back into the United States through Mexico. While in the United States, Factor was tried and sentenced in absentia, a legal proceeding that allowed the European authorities to try Factor although he wasn’t present. Factor was sentenced to 24 years in English prison. But, Factor would never serve his sentence as he devised an imaginative, intrepid, and intense escape plan that rivaled his cons.
Once back in the United States, Factor returned to Chicago where he knew he was well above the law and had the support of the Chicago Outfit gang and Al Capone. While not an official member of the Chicago Outfit, Factor had many connections to the gang and had hired them for their services whenever he had trouble with other gangsters or law enforcement.
In 1933 to avoid extradition to Europe, he faked his own kidnapping with the help of Capone. After several months he was “found,” and he accused Roger “The Terrible” Touhy of the kidnapping. Touhy, at the time of the accusation, had a stranglehold on the illegal beer production market in Chicago and Capone had tried and failed several times to muscle Touhy out. This fictitious kidnapping, orchestrated by Factor, created a gang war that led to Touhy being arrested and sentenced on kidnapping charges. This was a huge benefit to Capone’s empire and a means of escaping extradition for Factor.
Factor was unable to go to England to be imprisoned for his stock exchange cons due to the numerous charges and amount of people involved in his “kidnapping”. He had to be in the United States due to the “kidnapping” and was able to escape prison for his European crimes. Touhy was eventually imprisoned for the “kidnapping” from 1934 to 1959. After 26 years he was released, only to be murdered by the Chicago Outfit a month later on the front porch of his sister’s house. On December 19, 1959, Factor was questioned by the FBI where he took and passed a lie-detector test about the murder of Touhy.
Jake “The Barber” Factor had escaped justice after committing the biggest stock scam in European history. Factor went back to conning people in the United States and was later imprisoned from 1939 to 1949 for mail fraud involving selling fraudulent whiskey receipts that totaled $10 million.
After his release from prison, he soon moved to Las Vegas, where in 1955 he took over the Stardust Hotel, which he then sold in 1962 for $7 million. During his tenure at the Stardust, he operated as the front man for the Chicago Outfit; hiding the criminal ties of the casino from the public while acting on the gang’s behalf. During this time, he also attempted to bail out notorious mobster Jimmy Hoffa from his real-estate financial problems in Florida.
According to John Touhy, the author of When Capone's Mob Murdered Roger Touhy: The Strange Case of "Jake the Barber" and the Kidnapping That Never Happened, Factor had scammed anywhere from $50-200 million throughout his life; how much of this money he was able to keep is unknown.
In 1939, Factor was found to have $479,093.27 to his name when being investigated for not paying taxes for the previous four years. When asked about the tax discrepancy, he claimed to not remember and the matter was eventually dropped.
During the height of his career, Factor was wealthy and powerful enough to pay $20,000 to own a 1930 Duesenberg Model J Murphy. The Model J Murphy had the same 420 cubic-inch straight-eight cylinder with double overhead cams, 4 valves per cylinder engine design, and hand-built chassis as a Model J Phaeton. What set the Model J Murphy apart was the designer of the body of the car, the Walter M. Murphy Company, which provided the body to approximately 25% of Model J Duesenbergs sold.
By 1964 Factor had, for the most part, left behind his life of crime and shortly after the sale of the Stardust Hotel he retired to Beverly Hills, California. Once Factor had some legitimate wealth, he became both politically and philanthropically motivated. Factor donated a significant amount of money to John F. Kennedy’s 1960 presidential campaign. In 1962 after an investigation led by Attorney General Robert Kennedy, Factor was scheduled to be deported but instead received a presidential pardon from John F. Kennedy.
Factor’s philanthropy primarily focused on low-income African-American neighborhoods in California. Factor grew up very poor with Polish heritage and was a part of a racial minority in 1890s Chicago, for which he was negatively judged. His nickname, “The Barber,” was an insult to Factor. It was a reminder of his poor upbringing and a way of implying that, despite all of his wealth, he wasn’t any better than his past. Factor would pay reporters not to refer to him as “The Barber” but the name never went away. Perhaps because of this, Factor spent a large portion of his fortune on helping a group of people who he perceived as being in a similar position.
In a declassified 1967 FBI report to the director of the bureau titled, “Possible Racial Violence: Major Urban Areas: Racial Matters,” agents recount an investigation into Factor’s charitable actions. The FBI might have been investigating the issue due to Factor’s past, or it might have been because of concerns over racial tensions in the United States, as the report begins with “the Problem of denying the Negroes equal opportunity in the past would be greater than anyone realized.” The report details the loss of $1 million in federal funds to low-income African-American communities of Los Angeles from budget cuts, which had been recuperated by Factor’s donation to the area in the form of a $1 million youth center.
In 1968, the FBI wrote a second confidential memo to the director of the bureau about Factor’s philanthropic works. This memo was focused on Factor’s financial involvement with a large boy’s summer camp for low-income African-American children in the Watts neighborhood of Los Angeles. Factor is quoted in this report saying that the racial conflicts of the time were an “indictment of white people and … we have failed to really do anything.”
Factor spent his retirement overseeing the construction of churches, gyms, parks, and low-cost housing in low-income African-American communities. When Jake Factor died, three United States senators, the mayor of Los Angeles, and several hundred members of these communities attended his funeral.
Factor was a beloved member of his community as a philanthropist, but his reputation as a criminal and gangster was ever in the forefront.