THE EXPERT WITNESS: Treason in Detroit - The curious case of Max Stephan (episode 22, part two)


By Dr. John F. Sase, Ph.D.
Gerard J. Senick, general editor
Julie G. Sase, copyeditor
William A. Gross, researcher

In our last episode, we recounted the true story of Max Stephan the fiftyish German-born restaurateur and Nazi sympathizer who lived in Detroit. In 1942, Stephan was convicted of high treason. His case is particularly noteworthy because Stephan became the first U.S. citizen to be convicted of this crime since the Lincoln Assassination of 1865. However, there are still un-answered questions regarding the case, a fact that gives it current relevance to the legal community and strikes a parallel with recent events within our country.

A former prison guard and member of the German National Police, Stephan was convicted of helping a German Luftwaffe pilot, twenty-one-year-old Hans Peter Krug who had been shot down in Britain and placed in Bowmanville, a POW camp near Toronto, Ontario. Krug, who had escaped from the camp was attempting to go from Canada through the Midwest to reach the still-neutral country of Mexico. At this point in our tale, Krug has just arrived at the home of Mrs. Marguerite Bertelman, a German-born associate of Stephan. Bertelman waitressed at the "German Restaurant," (located on East Jefferson a block east of East Grand Boulevard) which Stephan owned with his wife Agnes.

Le Tour de Troit

On Friday, 18 April 1942, Bertelmann called Stephan between 9:00 and 9:30 a.m. He arrived at her house by automobile between 9:30 and 10:00 a.m. Reportedly, the Bertelmann home was the only private residence that Lieutenant Krug had entered during his time in Detroit. During her quest's brief stay, Bertelsmann provided Krug with $20.00 and some fresh underwear.

Krug met Stephan for the first time at the Bertelmann home. Stephan suggested to Krug that he abandon his impossible escape plan and give himself up. Was Krug considered a porcupine that Stephan wished to toss into the lap of someone else? Soon, Stephan reversed his position for no apparent reason. He invited Krug to remain in Detroit as his guest until Monday. Stephan explained further that he wanted Krug to be the featured speaker at a Sunday-night meeting of the Schwaben Society, a German cultural/social group. At this meeting, Stephan wanted Krug to tell about his life in Germany, his war experiences, and his escape. What Stephan did not reveal to Krug was that an inner core of pro-Nazis planned to remain at the German Restaurant, after midnight to celebrate the Fuhrer's birthday, which was on 20 April. Krug declined this invitation.

Stephan drove young Krug back to his establishment. Krug claimed that he did not have the address of the restaurant with him. This detail seems odd because Stephan had sent the packages prepared by the ladies auxiliary group from the local Red Cross to Bowmanville Camp from his place of business. Stephan then sent Krug, who had slept very little in the preceding days, on a walking tour of downtown Detroit. Krug made this 2.5 mile walk in broad daylight while wearing the same prison overalls that he had worn during his escape.

Following his walk, Krug returned from his downtown excursion by trolley before noon. Shortly afterward, Stephan and Krug began their whirlwind tour of Detroit's near-eastside, a trip that they would make in Stephan's car. The pair made stops at six commercial establishments. Their first destination was the A.W. Lenz Company. Here, Stephan picked up dishes, glassware, and crockery for the Schwaben Society meeting on Sunday evening. While at the Lenz Company, Stephan asked the proprietor, William C. Lenz, to call the Michigan Central railroad station and ask for departure times to Chicago for that day. The purpose of such an indiscreet inquiry remains unknown. Lenz reported back that the trains left at 4:00 p.m. and 11:00 p.m. Per trial testimony, Stephan and Krug made plans for the departure of the latter at 4:00.

Next, the pair stopped and purchased a small traveling bag for Krug from a Jewish merchant (name not known). The Jewish community had been very active against the Bund, a merger of the Friends of New Germany, a group formed by Germany's Deputy Fuehrer Rudolf Hesse and the Free Society of New Teutonia. The leader of the Bund was Fritz Julius Kuhn, a naturalized U.S. citizen from Munich who resided near Wyoming and Puritan Avenues in Northwest Detroit. During the 1930s, the Jewish community picketed the German Consul in Detroit with signs that read "We Don't Want Hitler Spies in Detroit."

Following the purchase of the bag, Stephan and Krug headed to Haller's Café at 1407 Randolph on the northeast corner of Gratiot at the lower end of Harmonie Park; Stephan had known proprietor August Haller for about ten years. During the Saturday lunch-hour, thirty patrons filled the Haller place. Rather than sitting at a less-exposed table, Stephan and Krug took seats at the bar. Krug gave his new travel bag to Haller, who placed it behind the bar. Haller then served the pair two rounds of boilermakers (whiskey with a beer chaser). One may wonder if such drinks on a relatively empty stomach and apparent lack of sleep left Krug a bit drunk. After he and Stephan left the cafe, Krug had to return to the Haller establishment to retrieve his new travel bag. It would seem less conspicuous for Krug to leave the bag in the back of Stephan's car before entering the cafe. Did he leave it with Haller for a specific reason? Did Haller place anything into the bag?

Next, Stephan and Krug drove to the Fortschrittsbund (Progress Federation) Hall at 3003 Elmwood Street, located at the northwest corner of Elmwood and Arndt Street on the near-eastside. Like dozens of German societies in America, the Fortschrittsbund had started as a singing organization. Its space served as a community-gathering spot for drinking and for singing traditional folk songs. Krug and Stephan continued to drink in the Fortschrittsbund. Their continued midday drinking led Krug to lapse into speaking German rather than English, an error about which Stephan warned him. This warning seems unusual because the establishment catered to patrons of German and Hungarian descent. Could getting Krug more tipsy while introducing him to a circle of friends have been Stephan's ploy to confirm the lieutenant's identity? To this, we ask our readers to recall Stephan's earlier career with the German National Police. We also must note that the powers-that-be distributed a "wanted poster" containing a photo of Krug on the previous day. However, Krug's current appearance did not match the image on this poster. Stephan knew that the FBI had watched him because of his ongoing involvement with various German organizations. Due to these facts, did he suspect that this Krug may have been an imposter?

Following a repast of coffee and cake washed down with a round of schnapps, the travelers left the Hall and drove four blocks to the (German-American) Europe Import Company. Theodore Donay owned this business, which was located at 3152 Gratiot Avenue, one block south of Mack Avenue. Of all of the contacts made that Saturday during Krug's Detroit excursion, Donay was the most outspoken pro-Nazi/anti-Semite. Ultimately, Donay's behavior that afternoon would lead to his undoing in this affair. Dietrich Rintelin, the assistant to Donay at Europe Import Company, had become a Confidential Informant T-1 for the FBI. Donay contributed another $20.00 to Krug, an act that Rintelin had witnessed. Later, the FBI would accuse Donay of giving "aid and comfort to the enemy." When Donay was arrested and brought to trial, Rintelin would serve as a witness for the prosecution. More immediate to the Stephan case, Rintelin notified the FBI about Krug on Saturday at 6:03 p.m. However, agents did not take action until thirty hours later. Though Krug had departed by that time, the FBI rounded up close to two dozen celebrants at the Hitler birthday party in the wee hours of Monday morning.

Upon leaving the Europe Import Company, Stephan suggested taking Krug to the eleven-room "gentleman's establishment" at 54 Duffield. Then owned by Mrs. Alvina Ludlow, the property now stands as a vacant lot on the north-side service drive of the Fisher Expressway between Woodward Avenue and Park Street. As it was the twenty-second birthday of Lieutenant Krug, Stephan proposed that the services provided by the female associates of Mrs. Ludlow would make a good present for the young escapee, imprisoned for almost two years. Mrs. Ludlow announced that she had one room available, though she would need to call in Mrs. "Peggy" Merrifield, a fortyish woman, to take the engagement. Merrifield arrived twenty minutes later by cab. After a few minutes, Stephan and Krug abandoned their plan for the latter's 4:00 p.m. train (which he did not take). Interestingly, Krug and Merrifield only met together briefly in their assigned room.

At his trial presided over by U.S. District Court Judge Arthur J. Tuttle, Krug testified that he did not find Merrifield attractive enough to complete their transaction. Later, Judge Tuttle requested that all testimony about this episode be struck from the trial records because, as he claimed, it would have endangered the innocence of any young readers of the court transcript. Huh? Mrs. Ludlow's establishment was two streets north of the Fox Theatre, west of the then-affluent Brush Park (Piety Hill) community, and a stone's throw from St. John's Episcopal Church. Given the location of the Ludlow house, we may wonder if Judge Tuttle would concern himself about implicating the reputations of notable third parties and U.S. Military personnel in the other ten rooms.

After their brief visit to the Ludlow establishment, Stephan and Krug did not arrive back at the Stephans's restaurant until about 6:00 p.m. This gap leaves almost two hours unaccounted for, given the ten-minute drive from Woodward Avenue back to the restaurant. By the time that Krug partook of his dinner (smoked pork loin and sauerkraut), the waitress, Mrs. Erna Schwartz, and the cook, Christina Klein, were beginning to verify the identity of Krug from news reports as well as from talk in the restaurant. At the trial, Schwartz testified that Stephan instructed her to escort Krug out of the rear door. Around 9:00 p.m., she pointed him toward the Field Hotel, located on Field Street, one half-block north of Jefferson Avenue. Registering as Hans Müller, Krug presumably remained at the hotel for the remainder of the night.

On Sunday, Stephan and Krug departed for downtown Detroit at 8:00 a.m. After stopping for a breakfast of chicken dinners at a barbeque restaurant, Stephan took Krug to the Greyhound Bus Station at the northwest corner of Grand River Avenue and Washington Boulevard. There, Stephan bought Krug a ticket to Chicago and saw him off.

Cheez It, the Feds!

Stephan returned to his establishment to prepare for the meeting of the Schwaben Society that evening and the more private birthday celebration afterward. The Schwaben meeting commenced at 6:00 p.m. By midnight, twenty celebrants remained to honor their Fuhrer's birthday. As the party heated up, FBI agents entered the back room and told the guests to accompany the officers to FBI headquarters downtown by way of the waiting transportation.

The FBI had accumulated information on pro-Nazi activities for two years before the United States entered World War II. The Bureau compiled a body of knowledge known as the National Security Index of Potential Subversives. This list included the name of Max Stephan. After the U.S. entered the war in December 1941, the FBI increased surveillance and conducted occasional raids. One of these raids focused on the roundup at the Stephans's restaurant on 20 April 1942. It included Margareta Bertelmann, the woman who had supplied Krug with money and underwear when he stopped at her home. On the eve of Hitler's natal day, Bertelmann waitressed at the restaurant; in her testimony, discovery indicates that she did so under pressure by Stephan. After being taken to headquarters for questioning, all attendees-except for Max Stephan-were released by the Bureau.

(Continued) ...