Yes, it's pretty much true. As I remember it, the original marble one Houdini had made was smahed to pieces in the 1970's. The vandals had heard a silly rumor that Houdini's secrets were in the bust. Needless to say, there wasn't anything.
After the destruction, the S.A.M. asked for donations for a new one. Several duplicates were made for the Parent Assembly and to heavy contributors to the bust fund. I think the Parent assembly tried once more to replace the bust and that's when the bust you mentioned was stolen. A son/son-in-law had a fight with his father/father-in-law over, believe it or not, over some tools one of them borrowed. When the son/son-in-law came up short, he turned dear old dad in. The bust, I believe was in the garage.
On the same subject, it's a real shame the Parent Assembly dropped the long standing tradition of performing the Broken Wand Ceremony on Halloween. Too bad the people running the show had to make a 60+ year tradition come to a screaching end.
Please visit my website.
I buy,sell + trade Houdini, Hardeen items.