Long-lost Fraud

Mysterious letters found in a Key West attic shed light on the failure of an early island bank

Asia Palomba and Dr. Corey Malcom with the letters Palomba donated to the Florida Keys History Center.

A scandal that led to the closure of a Key West bank – before deposits were backed by the Federal Reserve and federally insured. A fugitive who wound up in Australia, then Oklahoma City. Multiple cases of purported amnesia. These are the astounding real-life facts that are part of a story revealed in letters recently donated to the Florida Keys History Center.

The letters were written between 1913 and 1915. Most were from a man named E.M. Martin, vice president of the young Island City Bank (founded in 1905) to James L. Johnson, a cashier at the bank who lived on Caroline Street.

That home on Caroline Street was purchased in 1975 by the family of writer Asia London Palomba. Her mother, then a 10-year-old, found the packet of letters along with antique dolls and other detritus left in the house. The letters were tucked away and forgotten for decades as the family left Key West. Palomba's mother eventually took them to Italy, where she lived.

Now they have been returned to Key West, and donated to the Monroe County Public Library’s Florida Keys History Center by Palomba, who wrote about the incredible tale behind them for Atlas Obscura. It turned out that the Island City Bank’s failure in July of 1915 was due to Martin’s siphoning funds from the bank. And that he had disappeared from his sister’s home in Washington, D.C. earlier that month.

Postcard of Island City Bank on Duval Street in Key West. From the collection of Christopher C. Belland

The Secret Service tracked Martin to Australia – but he eventually wound up in Oklahoma City, living under a different name and claiming to have amnesia. It wasn’t even the first time he lost his memory.

“These letters are an important part of Key West banking history, and they shed light on what looks to be a case of early financial fraud on the island,” said Dr. Corey Malcom, Lead Historian of the Florida Keys History Center. “We are so thankful to Asia Palomba and her mother for donating these letters to the Florida Keys History Center. They are now a part of the Monroe County historical record and can help tell the strange-but-true saga of E. M. Martin and the Island City Bank.”

Palomba said it was her mother's idea to donate the letters, since she was the one who found them and made sure they were not thrown away.

"She had held onto them for so long in hopes of finally deciphering the story, and when I was able to do that, we both felt that our work with them was done and that they deserved to be properly preserved and immortalized in Key West history. We felt that the Monroe County Library would be best equipped to do that," said Palomba, a journalist based in Rome. "Plus, there's something poetic about the letters returning back to their island after 50 years away. Key West is such a repository for so many different kinds of history, and it feels good to know that the Island City National Bank is now part of that larger fabric."

There are still unanswered questions about E.M. Martin’s story. But the history of Key West at that time of financial boom and bust is now more detailed in vivid personal terms thanks, as Palomba writes in her story, to “a stack of dusty letters discovered by a little girl.”