(The following is a slight re-arrangement of content in Eric Schlosser’s underestimated and strangely obscure Reefer Madness, an excellent trio on dark markets of drugs, pornography, and migrant labour, that should be far better known, and has had me pining hard for his next major piece of writing. What follows, obviously, deals with the content of Reuben Sturman, a colossus of the obscenity economy, whose obscurity is equally strange as Mr. Schlosser’s book. The detail of the swan filled lake at Sturman’s mansion is from Dave Gardetta’s fascinating “Doctor’s Orders”.)
Of the four men of prominence who made fortunes in obscenity, three easily summon up an image. Hugh Hefner is the slightly handsy pajama clad grandfather, eternally obsessed with the donna angelicata of Illinois; Bob Guccione is the craftsman on a renaissance church who sells dirty engravings on the side; Larry Flynt is the backwoods youth who had sex with chickens but also pushed himself through Tolstoy’s War and Peace. The fourth, Reuben Sturman, summons nothing and is unknown to almost all: the one who once made the largest fortune making women more visible is the invisible man.
His parents were russian emigrants, and they ran a grocery in Cleveland. Whatever influence they had on his life, there were two that had a greater one: Sanford Aday and Earl Warren. Sturman graduated from Western Reserve university, became an affable wholesaler of comics and other mags which he built into an eight city wide business, was married with three kids. Along with comics, he sold crossword, movie, and car mags. At an employee’s suggestion, he started distributing titles that would outsell everything else he had twenty times. These were nude mags and erotic pulps. One of these was Sex Life of a Cop. The book was written by Sanford Aday, and got Sturman his first obscenity indictment, after which he sued J. Edgar Hoover for violating his civil rights. It was the start of a lifelong difficult relationship between Sturman and the law, with Earl Warren giving him his only legal daylight, finding a social value in Sex Life of a Cop, throwing out his conviction, narrowing the definition of obscenity, and allowing Sturman first to make a small fortune and then a huge one. His money would be made through three ancient elements: naked women, lawyers, and secrecy.
By the end of the 1960s, Sturman was the largest distributor of dirty books and magazines in the United States. He then went into the dirty movie business, developing the ingenious idea of the coin operated peepshow booth, moving the stag film from the group viewing of a Kiwanis club or frat house to a small dark space. He funded his own dirty films, printed the dirty books, owned the stores that sold the books and had the peeps. It was a classic case of vertical integration, with Sturman having a grip on every aspect from production to distribution. Every connection between Sturman and his business was hidden; if no evidence existed of Sturman’s hand in the company, then Sturman could not be indicted for its violations. Canadians, many of them young refugees from the draft, were recruited to be placed as figureheads of the various parts of the Sturman empire, as canadian tax records were outside IRS eyes. His Cleveland assets were owned by The Bahamian Company, whose president and CEO was a carpet store owner in Ontario. Memos from Sturman were adressed, “To whom it may concern”. Business letters from him closed with “Best regards”, and nothing else. Sturman changed his appearance day by day, sometimes with a long beard, sometimees staches, sometimes glasses, other days clean shaven and clear sighted.
Security cameras surrounded Sturman’s headquarters, and heavy steel doors blocked the way. Those asking for Sturman were told no one by that name worked there. After a year of surveillance, FBI agents demanded entry to the building, showing their badges to the cameras. They were still not let in. The steel doors were battered down. A year after, Sturman was indicted on obscenity charges for distribution of various films and mags through the mails. The content was undoubtedly disturbing, Sturman’s lawyer admitted. After seeing some of these movies, he warned, you’ll never eat a marshmallow pie again. Sturman and his associates were found not guilty. The jury sent the judge a note critical of the Supreme Court’s definition of obscenity.
Sturman now owned a Tudor mansion with a swan filled lake. Sturman drove several cadillacs. Sturman had a former prizefighter as a bodyguard. Sturman gave to the Cleveland ballet.
Richard Rosfelder was a twenty-seven year old investigator for the IRS Criminal Division. Richard Rosfelder lived in a condominium complex. A young employee of Sturman’s also lived in the condominium complex. Rosfelder knew of the young employee. The young employee owned two matching cadillacs. Reuben Sturman would come to wish like hell that the young employee had owned fewer cadillacs.
Rosfelder thought the cadillacs were interesting. Rosfelder thought the canadians were more interesting.
Rosfelder believed the same methods Sturman was using to disguise asset ownership might be used to avoid tax payment. Rosfelder went to Sturman’s headquarters to interview him. There’s no one by that name here, he was told. A cadillac drove by with a man giving a friendly wave. The friendly man was Sturman. Sturman was called in to give signature samples. A man came by in a big cowboy hat. The cowboy hatted man was Sturman. His signatures were illegible. The samples were worthless.
The money from Sturman’s peep booths was entirely in coins, with hundreds of employees making the collection in daily and weekly rounds, paying store owners and managers their cut, then pushing out dollies loaded with thousand dollar bags filled with quarters. Because of the lack of receipts involved, the take entirely in small change, it was possible to divert money out of records and move it overseas. Rosfelder suspected Sturman of doing something like this. Sturman was doing something exactly like this.
Anywhere from twenty five to fifty percent of the money from the booths was converted to cashier’s checks of $9999, to avoid the federal disclosure laws of checks of $10 000 and more, sent overseas and invested, or returned to the United States in a new form. In 1974, Sturman was arrested in Switzerland after he tried to open a bank account with a fake passport. I’m trying hide my money in Switzerland, he told the police, because I don’t like paying the tax. Why should he pay taxes, Sturman felt. So he could help pay salaries for the federal prosecutors and agents trying to destroy him? Fine by me, said the Swiss arresting officer, I don’t like paying taxes either.
The incident gave Rosfelder proof that Sturman had criminal intent. Rosfelder now just needed proof of crime.
Sturman had already restructured his company several times after tax authourities became interested in him. He had first transferred ownership of his companies to establishments chartered in Liechtenstein, which had some of the tightest corporate secrecy laws in the world. A Liechtenstein establishment was a legal entity whose directors had to be citizens of the country, and the entity issued nameless bearer shares held by the owner of the company. Only by finding out who had physical possession of the shares could company ownership be determined. Other companies were set up in Panama, where corporate secrecy laws were even stricter. When Liechtenstein amended its laws so that establishment directors were now liable for the establishment’s activities, Sturman transferred all his newly formed companies to Liberia. Liberia had stricter secrecy laws than either Panama or Liechtenstein. Liberia had a similar system of bearer shares to Liechtenstein. Liberia had the american dolllar as currency. Monrovia, Liberia was now the legal center of Sturman’s worldwide empire.
A crucial part of every structuring, was a series of Swiss bank accounts established under fake names, accessible only to Sturman and a handful of close associates. Wherever his companies were legally, a substantial part of the company’s revenue always ended up in these accounts, away from the eyes of tax authourities. In 1979, Sturman may have been the richest man in Ohio. On his tax return that year, he listed no overseas bank accounts. On his tax return that year, he declared an income of about twelve hundred dollars.
Three years into his investigation, Rosfelder and his associate, Thomas Ciehanski found a cheque from a bank in the carribean island of St. Vincent’s. The bank did not exist anywhere except on paper. The cheque’s destination was one of Sturman’s companies, its source a Swiss bank account. The paper trail led to a former attorney of Sturman. The former attorney refused to talk. The former attorney was told he would be a defendant in any tax case against Sturman. The former attorney then explained the set-up with the Swiss bank accounts. Rosfelder asked the Swiss government for access to the accounts, on the grounds that Sturman was involved with organized crime. The access was granted. This evidence for the connections with organized crime has never been seen, by either the public or Sturman’s attorneys. Reuben Sturman’s name did not appear anywhere on the accounts or in connection with the accounts. Rosfelder needed a handwriting sample to prove that they were Sturman’s. Sturman was detained. Sturman provided samples. The samples were illegible, worthless.
Reuben Sturman began to realize that Rosfelder was very serious about this. Reuben Sturman began to think about retiring.
Sturman, divorced from his first wife, married a young singer named Natalie Delgado. He sold many of his companies to their managers. Since, legally, he did not own the companies, the companies were transferred to the new owners, with Sturman afterwards hired as a consultant: the company was bought through a consulting fee transferred to Sturman. A federal grand jury subpoenaed Sturman’s business records. Sturman spent three weeks shredding them. Rosenfeld got trusted aides at every level of the organization to start talking and start co-operating. Sturman began to close his Swiss bank accounts. He was arrested again by the Swiss police. Sturman was asked again for a handwriting sample. The signature was legible. Sturman was indicted on various tax evasion counts in 1985. In 1987, he was indicted again on obscenity. During his tax evasion trial, one associate talked of moving gold bars in a cardboard box to avoid a paper trail. A Sturman accountant revealed that the company officers listed on financial records were picked at random from the white pages, the persons unaware that they were top executives in the largest porn distribution business in the United States. Sturman arrived at court in a Groucho Marx mask, his face hidden behind a plastic nose, dinky glasses, and oversized eyebrows. He was convicted of every count of tax evasion in 1989. In 1991, the obscenity case ended in a mistrial. The government had no case against me, Sturman told reporters. Sturman made his statement wearing a surgical mask. In 1992, Reuben Sturman was sentenced to four years fro tax evasion at Boron prison camp, in the Mojave desert.
The IRS now began to try to collect over five million owed in back taxes. Sturman terminated all his consulting contracts, asking his managers to either pay him in cash or send the money to overseas paper corporations. Sturman made all his purchases via a Visa card issued from a Swiss bank, with funds from a Panamanian company. The IRS seized the Tudor mansion with the swan lake. The IRS then sold it cheap to some faceless company headquartered overseas. The faceless company was owned by Reuben Sturman.
Some managers refused to pay Sturman. Business was good, business was possible without further harassment from the IRS. A store owned by a manager that stopped paying had its peeps destroyed by a gang with sledge hammers. Eight Chicago bookstores owned by another welshing manager were also targeted. The bookstores’ peep shows were powered by electric boxes. The electric boxes were to be destroyed with radio controlled bombs. The gang set off one bomb at a South Cicero bookstore. On the way to the next target, a traffic light signal or other radio wave triggered a bomb in the gang’s car. One man died, and the survivors began talking to the authourities. They had no idea who Reuben Sturman was. They had been commissioned for the work by Mickey Fein. Mickey Fein had no idea what the feds were talking about.
On December 1, 1992, Reuben Sturman wrote the third of a series of letters to a judge pleading for a reduced sentence. The juge denied his request. One week later, at Boron prison, there was a nightly bed check. Reuben Sturman could not be found at the bed check. The next day, Richard Rosfelder was having lunch with some reporters when he was told to call his office. The matter was urgent. Reuben Sturman had escaped from prison.
Stephanie Friedman was Sturman’s secretary. Richard Rosfelder and another investigator, Tony Olivio, saw the names of Stephanie and Douglas, her brother, showing up again and again in the prison visitor logs. The Friedmans would be subpoenaed. Stephanie would confess that she would receive checks from around the country for companies based in Liberia and elsewhere overseas, to be sent on to bank accounts in Switzerland, Luxembourg, and the Netherlands. Stephanie would also confess that Douglas had driven the car which had picked up Reuben Sturman after he jogged through Boron’s softball field and climbed under a prison fence.
Stephanie also had an interesting story to tell about the tax evasion trial. A young juror had noticed a beautiful woman in the court gallery. During a recess, the young juror was on a payphone when someone handed him a note, with a restaurant address, a time, and a lipstick kiss. The young juror met the beautiful woman for dinner at the restaurant. It could have been a pleasant meal, but: the woman kept wanting to talk about the trial. She was certain the defendant was innocent. Both the man and the woman had issues. The young man had a girlfriend. The beautiful woman was married. The beautiful woman was married to Reuben Sturman. The beautiful woman was Natalie Delgado. The man became very uncomfortable during the meal. Though he did not know who the beautiful woman was or who she was married to, he refused to see Delgado again. Richard Rosfelder heard this, and went pale. Reuben Sturman had almost gotten away again.
On February 9, 1993, federal marshals entered a small apartment in Anaheim, and arrested Reuben Sturman. On March 10, 1993, Sturman was indicted on extortion and other charges related to the destruction of adult bookstores. A jury found him guilty of extortion, but innocent of direct connection with the bombings. The judge refused to impose the large fine demanded by the government. Sturman told the court he was penniless. After being indicted for jury tampering over his wife’s involvement with a juror at his tax evasion trial, Sturman submitted a financial statement that declared his liquid assets to be roughly ten dollars. He was appointed a public defender.
In 1996, writer Eric Schlosser visited Sturman at the medium security Manchester prison in Kentucky. “You wanted to know how the industry started,” said Sturman. “You’re looking at the person who started it.” After the interview, Schlosser wondered if Reuben Sturman didn’t have one last trick up his sleeve. A year later, Sturman pulled his last escape: he made the jailbreak we all make, dying of heart and kidney failure on October 27, 1997. His death went almost entirely unnoticed. The next day, the New York Times published obituaries for art historian S. Lane Faison Jr. and federal judge Arthur Stephen Lane, but none for Sturman on that day, or any day after.
The industry which celebrates corporeality has become itself incorporeal. The sensual information of Sturman’s empire is now part of the electronic ethereal. The very qualities of invisibility and intangibility of an internet stream that make obscenity laws near obsolete has allowed freejackers to atomize profits, leaving the survivors to rip apart what’s left like rabid dogs.
In the mid-seventies, for the first and last time, Reuben Sturman dropped by the set of a porno he was funding. Shortly after, he walked off. He’d never been so bored in his life.