The Untouchables Case Report

Ness in Car JPEG

Ness (far left) and two unknown Prohibition agents around the time of the Capone investigation (ABS Personal Collection)

The following are excerpts from a working draft of the final summary report of Eliot Ness’s investigation into the Capone Syndicate for conspiracy to violate the National Prohibition Act (Prohibition Bureau Case No. 122-B). Untouchable Lyle B. Chapman prepared this document, dated June 13, 1932, as well as a longer, more detailed case file referenced in the text that seems not to have survived. Although Chapman’s supervisor in the Chicago Prohibition office, Special Agent in Charge W. E. Bennett, ordered him to surrender “all official data and memoranda relative to the case, now in your possession” when taking him off the case in December 1932, Chapman apparently kept two copies of this document—the only ones currently known to exist—along with other papers relating to his government service, which were sold at auction in 2018.

Much of the fifty-page report is concerned with laying out all the evidence, including a lengthy list of defendants, that Ness and his Untouchables used to establish the existence of an ongoing bootleg conspiracy—and to identify Al Capone as its leader. The document not only testifies to the extent and sophistication of the Untouchables’ work, extending far beyond the raids and arrests that made the papers—it shows that Ness and his agents worked under the assumption that these indictments would be prosecuted, instead of solely seeking to cut off Capone’s income. When this document is compared with Frank Wilson’s summary report of his investigation into Capone for income tax evasion, it becomes clear that the Untouchables’ work was no less complex or innovative—and resulted in an arguably stronger case—than that done by the Intelligence Unit.

This conspiracy is alleged against a large number of individuals and groups of individuals under certain firm names, more particularly set forth below, known as the CAPONE SYNDICATE.

Rediscovery identifier:11600

Al Capone (National Archives)

This conspiracy is alleged to have had its inception on January 6, 1921, with the organization of the World Motor Service Company. From this nucleus of a few individuals, is alleged to have grown an immense syndicate which controlled and operated its own breweries; cooperage plants; a fleet of beer trucks, tank trucks for hauling wort; and small trucks for deliveries, with many men on its payroll, each having specific duties to perform in this illicit enterprise. As thus organized, this conspiracy is declared to have continued throughout a period of more than eleven years, and to be still in existence.

The investigation on this case was initiated by George E. Q. Johnson, United States Attorney for the Northern Judicial District of Illinois, Eastern Division, about November 1, 1930. Through his efforts, a small group of investigators was organized by the assignment to Chicago of designated Special Agents and Prohibition Agents from various districts. This group was placed under the leadership of Eliot Ness, Assistant Special Agent in Charge of the Chicago office of the Special Agents Division, of which W. E. Bennett was Special Agent in Charge. The special group, so organized, operated from the latter office, but functioned as an independent unit under the close supervision of the United States Attorney, in order to coordinate this work with that of similar groups who were at the same time investigating members of the Capone syndicate as to income tax violations, etc., and William J. Froelich, Special Assistant to the Attorney General, was assigned to Chicago to assist the United States Attorney at Chicago, to render legal advice to the special groups, and to keep constantly in touch with these investigations by daily reports of the investigators. This plan was followed until about May 1, 1932, when the conspiracy, though not ended, was, for the purpose of this case, deemed to have closed, in order to complete the investigation and prepare the case for trial.

The method of obtaining evidence in this case differed from the usual procedure in that it presented an investigative as well as enforcement problem against an existing organization. Numerous seizures of breweries, beer trucks, distributing points, etc., were made by the group from January 1, 1931, to May 1, 1932. All leads and clues were investigated at the time, and the seizures connected with the conspiracy. In addition, the whole life of the Capone Syndicate, prior to January 1, 1931, was thoroughly investigated, and many breweries, truck seizures, and events, several of which had received no prosecution for lack of information, were clearly connected to make a continuous chain of evidence from January, 1921, up to the present time.

All of the above activity was conducted in the metropolitan area of Chicago, Illinois, during the period mentioned. … Investigation was also made at Chicago, Illinois; Springfield, Illinois; Aurora, Illinois; Elgin, Illinois; Hammond, Indiana; Michigan City, Indiana; Elkhart, Indiana; Connersville, Indiana; Kokomo, Indiana; South Bend, Indiana; Lake Geneva, Wisconsin; Milwaukee, Wisconsin; Detroit, Michigan; Grand Beach, Michigan; Springfield, Ohio; New York City; Philadelphia, Pennsylvania; and Miami, Florida, on November 1, 1930, and subsequent dates. …

The Federal Grand Jury at Chicago in the June term of 1931 returned an indictment under No. 23 256 against sixty-eight defendants upon evidence presented by the agents engaged on this case. This indictment is now pending, and several arrests have been made pursuant to it, but it is now deemed advisable to present the case again and ask a new indictment based on much new evidence and more complete knowledge due to continued investigation. …

A study of the names in this indictment and the list of defendants as now recommended…will show that many of those indicted are now included as aliases of some principal defendant… Longer investigation, bringing much new information, has reduced the list originally indicted but has added many new names to the list for reindictment. However, from this list has been eliminated a number of names, which, though directly connected with one or more acts of this conspiracy and which might properly be added to the list of defendants, are, however, judged to be of lesser importance, difficult to arrest, or for some other reason have been left out of the list, rather than to present a case including several hundred names. It has been deemed advisable to go to trial with fewer clearly-defined and certain defendants than to include the complete list of conspirators containing some dubious and uncertain names, although undoubtedly members of the illegal combination. …

The list of defendants recommended for reindictment contains 136 names, of which 18 are names of firms. Of this list 52 are in custody or under bond. This leaves 66 to be arrested. Not much difficulty is anticipated in arresting the greater majority of this number. …

The investigation has progressed, however, to a point where each new bit of information has much meaning and where leads develop rapidly, due to the vast amount of material gathered against this syndicate, and, since it is proposed to continue this investigation up to the date of trial, very important additions may be expected. Material developments along this line will be the subject for supplemental reports.

AGENTS AND OFFICERS ENGAGED ON THIS CASE

The following list includes the names of agents and others who participated in the investigation of this case, together with the designation when assigned to the case and approximate number of months so engaged:

NessRG

Eliot Ness (ABS Personal Collection)

Eliot Ness, Assistant Special Agent in Charge, Chicago, Illinois (Now Chief Investigator, Prohibition Dept., Chicago)
From November 1, 1930, to May 1, 1932……….18

ChapmanRG

Lyle B. Chapman (ATF)

Lyle B. Chapman, Special Agent, Detroit, Michigan (Now Special Agent, Chicago)
From January 1, 1931 to date (Still assigned) .. 17

 

LeesonRG

Joseph D. Leeson (ATF)

Joseph D. Leeson, Prohibition Agent, Detroit, Michigan (Now Special Agent, Detroit)
From February 1, 1931, to May 1, 1932……….15

 

RobskyRG

Paul W. Robsky (ATF)

Paul W. Robsky, Special Agent, Richmond, Virginia (Now Special Agent, Jacksonville, Florida)
From April 1, 1931, to May 1, 1932………….13

LeRoy W. Seney, Prohibition Agent, Detroit, Michigan
From August 1, 1931, to May 1, 1932………….9

Homer A. Goddard, Special Agent, Chicago, Illinois
From December 1, 1931, to June 1, 1932……….6

SeagerRG

Samuel Maurice Seager (ATF)

Samuel M. Seager, Special Agent, Chicago, Illinois
From November 1, 1930, to April 1, 1931………5

 

Marion A. King, Special Agent, Richmond, Virginia
From April 1, 1931, to July 1, 1931………….3

StutzmanRG

Warren E. Stutzman (ATF)

Warren E. Stutzman, Special Agent, Chicago, Illinois
From January 1, 1931, to March 1, 1931……….2

 

LahartRG

Martin J. Lahart (ATF)

Martin J. Lahart, Special Agent, Chicago, Illinois
Early in 1931……………………………..½

 

F. E. Christner, Prohibition Agent, Rochester, New York
Early in 1931……………………………..½

SterlingRG

Robert D. Sterling (ATF)

Robert D. Sterling, Special Agent, Detroit, Michigan
Early in 1931……………………………..½

 

CloonanRG

Bernard V. Cloonan (James B. Cloonan)

Bernard V. Cloonan, Special Agent, Chicago, Illinois; Thomas J. Friel, Special Agent, Chicago (Now Special Agent, Philadelphia, Pennsylvania); Willard G. Malsie, Special Agent, Chicago, Illinois (Now Assistant Special Agent in Charge, Chicago); and William J. Gardner, Prohibition Agent, Buffalo, New York (Now Los Angeles, California) assisted at various times in investigation.

GardnerRG

William J. Gardner (ATF)

R. Kinlock; Fred Hjerpe; and C. H. Arnett, Prohibition Agents, Chicago, Illinois, also rendered especially valuable assistance in seizure of breweries.

Agents of Intelligence Unit, Chicago, Illinois; Agents of the Committee on Prevention and Punishment of Crime, Chicago Association of Commerce (Secret Six); and Officers under Chief of Detectives William Shoemaker [sic] of the Chicago Police Department, rendered valuable assistance and ready cooperation.

CASE BUILT AROUND MANY SEIZURES

While it was not the original intention of the group to make seizures, as they were primarily interested in securing evidence, it became apparently early in the investigation that probably the best way to secure evidence was to make large scale seizures, since this syndicate was a going organization at the time of the investigation and a persistent violator.

THE SYNDICATE’S SYSTEM

Observation by agents shows that the system of beer distribution employed by the Capone Syndicate is as follows: Saloon keepers and other users would be supplied with beer from a beer drop or distribution point, where barreled beer from the brewery remained under ice for several hours. After consumption of the beer, the empty barrels would be picked up by syndicate trucks and brought to a cooperage plant operated by the syndicate, where they would be washed and coopered, if necessary. Trucks collecting these empty containers were always convoyed by at least one car. … The process of washing is important because beer may only be racked into clean barrels, and the washing plants involved a system of steam cleaning and operations requiring specialized equipment and expert handling.

The barrels, after being cleaned, would be placed in larger syndicate trucks and would be taken to a garage or ‘breaking point’, where the truck and load would be stored over night or for approximately an equal period of time to avoid danger of its movements being traced. It would then move to the brewery by a circuitous course adequately convoyed. … These men in their fast small cars would maneuver about the truck over a radius of about six blocks in each direction to make sure that agents were not following. To defeat this system, agents of the special group early devised the plan of ‘following’ the trucks by preceding them, watching the movements of the truck from the rear-view mirror, and thus avoiding entirely the convoy cars. By this plan the location of six breweries was ascertained in 1931 and 1932.

The barrels would then be received at the brewery, filled with beer, and often the same truck that brought the beer barrels to the brewery would be loaded with finished product in the containers that it brought the previous day. The same elaborate convoy system would then again be employed to safely conduct the beer to a breaking-point or perhaps direct to the beer-drop, where the beer would be iced and made ready for distribution to saloons, which ordinarily followed by smaller syndicate trucks the same evening. The large truck would then return to the cooperage plant, where it would reload with empties, and the whole process repeated every twenty-four hours.

In addition to these two types of trucks, the syndicate owned and operated very large trucks, which had the appearance of moving vans, but inside the body would be mounted a tank of about three thousand-gallon capacity for the hauling of wort. These trucks would load with wort at the various plants making this product and go directly to the brewery, since wort is a legitimate product and the only danger was that agents would locate the brewery. For this reason, adequate convoys always conducted the wort trucks in a similar manner as above described. … Two of these tank trucks were seized during the investigation, and they were very large and costly.

The activities of the various members of the syndicate in all stages of the operations described above were observed on a great number of occasions and accurate notes made, and the evidence thus secured made a part of this case.

In addition to the above operations, the syndicate also maintained a chain of district offices, a telephone switchboard through which by secret passwords members could communicate with other members, a bookkeeper, a messenger service, etc. These district offices collected from saloons in their districts, and rendered weekly reports to the main office, showing income from sales of beer and expenditures including regular payments to certain individuals for protection. Agents apprehended and copied one of these reports and it is available as evidence.

In connection with beer deliveries there is available as evidence a score or more of seized delivery slips, showing lists of saloons and other users to which beer was to be delivered, together with the number of barrels or half barrels of beer they were to get. Each of these slips was marked with a nickname of the particular driver assigned to make this delivery. …

MORE EVIDENCE BASED ON INVESTIGATION OF TRUCKS AND CARS

Beer is a relatively heavy commodity and its successful distribution depends upon safe movement of trucks. This is an important feature of the syndicate’s activity, and it is natural that this case should in large measure be built around facts deduced from investigation following seizures of trucks. Safe movement of trucks was attempted by the syndicate in two ways. Movement of trucks through the streets is impossible without an intricate bribery or “pay-off” system, and the evidence contains several incidents that tend to show that the syndicate realized this and had a smoothly working system throughout their area of operations and had the tolerance of many law-enforcement officers. The facts, however, do not warrant the including of police officers or public officials in this case as defendants. However, the agents early in the investigation were offered large bribes to quit following syndicate trucks, and all this evidence is incorporated. As the syndicate failed to bribe the agents working on this case, so they failed in their other plan of safe movement of trucks, namely, the convoy system. Probably seventy-five small cars, mostly Ford Coupes because of convenience in handling and their quick “get-away”, are incorporated in this case, having been observed many times and ownership and registration investigated. Approximately four hundred certified copies of State of Illinois license applications are in evidence, as well as a large number of City of Chicago license applications. … These have been examined by a handwriting expert…and identified. …

BREWERIES

In the matter of evidence, next to trucks the seizures of breweries are of importance in this case. The case gained its impetus by revelations shown by the investigation of two large breweries seized early in 1931. With the addition of four more following these, all connected to the syndicate, the investigation made good headway. It is interesting that in two cases where agents, after observations over a period of time, obtained search warrants for breweries only to find that their mission had been “tipped off” and that the breweries had moved hurriedly out, the investigation linked these “dry” breweries to the syndicate as closely as the others where many thousands of gallons of beer, finished and in process, were seized.

In all, seventeen large breweries are incorporated in this case, not including the two “dry” breweries mentioned. Of these eight were seized during the period of the investigation and nine before January, 1931, the first one being in 1923.

In the files of evidence are photostatic copies of leases for the premises; applications for light and power; telephone, and bank accounts. All handwritings have been examined and in a large number of instances are identified as having been written by defendants. …

HANDWRITINGS

In this connection more than one thousand separate specimens of handwritings [sic] have been carded and classified and submitted to the handwriting expert, who has already identified a large part of them and is still pursuing this part of the investigation, aided by the agents.

BANK ACCOUNTS

Also, investigation at the Lincoln State Bank…developed the fact that this bank was during the same period the financial headquarters of this syndicate. More than thirty accounts were found under many aliases and fictitious names, most of which have been connected with defendants in this case. Signature cards, ledger sheets, receipts for canceled checks, canceled checks, deposit slips, and cashier’s checks were found, and in several instances the actual rent checks for breweries were found and handwriting identified as that of defendants. Also the accounts of the cooperage companies were located in this bank, as well as accounts of two alleged cartage companies operated by defendants [Joe] Fusco and Nick and Frank Juffra to care for and maintain a fleet of syndicate trucks.

Also at this bank, cashier’s checks were found from the account of defendant Ralph Capone at another bank deposited in the account of defendant Fusco. The average amount of the checks is about $5,500.00. At the bank of their origin, it was found that Ralph Capone, as collector for the syndicate, had deposited from 1924 to 1929 (April) the amount of $1,851,840.00, all from the sale of beer. Since Fusco is shown to be in charge of beer manufacture, it is interesting to note that some of the money from beer sales went back to him to finance his activities. Cashier’s checks were also found purchased by Fusco and cashed by defendant Jack Guzik in large amounts. Also several cashier’s checks for the payment of telephone bills for breweries were found and other paid to the order of a large barrel manufacturing concern for empty barrels, each identified as to purchaser who is a defendant.

TAPPED TELEPHONES

Although discretion was used in the tapping of telephone lines, several important telephones were tapped during this investigation with much success. At one time the syndicate established a central office on the second floor of the Coliseum Garage. Over this telephone defendants Fusco, [Bert] Delaney, [George] Howlett, and others transacted syndicate business for a month or more. Records of all conversations were made and filed with the Association of Commerce [the Secret Six], through whose cooperation this work was carried on by reason of their special equipment and facilities. These are, however, available for evidence and leave no doubt as to the connection of the defendants with the conspiracy, and were the basis of many important clues, leads, and useful information. Other conversations were from time to time overheard over important telephones used by the syndicate with equally valuable results. For instance, on one occasion several conversations were noted between defendants in this case, which indicated that a meeting of the important syndicate members with Alphonse Capone, to discuss ways and means of successfully carrying on the beer business, would be held at the Lexington Hotel on March 21, 1930. Also, in the same manner it was learned that a similar meeting was held on January 5, 1931. …

HISTORY OF THE CASE

Attached hereto are copies of a detailed report of Assistant United States Attorney Daniel Anderson and Special Agent Lyle B. Chapman. … This report gives all the facts of the case in chronological order from January 6, 1921, to May 1, 1932. It is, however, voluminous and, therefore, without careful study, an accurate picture of the case is difficult to gain from it. The story is, therefore, given here as briefly as possible.

WORLD MOTOR SERVICE COMPANY, INC.

The first event in the alleged conspiracy occurred on January 6, 1921, with the incorporation of the World Motor Service Company. The Articles of Incorporation show that this firm was organized by Nick Juffra, Joseph Fusco, and William De Does, and that the assets consisted of four trucks, one Acason truck, one White truck, and two Velie trucks. Later, this fleet of trucks was augmented by several others and almost immediately this firm became a more persistent violator. In 1921 two of their trucks were seized with large loads of beer; in 1922 four of their trucks were likewise seized; in 1923 ten of their trucks were likewise seized; and in 1924 one truck was seized. These trucks were found to have been purchased by Al Brown (Al Capone); Frank Moran (Joseph Fusco); and the Juffra brothers, Nick and Frank. Among others, Joseph Fusco; Frank, Nick, and Tony Juffra; and Bert Delaney were arrested while driving these trucks with their loads of beer. At this time Al Capone, Joseph Fusco, and Bert Delaney were more or less subordinates, and the Juffras seemed to control the activities. Gradually Capone and the others named became stronger and more powerful and the Juffras less influential, until, later in the conspiracy, the Juffras are found to be working under their former workmen. …

In one case one of these trucks was seized and in less than thirty days and the same truck was seized again. The trucks would be released on bond and returned immediately to the beer traffic.

BETZ TRUCKS

These Betz trucks offer a chain of evidence from the start of the conspiracy to the end… Note especially how these trucks weave in the members of the conspiracy from the start to the finish. …

[M]any of the trucks in this case, which were involved in syndicate violations early in the story, would be turned in, when old, on new trucks which would continue the violations. All these trucks have been carefully tabulated and their whole history is available as evidence.

RAID ON GARAGE OF WORLD MOTOR SERVICE COMPANY

On March 4, 1924, Captain William Shoemaker [sic] (now Chief of Detectives, Chicago Police Department) raided the garage of this organization at 3105 S. La Salle Street and arrested defendants Nick Juffra, Joe Fusco, Joe Robillatta, Mike Lopristi, Tony Esposito, Max Weisbaum, and Frank Choose. Parked in the garage at the time were all of the Betz trucks mentioned above except one, which was under seizure at the time, and other trucks. Four hundred seventeen cases of whiskey were seized as well as a quantity of counterfeit strip stamps, guns, and ammunition. A number of documents were found on the person of Fusco, including bills of sale for Betz trucks; documents showing ownership of trucks; lists of truck drivers in Fusco’s writing which checked almost exactly with arrests made at prior truck seizures; notebook containing items about beer and whiskey and listing license numbers of seized trucks; two lists showing whiskey sales and beer sales for the week ending March 1, which list shows the names of Al Brown, Ralph, Heinan, Hollis, and others identified with this conspiracy; and a receipt by Jos. V. Bolton (an attorney) for $250.00 in re legal services for Al Brown paid by Jack Guzik. All these exhibits are in the files of the case.

This raid ended the regime of the World Motor Service Company, but the work was carried on under the name, World Cartage Company, by Frank Juffra and later under the name, Hanley Cartage Company, by George Howlett and Charles Fuehrmeyer

SEIBEN [sic] BREWERY

On May 19, 1924, the Chicago Police raided the Seiben [sic] Brewery and seized a large quantity of beer and arrested forty-two defendants, among them Nick Juffra…Frank Langley ([John] Torrio), Joe White (Delaney), and Frank Choose. Five large truckloads of beer were also seized. Two of these were Kelly-Springfield trucks owned and registered by John Brown (Fusco)…

KELLY-SPRINGFIELD TRUCKS …

The investigation of the Kelly-Springfield trucks above at the plant of the manufacturer in Springfield, Ohio, brought forth a mass of evidence regarding other Kelly-Springfield trucks which had been seized from time to time. This evidence shows the combination together of Fusco, Howlett, Fuehrmeyer, Frank and Nick Juffra, and others, and shows the connection of the Hanley Cartage Company and the Victory Garage. Witnesses were obtained who will identify Fusco and Torrio as buyers of syndicate trucks. Evidences of threatening and high-handed tactics on the part of syndicate members and manipulation of truck sales, were obtained. Handwritings were found which definitely linked defendants with trucks and repairs of trucks which were seized many times with loads of beer.

ANSONIA RESTAURANT
RAMBLER’S INN …

On November 12, 1924, a place called the Ansonia Restaurant was seized, of which Al Brown (Al Capone) was the proprietor. A quantity of wine, beer, and liquor was taken. On this case a warrant was issued for the arrest of Al Brown, the proprietor, but it was returned unexecuted and, as far as is known, Al Capone is a fugitive on this charge …

COTTON CLUB
MONTMARTRE CAFE
GREYHOUND CAFE

In the latter years of the case, these three night clubs were seized and much evidence obtained against Ralph Capone, Mike R. (‘Bon Bon’) Allegretti, William Dixon, and others. There is evidence in much abundance in these cases obtained from tapped telephones which may be incorporated in this case. These cases have been pending following the indictments for some time, but the principal witnesses were Special Agents Walter Filbert and John Wilson who were killed in line of duty near Fort Wayne, Indiana, last year and Informer Ted Moore who has left for parts unknown. This fact makes the case difficult and it has been thought a feasible plan to include the matters in the case. There is no doubt of the connecting features, but the advisability has not yet been fully determined.

All of the above have been included to round out the case and show a complete operation of the syndicate as to manufacture, transportation, as well as ultimate distribution to the consumer, or sale, of beer.

JAMES VESTA MATTER
ACTS OF R. CAPONE

RalphCaponeRG

Ralph Capone (National Archives)

On December 8, 1925, a truck was seized with several barrels of beer and a prisoner, James Vesta, arrested. … This seizure is especially important on account of subsequent events. There were only two agents present and the day was very cold and about two feet of snow had fallen. The agents had trouble in starting the truck to bring the seizure to headquarters, and, while one was working on this, the other was guarding the prisoner in the agents’ car. About this time three men came up to the agents’ car and, after some altercations, so interfered with the agent that the prisoner escaped. The agent called to his partner and, after some discussion the agents took one of these men to a nearby police station and locked him up, and then went out to try to find their prisoner. They were unsuccessful and returned to the station, and saw in front the Packard car with the two men in it who had escaped when the agents took their prisoner. These men called the agents over, and the agents, without any talk, dragged both out, rolled them around in the snow until satisfied they were not armed, and then locked them up with the other man. They then continued to look for Vesta but were again unsuccessful. Returning to the station again they found one of the men who had been dragged out of the Packard comfortably seated in the office in front of the stove getting warm. When the agents asked the officers why this man was out of the cell, the officers replied, ‘Do you know who this is?’ The agents replied that they did not and neither did they care, whereupon they were informed, ‘This is Mr. Capone.’ Ralph Capone then stated that, if the agents would allow him to accompany them to Cicero and would free him and his two men, he would get prisoner Vesta back for them. The upshot of the matter was that Ralph Capone went to Cicero and brought back Vesta, together with about thirty gangsters. The agents then demanded a man to drive the truck and contents to headquarters, whereupon this was agreed to, and the agents brought Vesta in. One of Capone’s men brought the truck of beer in, and Capone and the others of his gang departed.

This incident, together with the particular truck seized, which had been a flagrant offender for a long period of time, shows the intimate connection of the Capones with the truck seizures in this case. It also shows the power of the Capones and their organization at the time. …

TWO MORE LARGE BREWERIES

Truck seizures again followed and are important but not needful of further remark. Then, in the summer…of 1930 two more large breweries were taken, one at 2108 S. Wabash Avenue and the other at 4534 Cottage Grove Avenue. Defendant Charles Fuehrmeyer, then known only as Charles Wyner, was captured in the first brewery but received a fine of only $100.00 because of a lack of information. Now, however, this brewery involved a score of defendants of the syndicate. A truck was seized and a very large amount of equipment and beer, finished and in process.

Paul Martin and Steve Kasper were captured in the second brewery, together with nearly sixty thousand gallons of beer. Steve Kasper is now known to be Steve Swoboda, captured in four different breweries. No prosecution has been yet attempted on this brewery, but the investigation has linked the syndicate with it, especially the lessor, James Hanley, who is now known to be defendant Howlett.

SPECIAL GROUP ASSIGNED

Now comes the beginning of the investigation and activity of the special group assigned as stated at the beginning of this report. From January 1, 1931, to March 24, 1931, they were engaged in watching the plant of the Shields Cooperage Company and the various trucks plying between this plant and suspected breweries. Many trucks and cars were observed and adequate notes kept. Daily, as this information was brought in by the outside crew, the investigative crew obtained information, which was in turn given to the outside men for their information; and, in this way, in many instances the ownership and registration and other data on particular trucks and cars, etc., were available before the truck or car was seized. In many cases, due to a series of licenses with consecutive numbers taken out by the same individual, information was available and given to the outside crew of cars and trucks belonging to the syndicate before they were even seen. Every detail was investigated to the last degree, and soon a mass of information began to accumulate. The same methods were followed during the remaining months of the work and were very productive.

ATTEMPTS AT BRIBERY OF AGENTS

On March 7, 10, and 11, 1931, agents of the group were observing the Shields Cooperage and saw a large truck emerge at different times. This truck was followed to a garage at 4534 Cottage Grove Avenue where in 1930 a large brewery had been seized but which was now being used as a breaking-point. On March 12 this truck was again observed and followed. It was being convoyed by five cars, among which were two driven by defendants Frank Russo and John Miller. These men saw the agents and stopped in an alley, cutting off the agents’ car, and then jumped up and confronted the agents, asking, “Who the hell are you guys?” The agents identified themselves and asked the identity of their questioners, who were then not known but later identified. For answer, Russo grabbed Agent Leeson and a physical combat ensued, in which the agents came out well enough to continue to follow the truck. They followed it to a garage at Shields Avenue and 29th Street, where it entered. About this time five cars came up, all with license plates removed, and surrounded the agents. Among the men in the group later identified were defendants Patrick O’Brien, Mike Smith, Bert Delaney, Frank Russo, John Thoreson, and Albert Johnson. In the excitement the agents left a pistol on the seat of their car and Russo made an attempt to get it, but was restrained by Agent Leeson. By this time all the men mentioned had alighted and surrounded the agents. One of them said, “You don’t think you can take us all, do you?” The agents replied, “We are willing to try.” A murmur went through the crowd as if contemplating an advance on the agents, when defendant Delaney stepped forward, waved his hand at the men, and said, “Cut it out.” He then called the agents each by name and said, “Can’t we get together? You fellows know whose trucks you are following around. We won’t go into that.” He then made an appointment to meet the agents at 4534 Cottage Grove Avenue at 11:00 A. M. the same day. The agents entered into this by prearrangement with the United States Attorney and William J. Froelich, Assistant to the Attorney General, who had instructed them to follow any such plan, if suggested by the more prominent syndicate members.

The appointment was kept and Delaney appeared and said, “What is it going to cost us to have you fellows lay off these trucks?” The agents stated that they did not know him and could only deal with someone they knew and who was in authority. Delaney then asked them to mention the names of some they knew with whom they would deal, and the agents mentioned, “Joe”, meaning Fusco, to which Delaney said he would have Joe meet them at the same place the next day if they would agree not to make any seizures. This was reported to Mr. Ness and Mr. Froelich, who advised them to keep the appointment. This was done but nobody appeared and the agents proceeded to the garage at 29th and Shields, only to find that the truck was gone and the garage had been emptied.

The agents again resumed their watch on the Shields Cooperage Company and on March 14 saw the same truck again and started to follow it, when they saw Albert Johnson, and he saw the agents. He came up to them and said, “What’s the trouble? Weren’t you fellows fixed up yesterday?” The agents replied that they kept their appointment but that nobody met them. To this Johnson answered, “Well, give me ten minutes and I will have somebody here that will satisfy you.” The agents agreed to wait ten minutes and Johnson returned stating that he was unable to get in touch with the man he wanted but would see the agents the next day. The agents refused to do this and in a few minutes he returned and said, “I have $600.00 here for you fellows any place you say to meet, we will. If that’s not enough, say so. Then all you will have to do is to tell us the place and the day of the month and go and get your money.” The agents told him they were not interested.

On March 24 the agents were again watching activities at the Shields Cooperage, when they were again approached by Johnson who said, “Well, boys, I can do a little better by you this time. I have two grand in my pocket for you. Just do me a favor and take this, because neither one of us can do anything when we are bucking the other. If that’s not enough, let me know, and we will arrange to meet later on.” The agents again refused to accept the money.

SEIZURE BREWERY AT 1642 S. CICERO AVE.

During the above-mentioned period of observation and more particularly on March 3, 18, and 23, agents observed trucks going to garages at 1504 and 1642 S. Cicero Avenue in Cicero. The former is the Cicero Avenue Garage operated by Julius Pellegrini and the latter was known as Talbot’s Garage. Agents watched these two places constantly for many days and on two different occasions followed trucks from 1504 S. Cicero, which seemed to be a breaking-point, to 1642 S. Cicero by a circuitous course involving travel of about three miles, although the distance was only about two blocks, where the agents began to notice a strong smell of beer. On March 23 they definitely decided that the latter was a brewery and obtained a search warrant. On March 25 at 5:00 A. M. Agents Ness, Chapman, Leeson, Seager, Stutzman, Malsie, and Erkilla, accompanied by Prohibition Agent McCabe, entered these premises and seized a very large brewery, together with a new White truck with a moving van body and a three thousand-gallon wort tank mounted inside the body, and three prisoners, John Mann (Frank Juffra), Steve Swoboda (captured in four different breweries), and Henry Carter. An immense quantity of beer and equipment was confiscated.

This seizure was the opening wedge that exposed the conspiracy. The facts that had been obtained now took on wide meaning when the investigation of this brewery was added. The connection of Frank Juffra gave rise to an investigation going back to 1921, and much information showed plainly that members of the syndicate, responsible for this brewery, had long been associated with the same syndicate. This was exactly what was wanted – the special group had been assigned for the purpose of obtaining evidence against the Capone syndicate – and here was [sic] definite results. Every piece of evidence, documents, and papers, were carefully labeled and each shred of information was investigated to the minutest detail. Frank Juffra’s record showed a close connection with Fusco, Nick Juffra, Tony Juffra, Bert Delaney, Al Capone, and others. The truck was purchased by Fred Nagle, who was Howlett. … This brewery involved almost immediately sixteen members of the syndicate…

SEIZURE OF BREWERY AT 3136 S. WABASH AVENUE

The outside crew continued to watch the cooperage plant, follow trucks, and observe the general activity of the syndicate members. White truck carrying license X-4927 which they had observed going to the Cicero Avenue brewery but which was not captured there, was again observed. This truck was closely watched and on April 9 and 10 it was seen to drive into a premises at 3136 S. Wabash Avenue, and the place had all the earmarks of another brewery. On April 11 in the early morning hours the agents were watching this place and again saw the truck enter. Closer investigation brought them a plain odor of beer. A search warrant was quickly obtained and Agents Ness, Lahart, Robsky, Leeson, Esterbrook, Stutzman, and Seager entered and found a complete brewery. About forty-five thousand gallons of beer were seized and a large amount of equipment. Defendants Frank Carey, Steve Swoboda (arrested in the Cicero brewery), John Chandler, Patrick O’Brien, and Frank Contie were arrested in the brewery.

ATTEMPT TO STEAL SEIZED BREWERY EQUIPMENT

From an undercover source Agent Ness received information that it would be well to closely guard the brewery over Sunday. It was seized on Saturday. With this in view, Ness gave out the information that things would be left as they were until Monday morning and ostentatiously left the place with his whole crew. But later they slipped into place quietly and maintained a close watch. About 1:30 P.M. on Sunday, April 12, a large White truck was driven into the building and four men started removing the large fermenting vats. The agents immediately came from their hiding places and seized the truck and arrested Bert Delaney, Mike Smith, James Calloway, and Frank Stork (John Shon). The truck carried license No. X-4926, being one consecutive number lower in a series than the truck which had been observed by the agents. It was registered to Harry Olsen (Fuehrmeyer) and was purchased by Joe Thompson, who was proven by the investigation to be Fusco. When buying this truck he had turned in Betz truck No. 101596… This fact showed at once a connection between this brewery and all the earlier activity involving the Betz trucks, the World Motor Service Company, Fusco, and Capone, which was strengthened by the arrest of Delaney in the brewery and his early association with this same crowd. Nine men were involved by direct arrest and a dozen more by the investigation. This brewery and the Cicero brewery were directly connected by the arrest of brewmaster Swoboda in both and by the fact that two carbonic acid gas tanks were found with identical numbers in both breweries, showing that after seizure of the Cicero brewery the gang had picked up the tanks, which were the property of the Pure Carbonic Company and therefore left on the premises when the rest of the equipment had been confiscated, and had taken them to the Pure Carbonic Company for refilling with gas, and had used them in this brewery. …

“DRY” BREWERY AT 2408 S. LASALLE ST.

Observation of trucks continued but the syndicate was extremely wary now, and the loss of two big breweries caused them to cover their tracks with care, but the agents soon located a premises at 2408 S. La Salle Street which gave every indication of being another brewery. After considerable watching a warrant was issued, and on May 11 Agents Ness, Chapman, Seager, Leeson, and Stutzman entered. However, there had been either a “tip-off” or the agents had been observed watching the place, because a brewery had just been moved out. There was plenty of proof that it had been there within a few hours, the smell of beer was everywhere, and other indications showed a hurried departure. This matter was investigated and was connected with the syndicate as strongly as if a quantity of beer had been seized. The lease was signed by Patrick Carroll in the handwriting of Howlett. … Howlett has also been identified by witnesses as the lessor.

BEER DROP AT 2636-8 CALUMET AVE.

Following the above, observation and investigation were continued, and meanwhile a truckload of beer was seized and connected with the case. On June 20 Agents Leeson and Robsky discovered three men working inside a place at 2636-8 Calumet Avenue which they had been watching for some time and smelled beer strongly. They immediately entered and placed the men under arrest and notified the office. While one agent was away telephoning, the men broke away and escaped, but after an exciting chase James Calloway was recaptured. Defendant Tony Moreno, who was later arrested, was identified as one of those who escaped by both agents. A large truck was seized and 362 barrels and 10 half barrels of beer, all under ice. A number of delivery slips were taken showing addresses to which beer was to be, or had been, delivered. … The same truck was again seized later with a load of beer on March 7, 1932.

INDICTMENT OF JUNE 12, 1931
CAPONE PLEADS GUILTY

Meanwhile, however, other important events were taking place. This investigation, with evidence up to that time, was presented to the Federal Grand Jury by United States Attorney Victor La Rue and William J. Froelich, Assistant to the Attorney General, and the indictment was obtained against Al Capone and sixty-seven of his syndicate, as given above. Al Capone had…been indicted on income tax charges, and on June 16 he pleaded guilty to both indictments. On August 1 Capone was allowed to withdraw his guilty plea and substitute a plea of not guilty. However, this was taken under advisement by Federal Judge Wilkerson, insofar as the beer indictment was concerned, until September 8, at which time he accepted the not guilty plea and directed the Grand Jury to reexamine the evidence in order to bring in indictments under substantive offenses.

The Grand Jury met accordingly and was informed by the investigators on this case that indictments against all defendants for the substantive offenses had been obtained where possible and were pending, and that they had no offenses of this nature, within the statutory period, against Capone. Judge Wilkerson did not hear the Grand Jury’s report as to these facts, merely dismissing the jury when advised that no Jones Law offenses were found against Al Capone. …

Then followed the trial of Al Capone on violations of the income tax laws, beginning on October 5, 1931. Agents assigned to this case were present during the trial to make notes and take advantage of any evidence useful to this case. …

BEER DROP AT 222 E. 25th ST

Meanwhile on September 20 after Agents Ness, Leeson, Seney, and Robsky had traced trucks on several occasions to a large brick building at 222 E. 25th Street, they entered the building and seized a beer distributing plant, two trucks, 290 barrels and 12 half barrels and 56 cases of beer, and arrested Frank Contie (fourth time)… Many beer delivery slips were found giving hundreds of addresses to which beer was being delivered. …

ARREST OF GEORGE HOWLETT

During the summer the Shields Cooperage Company had vacated their premises due to activity of the agents on this case, and, although agents had succeeded in apprehending several violations of the syndicate during this time and seizing a truck of beer on October 12, they were unable to locate the new cooperage plant although they knew it was in existence. Following the indictment the agents had arrested several of the conspirators indicted, but Howlett and Fusco still eluded them. However, after an investigation covering two states and using tapped telephones and artifices based on their knowledge of the inner workings of the syndicate, Howlett was arrested on November 14. He was a major member of the syndicate but had previously been practically unknown and never had been arrested as far as is learned. On his person were found some calling cards with numbers on them. All these were checked with gratifying results. … [T]he most interesting find was a notation, Monroe 2961, which when checked was a telephone listed to the William Cooperage Company, 1025 W. Monroe Street. A very little investigation showed that this was the cooperage plant for which the agents had been looking…having moved to that address from the premises of the Shields Cooperage Company.

“DRY” BREWERY AT 5233-37 W. 22nd ST. CICERO

Meanwhile another truck of beer had been seized on November 17 and the agents had been watching the Williams Cooperage plant and following suspected trucks. Several were seen and noted and some of these traced to Pellegrini’s Garage, 1504 S. Cicero Avenue, and from there to an address at 5233-37 W. 22nd Street, Cicero, where the agents, after watching several days, decided there was a brewery and obtained a search warrant. The raid was made on December 21 but information had leaked out in some manner and the brewery was gone. Similarly to the former “dry” brewery, however, the indications were strong that the brewery had only just vacated the premises. Confirming this, agents went to Pellegrini’s garage and found three trucks which had been noted on several occasions as syndicate trucks loaded with brewery equipment. Investigation showed that another brewery had been located and raided in this same place earlier in the year by Prohibition Agents and had also just moved out. Both breweries were, therefore, investigated and definitely linked with the case. …

TWO LARGE BREWERIES

After the first of the year, 1932, events happened rapidly. The agents continued and on January 2, 4, 5, and 6, saw trucks go to the vicinity of 22nd and Lumber Street, where they would be lost, but on January 7 they saw the truck enter premises at 2271-73 Lumber Street. A watch was constantly maintained on the premises until 5:00 A. M. on January 8 but no one entered, and so the agents went in and seized a large brewery. About thirty-five thousand gallons of beer and a large amount of equipment were taken, and the investigation showed that Jack E. Singer was the lessor. He has been identified by witnesses and by handwriting as Howlett. Defendants Fuehymeyer, Dold, Frank Russo, Nick Trimarco, Albert Johnson, and others have been connected with this brewery.

MANHATTAN GARAGE SEIZURE OF SIX TRUCKS

Observation of trucks and convoy cars was continued and a large number identified with the Capone organization. … During February and part of March much information was learned over a tapped telephone in the syndicate’s headquarters in the Coliseum Garage… The Manhattan Garage had now been under observation by the agents as a suspected distributing point and breaking-point for some time. Several times agents had followed trucks into this place, and on March 4 Agents Leeson and Seney saw two large trucks enter this garage, both apparently heavily laden. They notified the office and Agents Ness, Leeson, and Seney entered. Both of the trucks seen to enter by the agents were inside loaded with beer, together with three other trucks loaded with brewery equipment and a truck fitted out as a complete bottling plant on wheels. Several carbonic acid gas tanks were found, three of which were identical with such tanks found in the Lumber Street brewery on January 8. … Two of the seized trucks have long histories of service in the syndicate and two have been directly connected with the syndicate and two are still under investigation. …

ARREST OF TRIMARCO AND DOLD …

On March 14 defendants [August] Dold and Trimarco were arrested while convoying a syndicate truck. On the person of August Dold was a paper in his handwriting, containing the license numbers of three agents working on this case, Ness, Chapman, and Robsky, as well as license numbers of automobiles driven by officers of other law enforcement agencies. …

LAST EVENTS OF CASE …

This closes the activity of the special group as to outside work, as the detail was dissolved about May 1, 1932. The investigation is still in progress, however, especially with regard to recent events. There are a large number of witnesses to be interviewed, some of whom are expected to add large chapters to this story. Much work is yet to be done on the investigation of trucks which involves new handwritings [sic] and will undoubtedly link many unconnected pieces of information with definite defendants in this case.

This conspiracy is still in existence and any seizures or events which occur up to the time of the new indictment will probably be added to the story. …

At present the witnesses in this case would make a list of well over six hundred names and more are continually being added. …

The investigation has brought out very little about the financial responsibility of those under inquiry, although it has shown that for a number of years members of the syndicate enjoyed a large income. However, they have suffered greatly in the last fifteen months on account of attorneys’ fees, bonds for arrested members, loss of breweries, trucks, and equipment. A recent report was published that the so-called “Untouchables”, a name applied to the special group, had cost the syndicate a half million dollars in six months. While listening on a tapped telephone, an agent overhead Fusco tell that he was $50,000.00 in debt for the month of February, 1932, and was unable to operate his business. While it is not to be assumed that the syndicate is “broke” or that they are not still deriving a large income from beer, it is known that their power and financial affluence has been greatly curtailed and that, where formerly they absolutely controlled every district of Chicago and suburbs, they are now forced to allow rival operators to control certain districts, contenting themselves with a working agreement and nominal control under sort of a truce to keep peace. …

CITIZENSHIP STATUS OF DEFENDANTS

From all available information and the knowledge that certain of the defendants are citizens, it would be reasonable to take for granted that all the defendants are native born or naturalized citizens. Little is positively known on this subject except in the case of the Capones, who are known to be native born, Alphonse in Brooklyn, New York, in 1899, and Ralph in Brooklyn, New York, in 1895. …

[S]imilar investigations in the Department of Labor have coincided with the investigations of the special groups of the Department of Justice and the Treasury Department, and the former have been active in deporting any aliens found among syndicate members, as a phase of the same mission, to rid Chicago of this obnoxious gang. …

CONCLUSION AND RECOMMENDATION

It is anticipated that the facts…here outlined will be presented to the Federal Grand Jury in the next two or three weeks for reindictment and that trial will be commenced in the Fall term of Court. It is recommended that investigation be continued until that time. Supplemental reports will be made as important developments transpire.

Respectfully,

[signed] Lyle B. Chapman

Special Agent