Early Business Career, Legal Issues
Following his discharge in 1945, Hensley and his brother went back to work for Marley in his United Sales Company in Phoenix and United Distributors in Tucson. In 1948, both brothers were prosecuted by the federal government and convicted of multiple counts of falsifying liquor records in a conspiracy to conceal illegal distribution of whiskey against post-war rationing regulations. Jim Hensley received a six-month sentence (later upheld but suspended by an appeals court) while his brother received a year in federal prison, and both were fined. In 1953, Jim Hensley and Marley were charged by federal prosecutors with falsifying liquor records. Defended by future Supreme Court Justice William Rehnquist, they were acquitted.
In December 1952, the Hensley brothers bought into the Ruidoso Downs racetrack in New Mexico, with Eugene running it and Jim returning to Phoenix. In a May 1953 hearing before the New Mexico State Racing Commission, the Hensley brothers concealed the existence an equal partner, Clarence "Teak" Baldwin, who had been banned from any ownership role due to illegal bookmaking activities. A 1953 New Mexico State Police investigation found further that Kemper Marley was a financial backer for bookmakers and had connections with Baldwin and with the bookmaking operations of organized crime, a conclusion echoed decades later by the Arizona Project investigative reporting team. The Hensley brothers gained their Ruidoso Downs racetrack license in 1953, as no New Mexico law barred convicted felons from race track ownership, although in 1955 new Governor of New Mexico John F. Simms would say he was "appalled" by the previous administration's decision to do so. Previous Governor Edwin L. Mechem had defended the approval, saying that the Hensleys had been under constant surveillance and deserved continued attention, but that no action was taken against them because the investigation showed that as race tracks go, all laws apparently were being observed. Jim Hensley would sell his interest in Ruidoso Downs to his brother Eugene in 1955 (who would in turn sell it to a Marley-connected company in 1969).
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