Evening Star Newspaper, July 26, 1931, Page 73

YGTON, "D, C; "JULY 726, 1931, . : S & APONE 5 CORNERED for the First Time of MoreThan 100 r Agents From Six us, and How They rars Muscling in on and Learning the SCARFACE AL undred Witnesses Evidence to Build e Against Chicago’s ber One and the ng of Crooks. Sullivan. “They were hailed by a taxi driver, himself a Federal agent. He told them of the new address, handed one of the peir @ match and resumed his wait.” beer racket, gambling, vice or dope traffic since 1925. Every one of these was a “prospect” for Wilson and his assistants when they finally launched the field work. Somewhere in this list, according to the law of averages, would be found a disgruntled per- son—a truck driver who had been undercut on a heavy haul, perhaps, or 8 woman who had been thrown over by some ranking mogul in gangland. Racketeering is hard on the nerves of even men of steel. And when they crack up and are kicked out of the circle they are usually ready to blow the story to the “Feds.” Even this was far from the end of the pre- liminary investigation. In the Prohibition Bureau a corps of 10 special Investigators had been turned loose three months before on all the Chicago field reports since 1924. Wherever there was found evidence of a liquor transaction in which an actual payment of money had been traced the case was plucked out of the files. Every such case, many of which had been closed long since prosecutions won or lost, was reopened for the time to determine whether the money might ultimately have reached Al Capone. HAT was the vital spot in the Government’s case—to prove the receipt of actual money. It was to be achieved only by tracing actual payments, $1, $1,000, $10,000 at a time, as the specific cases proved up. Next the records of the postal inspectors were checked against the names pulled from the Bureau of Investigation and the Prohibition Bureau. Uncle Sam’s men long have recognized that it is frequently but a short step from hi-jacking to mail robbery. Many times they have discovered bands working alternately ig the two fields of endeavor. When the postal records which were resurrected had been added to the Bureas & They snared Al Capone. Robert E. Neely (left), acting collector of Internal Revenue at Chicago. In the center, Elmer L, Irey. chief of the Internal Revenue Intelligence Unit, shakes hands with A. P. Madden, head of the Chicago unii. while Frank J. Wilson, Federal income tax expert of the Chicago district looks on. At the right is W. E. Bennett, in charge of the prohibi- tion operatives on the case. Investigation files, the reopened prohibition re- ports and the indexes of the Bureau of Immi- gration, the Government agents assigned to the field in Chicago had before them the most complete who's who in crime for the Chicago region that ever. has been compiled for any region of the United States. Some 1,200 names were at hand. They were the starting point for the inquiry. At this point the Prohibition Bureau swung its special agents into the Chicago sector along- side of the Internal Revenue Intelligence Unit, but each group was assigned to its own par- ticular job. There was as yet no co-ordination. The only uniform rule under which they operated in this early phase of the case was that no member of the Chicago police force was to be informed of the project under way. Under no circumstances were the Federal agents to seek out the aid of the Chicago police force. There should be no “leak” on this job. Prohibition Administrator J. F. J. Herbert at Chicago was directed by long-distance tele- phone from Washington to assign three men to reporting every fact which had come to light about Al Capone and his widespread operations " during the last five years. There was, of course, a great deal known by the men in the field from the gossip of the underworld. No matter, ran the order from Washington. ' Get it all into shape. The check- ing and sifting will come later. .For the im- mediate present the task is to put down on paper every name, every address, every inside . fact reported or rumored about every job. The significance can be deduced afterward. IVE weeks later a report of some 200 pages was sent to Washington. It contained the names of more than 1,500 runners, agents, collectors, sluggers and share - operators of Capone establishments, from dog tracks to speakeasies and brothels. It listed by street numbers more than 80 operating points of Capone and his henchmen. It mentioned many specific occasions on which Capone was known to have spent huge sums. Capone was generally known, for example, to have lost $100,000 on the Dempsey-Tunney fight in Chicago, but how he had ‘got the $100,000 in the first place could not be estab- lished. Capone entertained lavishly at his South Side hotel for three days before the fight. A thousand bottles of champagne were part of the stimulation provided for this gay occasion. It was the knowledge of the tangled inter- meshing of ward politics and racketeering in Chicago gained from this report which dic- tated a vital change in the master plan in Washington. Uncle Sam’s men were to work independently at their own assignments, but the Secret Service was to supervise a cover- ing “protection” for the entire operation. The general scheme was to assure that if a gangster’s gun at any instant blazed at a Federal operative, from whatever department, Government witnesses and an answering vol- ley were to be on the spot. It was at this point, late in 1930, that the concerted field operations actually began in Chicago. Internal Revenue men, prohibition agents, immigration inspectors, postal investi- gators, Secret Service operatives and narcotic agents move to Chicago to “get Al Capone.” Always guarded by secret operatives of their own force, two Internal Revenue men were assigned the task of muscling into the Capone organization. They were to work their way up ag close to the throne as possible. All along the line they were to watch for the disgruntisd or double-crossed hireling wh& might wish to talk. HIS phase of the operation was the most daring episode of the whole project, for the two agents knew well before they started that the slichtest misstep meant certain death. Every Intelligence Unit operative who worked on the job in Chicago reported, at one time or another, a direct threat upon his life, either by word or action. These reports, now safely in the hands of District Attorney Johnson, re- veal that Capone fought with tiger-like de- termination up to the very day of the in- dictment, When threats failed, he tried bribery. “He was not convinced to the very end that he was in a case which could not be ‘fixed.’” Wilson once reported to his chief in Washington. Beginning in Cicero, suburban nerve center of the entire Capone organization, these agents began as the roughneck habitues of the beer joints, always on the alert for a little piece of change from a job of one sort or another. It was from days of mere hanging around that these two revenue men learned of the Cicero bank, which was the clearing house for Capone money. Other agents sent to examine the books of the bank found mysterious accounts under a half a dozen names. They were mysterious accounts principally because of the violent fluctuations of the daily balances, and sec- ondly because of the irregularity of amounts of deposits. ‘These characteristics at once marked them as racketeer accounts. But even an examination of the old checks and deposit slips did not establish a positive connection with Capone These checks were invaluable, however, for they revealed the existing lines of the under- ground trafflc, gauged its volume and dis- closed the names and addresses of all who ac- tually handled money up "and down the line, whether in gambling, “alky” or vice. From them it was now possible to follow the day- to-day course of business and thus to come w face to face with the smaller fry as the very ends of the tentacles of the system. . Through this method of procedure a speak- easy proprietor was found who bought three kegs of beer a day . It was no particular secret, so far as he was concerned, that the stuff cost him $22 a barrel. More than si% months later, when the case finally was pree sented to the grand jury, this proprietor was summoned to tell of his payments over § period of two years. Trat was ‘“income.” It was by this same laborious building from the ground up on eyery transaction that the great sums listed in Capone's income table were arrived at. All of them, of course, were not as simple and direct as beer purchases, <IN the case of the dog tracks the agent§ finally approached the problem of proving “income” through individual bets. The dog track was known to be one of Capone's mos§ lucrative operations outside of the beer racket., Gamblers from all sections of the country mingled with Capone's gangsters about the kennels during the brief and flashy season. Tracing income from the bookmakers’ cages to Capone personally three or four years after the transactions was an assignment to chale lenge any investigator. Yet, by bringing in & man who could identify the ‘cashier” with whom he placed his bet. and then dragging in the *“cashier” himself. thousands of dollars of this revenue was traced. The key to this whole linz of investigation is found in section 1104 of the Internal Revenue law, which authorizes agents of the commissioner to seize books, records and papers wherever necessary, and to administer oaths and conduct examinatiors in the ecourt room manner. It was this sweeping authority Continued on Eighteenth Page Going over the ironclad ease against Al Capone; United States District Attorney @ George E. Q. Johnson (lzft) of Chicago, conferring with Assistant Distries Astorney Jacob Grossmanm.