In September, a French newspaper, Le Journal, assigned a reporter to question Alphonse Capone, who was known throughout Europe as the preeminent American gangster. The Chicago Police Department claimed they had no idea of Capone’s whereabouts, but the correspondent, who had never been to Chicago, readily found him. Like all Europeans, the French were appalled by Prohibition and inclined to view bootleggers sympathetically, and the resulting interview made headlines in both the United States and Europe, for the racketeer had brought all his formidable charm to bear on the journalist, who painted a vivid, bilingual portrait of the racketeer challenging his critics:
Lifting his shoulders, amplifying his voice, he exclaims:
“Hypocrites, hypocrites! This country has really too many of them. . . . I am sick of that game (c’est un jeu qui me rend malade). There are people who vote dry and who are wet. . . . And then there are the politicians who wear a mask of respectability and who are only crooks (des canailles). . . . They say they despise those they call gangsters, but they are glad to take their money to fatten their campaign funds. . . . How can you expect me not to despise these persons? I would rather share my breakfast with a stool-pigeon than with them.”
“With a stool-pigeon?”
My guide then explains that in gangster’s slang a stool-pigeon means a police indicator (un indicateur). . . .
“In any case, I hope that you won’t call me a ‘gorilla.’
“So long . . . (Adieu). This winter, if you come to Florida, pop in (passez chez moi). You will see my beautiful flowers.”
And the man of fifty corpses gives me, always smiling, his hand, fine and very white.
Capone sounded confident, even indignant, because he was convinced he was out of danger. Judge Lyle could say whatever he liked about gangsters to try to get himself elected mayor, Al Capone would not pay attention; that was what his lawyers were for. And he was also convinced that the Internal Revenue Service would never indict him for tax evasion. After years of investigation it was apparent the IRS had failed to find enough evidence to persuade a grand jury to return an indictment. If they continued to harass him, he would take the IRS to court, he would take the whole United States to court, if necessary, just as he had taken the safety director of Miami to court and watched him squirm as the judge lectured him about constitutional guarantees of freedom. Yes, Capone would enjoy his revenge on his antagonists; even better, it would be perfectly legal.
• • •
At the time, Frank Wilson agreed with Al Capone: the IRS had little to show for its two-year-long investigation. Wilson’s field agent, Art Madden, had once warned that Wilson might as well try to “hang a foreclosure sign on the moon” as nail Capone for income tax evasion, and Madden’s prophecy had proved depressingly accurate. By the end of the summer, Wilson was on the verge of giving up his futile investigation. “I am known as a cold and calculating character,” he noted, but “after two years I was in a sweat.”
Wilson had further cause for anxiety when he received word that the Capone organization was planning to kill him. Until this time, Wilson had taken reasonable precautions regarding his personal safety, but he had not feared for his life. The message came from an informer named De Angelo, but that was not his real name. It was the alias of Mike Malone, an undercover agent Wilson had assigned to gather intelligence on Capone nearly two years before. In Wilson’s estimation, Malone was “the greatest natural undercover worker the Service has ever had. Five feet, eight inches tall, a barrelchested, powerful two hundred pounds, with jet black hair, sharp brown eyes underscored with heavy dark circles and a brilliant, friendly smile, Mike could easily pass for Italian, Jew, Greek or whomever the occasion demanded. He was actually ‘black Irish’ from Jersey City.” Malone was married, but after the death of his infant daughter in a car accident, he and his wife had split up, and he had little interest in anything other than his work. As such he was a natural candidate for a prolonged, demanding, hazardous assignment.
In preparation for going undercover, Malone fabricated a long, involved history for himself as a hoodlum from Brooklyn and thus a suitable candidate for the Capone organization. In this role he registered at the Lexington Hotel, where he happened to be given room 724, adjacent to Philip D’Andrea, one of Al Capone’s bodyguards. During the next few weeks Malone, under the name De Angelo, made himself conspicuous in the hotel lobby until he was approached by one of Capone’s men, who asked him his business. “I’m a promoter,” De Angelo said. “Know anybody who’d be interested in buyin’ some gold bricks?” Maintaining his cover, De Angelo spoke of his Brooklyn past and mentioned his involvement in a shooting incident. He even claimed to have been a member of the Five Points gang, the spawning ground of so many racketeers. With this bold talk (all of it carefully contrived) he won the confidence of the Capone organization and eventually earned a job as a croupier in a Cicero gambling house. Throughout, De Angelo had always been scrupulous about keeping his distance from his real boss, Frank J. Wilson of the IRS. As the months passed he received regular promotions, until he became the head croupier of the joint. During his off-hours, De Angelo ate and drank with the Capone men, and he duly reported his findings, such as the remarks one hoodlum made to him concerning “The Enforcer,” presumably Frank Nitti: “He keeps everything in line for Al. Somebody gets out of line, Al tells the Enforcer. The next thing you know, a couple of guys get off a train from Detroit or New York or St. Louis, and the Enforcer tells them who has to go. The guys do the job and go home.” In contrast to the imported assassins, said the hoodlum, “Al don’t like his guys to do no shootin’ unless its absolutely necessary. And they gotta be quiet. That’s what happened to Scalise and Anselmi. I don’t want Al givin’ me no banquets. I see him give a guy a banquet one night, and when the guy gets up to take a bow, Al reaches for a baseball bat and beats the guy’s brains out right in front of everybody.” Shortly afterward, De Angelo received an invitation to attend just such a banquet, a birthday party Al was throwing for the Enforcer himself, Frank Nitti, at the New Florence restaurant.
De Angelo had his doubts about the wisdom of attending, but he knew Al Capone would attend, and he was eager to see Public Enemy Number 1 in action. He alerted other special agents to station themselves outside the restaurant where the celebration was to be held, and then went inside to watch Capone, McGurn, and other insiders drink themselves into oblivion. No bathtub gin for them; only the best imported champagne was served. Wearing a tuxedo, Capone maintained his dignity throughout the evening. He wielded no baseball bat on this occasion, and he even gave De Angelo a reassuring pat on the shoulder. If Al suspected that a spy for the IRS was present, he gave no indication.
However, De Angelo became convinced that Capone’s chef tried to poison him. The offending morsel was a piece of steak; when De Angelo swallowed, the meat burned his mouth and tongue, and he suddenly felt short of breath. He shouted for water, only to hear in reply, “What the hell do you want water for, with all this champagne around?” De Angelo lamely explained that his ulcers prevented him from drinking. After he drank a pitcher of ice water and recovered somewhat, he asked the man sitting next to him, Paul “The Waiter” Ricca, another prominent member of the Capone organization, what kind of meat they were eating. “Spiced steak,” Ricca said. “Don’t you like it?” The red-hot peppers turned out to be the most violent aspect of the party. And the cake was lovely: “Happy Birthday Frank,” it said.
After several months, De Angelo was joined in his game of deception by another undercover agent who went by the name of Graziano. Together, they happened to overhear a troubling conversation between two Capone gunmen. “Snorky’s gonna have that fella taken care of,” said one. “Where’s he livin’?” asked the other. And the first man replied, “The S.P.” As everyone in Chicago knew, the initials stood for the Sheridan Plaza, where Wilson and his wife resided under assumed names. De Angelo and Graziano immediately related this information to Wilson, who passed the grim news along to his
boss, Elmer Irey, the head of the Special Intelligence Unit. Irey came up with an even darker theory. What if Capone had known all along that Graziano and De Angelo were spies for the IRS? If so, he might be feeding them misleading information. And if Capone knew the men were spies, he would not hesitate to order their deaths whenever it suited him. Irey relayed his theory back to De Angelo, who, avoiding the phone for fear of wiretaps, replied by letter. “I feel very certain that the [Capone] gang has no inkling as to my real identity,” he wrote. “Since they are not on to me, they are not on to Graziano either. I have talked this matter over with him very thoroughly and he feels the same way as I do. We want to see this thing through.”
No sooner had De Angelo mailed the letter than he received further indication that Wilson’s life was in imminent danger, and the undercover agent broke all the rules of his trade by placing a call directly to Wilson at his room in the Sheridan Plaza. “This is an emergency,” he said when Wilson answered. “You’ve got to get out of the hotel right now.” In a near panic, Wilson did as De Angelo advised. When they met, De Angelo explained that Capone’s men had been tailing Wilson for days, and when the IRS man became skeptical, De Angelo stunned him by describing the lunch Wilson had ordered the day before, right down to the $5 bill with which he had paid for the meal. “I wanted to get you out of the Sheridan Plaza,” De Angelo said, “because they were going to kill you when you walked back to the garage for your car in the morning. . . . A couple of guys were going to let themselves into your car during the night. . . . When you got behind the wheel they were going to give it to you with a rod equipped with a silencer, and then when you slumped over they’d drive off with you, weight your body and toss it into the river.”
Listening to De Angelo describe how the Capone mob planned to do away with him, Wilson chewed on a nickel cigar. He released a cloud of smoke and said, “I’ll get the evidence on Capone if I never live to do another thing.”
But first, Wilson and his wife moved out of the Sheridan Plaza. As he checked out, he made of a point of telling the management that he was returning to Kansas. He and his wife then took a three-block taxi ride to his car and drove to an apartment house. Wilson got out, rang a doorbell, and then returned to his car. Next, he went to Union Station. He lingered there briefly and drove on to another hotel in Chicago, the Palmer House, where he checked in, convinced that his erratic movements had befuddled any Capone operative trying to tail him. In the meantime, the Chicago Tribune had learned of the threat against Wilson’s life and to his dismay ran a report on the front page. “I was much disgusted when I read the story this morning about the public disclosure of the plans of Capone to bring four gunmen to Chicago from New York,” he wrote Irey. “By that breach of confidence the lives of our informants [De Angelo and Graziano] may be in jeopardy, and our chances of obtaining further help from this source may be eliminated.”
Shortly afterward, undercover agent Graziano fed Wilson another lead. It was just a scrap of a conversation, and it seemed small, almost insignificant, but it would eventually become the first concrete evidence that Al Capone did in fact enjoy a vast, unreported income. The lead developed as Graziano lounged about the Lexington Hotel and fell into a conversation with yet another Capone employee, who claimed to possess inside information concerning the police raid on the Hawthorne Smoke Shop five years earlier, shortly after the murder of William McSwiggin, the young assistant state’s attorney. “They walked out with a nice book of figures from the smoke shop that they could’ve used against the Big Boy,” the employee said, “only they overlooked it.” Graziano could not be certain what this intelligence signified, but he dutifully reported the conversation in a letter to Irey, who immediately realized that a ledger already in the custody of the IRS contained vital information about Capone’s finances. Irey became so excited that he left Washington and went to Chicago to discuss the matter with his agents. Wilson, who had spent the better part of two years examining such ledgers, recalled nothing that fit Graziano’s description, but, he promised, “I’ll look through everything again.”
Wilson looked for hours and then for days. By midnight on the last day of his review, he concluded he had been wasting his time and prepared to go home. As he was storing the papers, he recalled, “I uncovered a ledger. It had been lying there in that file for about five years and the label on it didn’t mean a thing to me. But curiosity made me open it. As soon as I looked inside that book I knew we had our case.” What Wilson had discovered were the records Graziano had heard about, records the IRS had had in its possession all along, records that Capone had long feared the government might one day use against him. “I snipped the string and found myself holding three ledgers, black ones with red corners,” Wilson continued. “The first one didn’t mean much. The second I spotted as a ‘special column cashbook.’ My eye leaped over the column heading: ‘Bird Cage,’ ‘21,’ ‘Faro,’ ‘Roulette,’ ‘Horse bets.’ ” Wilson gave up any thought of going home that night and went to his cubbyhole of an office to study the ledgers and make a few calculations, and when he was finished, he realized he was going over the books of a business with net profits of over half a million dollars during an eighteen-month period, and that was four years ago, when Capone’s operation was much smaller. Even better, the ledgers showed income; Wilson and his crew had done yeoman’s work spotting Capone’s expenses, but to make the tax case really stick, it was vital to demonstrate Capone’s earning power.
The next step was to connect the information contained in the ledgers to Al Capone himself, and for once Wilson knew where to turn: Fred Ries, the cashier whom Nels Tessem had identified as a crucial link in the chain of Capone’s finances. But Ries had vanished. Wilson frittered away a week in search of his quarry, until he received a tip that the man in question could be found in St. Louis. Wilson and Tessem immediately boarded a train bound for that city. “We found out from the Post Office inspectors that a special-delivery letter was about to be delivered to him, so we simply tailed the messenger boy and I crossed Ries’s palm with a federal subpoena,” Wilson said of the arrest. The man from the IRS also found a letter from one Louis Lipschultz to Ries, advising the cashier to head further west, all the way to California; money for travel was enclosed. Lipschultz, Wilson knew, was Jack Guzik’s brother-in-law, so there was one more tie between Ries and the Capone gambling empire.
Ries was indignant as only the guilty can be, and more than that, he was afraid for his life. “Who are you?” he demanded of his unexpected visitors. “If you are government men show me your badges!” Wilson and Tessem had no badges to display. “I never squawked or squealed on Capone in my life,” Ries protested. “You have me all wrong. I never saw the Pinkert State Bank. I’ve never been to Cicero.” As Ries continued to proclaim his ignorance and innocence, Wilson realized that the cashier required a little more encouragement before he implicated the most feared racketeer in Chicago. Wilson was prepared to face just this problem. Through his network of informers, he had learned that Ries had an absolute horror of insects; on opening a burlap bag of cash, which happened to be infested with cockroaches, the cashier had recoiled in pathological dread at the sight of the little brown bugs scampering away. Wilson put this knowledge to immediate use by arranging to place Ries, now a material witness in the Capone case, in an obscure, rundown jail in Danville, Illinois. “In it was a little room on the third floor especially designed for Fred Ries,” Wilson recalled. “He took one look and gasped, ‘This ain’t fit for a dog!’ Cockroaches and other wildlife were virtually holding a convention on the premises.”
“If you don’t like it here,” Wilson told Ries, “just tell the jailer you are willing to play ball.” Wilson tossed a pack of cigarettes into the cell and departed, leaving the cashier to contend with his worst nightmare. The idea of torturing Ries with bugs appealed to Wilson; after two years of frustration, he enjoyed his power over the cashier. He told Tessem how Ries was probably going out of his mind right about then, and the two me
n “chuckled.” After enduring five days of torture in his filthy cell, Ries capitulated and summoned Wilson. “The bedbugs are eating me alive,” he wailed. “I haven’t eaten a decent meal or slept in five days. Take me out of here! . . . I’m nearly crazy. I’ll play ball—I’ll explain those cashier’s checks. But for God’s sake, get me away from these bugs!” Wilson toyed with his captive for a while, then freed Ries from Danville and spirited him into Chicago, where, before a grand jury convened in the middle of the night amid great secrecy, Ries explained how the Ship was rigged so that the house always won, how he converted the winnings, nearly $100,000 on a good night, into cashier’s checks, which he then turned over to Jack Guzik, how the cashiers skimmed salaries for themselves off the top of the house take, and finally, how he forwarded the largest cut of the profits to the “Big Fellow,” “Snorky,” “Scarface,” Public Enemy Number 1, call him whatever they liked, to Al Capone himself. Wilson was overjoyed; Ries’s testimony “sounded like the Gettysburg Address to me.” Largely on the strength of Ries’s testimony, the federal grand jury indicted Jack “Greasy Thumb” Guzik for tax evasion; the trial was set for November.
• • •
When Fred Ries testified before the grand jury, the federal government’s case against Al Capone suddenly began to come together. But the very next day, September 19, 1930, the case nearly fell apart when J. Edgar Hoover—the man who would later make a career out of boasting that he and his bureau had been responsible for bringing Al Capone to justice—refused to cooperate with George E. Q. Johnson in the hazardous business of prosecuting gangsters. Hoover begged off by claiming his bureau was understaffed and overworked, and in case those excuses failed to sound convincing, he also maintained that it was simply not the responsibility of the FBI to get Capone or any other racketeer. In a lengthy, combative memorandum to the assistant attorney general, Hoover complained:
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