Fast Cash: How $600K Went Missing From New York City Subway Headquarters | Inside Edition

Fast Cash: How $600K Went Missing From New York City Subway Headquarters

When $600,000 went missing one weekend in the summer of 1979, oddly not much of a fuss was made.

New York City was a metropolis in flux in the summer of 1979. The Big Apple was recovering from a financial crisis, the subway system was in the dumps, crime was on the rise, and in response, Mayor Koch, in his sophomore year as leader of the city, vowed to clean up the mess.

So it would be of no surprise to think that when $600,000 was stolen from the New York City Transit Authority headquarters in Brooklyn one July weekend that year, the heist would have been front page fodder for weeks. But many New Yorkers do not remember the caper, despite the large amount that went missing from an agency that at the time was begging for financial help, and even fewer recall the unbelievable way the money was taken.

Shake Down 1979

In the summer of 1979, Signorney Weaver kicked some “Alien” behind while James Bond went to space in “Moonranker.” AC/DC were on a “Highway to Hell,” Michael Jackson was “Off the Wall,” Joy Division were exploring “Unknown Pleasures,” while Donna Summer gave us “Bad Girls” to burn up the charts and disco clubs in the five boroughs.

New Yorkers were trying to find ways to distract themselves as the beloved hometown teams of the New York Mets and New York Yankees were both in a slump, not unlike the city itself, which was sliding further into financial and criminal chaos.

Police reported 1,700 homicides in 1979, a new record at the time, according to The New York Times. “For the first six months the police reported a 6.5 percent rise in serious crimes,” Times reporter Tony Schwartz wrote on Dec. 26 of that year. “They attribute the rise in homicides at least partly to an increase in killings committed during robberies. Between January and March, 6,320 robberies were committed in the city, compared to 6,021 during the same period in 1978.”

“New York City in the late '70s was wild, and not in a good sense. The biggest issue by far was street crime, and that spilled into the subways,” CUNY professor Andrew Sparberg told Inside Edition Digital.

“It was true that crime was everywhere, and the city government was not doing enough to stop it,” said Sparberg, who examined the history of the Metro Transit Authority in his book, “From a Nickel to a Token: The Journey from Board of Transportation to MTA.” “And it was all over the place.”

In March 1979, the NYPD declared a “war on subway crime” as part of Mayor Ed Koch's $7.5 million plan to combat the lawless feeling on the trains, the New York Times reported. Crimes committed on the subway in early 1979 “mushroomed,” the newspaper noted. In January alone there were 320 reported robberies, a figure that jumped 83% as compared to the same time the previous year. “More dramatically, there have been eight slayings in the subways so far this year,” the Times noted. 

For many New Yorkers, there was no greater symbol of the decay in the city than the subway. Train cars were filled with graffiti, they appeared to be a haven for criminal activity, and the subways were constantly breaking down causing delays.

“The system was just in horrible shape,” Sparberg said.

Then known as the Transit Authority, it was part of the state government and it's security operation overseen by a man named Sanford “Sandy” Garelick. Garelick, a World War II vet, was the first Jewish Chief Inspector and, at the time of his serving, the youngest Captain and Chief of the NYPD. He then switched to politics, serving as city council president before a run for mayor, which he lost to John Lindsey. Like many political figures, Garelick was polarizing.

“[He] was never considered to be the brightest bulb,” Mayor Koch’s former press secretary George Arzt told Inside Edition Digital.

“A sweetheart of a guy, and [a] real crime fighter. He was played as a buffoon, but Sandy wasn't. He was nice, he was smart. Everybody loved him,” former New York Daily News reporter Richard Edmonds told Inside Edition Digital. “This guy was, basically, a New York celeb, but he's from the Bronx, he lived a modest life.”

In 1975, Garelick was named by Governor Hugh Carey as chief of New York City's Transit Police Department and director of security. His office was inside the Transit Authority headquarters on Jay Street in Downtown Brooklyn.

The TA headquarters was an ominous-looking building that employed over 2,500 people. The affairs of the subway and bus systems were handled there. It was also the organization’s financial hub, as all of the money from the municipal public transit system was brought, counted and stored there. At times, the headquarters was said to house more money than most banks in the city combined.

“It is truly, institutional ugly. And inside, people hated to work there,” Arzt said. “The city at the beginning of the 20th century used to collect its receipts from the trains at all 472 stations and bring it to 370 Jay Street at Willoughby. The trains used to stop, would be unloaded at 370. You walked through a long tunnel, up a few stairs, and you were on the second floor near the money room.”

The limestone building stood over a subway station. A train would be used to collect the money from every station in the city and then bring it to the special station at Jay Street, where it would be sorted and counted.

“This is the most heavily guarded room in America. It had a dedicated train, a money train, that drove right into the building. The money was put, with armed guards, on an elevator, up just one floor. [It was] air tight. The highest security you could imagine. And the money train ran until 2006 when they transitioned to Metro Cards,” Edmonds said. “There was huge amounts of money going through that room. Let's take a day when there are four million riders, for example, that's $2 million in revenue coming in every day from the subways alone. Buses contributed more beyond that. A lot of that money came in in coins or small bills, because of the fare rate. So a lot of this stuff had to be counted and bagged, and then shipped to the bank.”

On the same floor as the money room was Garelick’s office, a room full of African violets with a door always open to the press. But mum was the word after $600,000 went missing from down the hall. 

A Blockbuster-Worthy Scheme

“This is the stuff that movie thrillers are made about,” Arzt declared.

A notice went out to all employees of the TA headquarters that the power throughout the building was going to be off for planned maintenance after everyone left on Friday, July 19, according to Edmonds and Arzt.

“They send out the teletype message a week before that there's going to be an assimilated blackout. It was a perfect weekend to pull this off,” Arzt said.

Weeks before the notice went out, two employees had accidentally locked themselves inside the secure money room and were forced to use a metal plate to break out of the highly-guarded area. To do this, they had to bust into the adjacent ladies’ room.

“They were embarrassed,” Arzt said. “They couldn't figure you can only open it from inside. They finally went to the adjacent women's room and find that there was something covering up a plate, covering up a hole in the wall. They go, they take out the plate. It's a 20-inch hole.”

The wall connecting the restroom and room that housed the cash was not immediately patched up. Instead, a “soft” wall was put in with what Arzt says was a “flimsy piece of plywood” that acted as a placeholder until something more permanent could be done. It wasn’t long until word spread that a soft wall was in place next to the money room.

“Everyone knew about it,” Arzt said. “Once those two guys got locked out of the money room, everyone on the second floor knew about it.”

But it seemed the temporary solution wasn’t given much thought. After all, it was in the ladies’ room in what had been considered an old boys club.

“God forbid there might be a woman in there. So, I think that had a lot to do with it, and the fact that, like I said, there were so few women working for the TA, it probably wasn't used that much,” Edmonds said. “This is New York City Transit Authority. And I make that point because it was quite autonomous. These guys were the subway guys, and they were all guys. Very few women, of course, in those days. And they pretty much did whatever they wanted to do. And it was an impenetrable agency.”

That was, until it wasn’t.

That power would be out in the building for an entire weekend presented the perfect opportunity for action. “I think, really opened a door, metaphorically, to this heist, which I'm sure, had been in the planning stages for a long time,” Edmonds said.

On Monday, July 23, two supervisors walked into the headquarters as they normally would, they made their rounds before going to the money room, the New York Daily News reported. Once they entered, they noticed a massive stack of money missing. It was later determined that 60 stacks of bills, each containing $1,000 worth of $10 notes, were missing, according to the Daily News.

“It was not there when they did their inventory. They discovered it was missing. Other money was there, but this money apparently had already been packaged for delivery to the bank, that way, was gone. And there was no sign of forced entry,” Sparberg said.

“The other thing was, of course, they weren't that greedy. They could have taken hundreds of thousands of dollars more, and there for the taking. No one's going to disturb you. They could have worked all night loading that stuff out,” Edmonds said.

“It was well strategized. They knew exactly what they were doing. Ten dollar bills are easy to pass off. Tokens, you couldn't get away with. Dollar bills are just too much to carry around,” Arzt said. “But the question is how did they get 120 pounds of $10 bills out of the building?”

Theories abound.

“One of the theories is that they took it to the locker room, which was nearby and they just split it up among themselves and carried it out,” Arzt said. “But there's another theory that they had help outside and they just threw the money out of the window. Now, these are bricks of $10 bills and even if you put it in a duffel bag, it's still heavy and would make a sound when it hit the ground. But [some] feel that there was help outside and it could have been thrown out the window and no one saw it.”

Not a Hollywood Ending

The internal news of the missing loot quickly made its way to Garelick’s office, then soon to the authorities and the press.

“To which Sandy, acting like Inspector Clouseau said, ‘Maybe it was misplaced,’’' Arzt joked. “Reporters ask him, ‘When it's time to report, have you asked the FBI for help?" He said, "We're the fifth or sixth largest police force. We don't need the FBI.’”

The news of missing $600,000 made some front pages, but didn’t quite make the splash that many would expect. But to understand the lack of reaction, one must first remember the times in which this occurred. Spargberg said that it didn’t stick with many citizens “because there were so many bigger issues, in terms of violence, crime on the subways, violent crime on the street.”

Garelick tried to sweep the missing money under the rug, according to Arzt.

“Garelik, to the reporters, said, ‘There's still no proof of a crime. It's an alleged crime.’ That's what he says the day after everything's discovered,” Arzt claimed.

The FBI along with the NYPD did become involved in the investigation. Ultimately, they learned that the powers that be inside the headquarters knew of the hole in the wall in the ladies’ room that led into the money room. Many believed the heist to be an inside job,

“The FBI is finally brought in. They determine that something did happen and that maybe three to six people were involved in this crime. Obviously, an inside crime," Arzt said.

Authorities also believed that the person or people responsible for the crime were still in the building and working as if nothing had happened.

Police questioned and fingerprinted over 700 people in the TA headquarters. Reports say one employee allegedly failed a lie detector test, however no arrests were ever made and no individual was ever named a suspect in the case.

Weeks after the cash was taken, empty money bags, similar to those the Transit Authority used, were found in a New Jersey motel.

“Nobody boasted about it,” Edmonds said. “I think it's a safe bet they were from New Jersey, too. Talk about adding insult to injury.”

In 1980, Garelik was relieved of his position in the Transit Authority by then-Governor Hugh Carey.

“I think Hugh Carey was genuinely embarrassed and wanted changes and very quickly,” Arzt said. “But if anyone was going to be a model for Inspector Clouseau, it would have been Sandy Garelik in this episode. He didn't know what was going on. He tells a reporter, ‘I want to keep a low profile. Don't put me into the story.’ You are chief of security for the MTA. How do you keep out of the story? ‘I want to keep a low profile.’ Really?”

Edmonds, who had a great relationship with Garelick, said he long believed he knew who was behind the heist, but that he could not prove it.

“So he was very forthcoming with me, and he did say, ‘I'm pretty sure I have a pretty good idea who did this. I can't prove it,’” he said. “And he took that secret to his grave. He lived to be 93.”

Garelick died in 2011.

“I think what stands out about this is, how foolish people can be about their own vulnerabilities,” Edmonds said.

“All in all, at the end, when you think about this story, it may be a movie thriller, but it's a movie thriller that's really a comedy,” Arzt joked.

More than 40 years since the money was stolen, the case remains unsolved.

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