Evening Star Newspaper, July 26, 1931, Page 72

N —— -~ e o ———— " ¥HT SUNDAY STAR, HOW UNCLE SAM’S CRACK SLEUTI W hen “Public Enemy No. 1” finally went to court. Scarface Al Capone photographed as he entered Federal Court in Chicago to sign $50,000 bond for his appearance to answer an income tax indictment. HEN the writers of detective fic- tion tales finally learn just how six departments of the United States Government put Scar- face Al Capone, “Public Enemy No. 1,” on the legal spot, there will be at hand material for at least a dozen new thrillers. Getting the goods on Al Capone was perhaps the greatest piece of detective work in American criminal history. It was executed in the field by Frank Wilson, ace of the Internal Revenue Intelligence Unit, and a corps of experienced income tax agents whose operations reached from California to New Orleans and Florida, and from Chicago to Pittsburgh and New York to Sioux Falls, S. Dak. Supervising the entire project of building up Capone’s elusive “income” was the job of El- mer L. Irey, chief of the Internal Revenue In- telligence Unit. He made 34 round trips to Chicago on the assignment between August, 1929, and June, 1931. The Federal Government has long had a policy of withholding the names of special agents who work on such cases, principally on the grounds that every one contributed to the achievement and that no man merits special acclaim. So the many heroes of this detective story must go unsung. They have been heart- ened, however, by lavish praise from their superiors. So vast and complex was Capone's system of ruthless racketeering, so far-flung his various enterprises, that the complete picture probably never will be pieced together. More than a hundred Government operatives had a part in it, from Florida to California, from the City of Washington to South Dakota. And not even the smallest part of the job was a venture for an amateur sleuth. For more than six months in 1929 prelim- inary work was carried on in Washington as an absolutely “air-tight” job. Not more than eight men knew of the project during this phase of its development. It is traditional that when Uncle Sam really goes after his man, he gets him. But even Uncle Sam seldom has had to deal with a customer so powerful, fearless and crafty as the Scarface. g L'S first rule of business was, “When in doubt, shoot.” And his second rule was never to keep money in a bank. His terms, whether in beer, alcohol, races, protection or sheer middle-of-the-road piracy, were ‘cash now.” On the payoff, it was cash off the inside of the pocket roll; on the collection, cash was added to the outside. When gambling debts were settled, it was in cash. When subordi- nate operators of beer joints paid tribute to Capone, it was rendered in fives, tens or twen- ties. Dollar bills were too bulky to handle conveniently. And larger bills were likely to be marked harbingers of the “Feds’—Govern- ment operatives. One pioneer Chicago rack- eteer, “Umbrella Mike” O'Brien, set the fashion years ago by collecting all his graft in ecash, dropped into his closed umbrella as he chatted with his “pay-off” men. ‘The record does not yet reveal just where the idea to close in on Capone with the tax laws originated. But the roots of the job run to high places in Washington, and it is known that a detailed master plan, co-ordinating the activities of half a dozen agencies of the Gov- ernment had been worked out in Washington for months before a single man ever went into the field to execute it. This plan was modeled roughly after a gen- eral's scheme for a major offensive in war. Instead of assigning artillery, air bombers, in- fantry and other militar\y units, however, it assigned Internal Revenue investigators, Secret Service operatives, prohibition squads and im- migration inspectors. Yet every sector of the gparation was spnchronized on the master plan. Befcre the aetwsl field work began the Bureau of Investigation in the Department of Justice examined every criminal record in its files covering a Chicago person. There were more than 3,000 of these records alone. Each was studied for a possible connection, direct or remote, with Capone’s operations. At the same time, experts in the Wicker- sham Commission were asked by Assistant At- torney General G. Aaron Youngquist for a special report on Chicago gangster activities. The commission had devoted long study to racketeering organization and methods and had at hand voluminous case material from a dozen or more cities. These two preliminary inquiries were com- pleted as long ago as April, 1930, indicating that the whole project had been conceived and set in motion in the Fall of 1929. EANWHILE, four special accountants in the Bureau of Internal Revenue had been detached from their regular work and assigned to searching the card indexes and returns for records of Capone’'s personal reports and those of his known confederates. After six weeks this staff reported to Commissioner of Internal Revenue David Burnet that at least since 1924 the Scarfare had made no income tax return. Obviously, if all the stories about Capone’s fabulous operations were true, here was an open and shut case. The mére failure to report on a taxable income is a felony. But here, too, was a difficulty which the layman might easily overlook. Before the Government can convict for failure to file an income tax return, it must be prepared to show, with evidence and testi- mony, that the defendant actually had a taxable income. This is the task that called for detective work of the highest order. Accordingly, Frank Wilson, veteran intelli- gence operative of the Bureau of Internal Revenue, was sent to Chicago from Washing- ton, early in 1930, to organize a plan to trace down Capone’s income since 1924, Then it was that for the first time positive word went out from Washington that the Federal Gov- ernment was out to close down hard on the super-racketeer—so far, at least, as lay within the federal province. Technically, Washington can have no legal interest in such manifestations of racketeering as first degree murder. That is a matter for prosecution under the State laws. But if an overlord of the underworld fails to pay income tax on his “earnings,” then that is a matter which only the Federal Government can prosecute. UT how build up a tax case against a man who does not keep money in the bank, at least not under his own name? Face Wilson's problem in your own terms and you have the world’s greatest substitute for the evening's crossword puzzle. And bear in mind, as you devise your plans, that the job is to corner a man who is known even by school children to dominate the most elaborate and far-flung organization for systematic lawlessless in modern times. He is ruthless, surrounded day and night by two- gun bodyguards. He has all the power of great wealth, all the influence of a politician who can swing a decisive bloc of votes in a State or city election. He has, moreover, a reputation for swift and decisive action when people cross his path. Your job, then, is to find out how much this man'’s income has been since 1924, and then to . praqye it in court. And if he finds out what you are doing, your head will be blown off before 6 o'clock tomorrow night. . Not only do you have to establish the specific amount of taxable income for each year, but you have to build your case in such a way that when you get to court you can prove it with documentary evidence and word-of-mouth testimony of people in the witness chair. You have, furthermore, the secondary problem of keeping your witnesses in sound health be- tween their appearances before the grand jury and the date you go to trial. Such was the assignment turned over to the intelligence unit of the Bureau of Internal Revenue. Out of it they produced positive record of more than $1,000,000 cash income for Capone personally in the years 1924-29, in- clusive. That million-dollar figure does not, of course, begin to touch Capone’s total income for the period. It represents only so much of it as the Government believed it could -prove in the courts. But reconstruction of even this much illegal income constitutes the monumental de- tective achievement of the racketeer era. For it was not reconstructed from records, checks, bank statements and orderly business ledgers. It has, rather, been wrung from the reluctant testimony of thugs, runners, body- guards, payoff men, dive keepers, bookmakers, bartenders, dope peddlers and professional “fixers.” LMER L. IREY, chief of the intelligence unit of the Internal Re<«>nue Bureau, had just returned .from Chicago for a conference Revealed Here in D¢ Is the Official St Federal Underc ‘Government B ‘Worked for Two Al’s Own Rackg Secrets of Sever: Who Gave Eno Up anIron-Clad Public Enemy World’s Worst with Department of Justice officials. On his desk was a portmanteau bulging to the thick ness of more than a foot with typed repo: from field operatives. Beside it was a bound volume of closely typed sheets, more than inches thick. On #iae heavy paper covel someone had scrawled hurriedly, “Capone.” “Have you read all that?” he was asked. “Yes, I've read it all, and written some of it. “Then that’s the whole story?” He laughed heartily. “That's our story, yes. But that's not all o it. Out in the office of District Attorney John son in Chicago there’s a whole safeful of docu mentary evidence, transcripts and exhibits.” Also there is a similar file on Capone in the Prohibition Bureau, another in the office of the chief postal inspector, still another in the office of the commissioner of narcotics. That is why no one official of the Govern ment will undertake to say that he knows th whole story on the case against Scarface Capone. Every bureau or division which had a pa in the master plan knows all about its own operations. But only from a survey of the various sectors in the major operation may the| whole project be hung together. Tlm laborious researches of the Bureau of Investigation in Washington provided live “leads” to more than 500 men and women who had at one time or another figured in Chicago’s