Like in the bootlegging business, Capone ran into the same old antagonist Bugs Moran. Moran had tried twice to murder Al's friend and colleague Jack McGurn. When Capone went to Palm Island for the winter, Jack McGurn went to visit him in early February to discuss the enduring problems with Bugs and his North Siders gang.
Neither McGurn nor Capone ever thought that the planned assassination of Bugs Moran would be an event that would be notorious for many decades to come. Capone was lolling so lavishly in Florida, so how could he be held responsible for the murder of a bootlegger. "Machine Gun" McGurn was given complete control of the hit.
McGurn put together a first rate team of out-of-towners. Fred "Killer" Burke was the leader and was assisted by a gunman named James Ray. Two other important members of the team were John Scalise and Albert Anselmi who had been used in the murder of Frankie Yale. Joseph Lolordo was another player, as were Harry and Phil Keywell from Detroit's Purple Gang.
McGurn's plan was a creative one. He had a bootlegger lure the Moran gang to a garage to buy some very good whiskey at an extremely attractive price. The delivery was to be made at 10:30 A.M. on Thursday, February 14. McGurn's men would be waiting for them, dressed in stolen police uniforms and trench coats as though they were staging a raid.
McGurn, like Capone, wanted to be far away from the scene of the crime so he took his girlfriend and checked into a hotel. Establishing an airtight alibi was uppermost in his mind.
At the garage, the Keywells spotted a man who looked like Bugs Moran . The assassination squad got into their police uniforms and drove over to the garage in their stolen police car. Playing their part as police raiders to the hilt, McGurn's men went into the garage and found seven men, including the Gusenberg brothers who had tried to murder McGurn.
The bootleggers, caught in the act, did what they were told: they lined up against the wall obediently. The four assassins took the bootleggers' guns, and opened fire with two machine guns, a sawed-off shotgun and a .45. The men slumped to the floor dead, except for Frank Gusenberg who was still breathing.
To further perpetuate this charade, the two "policemen" in trench coats put up their hands and marched out of the garage in front of the two uniformed policemen. Anyone who watched this show believed that two bootleggers in trench coats had been arrested by two policemen. The four assassins left in the stolen police car.
It was a brilliant plan and it was brilliantly executed except for one small detail --the target of the entire plan, Bugs Moran, was not among the men executed. Moran was late to the meeting, seeing the police car pulling up just as he neared the garage. Moran took off, not wanting to be caught up in the raid.
Soon, real policemen came to the garage and saw Frank Gusenberg, on the floor, dying from twenty-two bullet wounds.
"Who shot you?" Sergeant Sweeney asked him
No one --nobody shot me," whispered Gusenberg. His refusal to implicate his executioners continued until his death a short time later.
It didn't take a genius to figure out that the target of the very cleverly organized assassination attempt was Bugs Moran and the most obvious beneficiary, had the attempt been successful, was Al Capone. Even though Al Capone was conveniently in Florida and Jack McGurn had an airtight alibi, the police, the newspapers, and the people of Chicago knew who was responsible. The police could hardly arrest Capone with no evidence. McGurn was smart enough to marry his girlfriend Louise Rolfe, better known as the "blonde alibi," who could not testify against her new husband. All charges against him were dropped. No one was ever brought to justice for the spectacular assassination.
The publicity surrounding the St. Valentines Day Massacre was the most that any gang event had ever received. And it was not only local publicity. It was a national media event. Capone ballooned into the national conscious and writers all over the country began books and articles on him. Bergreen saw the massacre as endowing Capone with a grisly glamour: "There had never been an outlaw quite like Al Capone. He was elegant, high-class, the berries. He was remarkably brazen, continuing to live among the swells in Miami and to proclaim love for his family. Nor did he project the image of a misfit or a loner, he played the part of a self-made millionaire who could show those Wall Street big shots a thing or two about doing business in America. No one was indifferent to Capone; everyone had an opinion about him..."
Capone reveled in his new found celebrity status and used Damon Runyon as his press agent. But the damage of all that publicity had been done. He attracted the attention of President Herbert Hoover. "At once I directed that all of the Federal agencies concentrate upon Mr. Capone and his allies," Hoover wrote. In the beginning of March, 1929, Hoover asked Andrew Mellon, his secretary of the Treasury, "Have you got this fellow Capone yet? I want that man in jail." A few days later, Capone was called before a grand jury in Chicago, but did not seem to understand the seriousness of the powerful forces there were amassing against him.
Capone thought he had more pressing matters to resolve. Evidence was mounting that two of his Sicilian colleagues were causing Capone problems. Kobler describes the famous scene in which Capone met the problems head on:
"Seldom had the three guests of honor sat down to a feast so lavish. Their dark Sicilian faces were flushed as they gorged on the rich, pungent food, washing it down with liters of red wine. At the head of the table, Capone, his big white teeth flashing in an ear-to-ear smile, oozing affability, proposed toast after toast to the trio. Saluto, Scalise! Saluto, Anselmi! Saluto, Giunta!
"When, long after midnight, the last morsel had been devoured and the last drop drunk, Capone pushed back his chair. A glacial silence fell over the room. His smile had faded. Nobody was smiling now except the sated, mellow guests of honor, their belts and collars loosened to accommodate their Gargantuan intake. As the silence lengthened, they, too stopped smiling. Nervously, they glanced up and down the long table. Capone leaned toward them. The words dropped from his mouth like stones. So they thought he didn't know? They imagined they could hide the offense he never forgave -- disloyalty?
Capone had observed the old tradition. Hospitality before execution. The Sicilians were defenseless, having, like the other banqueters, left their guns in the checkroom. Capone's bodyguards fell upon them, lashing them to their chairs with wire and gagging them. Capone got up, holding a baseball bat. Slowly, he walked the length of the table and halted behind the first guest of honor. With both hands he lifted the bat and slammed it down full force. Slowly, methodically, he struck again and again, breaking bones in the man's shoulders, arms and chest. He moved to the next man and, when he had reduced him to mangled flesh and bone, to the third. One of the bodyguards then fetched his revolver from the checkroom and shot each man in the back of the head."
Although Al didn't understand it at the time, the St. Valentine's Day Massacre and the subsequent ocean of publicity, some of which glamorized Capone and some of which demanded justice, catalyzed the government forces against him. After just a few days in office, Herbert Hoover pressured Andrew Mellon, the Secretary of the Treasury, to spearhead the government's battle against Capone.
Mellon commissioned a two-pronged approach: to get the necessary evidence to prove income tax evasion and to amass enough evidence to prosecute Capone successfully for Prohibition violations. Once the evidence was collected, the Treasury agents were to work with the U.S. Attorney, George E. Q. Johnson to initiate prosecution of Capone and the key members of his organization.
The man charged with gathering the evidence of Prohibition violations --bootlegging --was Eliot Ness, who began to assemble a team of daring young agents like himself. The biggest effort was led by Elmer Irey of the IRS Special Intelligence Unit, who redoubled his ongoing efforts shortly after Hoover's mandate. While there was doubt that Capone could be successfully prosecuted for Prohibition violations in Chicago, regardless of the weight of evidence, Mellon felt sure that with the Sullivan ruling the government could get Capone on tax evasion.
Capone was, at least initially, unaware of the forces put in motion against him and generally did not let concerns about federal agents interfere with business. In mid-May, 1929, Capone went to a conference in Atlantic City where gangsters of all types from all over the country met to talk about cooperation rather than mutual destruction.
To keep violence and rivalry to a minimum, they divided up the country into "spheres of influence." Torrio became head of an executive committee which would arbitrate all disputes and punish renegades. The conferees had decided that Capone should surrender his Chicago criminal empire to Torrio to divvy up on his own terms. Capone had no intention of going along with carving up his empire or turning it over to Johnny Torrio.
After the conference, Capone went to a movie in Philadelphia. When the movie was over, two detectives were waiting for him. In less than 24 hours Capone was arrested and imprisoned for carrying a concealed weapon.
Taking off his 11 1/2 carat diamond pinkie ring, Capone gave it to his lawyer to pass on to Ralph and was packed off first to the Holmesburg County Jail and finally to the Eastern Penitentiary where he stayed until March 16, 1930. He left the running of the business to his brother Ralph, Jack Guzik and Frank Nitti "The Enforcer
Another setback to Capone came when Ralph was indicted on tax evasion charges in October of that year. Wanting to send a message to other gangsters, federal agents led Ralph away from a boxing match in handcuffs. Persistent civil servant Elmer Irey had been investigating Ralph for years. Ralph was nowhere near as smart as his brother Al when it came to hiding his wealth and financial transactions. He was sloppy, greedy and dumb -- a natural target for an ambitious Treasury agent named Eliot Ness, who wiretapped his phones, and Nels Tessem, a highly-talented IRS agent, who scrutinized every financial transaction that Ralph made. Nitti and Guzik also had their days in tax court as a result of this determined and exhaustive investigation.
With Al in jail and Ralph, Guzik and Nitti running the business, Ness was given the mission of collecting enough evidence of Capone's bootlegging to convince a grand jury that Capone was violating Prohibition laws as well as evading income tax. Ness had his men tap Ralph's phones continuously. With the intelligence Ness gathered, he was able to ram the front door of Capone's South Wabash brewery with a truck outfitted with a snowplow on the front. Emboldened by this frontier lawman approach, Ness and his "Untouchables" continued to wiretap and shut down Capone breweries.
In mid-March of 1930, Capone was released from jail, a few months early because of good behavior. A week later, Frank J. Loesch, the head of the Chicago Crime Commission, put together a Public Enemies list which was headed by Alphonse Capone, Ralph Capone, Frank Rio, Jack McGurn, and Jack Guzick, all Capone colleagues. The list was publicized in the newspapers and quickly adapted by J. Edgar Hoover as the FBI's list of the "Most Wanted" criminals. So now, Al Capone, who wanted so much to legitimize himself as a contributing member of the community was Public Enemy Number One. He was enraged, humiliated and thoroughly insulted.
In that same month, Elmer Irey went to Chicago to meet with the agent-in-charge Arthur P. Madden to map out their battle strategy. It became clear to both of them that they needed an insider in the Capone organization if they were going to be successful in the short-term. Before he went back to Washington, Irey spent two days hanging around the lobby of the Lexington Hotel, posing as a salesman. Once he developed a feel for the kinds of thugs that lived there, he came up with a brilliant idea: he would find two undercover agents who could, posing as gangsters, infiltrate the Capone organization.
"The obvious choice was Michael J. Malone....He was a good actor, with an ability to blend into any background. He had nerves of steel and a sharp intelligence. His dark, almost Mediterranean looks and his ability to speak Italian made him an ideal candidate for infiltration into the Italian-dominated Capone empire" (Ludwig, Smyth). Another undercover agent was selected to be his partner in this venture.
Malone would take the name De Angelo and the other agent Graziano. Major efforts were made to create false identities for the two men as small-time Brooklyn racketeers. They knew that every single detail of the forged identities would be scrutinized and that their lives depended upon how well they studied for their parts.
Neither Graziano nor De Angelo could ever be seen or heard talking to Irey or Madden, so an intermediary had to be found. The third agent in this venture was Frank J. Wilson, a 43-year-old star in the agency. Wilson would not only be the contact man for Graziano and De Angelo, he was to coordinate intelligence and evidence and perform some of the investigations himself.
In June of 1930, Wilson got approval from the eccentric publisher of the Chicago Tribune to question one of his reporters. Jake Lingle was a friend of Al Capone's who flaunted the relationship. Bergreen believed that Lingle wanted more than the profitable connection he had to the mob. "His influence made him feel invulnerable when in fact his position was extremely vulnerable. Acting as a double agent or even a triple agent was too thrilling to resist. Not satisfied with playing this extremely tricky role, he agreed to inform on Capone for the federal government."
Lingle's appointment was June 10, but he got a bullet in the back of his skull the day before.
The uproar was deafening. Capone rode it all out at his home in Miami Beach. When asked about Lingle, Capone said, "newspapers and newspapermen should be busy suppressing rackets and not supporting them. It does not become me of all persons to say that, but I believe it."
Meanwhile, Irey's Mike "De Angelo" checked himself into the Lexington Hotel, dressed himself in flashy expensive clothing and hung around the hotel bar, quietly reading the newspapers. Eventually the Capone soldiers struck up a conversation with him and started to ask him questions about his background.
"We want the McCoy about you," one of the gangsters told him. "You look like maybe you're on the lam and might be open to a proposition --and how do you know, we might have something for you."
De Angelo played along: "matter of fact, I am open for something, but it's got to be good. If you want it straight, why I come out here in the first place is I didn't know but what maybe I could tie in with the Big Boy."
The gangster told him they had to do some checking first, but to hang around for a few days and they'd give him an answer. De Angelo hoped he hadn't screwed up any of his fabricated identity or he would be a dead man. A few days later, he was invited to meet with the mob and Capone himself at a big party. Fully aware that Capone would wine and dine a traitor and beat him to death with a baseball bat, De Angelo went to the party with trepidation. Fortunately, Irey's thoroughness in crafting his agent's background paid off handsomely. De Angelo was made a croupier in one of Capone's Cicero gambling joints.
Just before Ralph Capone's trial, De Angelo found out that the mob was going to focus on the government's witnesses. It was good intelligence because Irey arranged for extra protection of the government witnesses. The result was a guilty verdict for Ralph and no damage to government witnesses.
A few months later, De Angelo was joined by Graziano, who got a job checking on Capone's beer deliveries. Just before Christmas, they uncovered a plot on Wilson's life and caught it just in time. Now that the Capone organization knew about Wilson, Irey wanted to reassign him, but Wilson wouldn't have it. This attempt on his life made him all the more determined to get Capone.
The real intelligence paydirt came in a conversation between Graziano and one of Capone's employees. "The income tax dicks ain't so smart. They've had a record book of Al's for five years that could send him to jail, only they're too dumb to realize it."
It turned out that the mountain of records taken from a raid years earlier on the Hawthorne Hotel included a ledger that documented the financial operations of the Hawthorne Smoke Shop for the years 1924-1926. What Irey needed now was to figure out the identity of the two bookkeepers who made those entries. The handwriting didn't match up with any of Capone's men. Chances were that Capone had them disposed of when the ledgers were seized.
Graziano took a huge risk and asked the man who told him about the ledgers if the bookkeepers had been "taken care of." The gangster replied, "they weren't exactly taken care of because they were only a couple of dopes, but they left town five years ago when the smoke shop was raided." Incredibly enough, the gangster then told Graziano their names: Leslie Shumway and Fred Reis.
On another government front, Eliot Ness was becoming increasingly successful at finding and shutting down Capone's brewing business. He and his Untouchables had impressively documented thousands of Prohibition violations that would be used against Capone if the tax case failed.
Ness wanted very much to humiliate Capone publicly as well as to put him in jail. The murder of his one of his friends was the catalyst to a plan to openly embarrass Capone. From his many successful raids on Capone breweries and other liquor operations, Ness had accumulated some forty-five trucks of various types, most of which were new. The government had contracted for a new storage place for Ness's vehicle collection that would eventually be sold at public auction. Until then, it was necessary to move the trucks to the new garage.
Ness hit on an idea to strike a psychological blow to Al Capone pride, something few intelligent people ever attempted. Ness had all of the trucks polished to a fine shine. Then he arranged for a group of drivers to operate the convoy of trucks. When everything was ready, Ness made his boldest move.
He called Capone's headquarters at the Lexington Hotel and bullied his way into getting Capone himself on the phone.
"Well, Snorkey," Ness called him by the nickname only Capone's close friends used," I just wanted to tell you that if you look out your front windows down onto Michigan Avenue at exactly eleven o'clock you'll see something that should interest you.
"What's up?" Capone asked, curiosity in his tone.
"Just take a look and you'll see," Ness said just before he slammed down the phone.
The motorcade came to the Capone's Lexington Hotel headquarters at eleven o'clock in the morning. Moving very slowly, it passed a bunch of Capone's gangsters milling around outside the hotel. Ness could see the wild gesticulating and confusion on Capone's balcony.
This was a big day for Ness and his team. "What we had done this day," he told people later, "was enrage the bloodiest mob in criminal historyWe had hurled the defiance of "The Untouchables" into their teeth; they surely knew by now that we were prepared to fight to the finish."
Ness had certainly succeeded in making Capone angry. Right after the parade, Capone stormed through his suite shrieking and breaking things up. Not only had Ness succeeded in enraging Capone, but, more importantly, he was making a significant dent in Capone's business. Millions of dollars of brewing equipment had been seized or destroyed, thousands of gallons of beer and alcohol had been dumped and the largest breweries were closed.
Wiretaps on Capone's lieutenants revealed how bad things were getting. The mob had to cut back its graft and payments to the policemen. Beer had to be imported from other areas to supply the speakeasies that used to buy Capone's beer. Things got even worse when they raided a gigantic operation that was supplying 20,000 gallons a day.
Finally, the government's mission was coming to closure in the early spring of 1931. Facing a six-year statute of limitations on some of the earlier evidence, the government had to prosecute the 1924 evidence before March 15, 1931. A few days before that deadline, on March 13, a federal grand jury met secretly on the government's claim that in 1924 Al Capone had a tax liability of $32,488.81. The jury returned an indictment against Capone that was kept secret until the investigation was complete for the years 1925 to 1929
On June 5, 1931, the grand jury met again and returned an indictment against Capone with twenty-two counts of tax evasion totalling over $200,000. A week later, a third indictment was returned on the evidence provided by Ness and his team. Capone and sixty-eight members of his gang were charged with some 5,000 separate violations of the Volstead Act, some of them going back to 1922. The income tax cases took precedence over the Prohibition violations.
Capone was facing a possible 34 years in jail if the government completely won its case. Capone's lawyers presented U.S. Attorney Johnson with a deal. Capone would plead guilty for a relatively light sentence. Johnson, after discussing the offer with Irey and the new Treasury Secretary Ogden Mills, accepted the deal and agreed to recommend a sentence between 2 and 5 years.
Why would the government after all its efforts take accept such a light sentence? First of all, despite the government's extraordinary efforts to hide Shumway and Reis, there were very real concerns about them living to testify. Capone had put a bounty of $50,000 on each of the bookkeeper's heads. There was also some doubt that the six-year statute of limitations would be upheld by the Supreme Court. An appeals court had already ruled on a three-year statute of limitations for tax evasion. Then there was an enormous potential for jury tampering, both through bribery and intimidation.
When word of the deal leaked, the press was outraged that Capone would get off with such a light sentence.
Capone went into the courtroom on June 16 a fairly happy man. When Capone pleaded guilty, Judge Wilkerson adjourned the hearing until June 30. Capone told the press he was entertaining offers from the movie studios to make a film of his life. He was in excellent spirits when he appeared for sentencing in front of Wilkerson at the end of the month.
Judge Wilkerson had a little surprise for Al. "The parties to a criminal case may not stipulate as to the judgment to be entered," Wilkerson said firmly. He made it quite clear that while he would listen to Johnson's recommendation, he was not bound to go along with it. "It is time for somebody to impress upon the defendant that it is utterly impossible to bargain with a federal court." It was a shock to Capone. The deal, the plea bargain was kaput and Al was clearly worried. Capone was allowed to withdraw his guilty plea and a trial was scheduled for October 6.
Capone spent his summer of freedom in his old hideout in Lansing, Michigan, seemingly resigned to the trial. However, behind the scenes his organization had procured the list of prospective jurors and began bribing them by every means possible.
Wilson got word of the bribery and went with Johnson to Judge Wilkerson with the evidence that Capone's gang was bribing and threatening the potential jurors. Judge Wilkerson was neither surprised nor concerned. "Bring your case to court as planned, gentlemen," he told them confidently. "Leave the rest to me."