by Damon Runyon
The letter was read to Judge Wilkerson, but not to the jury, which was sent from the room while the lawyers argued. It was produced by Samuel Clawson, of Washington, one of the attorneys representing the government, as soon as court opened today.
The letter was written by Mattingly when he was endeavoring to adjust Al Capone’s income tax troubles with the government, and traced Capone’s financial rise from a modest $75 per week, prior to 1926, to an income of $26,000 in that year, $40,000 in 1927, “not to exceed $100,000” in 1928, and “not to exceed $100,000” in 1929.
The source of the income was mentioned as an organization, the nature of which was not described, in which a group of employees had a third interest, and Capone and three associates a fourth.
Mattingly wrote:
“Notwithstanding that two of the taxpayer’s [Capone’s] associates insist that his income never exceeded $50,000 in any one year, I am of the opinion his taxable income for the years 1926 and 1927 might be fairly fixed at not to exceed $26,000 and $40,000 respectively, and for the years 1928 and 1929, not to exceed $100,000.”
Capone listened to the letter with keen interest. He seemed in great humor, although it was what you might call a tough day for his side. The letter went on:
“The so-called bodyguards with which he [Capone] is reputed to surround himself, were not as a general rule his personal employees, but were employees of the organization who participated in its profits.”
Referring to Capone’s assets, the letter said:
“The furniture in the home occupied by the taxpayer while he was in Florida was acquired at a cost not to exceed $20,000. The house and grounds have been thoroughly appraised, and the appraisal has been submitted to you. There is a mortgage against the house and grounds of $30,000. His indebtedness to his associates has rarely ever been less than $75,000 since 1927. It frequently has been much more.”
The letter was produced by the government attorneys on the appearance of George E. Slentz, of Washington, D.C., first witness of the day. Slentz is chief of the power-of-attorney section of the Bureau of Internal Revenue, and Attorney Clawson wanted him to identify the letter written by Mattingly.
Helen Alexander, vault clerk at a state bank in Cicero, identified a contract for a vault signed in 1927 by Al Capone and Louis De Cava. She identified Capone’s signature and pointed him out in the court room, but she did not recall seeing Capone at the bank in connection with her duties.
Louis H. Wilson, connected with the Internal Revenue Collector’s office here, testified to a conference with Mattingly, who said Capone owed income tax, and was willing to pay.
There was another conference at which Capone was present in person, and also C. W. Herrick, Internal Revenue agent. Everything said at the conference was duly set down by a stenographer.
Judging from the transcript of that conference, read in court today, Capone’s chief answer to questions about his income was: “I would rather have my lawyer answer that.”
He denied having anything to do with a dog track, never owned a race horse and never had a bank account.
After Capone left the conference Mattingly told Wilson he would get some facts together as best he could and make a return. He recommended, Wilson said, that the government get busy at once, as Capone had some money at the moment, and would pay up.
But apparently Mattingly’s task was a little difficult. He reported he couldn’t get definite records on Al Capone’s income. Finally Mattingly produced the letter that caused the excitement today.
At the rate the trial is traveling now, it will take several weeks to conclude it. The defense attorneys are contesting every inch of legal ground. Al is getting a good run for his money, anyway. He came and went today mid the usual excitement outside the court house, but the crowds do not seem able to pick the hole he bobs out of with any degree of success.
Chicago, October 9, 1931
The soft murmur of the blue breakers caressing old Miami shore sort o’ sneaked into Judge Wilkerson’s court room this afternoon, between shrill snorts of the Chicago traffic coppers’ whistles outside, as witnesses from the sunny Southland connected Al Capone up with $125,500 transmitted from Chicago to Miami by wire.
Having shown to the jury in the Federal Court where all those potatoes went, your Uncle Sam was going about the business of trying to prove whence they came when Judge Wilkerson adjourned to a half day session tomorrow.
The last witness of the day, one John Fotre, a sharp-featured citizen, wearing a slightly startled expression, who is manager of the Western Union branch office in the Lexington Hotel here, was identifying a money order showing some of the money went to Capone from Sam Gusick, when Wilkerson called a halt.
The Lexington Hotel is sometimes spoken of as “the Fort,” and is said to be the citadel of the Capone forces. Sam Gusick is reputed to be one of Al Capone’s business managers. Fotre said he couldn’t say if it was Sam Gusick in person who sent the dough per the money order in question, because he didn’t know him.
Much of the money was traced to the purchase and improvement of the celebrated winter seat of the Hidalgo of the Hoods on Palm Island, in Biscayne Bay, between Miami proper and Miami Beach.
It was traced through Parker Henderson, Jr., whose testimony indicated he was in Capone’s confidence to an amazing degree. He was manager of the Ponce de Leon Hotel in Miami.
It was there Capone stopped when he first went to Florida in 1928, at which time, and later, according to the testimony today, the good burghers of Miami were so perturbed by his presence they held meetings.
How Henderson came to arrive on such terms with Capone did not appear, but it was Henderson who negotiated the purchase of the home, and who handled large sums of money for Capone in improving the place.
Henderson testified to signing numerous Western Union money transfers with the name of Al Costa, turning the money over to Nick Serritela, who worked for Capone, or to Capone himself.
They were generally for sums of $1,000 or $1,500. Other transfers were in the names of Peterson and Serritela. There were over twenty different transfers, amounting in all to $45,000, of which about $15,000 was transmitted to Henderson personally to be spent in improving the Palm Island property.
The rest was for Capone.
These transfers refer only to the telegraph office in Miami. Later witnesses added $30,300 as having gone through the Western Union branch in Miami Beach.
Capone listened with great interest as the witness testified.
Henderson narrated the detail of the purchase of the Palm Island property, which was made in his name. Later he transferred the property to Mrs. Mary Capone, Al’s wife.
Henderson came to Chicago, May, 1928, and saw Capone and got money to pay off the men working on the improvements.
He said Al invited him to stay at the Metropole Hotel, then the Capone G.H.Q., and while there he saw such celebrities as Ralph Capone, Jack Gusick, Charley Fuschetti, Jack McGurn, a party called “Mops” and others.
This was after Capone was living on Palm Island. The money came in batches of from anywhere from $600 to $5,000. Some of the transfers were to Albert Capone, a brother, but the witnesses said Alphonse Capone signed for many of them.
Vernon Hawthorn, a Miami attorney, told of a meeting at which Capone and a number of officials of Miami and Dade County, Florida, were present. It was in 1928; Capone had just appeared in Florida and the good citizens of Dade wanted to find out what the celebrated visitor intended in their startled midst. Al said he was there to rest.
The witness said Capone told him he was in the cleaning and pressing business in Chicago. Finally, the witness said, Al admitted his business was gambling and that he was interested in a Cicero dog track. Furthermore, that he had bought a home in Miami.
The question was asked him at the meeting, “What do you do?” and according to the transcript read this morning, Capone said, “I am a gambler. I bet on horses.”
“Are you also a bootlegger?�
�
“No, I never was a bootlegger in my life.”
He said the Palm Island home was in his wife’s name. He denied he had received any sums of money from Charles Fuschetti under the name of Costa.
Morrisey Smith, day clerk and cashier at the Metropole Hotel, Chicago, where Capone used to have his headquarters in a suite of five rooms, was examined by Attorney Grossman, who asked, “Who paid for this suite of five rooms?”
“Mr. Capone.”
He did not know how much. Grossman handed him the cash sheets of the hotel and Smith picked out a payment of $1,500 for rooms in 1927. No period of time was stated. He was registered as Mr. Ross. The witness testified to numerous other payments, always in cash.
Counsel for the defense could not see what this was all about and spoke to the Court about it. The judge replied, “I presume it’s to show he had money. If you pay out something you must have something coming in.”
A party for Al’s friends who came to the Dempsey-Tunney fight was listed. It cost $1,633. Al gave “small gratuities” to the hotel help now and then, Smith’s idea of a “small” gratuity was something surprising. He explained, “He would give five dollars or something like that.” Fred S. Avery was manager of the Hotel Metropole when Capone was there. He went to see Capone on one occasion and asked him about a little money and Capone personally paid him the next day. His bills ran around $1,200 to $1,500 a week. Avery said the Dempsey-Tunney entertainment ran two nights.
October 10, 1931
The life of Riley that Al Capone is supposed to live on Palm Island was reflected in testimony brought out by your Uncle Sam before Judge Wilkerson and the jury in the Federal Court this morning.
The butcher, the baker, and the landscape maker from Miami were among the witnesses, not to mention the real estate man, the dock builder, the telephone agent, and the chap who supplied the drapes for 93 Palm Island.
It came out that quite a batch of meat was gnawed up in Al’s home in the course of several seasons—a matter of $6,500 worth. Also plenty of bread, and cake, and macaroni was consumed.
The telephoning was terrific. Someone must have been on Al’s phone almost constantly. In the course of four Florida seasons there was gabbing, mainly at long distance, to the tune of over $8,000 not counting wrong numbers, but your Uncle Sam contented himself with standing on $4,097.05 in two years in his effort to prove Al must have had plenty of income because he spent plenty.
Your Uncle Sam argues that if a man spends a raft of money he must necessarily have a raft of money to spend, a theory that sounds logical enough unless your Uncle Sam is including horse players.
We had a slight diversion after Wilkerson adjourned court until Monday, with another warning to the jurors not to permit anyone to communicate with them.
The diversion consisted of the seizing of the mysterious Phillip D’Andrea, Capone’s bodyguard who has been sitting behind Al since this trial started, by a United States deputy marshal, and the alleged discovery on his person of a .38-caliber John Roscoe, or pistol.
D’Andrea was ordered by Judge Wilkerson to stand trial for carrying a revolver in the court room, and was taken to jail.
D’Andrea is a short, stout bespectacled individual, who dresses well, and looks like a prosperous professional man.
He has been described as a friend of Capone’s and Al seemed much perturbed by his seizure. He waited around while D’Andrea was in the marshal’s office, with Capone’s attorneys, Ahern and Fink, trying to get him out of his trouble.
Al said he didn’t know D’Andrea carried a gun, and didn’t believe he did.
The twelve men, most of them small towners, and of occupations that would argue a modest scale of living, listened intently to testimony that indicated Al’s comparatively elaborate existence, although the reputed magnificence of Al’s Palm Island estate dwindled somewhat in the imagination of the urban listeners when expenditures for improvements were related.
These expenditures were not unusually heavy. In fact, Al was depicted in some of the testimony as a householder with a repugnance for being “gypped” in small details.
This morning Capone had on fresh scenery in the form of a dark-colored double-breasted suit of greenish hue, white linen, a green tie and black shoes. He had gone back to his famous white hat.
The attendance at the session today was positively disappointing. Fewer than a dozen persons sat in the seats assigned to spectators when court opened. Can it be that Chicago is losing interest in Al Capone?
William Froelich, of government counsel, read a list of money transfers to the jury showing the transfer of a total of $77,500 to Capone in Florida.
W. C. Harris, office manager of the Southern Bell Telephone Company at Miami, was the first witness. He identified a contract for phone service between the company and Al Capone at 93 Palm Island.
Harris identified company bills for service to the Capone residence amounting to $955.55 in 1928 and $3,141.50 in 1929, a total of $4,097.05, mostly for long distance calls.
Richard Plummer, of Miami, testified to supplying the draperies for Capone’s home in 1928 at a cost of $1,000. He said Capone paid him in cash.
George F. Geizer, night clerk at Capone’s old G.H.Q., the Metropole Hotel, Chicago, testified to receiving payments in cash to the amount of $2,088.25 from Capone for hotel bills on August 4, 1921.
Louis Karlinch, of Miami, testified he sold meat to Capone to the amount of $6,500 over a period of three years, nearly always getting his money in cash. The bills amounted to around $200 a week. Albert Fink, attorney for Capone, asked, “Do you think Al ate all the meat himself?”
“No. One man couldn’t eat it all.”
H. F. Ryder, of Miami, built a dock for Capone on Palm Island and worked around the place generally. Ryder, a small, dark-haired fellow, was inclined to be quite chatty about things. He spoke of seeing Capone with a roll of bills that would “choke an ox.”
Fink wanted to know how big an ox. He also asked the witness if it couldn’t have been a “Western roll,” which the attorney explained is a roll of $1 bills with a big bill on top. Ryder said it might have been.
Ryder testified he still has $125 coming to him from Capone for work, but said he wasn’t worried about that. He said he expected to get it when he ran into Capone. In fact, Ryder had a boost for Al.
When Ahern asked his opinion of Capone he answered, “A mighty fine man.”
Curt Koenitzer, a chunky, red-faced builder and contractor in Miami, testified to building a garage and bathhouse on the Palm Island property. He was paid by one of Capone’s brothers.
A swarthy, dapper chap with black hair and a black moustache was expected to turn out at least a duke, but is Al Capone’s baker in Miami. His name is Milton Goldstron.
He delivered bakery supplies to Capone’s house in 1929, 1930 and 1931 to a total of $1,130 and was paid by Frank Newton, caretaker of the Capone premises.
F. A. Whitehead, hardware merchant, testified to the building of iron gates for the Capone estate.
H. J. Etheritz, who is connected with Burdine’s department store in Miami, testified to purchases by Capone of drapes amounting to $800.
Joseph A. Brower, landscape gardener, testified to doing some work on the Capone estate. He was paid $2,100 in checks signed by Jack Gusick. He said Capone described Gusick as his financial secretary.
Frank Gallatt, of Miami, said he was hired in 1929 to put up some buildings on Palm Island. Capone himself did the hiring, he said. Also Capone had paid him personally between $10,000 and $11,000 in cash.
October 12, 1931
A gleaming diamond belt buckle, one of a batch of thirty purchased by Al Capone at $277 apiece, or $8,310 for the lot, was flashed before the astonished eyes of the jury today.
Al bought these buckles for his friends. One of the buckles is said to have been worn by Alfred (Jake) Lingle, Chicago underworld reporter, who was assassinated in June of last year, for which crime Leo V. Brothers is now doing a s
tretch in the penitentiary.
The jurors peered at the buckle with interest. Each buckle is said to have been engraved with the initials of the recipient, but markings on the buckle displayed today were not revealed, a fact that is doubtless causing someone to heave big sighs of relief.
Judge Wilkerson seemed to think the exhibition of the buckle to the jurors might be with the idea of giving them a line on the quality of the gewgaw, and he remarked, “The quality of the goods makes no difference. It is immaterial whether the defendant got value received or not as long as he spent the money.”
In other words, Al may have been “gypped,” but that doesn’t enter into the case.
Besides diamond buckles, Al passed suits of custom-made clothes around among his friends at $135 per copy, though not so many of these. He also had shirts made at from $22 to 30 apiece, with the monograms $1 each. His ties cost $4 each and handkerchiefs $2.75 apiece. He bought them by the “bunch.”
We got right down to Al’s skin today.
We found out Al wears silk union-suits at $12 a smash, and athletic “shorts” at $5 a clip. A Mr. J. Banken, of Marshall Field’s and who evidently has an abiding artistic interest in his business, told us about that.
Albert Fink, Capone’s attorney, who is a fellow you wouldn’t think gave much thought to underwear, or other gents furnishings, perked up and interrogated Banken about those union-suits, especially after Banken had described them as a fine silk, “like a lady’s glove.” Fink leaning forward asked, “Warm?”
“No, not warm. Just a nice suit of underwear.”
“How much are they now?”
“Ten dollars.”
“Aha,” said the attorney, reflectively, “they’ve gone down?”
“Yes, two dollars,” replied Banken, and it looked for a moment as if he had a sale.
The testimony revealed Al as rather a busy and shrewd shopper. While he is usually pictured as a ruthless gang chieftain, he was today presented as a domesticated sort of a chap going around buying furniture, and silverware, and rugs, and knickknacks of one kind and another for his household.
