With Jake Lingle’s execution, tax investigator Frank Wilson lost more than a potential informant—his chances of getting anyone else to talk died, too. If the mob could kill Lingle, no one in their orbit was safe.
“Every witness we needed was dumb as an oyster when it came to talking about Capone,” Wilson said. “They were a hundred times more afraid of being killed by Capone guns than they were of having to serve a prison term for perjury.”
Wilson reached out to Chicago reporters for assistance, to no avail. In St. Louis, he called on an old friend, John T. Rogers of the St. Louis Post-Dispatch. Like Lingle, Rogers worked both sides of the crime beat, with a knack for making friends with unsavory characters. Every Christmas, cards and gifts filled Rogers’s mailbox.
“The whores and hoodlums always remember me!” he’d say.
Rogers owed Wilson a favor for helping expose a corrupt judge for a Pulitzer Prize–winning story. Now Wilson badly needed to talk to E. J. O’Hare, still seeking to prove Capone’s taxable income by linking him to Hawthorne Kennel Club profits. Rogers knew O’Hare, head of that dog track, from covering the Jack Daniel’s distillery trial back in ’25, after “Fast Eddie” cheated George Remus. With his Post-Dispatch editor’s blessing, Rogers agreed to serve as intermediary between Wilson and O’Hare.
In June, Wilson returned to St. Louis for a meeting with Rogers and O’Hare. Fearful of getting “knocked off,” the glib lawyer agreed to speak only confidentially. Then O’Hare admitted he’d incorporated the dog track in 1927 with Capone, Jack Guzik, Frank Nitto, and Johnny Patton.
These names had appeared on stock certificates, but Capone and Nitto had theirs struck off, after word of the deal got out. Wilson reported back to Washington, certain Capone “received a big cut of the proceeds from the track.” But after scouring the operation’s books, he found no proof of “unreported income of the Hawthorne Kennel Club.” Once again, a dead end.
Maybe the lead hadn’t panned out, but its source certainly did. Despite fears of reprisal, O’Hare had no problem passing along secrets of the Outfit’s operations, soon becoming Wilson’s most trusted informant.
“I saw my undercover man, Eddie, infrequently,” Wilson wrote, “but I was in almost constant touch with John Rogers. . . . When there was a missing link in a puzzle, I slipped the word to John.” The St. Louis reporter would meet secretly with Wilson and say, “Eddie said here’s the answer. . . .”
Wilson considered O’Hare a naïve businessman in over his head who wanted out. “He didn’t then realize that he was in the gang for keeps,” Wilson wrote of O’Hare, “and could not drop out if he wanted to. . . . I thoroughly sympathized with Eddie as I fully realized the serious predicament into which he unconsciously had been enticed.”
More than anything else, O’Hare feared his son, Butch, might follow him into the gambling business. Butch had a wild streak his father hoped to tame with military school. O’Hare often told his daughters, “If we have a war, Butch will become an admiral; if not, I fear he will become nothing.” Wilson felt O’Hare’s concern over his son’s future had convinced him to turn on Capone.
But “Artful Eddie” was not the innocent he’d sold himself to be—O’Hare understood what he was getting into with the Outfit, and had no intention of getting out. He also knew the feds had enough evidence from the dog track to send him away on his own income tax rap. Maybe Wilson used that as leverage; maybe he didn’t have to.
O’Hare figured to stay out of jail by cooperating. But he also had another agenda, one to which Wilson seemed oblivious—the federal drive to get Capone had brought unwanted attention to the entire Outfit. Raids, arrests, indictments, and screaming headlines were cutting into everybody’s bottom line—including O’Hare’s.
Like Chicago’s legitimate businessmen—and their private police force, the Secret Six—O’Hare knew Capone and his notoriety were bad for business. That made O’Hare eager to give the feds the prize they sought—the Big Fellow—in hopes they might lay off everybody else. He would have to act fast, with the tax men swinging through the Outfit like a wrecking ball.
Next up was Jack Guzik. Though filing tax returns since 1927, Guzik declared an income well below his actual take. The Intelligence Unit, digging through the records at Pinkert State Bank, uncovered tens of thousands of dollars in cashier’s checks purchased by one “J. C. Dunbar.”
Guzik endorsed many of these checks. To prove this represented taxable income, the agents had to identify its source, finding Dunbar and getting him to testify. But so far, they had no leads. “Dunbar” was clearly an alias. But for whom?
Probably with O’Hare’s help, Wilson identified “Dunbar” as Fred Ries, cashier for several Capone-controlled Cicero gambling joints. A handwriting sample, compared with the cashier’s checks, confirmed Ries filled them out. But Guzik and his brother-in-law, Louis Lipschultz, had spirited the cashier away for safekeeping. Then, in late August, Wilson learned from a postal inspector that Lipschultz sent a certified letter to Ries, with money and instructions to flee to California. Wilson and Nels Tessem followed the letter to St. Louis. As soon as Ries got his mail, the tax men served him a subpoena.
Bald, with thick eyebrows on a long, sour face, Ries telegraphed his hatred of cops with a beady-eyed glare.
“When we questioned him regarding his employment in the gambling establishments in Cicero,” Wilson recalled, “he cleverly denied any knowledge of the facts which could be used by the government as evidence against Al Capone, Jack Guzik or other principals in that organization.”
Wilson and Tessem, wary of Ries again slipping their grip, held the cashier as a material witness. They returned him to Illinois and locked him up at the Danville county jail under a $15,000 bond, keeping his location a secret so the Outfit couldn’t bail him out to save or kill him.
Eventually Ries opened up, outlining in detail his work at a Cicero casino known variously as the Hawthorne Smoke Shop and the Ship—each Dunbar check represented a day’s gambling profits, over and above the $10,000 “bank” kept on hand. Jack Guzik had instructed Ries to give these profits to Bobby Barton, Guzik’s driver, collector, and all-around stooge.
Simply handing over bags of cash might risk theft, Ries decided, and instead bought cashier’s checks under various assumed names. Cash, of course, would have left no trace, whereas checks left a paper trail leading right back to Guzik, arrested on income tax evasion on September 30.
Federal agents shuffled Ries from Milwaukee to Highland Park, working to keep him alive till the trial. While Ries’s testimony heavily implicated Guzik, Capone remained untouched. Ries said he’d seen Al around the casino a few times; he’d heard that Capone, his brother Ralph, and Frank Nitto made up the syndicate running the place. But such hearsay was inadmissible, and—unlike Guzik—the others never dealt directly with Ries, at least as far as he was willing to admit.
One night in September, Frank Wilson took stock of how he’d spent his summer. Holed up in his cramped, claustrophobic office, he laid out all the evidence he and his men gathered in their hunt for Capone.
“By midnight I had decided that it amounted to just about nothing,” Wilson recalled, “and was ready to go home.”
Wearily, he gathered up the papers to put them away, but the file cabinet was locked, and he couldn’t find a key. Tired, impatient, cranky, he found an unlocked cabinet in a nearby storeroom and opened it, looking to leave his papers and sort it all out tomorrow.
“As I was doing this I uncovered a ledger,” Wilson wrote. “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.”
He flipped through the dusty book, taking in the headings. On one page, he saw payments to “Town,” “Ralph,” “Pete,” “Frank,” “J & A,” “Lew,” and “D.” His breathing grew faster—the ledger appeared to document the profits of a major gambling house, nearly $600,000 from 1924 to 1926. But the raid took place in the suburbs, an unlikely site for a casino that size.
Then he spotted a simple notation: “Frank paid $17,500 for Al.” Wilson felt certain that “Al” was Al Capone.
“As soon as I looked inside that book,” Wilson said, “I knew we had our case.”
Proving it would be another matter. The ledger, dating to the McSwiggin murder crackdown, had been misfiled. The book bore no identifying marks, not where it came from nor what it represented. Nowhere did the name “Capone” appear. To use it in court, Wilson would have to trace the ledger to its source, and the person or persons who’d filled it out.
Handwriting from three individuals was apparent. During their investigation, the Intelligence Unit gathered script samples from several members of the Outfit, which they compared to the ledger, searching for matches. They found two—both Hawthorne Smoke Shop employees. But the bulk of the entries, apparently made by the casino’s bookkeeper, remained unidentified.
Wilson turned to E. J. O’Hare, who said the Smoke Shop books were kept by a meek little man named Leslie A. Shumway. The two had a history—Shumway and O’Hare had been indicted back in 1929 for allegedly conspiring to give perjured testimony about local dog tracks. The agent already had a handwriting sample from Shumway not matching any ledger entries.
But Shumway’s script was in pencil, while the book had been filled out in ink—perhaps when Shumway used a pen, his handwriting differed. Wilson got hold of something Shumway wrote in ink, and compared it to the ledger—a perfect match.
He set out to find the bookkeeper.
On October 31, the Intelligence Unit traced Frank Nitto to an apartment in Berwyn. Nitto had grown a mustache, not enough of a Halloween disguise to keep Pat Roche from making him and putting on the cuffs. The arrest brought Nitto into a limelight he’d always worked to avoid. A reporter in court called him “a velvet glove over an iron hand,” with “no suggestion of the grim name—the Enforcer—he won in the Capone organization.”
If the government had understood Nitto’s importance in the Outfit—his relative anonymity having served him well—George E. Q. Johnson might have been less receptive to a plea bargain. The prosecutor, overworked and understaffed, doubted the strength of his case; he remained focused on nailing his bigger and flashier target—Capone. Ultimately he agreed to an eighteen-month sentence, with the possibility of parole in as little as a year, if Nitto met certain conditions.
This included the gangster promising to turn his back on both Chicago and the rackets, to start a “useful life,” though how that might be enforced remained unclear. Nitto agreed, taking a guilty plea in late December. By not fighting, he had won the shortest prison sentence of any Capone gangster convicted of tax evasion. He announced his victory to the press.
“I have never committed a crime of moral turpitude,” he lied. “I have never done anything that is condemned by society as morally wrong. I didn’t pay income taxes because the laws were not clear. But if society demands a penalty from me, I am glad to pay it.”
Less than three weeks after Nitto’s arrest, Jack Guzik, too, was found guilty of income tax evasion. Apparently unmoved by the verdict, “Greasy Thumb” got out on bond to await appeal. But the speed of his conviction—under two months since his arrest—sent tremors through the underworld.
“When the witnesses we needed saw those leaders of the Capone organization getting knocked off in rapid-fire order,” Frank Wilson said, “it began to dawn upon them that the United States Government meant business and that Capone, perhaps, after all was up against something he couldn’t beat this time. He’d failed to fix it for the fellows closest to him.”
But to get anyone else to talk, the tax men had to protect star witness Fred Ries. Federal agents bounced him from hotel to hotel, under constant armed guard. The Secret Six paid him $10 a day, but Ries grew stir-crazy, his mood foul. Life on the run didn’t agree with him. The feds feared they might lose his cooperation before Capone went to trial—didn’t Ries understand if he walked out, he’d be dead?
That spring, Wilson visited Robert Isham Randolph to ask if the Secret Six might help get Ries out of the country for a while, and soon Ries was booked on a round-trip voyage to Montevideo, Uruguay.
That way the Six would keep Ries safe and happy until they needed him again—an all-expenses paid vacation, and early forerunner of the Federal Witness Protection Program.
As Frank Wilson chased down every lead, Capone kept pressing for a settlement.
His attorney, Lawrence Mattingly, negotiated with the tax men throughout the spring and summer of 1930. On September 20, Mattingly visited Revenue Agent Louis H. Wilson (no relation to Frank) to seal the deal.
“Mr. Mattingly . . . said it was very difficult to get the facts and figures together,” Louis Wilson recalled. “He took some papers out of his inside coat pocket and in turning them over he would look out the window and talk very slowly, deliberately. Finally he threw the papers over to me. . . . ‘This is the best we can do. Mr. Capone is willing to pay the tax on these figures.’ ”
Mattingly hemmed and hawed, indicating he knew the risk: He was handing over evidence that could be used against his client in court. But this still seemed Capone’s best bet to stay out of prison. The letter roughly sketched the gangster’s financial situation and business history: before 1925, when Torrio turned over Outfit control, Capone had earned no more than $75 a week, not enough to owe any income tax. Since then, as a full financial partner, he’d received one-sixth of the gang’s total profits.
Mattingly said Capone’s “taxable income for the years 1925 and 1926 might fairly be fixed at not to exceed $26,000 and $40,000 respectively, and for the years 1928 and 1929 not to exceed $100,000 per year.”
The government knew this assessment was ridiculous. Capone’s “sources of income are known to us,” one Internal Revenue official said. “We believe he could cash in for $20,000,000. But where has he hidden it? Our men get so far, then they find themselves in blind alleys. . . . We get leads that look good, but don’t materialize.”
Now they had a solid starting point. To convict Capone of a felony, they had to show he knew about his tax debt and willfully chose not to pay it by hiding money from the government. The Mattingly letter proved the first point—the gangster could no longer claim ignorance; his lawyer had admitted, in writing, Capone received taxable income.
And if the feds could establish Capone earned more money than the sums in the letter—that he’d lied—they’d have him on the second point. Just like Jack Guzik, Capone had badly miscalculated. By trying to pay his taxes, he’d given the feds a foundation upon which to build their case.
Yet Capone still seemed convinced he could buy his way out. In November, Commissioner of Internal Revenue David Burnet had a visit from Chicago lawyer Harry Curtis, son of the vice president of the United States. If Burnet’s bureau would drop any and all investigations of Chicago gangsters, the racketeers would pay “at least $3,500,000” to wipe away their tax debts.
Burnet didn’t accept the offer, nor did he when Lawrence Mattingly visited some time later with what some might call a settlement, and others a bribe.
“I have been informed,” Burnet wrote, “that approaches have been made from time to time to various Federal officials in Chicago in the interest of these gangsters with a view to having their cases settled in other than a regular manner.”
In October, Pat Roche decided to take his sixteen-man squad and go on the offensive—if the Capone Outfit felt the heat, maybe they’d turn over the Lingle shooter, most likely a member of a rival gang. Wielding sledge, ax, and crowbar, Roche and his wrecking crew raided gambling joints, bordellos, and speaks in Chicago and the suburbs, arresting one and all, capturing ledgers and other evidence.
Roche’s boss, State’s Attorney Rathbun, exhumed dormant charges against known gangsters and rounded up parole violators. Sky-high bail, courtesy of Judge John H. Lyle, kept hoods behind bars till their court date. This put certain key Outfit players temporarily out of commission.
Judge Lyle was launching his own attack on Capone. Pompous, self-righteous, Lyle hated gangsters almost as much as he loved publicity. At Roche’s urging, the judge cooked up a scheme to use an old vagrancy law—defining vagrants as anyone not “lawfully provid[ing] for themselves,” and/or who frequented “houses of ill fame, gaming houses, or tippling shops.”
“I had within me a warm, tingling sense of satisfaction as I reviewed the possibilities in the law in the case of . . . Al Capone,” Lyle wrote. “If Capone, arrested on a vagrancy warrant, declined to answer questions he would automatically fail to disprove the allegations. I could find him guilty of vagrancy and fine him $200.”
If Capone tried to pay a fine, he’d have to tell where the money came from, which if he told the truth meant criminal charges, and if he lied meant perjury. Failing to pay the fine could send him to the workhouse.
What sounded good in theory flopped in practice. A fleet of squad cars went out in an effort to round up names on the “Public Enemies” list, serving up but a single warrant for a “vagabond” already in custody on an unrelated charge. In the coming weeks, names from that list did appear before the judge—including Ralph Capone and the Guzik brothers—who received a severe scolding from the bench before getting out on bond.
Capone himself avoided Judge Lyle’s roust by staying outside the city limits. In late September, a Chicago Crime Commission investigator reported Capone and six of his bodyguards had attended a high school football game in Cicero. Two police officers paid the gangsters no heed, despite whispers of “There’s Al Capone” rippling through the stands.
Escaping both winter cold and official heat, Capone hid out in Miami. Lyle’s ire grew—he would send Capone to the chair for the murders of Colosimo and Joe Howard, should he ever get the “reptile” before his bench. Lyle had never been much for respecting civil liberties, routinely setting obscenely high bail.
The Illinois Supreme Court, finding Lyle’s use of the vagrancy statute unconstitutional, said, “It sought to punish an individual for what he was reputed to be, regardless of what he actually did.” Still, Capone kept getting hit on all sides—Prohibition agents hitting his speaks and breweries, Roche raiding brothels and gambling joints, and the Intelligence Unit building their tax case, right down to an inventory of the Big Fellow’s silk underwear.
In late October, as Tribune reporter John Boettiger reported, a “wealthy businessman” approached Roche and his boss Rathbun with a message: Al Capone wanted a meet. This intermediary from the world of business may well have been the ubiquitous E. J. O’Hare; Boettiger took pains to conceal the man’s identity. Neither Roche nor Rathbun was interested. Pressed for a meeting, the state’s attorney finally agreed to send a representative to hear Capone out.
The businessman led the representative to a suburban home “surrounded by old elms and beautifully landscaped”—O’Hare was dividing his time between Chicago and St. Louis—and ushered him into a drawing room, where Capone awaited. They shook hands and sat by a fireplace, the businessman leaving them to it.
“Here’s what I want to tell you,” Capone said, “and I won’t be long about it. I can’t stand the gaff of these raids and pinches. If it’s going to keep up, I’ll have to pack up and get out of Chicago.”
The representative told Capone there would be no letup, that things remained hot since the Lingle murder.
Capone said, “Well, I didn’t kill Jake Lingle, did I?”
“We don’t know who killed him.”
“Why didn’t you ask me? Maybe I can find out for you.”
“Maybe you can.”
Capone shifted in the easy chair’s deep cushions. “I know none of my fellows did it. I liked Lingle, and certainly I didn’t have any reason to kill him.”
He offered a possible motive. “I have heard that Lingle was involved in the attempts of the North Side gangsters to open a dog track in the [Chicago] Stadium . . . that Lingle was asked by the Zuta crowd to see to it that the police and the state’s attorney would not bother them, and that Lingle was paid $30,000.”
When “the Zuta crowd” got shut down in their effort, Capone said, “they blamed Jake Lingle, and I think that’s why he was pushed.”
Pushed—underworld lingo for “killed.”
“But I don’t know who they used to do the job,” Capone insisted. “It must have been some fellow from out of town. I’ll try to find out.”
The representative said Capone could do that if he wanted to, but it wouldn’t help him with Roche.
Capone said nothing for a while, then claimed he’d been approached by Bugs Moran and the North Side gang to make peace.
“[Moran] wants to join up with me,” Capone said, “and maybe I can trade off with him for a bit of information on the Lingle murder. I might take him in, if he will tell who killed Jake.”
Capone would succeed in ending the North vs. South Side war by buying Moran out, but Aiello wouldn’t go so quietly.
The ganglord said when he had the name of Lingle’s killer, he’d send it through the businessman connection who was again on hand to drive the representative out of this nice neighborhood from which the Big Fellow would no doubt soon depart, Judge Lyle’s vagrancy charge still looming.
The representative reported back to Rathbun and Roche, who had their doubts about Capone’s offer, with nothing to do but wait for developments.
And continue raiding.
A few days later, another of Capone’s problems walked briskly out of an apartment building on North Kolmar Avenue, apparently on his way to grab a train out of town. Before he got to the waiting cab at the curb, machine-gun fire pelted Joe Aiello from a second-story perch across the way.
The mortally wounded Aiello stumbled into a courtyard, out of the line of fire, only he wasn’t, really: another tommy gun above showered down more burning metal projectiles. Fifty-nine bullets, a pound’s worth, had solved another Capone problem.
The hit, recalling the Hymie Weiss job engineered by Frank Nitto, took careful planning. Aiello, hiding out in a business associate’s apartment, had not shown his face for two weeks. Almost that long, in a pair of machine-gun nests—on either side of the street—killers had been on round-the-clock watch. The hit suggested Nitto’s careful planning—even the path of Aiello’s flight had been predicted.
Five men quickly left their perches—getaway cars, and the night, were waiting.