The Minnesota JFK Connection:
David Kroman and the American
Allied Insurance Scandal

Early in 2002 by a roundabout set of circumstances, our little JFK research group here in Minnesota came in contact with long time JFK activist, researcher, investigator, and lecturer, Gary Schoener. Now, to say that it has been a pleasure and an honor to have Gary associated with our group would be quite an understatement! He has been the primary speaker at two of our meetings and has participated in others. Although he was unknown to most of us, it turns out that he was one of the first generation of independent researcher/investigators in the JFK case, working closely, especially, with Vincent Salandria and Harold Weisberg. In 1968, at the age of 23, he was so highly regarded that he was asked to come down to New Orleans in the spring of that year to “help out” with the Jim Garrison investigation. His story goes on from there and when he started filling us in on some of the things he had been involved in we felt an obligation to help expand on his story.

According to Gary Schoener, a Minnesotan by the name of David Kroman was in Dallas soon after the assassination interviewing people using the name Don Morgan. Those who encountered him there—doing whatever it was he was doing—would have been very surprised to know that this “investigator’s” name was really David Richard Kroman and that he was an attorney employed by the Minnesota Insurance Commission in St. Paul, Minnesota. They may have been even more surprised to learn that in a few short months he would be named president of U.S. Mutual Insurance Company, a high risk auto firm, with headquarters in St. Paul. Notable about this insurance company was the fact that it had as vice president the Lieutenant Governor of Minnesota, A.M. “Sandy” Keith.

David Kroman remained relatively unknown until March 27, 1967, when a curious incident—that took place on a lonely stretch of Interstate Highway 94 about 20 miles east of Bismarck, North Dakota—caused his name to be splashed across the headlines of Midwestern and some national newspapers. At about 4:00 AM on that Monday morning he was found in a semi-conscious condition in a locked car, in the ditch, with a loaded shotgun on the seat beside him. Before this Monday was over, this incident would draw the attention of FBI Director J. Edgar Hoover, who would report to Attorney General Nicholas Katzenbach that “we are following this matter closely and you will be advised of pertinent developments.”

David Kroman remained relatively unknown until March 27, 1967, when a curious incident—that took place on a lonely stretch of Interstate Highway 94 about 20 miles east of Bismarck, North Dakota—caused his name to be splashed across the headlines of Midwestern and some national newspapers. At about 4:00 AM on that Monday morning he was found in a semi-conscious condition in a locked car, in the ditch, with a loaded shotgun on the seat beside him. Before this Monday was over, this incident would draw the attention of FBI Director J. Edgar Hoover, who would report to Attorney General Nicholas Katzenbach that “we are following this matter closely and you will be advised of pertinent developments.”

Now, some background is required to understand what David Kroman was doing in North Dakota in March of 1967. A week earlier trial had opened in Bismarck in the 3 million dollar fraud and conspiracy case involving the famous American Allied Insurance Company of St. Paul, of which David Kroman’s U.S. Mutual Insurance was a subsidiary. David Kroman, and the Insurance Commissioner of Minnesota, Cyrus Magnusson, were two of the five defendants in this trail in which testimony was heard of fraud, conspiracy, bribery and blackmail.

In the end, this trial and accompanying scandal would wreak havoc on David Kroman, his family, friends, associates, numerous Democratic-Farmer-Labor politicians, lawyers, judges, and on the state of Minnesota in general. Before it was all over the Lt. Governor of Minnesota, Sandy Keith, would retire from politics and the incumbent Governor, Karl Rolvaag, would be defeated for re-election and would find himself appointed ambassador to Iceland by President Lyndon Johnson, some would say to get him as far away as possible until this mess blew over and before it could do even more damage up the line in Minnesota politics.

Now this all would be quite an interesting story—but for our purposes, just another long forgotten political scandal—were it not for David Kroman and his JFK assassination “investigation.” That Monday morning Kroman was taken by ambulance to a Bismarck hospital where doctors speculated that he may have had an epileptic seizure before he went off the highway. Kroman claimed, however, he had taken to the ditch when an occupant of a car that had followed him all the way west from Minneapolis/St. Paul had pointed a gun at him. The North Dakota Highway Patrolmen who searched Kroman’s car may have been puzzled when they found among his possessions a disguise kit containing a wig and dark glasses.

Kroman was declared fit to be released from the hospital that afternoon. But before he was, however, he called an impromptu bedside press conference and exploded a bombshell in the middle of this trial. Kroman announced that the reason he was run off the road was because of the investigation he had been pursuing for over three years into the assassination of President Kennedy. At this point he announced he knew the identity of the “real” assassin and that he would reveal it in a few days. “He added that he would show what occurred, where it occurred and who was involved.” (The St. Paul Dispatch).

The federal judge presiding at the trial, Edward J. Devitt, was having none of David Kroman the assassination investigator. A mistrial was declared for Kroman, he was turned over to the U.S. Marshall, and was shortly on his way to the psychiatric section of the Federal Prison Facility in Springfield, Missouri, for tests to determine if he was sane and competent to stand trial. According to Gary Schoener, it was at the Springfield facility that Kroman ended up in a cell adjacent to Richard Case Nagell, the former Korean War hero and intelligence agent, whose story is told in Dick Russell’s book The Man Who Knew Too Much. A Steve Jaffe memo to Jim Garrison of February 14, 1968, actually describes Kroman and Nagell, not as being in adjoining cells, but as cellmates.

David Kroman remained in Springfield, Missouri, for his court assigned 45 days and on May 4th he was declared “sane and competent” and was returned to Minnesota. He resided in the Hennepin County Jail in Minneapolis before being released on a $10,000 bond. After his release he left for his home in Rocky River, Ohio. He, his wife Imogene, and their sixteen year son had moved to Ohio from Edina in late 1966 or early 1967 after conditions in Minnesota became intolerable for them. His wife is quoted in a newspaper article from the Cleveland Plain Dealer (March 28, 1967) as to how their Edina home had been broken into on more than one occasion and that David had been beaten and intimidated.

This same article describes how his wife, who was working at the time as a court stenographer in the Cleveland court system, was visited in her home by a Cleveland Plain Dealer reporter and photographer and she drew their attention to a humming sound coming from a wall that she thought was a bugging device. The reporter and photographer said they could hear the humming sound but could not determine what was causing it. A St. Paul Dispatch article, from this same time, also quotes Mrs. Kroman as saying “that she did not believe, for one minute, that her husband was mentally ill.”

The story of the American Allied Insurance Company had begun officially in July of 1963 when it was incorporated in St. Paul, in the high risk auto field. American Allied was one of a combination of firms owned by Phillip Kitzer, and his two sons, Phillip Jr., and Joseph, of Hinsdale, Illinois. In 1963 the Kitzers owned at least 14 companies, 8 in Illinois, 5 in Minnesota, and 1 in London. How David Kroman became involved with the Kitzers is not known at this time but he is quoted in newspaper coverage from the Bismarck trial that he severed his connection with the Minnesota Insurance Commission in April of 1964 and shortly thereafter was named president of the American Allied subsidiary, U.S. Mutual Insurance. Former Lieutenant Governor Sandy Keith testified at the trial that he joined U.S. Mutual as vice-president, director, and legal counsel, at the behest of David Kroman during this same time frame. He also testified that he resigned from U.S. Mutual—to avoid political destruction—on February 17, 1965, after a discussion with Governor Rolvaag.

Two conservative legislators from Minneapolis, Otto Bang and Lyall Schwarzkopf, were the first to draw public attention to the American Allied case in early 1965. The official word that the company had been declared insolvent was announced in the press on August 5, 1965. In October David Kroman and sixteen others were indicted for mail fraud, wire fraud, and conspiracy, by a Minnesota Federal grand jury directed by U.S. District Attorney Miles W. Lord. One of the other sixteen was Minnesota Insurance Commissioner Cyrus Magnusson. In February of 1966 U.S. Mutual Insurance was placed in receivership. In March of 1966 the American Allied fraud trail was postponed until sometime after the 1966 elections by U.S. District Judge Edward J. Devitt.

As improbable as it may seem, on February 20, 1966, Cyrus Magnusson and David Kroman announced their candidacies for Governor and Attorney General, respectively, for the upcoming 1966 election. And later in the summer, just before the state Democratic-Farmer-Labor Party convention, they went on WCCO radio in Minneapolis and “declared war” on the DFL party. No one took them seriously as candidates but their purpose seemed to be to gain a platform for expressing their bitterness over what they saw as the treachery and betrayal by some of their former DFL Party “friends.” The transcript of their thirty minute radio interview from June 9, 1966, has Insurance Commissioner Magnusson describing what they intended to do if Governor Karl Rolvaag and Attorney General Robert Mattson were to be endorsed at the convention: “…I could add one further comment on this, that Mr. Kroman and I have the horses---we know where the bodies are buried. If those two individuals are endorsed at the convention every single misstep, improper act, (and) personal action which reflects discredit upon the state since 1954 will be released. It will be released in various ways. One, through what I like to call a treatise that Mr. Kroman wrote called ‘A House That Hurbert Built,’ which he is presently updating. A second publication which is entitled, ‘Midgets in the Earth’ deals with the erosion of the DFL party which is now run the dregs of the Freeman administration.”

Early in 1967 the decision was made to split the American Allied Insurance case into two trials, one in Bismarck, North Dakota, and one in Minneapolis. The Bismarck trial had as defendants, the “core” figures in the case, Cyrus Magnusson, Phillip Kitzer (president of American Allied and associated companies), Phillip Kitzer Jr., George J. Hruban, Frank Buffum, and David Kroman. Before the trial got underway Judge Edward J. Devitt agreed to the separation from the Bismarck trial of Frank Buffum, a New York securities dealer. The trial with the five remaining defendants began on March 20, 1967 with David Kroman representing himself.

In the Bismarck trial that lasted for 14 weeks, testimony was heard of fraud, conspiracy, bribery and blackmail. The government alleged that the defendants defrauded policy holders through a scheme that enabled them to misappropriate company funds behind a screen of false assets, thereby causing the company to collapse. The defense contended that American Allied was never insolvent but was found so through a rigged state examination that was part of a political aggrandizement plot headed by Miles Lord and former Gov. Karl Rolvaag.

On June 23, 1967, Cyrus Magnusson, Phillip Kitzer Sr., Phillip Kitzer Jr., and George J. Hruban, were found innocent of all charges. According the account of the trial in the St. Paul Dispatch, jurors reported that they had a difficult time following the complicated financial transactions presented by the prosecution and ended up relying more on live witness testimony. They were especially influenced by the six days of testimony by Phillip Kitzer, Jr., and by what must have been an effective defense in which the case was portrayed, not as one of business fraud, but as a political conspiracy. According to the defense, this involved Governor Karl Rolvaag, Attorney General Robert Mattson, and Miles W. Lord in a conspiracy to destroy the political career of A. M. “Sandy” Keith, and to advance the career of Lord, who by the time of the trial had become a federal judge. Because of this verdict in the Bismarck trial, chief prosecutor Patrick J. Foley then requested, by petition, the acquittal of the remaining thirteen defendants in the Minneapolis trial. This acquittal did indeed take place on July 26, 1967. Although this ended the criminal trials in the case, there were a number of civil suits that continued in court, at least until 1976, when in the case of Bonhiver vs. Graff, the Minnesota Supreme Court upheld a $117,350 damage assessment against accountants working for American Allied.

On March 23, 1967—at about the time the Bismarck trial was getting underway—a mysterious letter was sent to New Orleans district attorney Jim Garrison telling of the letter writer’s meeting and association with Richard Case Nagell and recommending that Garrison get in touch with Nagell. This letter is notable for the fact that it is signed Don Morgan (alias). Now, ones first thought would be that it must have been sent by David Kroman, because he was known to have been using the Don Morgan alias. However, when one learns that this letter is also referenced in The Man Who Knew Too Much by Dick Russell, and when one learns how it is represented in the book, things are seen in a different light.

The Russell book states that this letter was sent to Garrison by Vaughn Marlowe, the former Fair Play for Cuba Committee member, under the alias Don Gordon, even though anyone looking at the letter can see that it is signed by Don Morgan (alias). And still puzzling is the fact that the name Don Morgan is nowhere mentioned in the 1992 edition of The Man Who Knew Too Much, nor is the name David Kroman. Even more puzzling is the fact that the transcription of a live interview with Vaughn Marlowe from the summer of 1990 contains word for word exact phrases from the Don Morgan letter (TMWKTM, 1992 ed., pp 335-343). It was hoped that the new edition of The Man Who Knew Too Much that appeared in 2003 would clear up these discrepancies, but instead the waters were muddied even further.

The 1992 edition has:

I was aware of Marlowe for many years before we met. It was he who, in March 1967, had sent a letter to Jim Garrison (under the alias “Don Gordon”), informing the New Orleans DA about his peculiar relationship with Richard Nagell. (p 333)

The 2003 edition has:

I was aware of Marlowe for many years before we met. It was he who, in March 1967, had sent a letter to Jim Garrison (under the alias “Don Morgan” [sic] Gordon), informing the New Orleans DA about his peculiar relationship with Richard Nagell. (p 210)

So what does “‘Don Morgan’ [sic] Gordon” mean? And the bigger question: Why, still, no mention in the book of David Kroman? In this exhaustive investigation of Richard Case Nagell’s life and connection to the Kennedy assassination, how could he have been missed? Here was a lawyer and former insurance company president, a friend and business associate of the Lieutenant Governor of Minnesota, who had been pursuing an investigation into the assassination for over three years, a man whose name had just appeared in page-one headlines in newspapers across the country, a man who had just announced to the world (at a press conference) that he had solved the assassination case and would be providing the name of the “real assassin” in a few days. Here was a man who then ends up for 45 days, not only in the same prison facility as Nagell, but in an adjacent (or possibly the same) cell. Should this not have been one of the most important and explosive elements of the whole story?

The October 18th, 1967, issue of the St. Paul Dispatch reports that, in a separate case, David Kroman plead guilty to accepting bribes from officials of the Equity Funding Corporation of America in 1964 when he was a lawyer with the Minnesota Insurance Commission. The St. Paul Dispatch of October 27th reported that Kroman was sentenced on that date to one year in the Minneapolis workhouse and a fine of $1,000. The year in the workhouse was suspended upon immediate payment of the fine. The fine was paid by Kroman’s brother, as Kroman at the time did not have sufficient funds. This court action took place in Hennepin County District Court before County Judge Theodore B. Knudson.

Shortly thereafter (early November 1967), Garrison investigator, Steve Jaffe, was sent to Minnesota to check out the David Kroman story. While in Minnesota Jaffe was fed hogwash and fairy tales by Kroman’s brother Stanley, and by Kroman’s colorful, tax protesting, John Birch Society quoting, attorney, Jerome Daly. And Gary Schoener informs that “…Steve Jaffe, an enthusiastic young man who a lot of people liked, was thrust into a key role. They manipulated him—Kroman himself bragged to me about how they scared him and ran him ragged when he came to Minneapolis.” David Kroman, himself, was in Ohio while all this was going on, and Jaffe did reach him by phone. The disinformation from Stanley Kroman and Jerome Daly must have, in fact, been flying thick and heavy because the resultant memo from Jaffe to Jim Garrison is a confusing jumble of facts and dates from the Bismarck insurance trial, Kroman’s stay in the Springfield, Missouri, prison facility, and from an incident in Tennessee in January of 1966 in which Kroman claimed he was beaten and robbed of important JFK case papers.

On December 5, 1967, David Kroman was encountered (in disguise!) in the offices of the L.A. Free Press by Garrison investigator Steve Burton. In the memo prepared for Garrison, Burton reports on Kroman regaling he, Free Press editor, Art Kunkin, and researcher Ray Marcus, for over three hours, on his “investigation” and his theories about the assassination. Notable in this interview that Burton reports on, is Kroman’s attempt to “market” Richard Case Nagell to Garrison. The memo reads: “…of particular importance to him was whether Garrison knows of a witness who pegs Oswald as a Russian double agent. He flatly refuses to speak to Garrison unless he knows and names this witness.”

Sometime later (in the late 60s or early 70s), David Kroman was working as a night janitor at the Glenwood Hills Hospital in a Minneapolis suburb, a psychiatric hospital that catered to important Minnesotans, including politicians. Here Kroman was caught going through patient files. At one point Kroman was observed through his apartment window, donning a janitor’s uniform and packing a small sophisticated looking camera into his lunch box.

David Kroman died in Ohio on October 10, 1987, at the age of 64. At the time of his death he was employed as a custodian working for a suburban school system in Ohio.