The books used to compose this podcast included:
“Leopold and Loeb: The Crime of the Century,” by Hal Higdon, and
“Arrested Adolescence: The Secret Life of Nathan Leopold,” by Erik Rebain.
The music used in this podcast included:
Intro, Part One and Outro, Part Two: “Dance of the Gypsies,” by Hanu Dixit
Outro, Part One: “Never Surrender,” by Anno Domini Beats, and
Intro, Part Two: “Inconsciousness,” by Mini Vandals
The shocking story behind the biggest swindle in the history of Wall Street.
Agent Cacioppi was so taken aback by Madoff’s candor and unusual cooperation he called his office to determine what he should do next. Typically, a subject with Bernie’s sophistication and community stature would refuse to answer questions and stall, at least requesting time to speak with or even have an attorney present before answering any questions. Madoff’s admissions to the agents were an unexpected response. The agent was told to arrest Madoff and bring him to FBI offices at 26 Federal Plaza.
Upon graduation from college, Madoff briefly attended Brooklyn Law School but unlike his brother Peter, who graduated from Fordham Law School, he dropped out after a year. He did pass the requisite exams to not only sell financial securities but to also operate his own securities brokerage firm, which he formed in 1960, calling it Bernard L. Madoff Investment Securities. By then, Madoff was already married to Ruth Alpern, the daughter of a successful accountant, Saul Alpern. Another occasional fable that Madoff spun was that his working capital came from his summer jobs installing sprinklers and as a lifeguard. He frequently left out the fact that his father in law not only lent him fifty thousand dollars, he also gave him a desk in his firm’s office and referrals of all of Saul’s client base.
By the early seventies, several personal events greatly affected Madoff, the sudden and relatively early death of both of his parents and the inclusion of his brother Peter into his growing business entity. Between July 1972 and December 1974, Ralph and Sylvia would both die suddenly before their sixty-fifth birthdays an event that probably prompted the elder Bernie to take his younger brother under his business wing. Peter was a critical employee who became more operations and technology oriented, helping to keep the firm’s broker dealership on the cutting edge of upgraded technology in a securities market environment that was undergoing a technological revolution. And Peter would also assume the role of chief operations officer, a critical responsibility in any brokerage firm but even more so within Bernard L. Madoff investment securities.
His sons, Mark and Andrew, newly minted graduates of the University of Michigan and Wharton respectively were both now working for the firm, albeit on the broker dealer side of the business.
Avellino claimed that all of the money was there and was in the hands of his money manager, Bernard Madoff. As soon as he had heard of the SEC inquiry, Madoff tried to get ahead of what he knew was coming. Not only an SEC demand for the return of the assets but a possible scrutiny of his trading history to determine whether or not he in fact was running a legitimate money management firm, with ongoing investment in the markets. To do this he tasked one of his employees, Frank DiPascali, the individual who already was involved in producing investor statements that were most likely either distorted if not out right falsified, to reconstruct trades for all of the Avellino and Bienes accounts that would demonstrate the profits necessary to generate the claimed returns. These fictitious trades also had to stand up to SEC scrutiny. Amazingly, Madoff’s conversations concerning his trading strategies and DiPascali’s creation satisfied the SEC, however they did get a court order to force Madoff to return what were illicitly collected funds.
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The shocking story behind the biggest swindle in the history of Wall Street.
But, if many of Madoff’s clients were happy to not question his returns and process, the cynical, highly competitive and data driven world of Wall Street always invited scrutiny of its biggest stars, even if this was the result of envy or alienation. In Harry Markopolos, one found an individual motivated by both market place rejection and a competitively brilliant grasp of financial marketplace analytics. In 1999, Markopolos was employed as a portfolio manager by Rampart Investment Management, a small Boston, Massachusetts options trading shop that managed a modest amount of money. Markopolos was quite familiar with Bernie Madoff, his firm having marketed a split-strike conversion product that he helped develop. Unfortunately, the product did not generate particularly good returns and was eventually scrapped, Markopolos additionally both intrigued and frustrated by repeated stories of the phenomenal performance generated by Bernie Madoff. If you’re so smart, why the hell can’t you do what Bernie does? His hard boiled, Boston sales compatriots constantly needled him. To a quant like Harry Markopolos this was the ultimate put down and challenge, but there wasn’t much he could substantively do about it.
That changed when a senior co-worker named Frank Casey, returned from a New York sales call he had taken with Rene-Thierry Magon de la Villehuchet at Access International Advisers. Villehuchet not only managed money for some of Europe’s most high profile aristocrats he was literally a member of the French nobility himself. In his sixties, he was a client of Bernie Madoff’s since 1985, and rebuffed Casey’s sales pitch with glowing accounts of Madoff’s consistent high returns and reporting process that purported to send daily updates of all transactions performed on behalf of Access’s accounts. Casey then played the only sales card he had left, asking why Rene-Thierry allowed Madoff to hold the securities he purchased on Access’s behalf himself, as opposed to a third party custodian which was required for registered investment managers. Villehuchet’s answer was simple. Bernie Madoff wasn’t a registered money manager, so he was not required to do so and the Frenchman was dismissive of any of Casey’s concern, saying he trusted Madoff implicitly. The meeting quickly terminated with at least Villehuchet providing a copy of his returns and portfolio performance. Casey subsequently got seven years of such performance from Broyhill Securities’ All Weather Fund, another Madoff feeder fund and tossed this information on Markopolos’ desk.
This article was quickly followed up by another piece in the much more formidable business publication, Barrons, written by Erin Arvedlund. Again, although not accusatory, it was certainly skeptical of Madoff with similarly specific questions. Madoff’s response to these articles was to have Frank DiPascali construct a fake in-house computer terminal that supposedly was a trading platform connected to other trading counter parties, in fact it was connected to another employee’s in house terminal, hidden in another part of the office, all of these simulated trades completely bogus. Another DiPascali creation was a supposed live screen of an account at the Depository Trust and Clearing Corporation, known as the DTC, where securities owned by Madoff purchased during alleged trades were being held in his account. The fake reproduced the DTC’s logo, fonts, formats even the type of paper used for actual DTC reports.
On December 11, 2010, on the second anniversary of his father’s arrest, Mark Madoff committed suicide by hanging himself from his apartment ceiling with a dog leash. At the time of his death he was the subject of nine federal lawsuits, including suits brought by trustee Picard. His wife had already changed her and their childrens’ last name to Morgan. Unlike Andrew he seemed deeply sensitive to allegations that he knew about the fraud. His body was discovered by his stepfather in law when he rushed to the apartment after Mark’s wife received some alarming e-mails, Madoff’s 22 month old son and pet dog left alone in the apartment. This suicide, did not stop the relentless Picard, who then filed suits against Mark’s ex-wife and current spouse to recover funds deemed ill gotten gains.
Upon sentencing Bernie Madoff was sent to the Federal Correctional Institution at Butner, North Carolina. He occasionally granted interviews that were mostly self-serving with Madoff blaming his behavior on the culture of Wall Street or getting in over his head on something he never meant to pursue on a long term basis. He expressed exasperation with his clients who he labeled as greedy, especially the big four, three of whom were now dead. Although he continued to correspond with his wife, his two sons allegedly never spoke to him again, after he confessed his role in the fraud, one of few developments in his life that actually seemed to disturb him. Although initially accounts of him being assaulted in prison circulated in the media, he eventually referred to Butner as a relatively pleasant place akin to a college campus, his main objection to prison the sheer boredom it entailed.
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For twenty years, Whitey Bulger terrorized Boston with the full collusion of the FBI. On the run for sixteen years, he was eventually arrested on June 22, 2011.
Between the ages of thirteen and eighteen Bulger was arrested ten times, for crimes ranging from larceny, drunk in public and assault and battery. Only once were charges ever pursued to the point of a criminal conviction and even then, Whitey was able to get the charge reduced on appeal. It is no wonder that he developed an arrogant disdain for the criminal justice system and a sense of invulnerability. Unfortunately, this mentality only increased the severity of his transgressions. In May of 1948, Bulger and two accomplices enticed a young female into Whitey’s car and attempted to rape her at a beach in Dorchester. The girl fought back and was kicked to the curb, but not before getting the license plate. All three teens were quickly arrested. Again, Bulger plead guilty to a lesser assault charge, paid a fine and avoided a serious prison term. Within two months, he was arrested again, this time for a drunken assault in a diner that turned into a brawl with the police who showed up to arrest him. Again, he plead guilty to the lesser charge of public drunkenness, paid a modest fine and walked away.
Despite Bill Bulger’s vehement and relentless involvement, including an eleventh hour visit to DC to the Director’s office for an unscheduled, in person request for a last minute reprieve, on November 13, 1959, Whitey was flown commercial, with federal marshals, from Baltimore to San Francisco. From there, in leg irons, he was placed on the small ship that transported him to the center of San Francisco Bay and the Rock. This was an especially isolating development for Whitey for in the late fifties transcontinental flight was a luxury the Bulger family certainly could not afford. He would have to rely on letters only, the occasional visit from his brother or other family members now an impossibility.
On May 27, 1981. In broad daylight, at a country club in Tulsa, Martorano followed Roger Wheeler to his car in the parking lot and as Wheeler got in Martorano pulled the door open, put a bullet right between Wheeler’s eyes and hopped into a getaway car driven by another Winter Hill mobster. Tulsa investigators quickly determined that criminals from Boston were probably involved, but when they and Oklahoma City FBI agents contacted Boston FBI, they got nowhere.
Gradually, even the highest level coke and pot dealers were invited to the upstairs office of the Triple O’s Bar. There, Whitey would be waiting, usually with at least Kevin Weeks, a former bouncer that Whitey took under his wing, gradually relying on him as one of his top enforcers.
In July of 1956, there was no cushy Club Fed where Whitey could serve out his time in relative penal comfort. Instead, he was sent to the Federal Penitentiary in Atlanta, a huge, forbidding edifice that had housed the likes of Al Capone, Mickey Cohen and Vito Genovese. By comparison Whitey Bulger was a two-bit, bank robber, not exactly intimidating at 5’10”, 150 pounds and other than a few hoodlums back in Boston not particularly well connected. After thirty days of quarantine that was mandatory for every new inmate, Bulger was assigned to one of the eight man cells that comprised most of the tiers of the prison.
Although Bulger had shot some gangster rivals to death in his early battles with the Mullens, his hands on violence began to ramp up in the late seventies, probably as a result of his newfound power as the most powerful criminal in South Boston. This attitude was evidenced in the matter of Louie Latif, a bookmaker and drug dealer who began to behave erratically, first by murdering several business associates who caught him stealing and then by dealing cocaine. Both behaviors were not only repeatedly unsanctioned by Bulger, Litif also refused to pay rent. Summoned to the upstairs office at Triple O’s, Litif was pointedly warned that he was crossing a very serious line. Litif responded that as long as he and Whitey were friends, he didn’t have a problem. Bulger fixed him with what must have been a terrifying stare and responded, “We’re not friends anymore.”
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For twenty years, Whitey Bulger terrorized Boston with the full collusion of the FBI. On the run for sixteen years, he was eventually arrested on June 22, 2011.
Litif got off with this stern warning but then made the mistake of telling Bulger that he was going to murder his bookmaker partner, a last straw. On April, he was invited to the Triple O’s where Bulger stabbed him repeatedly with an ice pick and Steve Flemmi shot him in the head. His body was found in the trunk of his car, in garbage bags, abandoned on a South End street. In another example of his macabre sense of humor Whitey explained to associates afterwards that Litif, known as a flashy dresser, was wearing green underwear after they stripped his body. Therefore, they made sure that they used green garbage bags, so that Louis would be found, color coordinated.
Only a few months later, a Southie criminal named Brian Halloran tried to extricate himself from some serious criminal charges by going to the FBI, with details tying Bulger and Flemmi to the murders of Louie Litif and Roger Wheeler, even claiming to be an eye witness in both cases. Although Halloran was at least embellishing if not outright lying about his presence at the Wheeler slaying, he was close enough to Callahan to be able to secretly record potentially incriminating conversations. He pleaded to be allowed into the witness protection program and the agent handling his case figured he would run that by supervisor John Morris, to see what he thought. Morris immediately told Connolly who told Whitey Bulger.
With two bodies now buried in its basement, Whitey Bulger began referring to the Nee house as the Haunty. The cellar would have another permanent guest, Deborah Hussey, Steve Flemmi’s quasi-stepdaughter. Although he and Marion Hussey never married, he lived within the Hussey household and was perceived as the father in the family. That is, until Deborah Hussey revealed that Flemmi had molested her sexually, beginning when she was a young teenager. As an adult, Debbie developed a serious drug addiction and resorted to prostitution to feed her habit. Arrested on numerous occasions, she frequently named dropped both Flemmi and Bulger to the police. She also took to hanging around the Triple O’s and demanding drinks from the customers or hitting up Southie dope dealers for freebies, bragging that she had connections to Whitey, another big red flag. Bulger believed her to be a dangerous loose cannon and began pushing Flemmi to do something about it. In early January, 1985, Flemmi did. He got her to meet him by feigning guilt over what had happened between them and the general situation with her mother. He asked to make it up to her by taking her clothes shopping and telling her he was thinking of buying her her own place. Why don’t we drop by and take a look and see if you like it? The house in question was The Haunty.
Ambitious, Connolly was fully aware that for the FBI, the American Mafia to the exclusion of all other organized crime entities was the paramount target of Federal law enforcement. Aware that Steve Flemmi already had provided information, Connolly set his sights on forming the same relationship with Whitey Bulger. Thus far in his brief FBI career in New York, Connolly received high praise during his ongoing evaluations with the stipulation that he had not developed any confidential informants. The agent, knowing Whitey from the old neighborhood and willing to cut ethical and professional corners, understood that developing Whitey as a Top echelon informant could be, within the bureau, a career maker.
In the cat and mouse game of criminal informant, it quickly became clear that the lines were being blurred as to who was the cat and who was the mouse. John Connolly introduced Bulger and Flemmi to his newly installed supervisor within the FBI’s Boston Organized Crime Unit, John Morris. Connolly also arranged for regular dinners at Morris’ home in Lexington, Mass, dinners that included Whitey showing up with cases of very expensive wine, that always got left behind. Morris was blown away by Connolly’s ability to gain access to two such high level informants and was also manipulated by Whitey’s slick Robin Hood façade of claiming to abhor drugs, detesting the Mafia and keeping his neighborhood free from hard drugs like cocaine and heroin and the junkies and pushers who came with such pestilence. All of these claims were either ultimately self-serving or outright lies, but Morris was taken in.
In the late afternoon of June 22, 2011, in Santa Monica, California a property manager name Josh Bond was sitting in his office at the Embassy Hotel. Picking up the phone, Bond punched in the number of tenants from another property across the street, the Princess Eugenia Apartments at 1012 3rd Street, only blocks from the Pacific Ocean.
Whitey also made the most crucial connection of his criminal career when he began to interact with Stephen Flemmi, a member of the Winter Hill Gang who had ambitions of bigger and better things. Nicknamed “The Rifleman,” based on two Army tours of duty in Korea, in which he earned both a Bronze and Silver Star, Flemmi also had an ongoing relationship with longtime Boston FBI agent Paul Rico who specialized in developing informants in the New England criminal underworld.
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For twenty years, Whitey Bulger terrorized Boston with the full collusion of the FBI. On the run for sixteen years, he was eventually arrested on June 22, 2011.
Whitey did not limit himself geographically to South Boston. No longer able to access Marshall Motors because a jailed, cash strapped Howie Winter’s family needed to rent it out, in early 1980, in a location owned by confederate George Kaufman, he set up another headquarters at a garage on Lancaster Street, only blocks away from Jerry Angiulo’s North End office in a restaurant on Prince Street. Here Bulger routinely met with Ilario “Larry” Zannino, Angiulo’s number two man, among other bookies and criminals. An initially strategic spot for such interactions, the Lancaster location set off a law enforcement reaction that was practically a keystone cop imitation. When the Boston State Police received a tip that the garage was actually a chop shop, two investigators began surveillance from across the street. Stunned when they observed the entrance and exit of some of Boston’s most notorious mobsters, they realized bugging the garage would probably provide a mother lode of indictments. Jack O’Donovan, the head of the organized crime unit for the Massachusetts State Police had long suspected that the FBI was colluding with Bulger, and O’Donovan was intent on investigating and arresting Bulger himself.
When Charley Gasko emerged from the elevator into the rear area of the apartment building he would not be meeting up with Josh Bond. Instead, he would be confronted by a half dozen FBI agents and various other law enforcement officials, guns drawn. They ordered him to get on the ground, but despite his age and relative frailty, his response underlined that this was not your typical 81 year old senior citizen, in fact it was not Charlie Gasko at all. It was America’s Most Wanted criminal, James J. (Whitey) Bulger.
Minutes later he called his longtime companion, the alleged Carol Gasko, who was in fact Bulger’s longtime girlfriend and fellow fugitive, Catherine Grieg, his accomplice during Whitey’s 16 year odyssey. He told her that he had been arrested, that she should stay in the apartment and minutes later she was also brought down to the garage, both fugitives now in handcuffs.
Bond, who also managed the Princess Eugenia, needed to reach Charles or Carol Gasko, the elderly, childless couple that occupied the northeast third floor corner apartment, #304. The property manager actually knew the Gaskos’ quite well, his own apartment was next door to theirs and he interacted with Charlie Gasko quite frequently. Bond heard the phone ringing in his earpiece but there was no answer. He hung up, not sure what to do. The reason for his call was that the Gasko’s storage unit at the rear of the building was broken into and he needed to know how the couple wanted to handle the situation. Come down and meet him, Josh, in the back of the building or just have Josh notify the police.
On the evening of October 29, Bulger arrived at the US Penitentiary in Hazelton, West Virginia. A high security prison where two inmates were murdered in the previous six weeks, unfortunately it also housed at least two individuals who made it completely unsuitable for Bulger. One was Fotios (Freddy) Geas, serving a life sentence for the murder of two underworld criminals. Although of Greek ethnicity, Geas was a hitman who operated in Springfield, Mass and was affiliated with the Mafia’s Genovese crime family. In fact, he was arrested as part of the FBI’s investigation of organized crime in the Western Massachusetts area, an investigation that eventually involved the administration of Mayor Michael Albano. Paul DeCologero was also a Northeastern Massachusetts organized crime figure, serving a lengthy sentence for murder. On the morning of October 30, only minutes after Whitey Bulger’s prison cell door was unlocked at 6 AM, close circuit cameras showed Geas and DeCologero entering Bulger’s cell. They left seven minutes later. Whitey Bulger was discovered dead at approximately 8:20 AM,
The Bulger family was not aware of his transfer to West Virginia and Jackie Bulger found out about his brother’s death from the media. However, it seems that many inmates knew of Whitey’s impending transfer, Sean McKinnon, Geas’ cellmate, and the third man eventually indicted for his murder was recorded on a prison line telling his mother in advance that Whitey was on his way.
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In 1961, an unemployed cab driver, Kempton Bunton, pulled off one of the most remarkable art thefts of the 20th century. Or did he?
Bunton’s mother named him Kempton Cannon Bunton after a British jockey, Kempton Cannon, who won the Epsom Derby only days before her son’s birth, June 14, 1904, a victory she financially backed. When asked about his unusual name, Bunton also always replied, “It’s Kempton as in Kempton Park racecourse,” as if to underscore his interest in such an edgy activity.
Arthur Wellesley, the First Duke of Wellington, became one of the most prominent military and political leaders of the British Empire during the first half of the nineteenth century. Despite spending approximately fifteen years in military posts that included the Netherlands and especially India, Wellesley remained an obscure commanding officer until his 1808 assignment to the Peninsula War, an extended conflict on the Iberian Peninsula combating Napoleonic occupation. This grueling struggle, combined with Napoleon’s disastrous 1812 invasion of Russia, depleted French military strength, and lead to France’s eventual capitulation. One of the key moments of the Peninsula War occurred when Wellesley, then the Earl of Wellington, achieved a decisive victory at Salamanca, which lead to the liberation of the capital, Madrid and the flight to Valencia of Joseph Bonaparte, titular king of Spain, and brother of Napoleon Bonaparte. The Earl entered the capital on August 12, 1812, at the head of his troops, the British hailed as liberators by Madrid’s grateful inhabitants. The Peninsula War dragged on laboriously until 1814 and the final collapse and abdication of Napoleon Bonaparte, but after Salamanca, Madrid was never reoccupied by French forces.
As a celebrity, Wellington, in the capital, crossed paths with Francisco de Goya, the Spanish Court Painter and a prominent member of official society in his own right. Goya was able to get the British commander to sit for a sketch and two other eventual paintings, an equestrian study and a remarkable portrait of Wellington, in scarlet uniform, festooned with numerous colorful decorations and a remarkably lifelike expression. Over time, as the historical prominence of both men grew, this portrait achieved a special stature denoting the interaction of one of Europe’s greatest artists with one of the continent’s most accomplished statesman and military leaders, a truly rare collaboration.
The initial controversy and subsequent national retention of such a uniquely British artifact generated massive publicity and anticipation when it was announced that the painting would be placed on display at London’s National Gallery, beginning August 2, 1961. For two and a half weeks, crowds averaging well over five thousand patrons daily, an unusual increase over the normal number of the museum’s visitors, flocked to see the newly acquired painting. To accentuate the stature of and to insure maximum accessibility for the throng of visitors eager to see the portrait, Goya’s Duke of Wellington was displayed on a portable easel, not in one of the museum’s rooms with other paintings but by itself, in a common area, in the North Vestibule of the Gallery. It also was loosely secured on the easel to allow for immediate removal in the event of fire or some other calamity. Then, on August 21, the painting vanished.
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In 1961, an unemployed cab driver, Kempton Bunton, pulled off one of the most remarkable art thefts of the 20th century. Or did he?
Although Bunton was initially only charged with one count of larceny, the prosecution submitted an indictment that was much more severe. He was now charged with two counts of larceny, one for the painting, one for the frame, that was never recovered, and one charge of menacing for submitting letters to Lord Robbins demanding money. In addition, he was charged with creating a public nuisance by depriving citizens of their right to see the painting and with additional menacing, implying the potential threat to permanently keep or even destroy the artwork in his letter to the Mirrror. Breaking out the frame and the portrait theft charges separately and prosecuting Bunton for inconveniencing the public, certainly seemed like a case of overcharging, however the prosecution might have been concerned about a jury’s reaction to an oddball like Bunton, especially where charity was supposedly involved and they may have wished to underline the gravity of the offence.
On November 4, 1965, in the Central Criminal Court, Kempton Bunton’s trial began before Judge Carl Aarvold, a distinguished jurist eventually knighted for his public service. The court was known by its nickname, Old Bailey, the site of numerous famous and sensational court cases involving many famous defendants. Its marble floors, ornate décor and fine wooden walls evoked the image of a British courtroom popularized throughout the world in film and television.
Although Bunton was initially only charged with one count of larceny, the prosecution submitted an indictment that was much more severe. He was now charged with two counts of larceny, one for the painting, one for the frame, that was never recovered, and one charge of menacing for submitting letters to Lord Robbins demanding money. In addition, he was charged with creating a public nuisance by depriving citizens of their right to see the painting and with additional menacing, implying the potential threat to permanently keep or even destroy the artwork in his letter to the Mirrror. Breaking out the frame and the portrait theft charges separately and prosecuting Bunton for inconveniencing the public, certainly seemed like a case of overcharging, however the prosecution might have been concerned about a jury’s reaction to an oddball like Bunton, especially where charity was supposedly involved and they may have wished to underline the gravity of the offence.
Kempton Bunton had a spontaneous manner of testifying that incorporated unintentionally hilarious comments that convulsed the entire courtroom, including the judge, with raucous laughter. When asked if he had ever told his wife about the theft, Bunton replied emphatically and without hesitation,
“No, then the whole world would know, if I told her.”
When Cussen attempted to challenge Bunton’s assertion that he always intended to return the Goya, Bunton was practically exasperated,
“Absolutely, it was no good to me otherwise. I wouldn’t hang it in my own kitchen if it was my own picture,” the comment again bringing down the house, an unemployed cab driver deriding one of the art world’s most esteemed paintings. Again and again, Bunton’s oddball demeanor and ability to stonewall the prosecution not allowing Cussen to portray him in a diabolical light.
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Material used to compose this podcast included the book:
“Kidnapped: The Incredible, True Story of the Art Theft that Shocked a Nation,” by Alan Hirsch.
Also, the newspaper article: “The Man Who REALLY Stole Goya’s Priceless Duke of Wellington,” by Kevin McDonald, The Daily Mail, June 14, 2021.
The outro for part one and part two is, “Wedding Invitation,” by Jason Farnham.
And a very special thanks to William Haviland, for his permission to use his solo piano version of “Jerusalem,” for the intro in parts one and two. You may review additional information and performances by Mr. Haviland at his website. A link is provided below:
In 1929, Al Capone was worth an inflation adjusted 1.5 Billion Dollars.
Most speakeasies and night clubs serving illicit alcohol provided entertainment in some form, mostly jazz or a vocalist with a band. One of these entertainers named Joe E. Lewis was a regular performer at the Green Mill, a club that was owned by the Outfit. As compensation, Al Capone gave Jack McGurn a piece of the club’s profits and when McGurn found out that Lewis was not going to renew his contract and was going to earn more money at the Rendezvous, a North Side Gang operation, he confronted the singer-comedian and told him he couldn’t leave.
Lewis brushed him off, said his contract was up and that was that. He actually performed at the Rendezvous for a week, protected by a bodyguard who accompanied him to and from his hotel residence. Lewis then decided he didn’t need protection, that McGurn had only been trying to scare him. On November 9, 1927, seven days after he opened at his new club, three men showed up at Lewis’ Commonwealth Hotel room, burst in on the sleepy Lewis when he opened the door and pistol whipped him into unconsciousness. Then one assailant took a large knife to Lewis’ throat and mouth and even cut off part of the singer’s tongue. Although they could have merely shot the defiant entertainer, the thugs instead sent a terrible message to Lewis and any other performer who attempted to assert such independence. Joe E. Lewis managed to crawl into the hallway and was quickly taken to a hospital where he underwent extensive but successful surgery. He recovered but eventually became a stand-up comedian, his voice now a bullfrog like croak, no longer able to belt out night club standards. Ironically, most likely to counter the public outcry over the incident, Al Capone actually went out of his way to patch things up, claiming to Lewis personally that he knew nothing about the attack and that Joe should have come to him personally if he had a problem. Capone also got him back to the Green Mill, equaling his deal at the Rendezvous, and gave Lewis winning tips at dog and horse races controlled by the Outfit. Lewis’ career continued successfully well into the sixties, and a biographical film starring Frank Sinatra called the Joker Is Wild was produced in 1957, reiterating Lewis’ terrible ordeal and recovery.
While this investigation proceeded laboriously, in mid-1929, a curious incident occurred which only added to the mysterious lore surrounding Al Capone. In mid-May of 1929, Capone traveled to Atlantic City to participate in what became known as the Atlantic City Conference. Organized by Meyer Lansky, this gathering included almost all of American organized crime including Capone, Lucky Luciano, Frank Costello and many other gangsters from all over the US. The meeting was the first attempt by the American underworld to set up a national organization to oversee and make decisions to divide territory and adjudicate disputes without violence. Another underlying issue was a resolve to minimize the attention that Al Capone was generating, involving both the type of violence that occurred with the St. Valentines Day Massacre and Capone himself, who routinely sought out positive media coverage and made himself publicly prominent to the point of celebrity, behavior that created hostility from other prominent underworld figures who abhorred attention of any kind. Following the conference, which concluded on May 16, Capone intended to return to Chicago by train via Philadelphia. With some time on his hands, he and a bodyguard went to a movie and when the film ended, upon leaving the theater, both men were arrested, searched and found in possession of a firearm, in Capone’s case a .38 caliber revolver.
. But his respite was brief, In late April, the Chicago Crime Commission, a watch-dog collection of businessmen with no legal standing issued a list of the 14 most prominent Public enemies in the city. Headlines about this list screamed over the front pages of every American newspaper and when Capone attempted to lie low in Miami, he was continually arrested there as a public nuisance, harassment that he eventually successfully fought in court.
Al Capone’s legal good fortune ran out on October 18 when the jury returned with a verdict of guilty. Six days later Capone received a sentence of eleven years, the longest sentence ever imposed for tax evasion. By comparison, Nitti and Guzik received 18 months and five years respectively. Although he would appeal, Capone was confined in the Cook County Jail until May 2, 1932, when the Supreme Court of the United States refused to hear his case. Immediately, the Federal government prepared to send him not to Leavenworth , where Nitti and Guzik languished, but to the penitentiary in Atlanta, the system’s harshest. He began serving his sentence on May 4.
On August 19, 1934 Al Capone was placed on another train with 42 other prisoners, a train that was very different from his ride to Atlanta on the Dixie Flyer where he interacted with other civilians and played cards. It was armored with bulletproof plating, its windows barred, the Atlanta prison warden and numerous heavily armed guards along for the ride. The occupants were not told of their destination, but rumors had swirled for months about a new federal prison, even harsher than Atlanta, an escape proof dungeon on an island in San Francisco Bay. It was called Alcatraz.
Because of his notoriety, his propensity for braggadocio about past criminal exploits and his constant demands from the warden for special treatment, Al Capone was not a popular inmate. In fact, on June 26, 1936, another inmate stabbed him with the detachable blade of a pair of barber shears, which Capone survived.
Finally, unwillingly to merely release Capone before his time, the Bureau of Prisons allowed his transfer to Terminal Island, in San Pedro, California on January 6, 1939. By now, Capone’s mental capacity was utterly diminished, his conversation peppered with the mention of celebrities. exploits and future plans that were utterly delusional. Neither the Capone family or the Federal government wanted the spectacle of a public release of Al Capone. Government doctors recommended that the family consign Capone to the care of members of the medical staff at Johns Hopkins Hospital in Baltimore, the leading specialists in the nation on the treatment of neurosyphilis. Capone was secretly transferred to the penitentiary at Lewisburg, PA and then officially released on November 16, 1939.
It took longer, but the demise of Jack McGurn was perhaps the most illustrative example of how quickly Capone’s power diminished. McGurn was always considered a braggart and a hothead, and with Capone gone, Frank Nitti had no use for him, McGurn too recognizable as a hitman. For a while McGurn tried to hustle a living as a golf pro, hanging out at a mobbed up Chicago golf course of which he was a part owner. By 1936, still married to Louise Rolfe, McGurn was broke, hadn’t killed anyone in years and was rumored to have threatened Frank Nitti if Capone’s successor didn’t let him back into the rackets. On February 14, 1936, seven years to the day after the infamous massacre he allegedly planned, Jack McGurn was bowling with two buddies, a regular Friday night outing. Shortly after midnight, three gunmen burst into the bowling alley and methodically shot him fatally in the head and back. Although technically, February 15, earlier on Valentine’s Day, someone knowing that McGurn would be at the bowling alley, left him an inscribed Valentine with a drawing of a couple, apparently in need of cash, standing gloomily with a For Sale sign next to their worldly goods. The printed message inside read:
“You’ve lost your job; you’ve lost your dough;
Your jewels and cars and handsome houses!
But things could still be worse, you know…
At least you haven’t lost your trousas!”
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