Thursday, July 21, 2005


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Photo: Steinberg-Baum

One could get the impression that the block southeast of the Ninth Street & South Grand intersection has always been "run down". A visit to that neighborhood today would reveal a large parking lot for ABF trucking. The entire southeast side of the block is a fenced field of weeds, and aging asphalt. The neighborhood has known better days. Back in the 1960's, and early 1970's what is now a vacant wasteland hosted a bustling retail center - The Steinberg-Baum Company Discount Store.

I remember as a young child shopping at Steiberg-Baum. It was a large store, with great prices - or so I was told. The store was always filled with shoppers. So whatever became of the store? I asked that question of my parents shortly after the store closed down. I was told that the owner's were "crooks", who hadn't paid their taxes, and several had "skipped the country" whatever that meant.

I ran a google search, not really believing I'd find anything, but there's no escaping Google. The following material (somewhat edited for readibility) was obtained from here:

Former Illinois Department of Revenue employee Sidney Flaxman CPA, and four former officials of the Steinberg-Baum Company were named in an eight-count indictment charging conspiracy and mail fraud. The indictment alleged that false retailers' occupation tax returns had been submitted to the State of Illinois. From January 1, 1968, through January 30, 1971, the returns submitted had understated sales by approximately $32 million, resulting in a loss of revenue to the State of Illinois of roughly $1.5 million.

There were thirteen retail stores, each of which was a separate corporation. According to Flaxman, when he first prepared a retailers' occupation tax return and showed it to Louis Steinberg, president of the companies and named in the indictment as a co-conspirator, Steinberg told him that he had not taken into account the wholesale sales. From a notebook, Steinberg gave Flaxman the amounts of wholesale sales which he, Steinberg, said should have been deducted.

The wholesale sales amounts furnished by Steinberg were fictitious and generally amounted to 90% Of the total sales.

There was evidence from General Manager Freedman that Steinberg-Baum's policy was to report only about 10% Of actual retail sales.

Also, by mailing the false tax returns to, "Retailers' Occupation Tax Division, 400 South Spring Street, springfield, Illinois 62706" they were guilty of mail fraud.

And now we know the rest of the story.


Marie said...

I never liked shopping in that store. Ugh.

Based on the evidence of the quote you posted, does anyone besides me think it's a little more than coincidence that the State Lottery (which was then part of the Dept. of Revenue) ended up in that building?

So, those that didn't skip the country went to prison? I wonder if they're out yet. Probably. But, doing what and where?

P.S. Somewhere around here, I have a book with a photo of South Grand right there. The photo was taken before the viaduct was put in. I'll try to find it and see if I can scan it for posting.

JeromeProphet said...

That would be great Marie.
Let me know when you post it.
That area of town was developed, and was doing quite well generations before any of us were alive.

If the train track could be removed it would open up a lot of possibilities, but that's another subject entirely.

Also, it looks like a stripmall will be going in across the street - after the Georgian is demolished.

Tracy said...

Wow, Steinburg-Baum, what a blast from the past. I remember going there as a kid, too. Even then I thought it was kinda dirty and cluttered. Isn't it J&H Recycling now?

New reader here ... I have been reading the 11th Hour because his wife did an article on our Freecycle site.

Thanks for your interesting thoughts!

Anonymous said...

Hey, my father handled the bankruptcy of Steinberg baum in chicago. He took me alomg during the inventory process and i remember riding one of the bikes through the store aisles and having pretty much free reign. I think steinberg ran away to an island if my memory serves me right, but my dad has passed so i cant ask him where he ended up.

Anonymous said...

S&B didn't go out of business becasue of tax fraud... it was beacuse of fabricated loans from Cosmopolatin bank. It was the largest case of embelzzment in US history until EF Hutton.

Louis Steinberg lived in Rhodesia for a number of years- not an island.

S&B was also the predessor and insparation to the K-Mart brothers.

Just FYI.

Anonymous said...

omg sooooo many too many memories thanks for onfo

mariols said...

I worked at the office on Grand and Halsted for a number of years. Would love to hear from any other employees.

Anonymous said...

I believe that Louie Steinberg returned from Rhodesia and spent the rest of his life in Marion State prison.

email jp






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