EXPOSING THE LUDWIG SPY RING IN WW2

Norman Ridley, author of Spying for Hitler, which is available now, reveals the fascinating story of how the Nazis’ Ludwig Spy Ring was uncovered just before the United States entered the Second World War.

At around 10.00 pm on the evening of 18 March 1941, a tall, swarthy 50-year-old man with black hair and horn-rimmed glasses somewhat foolishly tried to cross against the lights in Times Square, New York. Not surprisingly he was struck by a yellow cab and spun into the path of a second vehicle that knocked him to the ground and ran over him.

A second man who had been with him was momentarily stunned but, as the traffic came to a halt, he ran into the road, grabbed a briefcase that the injured man had been carrying and ran off before the police arrived. The injured man was taken to St Vincent’s Hospital where he later died.

When the police investigated they found that he was carrying documents that identified him as Don Julio Lopez Lido, a courier working at the Spanish Embassy, but who had only recently arrived in the country. The injured man might well have become just another traffic statistic and the loss of the briefcase just another opportunist theft, except for the fact that none of the clothes the man was wearing had any sort of labels and a notebook found in his pocket contained what seemed to be names and ranks of U.S. military personnel all written not in Spanish but German.

The FBI were called in and searched his hotel room. There the agents found maps and documents relating not only to the size, equipment, location and morale of U.S. Army units and details of the routing of convoys between America and Britain, but the man’s true identity. He was Ulrich von der Osten, a German army major who was previously unknown to either U.S. or British intelligence.

The US authorities quietly waited to see if anybody would come along to claim the body from the mortuary. It turned out that the funeral arrangements were made by a U.S. citizen, Kurt Frederick Ludwig. There was nothing on record about Ludwig but he was placed under immediate and close surveillance.

A few thousand miles away at the luxurious Princess Hotel in Bermuda, the headquarters of British wartime counterintelligence, Montgomery Hyde managed some 1,500 censors who routinely examined all mail carried from Europe to the U.S. by Pan Am and Britain’s Imperial Airways.

One letter that aroused Hyde’s curiosity seemed, in a roundabout way, to refer to the Times Square accident and included a reference to someone called ‘Joe K’ who, apparently, was the man who had been with von der Osten when he was knocked down.

The codename ‘Joe K’ was known to both British intelligence (MI6), and the FBI. It was associated with several other messages written in secret ink concerning more detailed information about cargoes destined for Britain. Many letters that carried this signature referred to ‘Uncle Dave and Aunt Loni’. When the FBI had searched von der Osten’s papers in his hotel room, they had come across a telephone number for Dave and Loni Harris and a reference to someone called Fred Ludwig, who was apparently their nephew. From this they were able to identify ‘Joe K’ as Kurt Frederick Ludwig, who had been born in Freemont, Ohio, at the turn of the century but had gone to Germany with his parents when he was only 6 years old. He returned to the U.S. in 1925, but only for a few years, before returning once again to Germany in 1933.

In Berlin, Colonel Erwin von Lahousen, of German military intelligence, was concerned that von der Osten’s death might be a thread that the FBI could pull to unravel two German spy rings operating in the U.S. at that time, but Ludwig assured him that the accident had not compromised him in any way. He did not know that FBI agents were following his every move and soon discovered the identities of a number of his contacts, including one Paul Scholz, who was arrested by FBI on 28 June 1941.

Ludwig panicked and decided to cross the country and try to get out through San Francisco, but first he tried to ‘lose’ himself in a Bund summer camp in Pennsylvania to throw off any surveillance. When the FBI tracked him down and searched his room, Ludwig changed his plans and, leaving the camp on 2 August 1941, headed south to Miami where he made contact with a man known to the world as John Charles Post, but who was otherwise known on the Miami waterfront as ‘Captain Jack’.

The Swiss-born and German-educated Post was none other than Carl Schroetter, who Ludwig now called on to find him a boat to get him to Cuba without obtaining travel papers. There was no way that Schroetter could do that and so Ludwig was forced back onto his original plan and set off across-country.

He abandoned his car at Bute, Montana, and continued by bus, but Hoover’s men were right behind him. When it was clear that Ludwig’s only intention was to get to San Francisco and board a ship as soon as possible, they stepped in and arrested him on the dockside. As soon as Ludwig was in custody, the FBI arrested Schroetter at his home address of 220 Northwest 33rd Avenue, Miami.

The trial of Kurt Ludwig and his eight associates began on 3 February 1942, when all nine were indicted on charges of conspiracy to violate the espionage statutes, and all were convicted. Sentenced to ten years in Atlanta Federal Prison for espionage, Schroetter slashed his wrists with the diaphragm of a radio headset and hung himself with a bedsheet attached to a water pipe.

The full story of the Ludwig Spy Ring is revealed by Norman Ridley in his book Spying for Hitler, which is available now.