Sometime in early 1951, Richmond numbers kingpin Harry Donovan must have figured his act needed cleaning up right quick, before the boom got lowered. He didn’t see a fire but there was smoke on the horizon.
Perhaps he had tired of the grind of the daily numbers game. It’s also possible he was growing more comfortable with his status on the horse racing circuit and his substantial investments at Thorncliff farm. Yet Donovan could not ignore the troubling storm clouds coalescing around the nation’s mobsters and racketeers.
Like a Broadway roadshow, the U.S. Senate’s Kefauver Committee captivated the nation with its televised hearings in the summer of 1950. The congressional panel would work through the fall of 1951, mapping evidence of an organized criminal network fueled by the staggering profits from illegal gambling, prostitution and drugs. Many local crime bosses, according to rumors, were tolerated and even protected by corrupt policemen and politicians.
Hollywood was starting to cash-in on the storyline, too. In June 1950, film producer Frank Seltzer told the Kefauver Committee he was threatened during the filming of “711 Ocean Drive,” a movie shamelessly marketed as a “fearless expose” of an “$8 billion gambling syndicate and its hoodlum empire.” In the film, telephone company employee Mal Granger (Edmond O’Brien) is recruited by the Mob to secretly bootleg real-time horse racing results to illegal bookmaking operations. In a master stroke of movie marketing, Seltzer told the congressional committee that filming had to be completed under police protection after his crew was virtually run out of Las Vegas.
In late March 1951, the Kefauver Committee finally would hear directly from FBI Director J. Edgar Hoover, who had remained stubbornly unwilling to acknowledge the existence of an organized crime syndicate. Besides, Director Hoover told the committee, illegal gambling was a local issue — and not a federal concern.
“Organized gambling is a vicious evil. It corrupts our youth and blights the lives of our adults. It becomes a springboard for other crimes: embezzlement, robbery and even murder,” Hoover testified. “But like any other type of crime, it can be controlled. If the laws against gambling presently on the state and local statute books were earnestly and vigorously enforced, organized gambling could be eliminated in 48 hours in any community in this land.”
“No criminal, the gambler and his allies included, can long stand up before a determined, intelligent and informed public opinion,” Hoover concluded. “That in my opinion is the basic answer to the gambling problem: an aroused public opinion which will act on a local level through local law enforcement authorities to wipe out the menace."
Even in a sleepy southern city like Richmond, Donovan had to be uncomfortable about the spotlight on illegal gambling emanating from the Kefauver Committee and the “aroused public opinion” urged by the FBI chief. What’s more, Donovan probably could predict the bureaucracy’s knee-jerk response to all of this unwanted attention: suddenly, there was a noticeable uptick in IRS enforcement activities and Justice Department prosecutions of local racketeers.
There is ample evidence that Donovan made a choice in 1951 to walk away from the illegal numbers racket he had spent more than 15 years building into a million-dollar business. By now, his family was comfortably ensconced in a fine house with manicured gardens overlooking Byrd Park. He had his horse farm a half-hour outside of the city, and his time and money increasingly were tied-up with his stable of competitive race horses.
So in June of 1951, Harry Donovan created a legitimate and legal business. He founded Richmond Amusement Sales Co., and the company began placing vending machines and coin-operated jukeboxes at hundreds of restaurants, lunch counters, bars and private clubs across the city.
The relatively new vending machine industry was growing rapidly. While it may not have been run by the Mob, it certainly was Mob-adjacent. Crooked unions often controlled the manufacture and distribution of the machines. Payola often determined which records and artists were featured most prominently on the jukeboxes. Many distributors resorted to kickbacks and strong-arm tactics to carve-out local territories. And the steady flow of nickels, dimes and quarters through the jukeboxes and vending machines helped local crime syndicates launder their dirty money.
The owners and distributors of coin-operated amusement machines called themselves “coin men,” and in the 1950s the industry was growing fast enough to be routinely covered by the weekly music industry publication Billboard. The coverage occasionally offered hints about the murky reputations of many of the coin men. For example, one editorial published in Billboard encouraged jukebox operators to consider donating their used machines to local youth clubs.
“Such meetings give lie to the common misconception about the industry and the men who are part of it,” Billboard helpfully suggested. What’s more, Billboard said, such encounters would allow other business leaders to discover for themselves that a coin man, in fact, “could be a good citizen and an asset to the community.”
At the time, Donovan’s Richmond Amusement Sales Co. was one of more than a dozen jukebox distributors active in the Richmond region, and there was plenty of business to go around. His business started in a downtown storefront in the 800 block of Broad Street, and later relocated to a larger building on Main Street well-known to current Richmonders for its subsequent 20-year run as the popular Avalon Restaurant & Bar.
In 1955, after creating a veneer of respectability through a legitimate business, Harry Donovan might have believed he finally was on the right side of the law -- arguably for the first time in his life. But the IRS was not quite finished with him yet. They had been watching him closely ever since he beat them in a tax case in 1938. He was frequently audited, and was subjected to at least one unscheduled visit from IRS agents inquiring about the balances held in Donovan’s bank accounts. IRS accountants could not figure out how the income and expenses he disclosed on his annual tax forms could possibly support his extravagant lifestyle.
On February 23, 1955, federal agents finally pounced. Reaching all the way back to the tax year 1948, when Donovan was at the top of his game in the numbers racket, the IRS filed charges alleging income tax evasion. Significant additional indictments would soon follow - all covering alleged tax evasion in the years before Donovan left the business - and Donovan would spend the next 18 months waging a spirited battle against the IRS in federal court in Richmond. A jury trial would stretch for eight days and the court transcript would approach 900 pages -- and, at the end of it all, Harry Donovan would beat the taxman a second time.
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