Lost Treasure: The Graff Jewels and the Marlborough Diamond

The Original Graff Diamond Caper Was an Audacious Grab for the Chicago Mob

Michael East
Oct 20, 2020 · 8 min read

It has all the makings of a hardboiled classic. With Chicago mobsters and a significant heist, you could be forgiven for thinking the tale of the Marlborough diamond affair is one of Dashiell Hammett’s Sam Spade novels. The theft of the diamond, worth £400,000 (£1.5 million in today’s money) was, however, all too real, with the loot vanishing into the depths of the mafia underworld.

Graff diamonds boutique in Sloane Street as it is today | Google Street View, screenshot

It was on the morning of September 11, 1980, at the Graff jewellery shop in London’s exclusive Knightsbridge that a security guard let a well-dressed man into the premises, no doubt believing that another customer was about to make a purchase. Some say he was dressed in a fedora, others as an Arab sheikh. Perhaps he had been attracted by the display of the impressive 45-carat Marlborough diamond that adorned Graff’s window. Once inside, however, the man immediately pulled a gun and ordered staff and customers onto the ground, letting in an accomplice armed with a hand grenade.

The robbers were fast, seizing a sum total of £1,429,000 (over £5.5 million today) worth of diamonds, including the Marlborough diamond. 20 stones in all were stolen, with the prized Marlborough packed safely into a briefcase before the robbers made good their escape. It was an audacious and bold heist made in broad daylight, yet clearly opportunistic as the far more valuable 70-carat Idols Eye diamond was in a display cabinet close by.

As with all jewel thefts, time is of the essence in recovering the loot intact. The more famous stones and pieces can never be sold on the open market and unless a buyer is already in place, the likelihood that the artefacts will be recut, broken down or melted, is high.

Gladys Deacon, later Gladys Spencer-Churchill, Duchess of Marlborough, 1910 | public Domain, photo enhanced by the author

The stunning Marlborough diamond was such a gem. It had belonged to the noted American beauty and intellectual Gladys Deacon, the second wife of the Duke of Marlborough, Winston Churchill’s cousin. Like with most diamonds, there is a tragedy in its history. Gladys had once been a light of society, painted by Boldini, sculpted by Epstein and admired by Proust, who said of her: “I never saw a girl with such beauty, such magnificent intelligence, such goodness and charm.” Her marriage to Marlborough was unhappy, however, and there were tales that she had been evicted from Blenheim Palace by the Duke after the Crown Prince of Prussia fell in love with her at first sight.

To maintain her legendary beauty, Gladys had attempted a prototype nose job, injecting paraffin wax in an attempt to create a Grecian profile. The wax slipped during the operation, disfiguring her face.

“I saw an extraordinary marionette of a woman — or was it a man? It wore grey flannel trousers, a wide leather belt, masculine overcoat and a man’s brown felt hat, and had a really frightening appearance, but the hair was golden-dyed and long. [It was] Gladys Marlborough, once the world’s most beautiful woman, the toast of Paris, the love of Proust, the belle amie of Anatole France. She looked at me, stared vacantly with those famous eyes that once drove men insane with desire and muttered: ‘Je n’ai jamais entendu ce nom-la’. She flung down a ruby clip she was examining and bolted from the shop.”

Henry Channon MP following an encounter in a jewellery shop, 1943

Gladys would veil herself and retreat from public life, becoming a recluse with only her treasures and cats for company. She eventually succumbed to mental illness and was forcibly institutionalised in 1962. She died at St Andrew’s Hospital, a mental care facility, in 1977. After her death, the stone was sold to Graff and reset into a necklace, originally having been a brooch.

Luckily for Scotland Yard, despite the excellent execution of the robbery itself, the perpetrators were far less careful in covering-up their crime. Again, two accounts exist of how the perpetrators were first identified, with the report that claimed they were dressed as Arabs stating that a passing accountant became suspicious of one of the men’s drooping fake beards. Intrigued, they watched events unfold and took down the license plate of the getaway vehicle.

The second account, tallying with the “well dressed” version of the story says that member of staff at Graff followed the two robbers as they exited the store, despite both being well-armed. She instead managed to get the number plate.

The Marlborough Diamond | ABC 7, screenshot

No matter how events unfolded, police quickly noted that the rental car had been registered by Art Rachel under his own name. Known as “the Genius”, he was quickly identified as an American mobster and member of the infamous Chicago Outfit. The second robber, who was noted to have had a deformed hand, was also recognised as Joseph “Monk” Scalise, known in mob circles as “winterhand” due to his four missing fingers. Both Scalise and Rachel had registered under their own names at the Mount Royal hotel.

Joseph Scalise, known as Jerry, was a high ranking member of the Chicago Mob and known for both theft and violence. He reportedly served as a soldier for mob boss Albert Tocco and is alleged to have been part of a mob hit squad called “The Wild Bunch” during the 1970s. He was never charged with any murders.

The Chicago outfit is one of the best-known mafia groups in the United States and in many ways defines the popular perception of the mafia in the public consciousness. Rising to power in the 1920s under Johnny Torrio and Al Capone, the organisation is one of the most influential and most extensive outfits in the American Midwest, its influence stretching as far as California and Florida at its peak.

However, the Marlborough caper was far from their finest hour, and it was just 11 hours after the robbery that American police arrested Scalise and Rachel as they stepped off a British Airways plane at Chicago’s O’Hare International Airport. They were not carrying any of the stolen jewels.

They would attempt to fight extradition to the UK for three years before finally being turned over in July of 1983. After standing trial in 1984, they were sentenced to 16-years at HM Prison Parkhurst on the Isle of Wight. They were released in 1992 having served 12 years.

Scalise and Rachel after their arrest, CBS News screenshot

FBI agent Jack O’Rourke travelled to the UK to interview the two suspects during their incarceration. Both refused to talk about the Marlborough case, with Rachel even refusing to sit for the interview. During their time in prison, both men refused offers of lesser sentences for revealing the whereabouts of the jewels and following the visits by the FBI Scalise sent a letter to his attorney to make it known, he didn’t talk.

The Marlborough Diamond | Graff

The theories as to what happened to the diamond are wide-ranging, some believing the diamond is still buried somewhere in the UK. Others, however, believe that the diamond was passed off to an accomplice, likely mailed back to the United States. Sadly, it may be likely that the diamond was cut into hundreds of smaller stones.

Following the publicity surrounding the case, Paul Bryk, a London cab driver, came forward to say that two men, whom he didn’t realise were the Chicago mobsters at the time, had asked him to post a package while he took them to Heathrow. He obliged and could only remember that the parcel had a New York address. This account would tally with what a former Chicago Outfit hitman told FBI investigators in 1989. Having once been close with Scalise, the informant revealed that the diamond had been immediately mailed to Scalise’s sister in New York.

During an interview with ABC7 I-Team in 2001, Rachel claimed he’d already spent the money he made from the London heist and when asked by investigative reporter Chuck Goudi exactly how much that was, he snapped that it was “none of your business.” Scalise, however, contradicted his old partner’s claims in 2011, saying that if insurers “Lloyd’s wanted to pay enough money, maybe they could [find it].”

Scalise’s attorney Vadim Glozman points out the obvious case against Scalise still having the diamond or access to any money gained, saying that “as far as I’m concerned if he had it he wouldn’t be living off of social security benefits.”

Following their release from prison, both men returned to their lives of crime, with charges over the coming years including burglary and drugs offences. However, in 2012, their 30+ years of criminality finally came to an end at the ages of 74 and 73 when Scalise and Rachel were found guilty of racketeering, having made extensive plans for burglaries and armed robberies. Rachel, who explained his actions as “the way we are. We got nothing better to do” was sentenced to 8 1/2 years. Scalise, who took a plea deal, got 9 years.

While the theft of the Graff Diamonds was undoubtedly bold, the poor planning and getaway suggest that Scalise and Rachel likely didn’t have any advanced plan to get rid of their loot. Equally, both men’s quick return to crime and alleged future poverty suggests they saw little return. Likely recut into hundreds of cheaper stones, the final value of the heist will have been much lower, particularly once accomplices, bosses and jewellers had taken their cut. Determined to uphold their mafia code of omertà, the famous principle of silence, what truly happened to the Marlborough diamond and the rest of the jewels from the 1980 Graff robbery will likely never be known.

I am a freelance long-form writer who writes on true crime, politics, history and more. I am entirely self-funded and if you liked this article, please consider a donation via Patreon as a token of appreciation or directly via PayPal. You can join my mailing list for the latest articles and also like my Facebook page. I’m also active on Twitter. I can be contacted for projects through my website MichaelEastWriter.com where you’ll also find lots more content.

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Michael East

Written by

Freelance writer. Writing on true crime, mysteries, politics, history, and more. | https://linktr.ee/MichaelEast

The Mystery Box

A publication about unsolved mysteries from the deep ocean to space and from antiquity to present day.

Michael East

Written by

Freelance writer. Writing on true crime, mysteries, politics, history, and more. | https://linktr.ee/MichaelEast

The Mystery Box

A publication about unsolved mysteries from the deep ocean to space and from antiquity to present day.

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