Al Capone Trial: 1931

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Al Capone Trial: 1931

Defendant: Alphonse "Scarface Al" Capone
Crime Charged: Income tax evasion
Chief Defense Lawyers: Michael J. Ahern and Thomas D. Nash
Chief Prosecutor: George E. 0. Johnson
Judge: James H. Wilkerson
Place: Chicago, Illinois
Dates of Trial: October 6-24, 1931
Verdict: First indictment (tax liability for 1924): Not guilty; second indictment (22 counts): Guilty on five counts (tax liability for 1925, '26, '27, '28, and '29); third indictment (violation of Volstead Act): Indictment not pursued
Sentence: 11 years' imprisonment, $50,000 in fines, $30,000 in court costs

SIGNIFICANCE: While for 10 years the Chicago police had been unable, if not unwilling, to put the most notorious and murderous of mobsters behind bars, the federal authorities found a way to jail him: through the tax laws. Thus the head of the country's most powerful syndicate providing Americans with bootleg liquor, gambling and prostitution wound up in Alcatraz.

A Brooklyn boy who quit school in the sixth grade after beating up his teacher and getting beaten up by the principal, Al Capone earned the nickname "Scarface Al" as a teenager when his face was severely slashed in a fight. At 21, he moved to Chicago to help his uncle—the city's most powerful brothel keeper—broaden his business to include control of bootlegging. By 1925, at age 26, Capone was running an organization of 1,000 racketeers with a $300,000 weekly payroll.

By eliminating his competition (he ordered 500 deaths, while an estimated 1,000 people died on both sides in his bootleg wars), Capone built a vast network of liquor distributorship, distilleries, breweries, and brothels. To maintain control, he paid off countless politicians and police. At the same time, he made certain all his accomplices were absolutely trustworthy—a key factor in ensuring his safety. So successful was Capone that when a rival gang sent a string of cars filled with machine-gunners to pump a thousand rounds into Capone's headquarters, he remained unscathed.

The St. Valentine's Day Massacre

On St. Valentine's Day, 1929, Capone ordered his men to kill "Bugs" Moran, head of the gang that had machine-gunned the Capone headquarters. Masquerading as police officers, Capone's men massacred seven opponents in a downtown warehouse. The people of Chicago were outraged.

Colonel Frank Knox, publisher of the Chicago Daily News, asked newly inaugurated President Herbert Hoover for help. Reportedly, Hoover told Secretary of the Treasury Andrew Mellon, "I want that man in jail."

Federal authorities held jurisdiction over Capone's activities in only two areas: violation of the Volstead Act (i.e., Prohibition) and evasion of income taxes. The problem was proving either case: Capone had never maintained a bank account; he owned no property under his own name; he endorsed no checks; he paid cash for whatever he bought.

Nevertheless, the Internal Revenue Service sent Special Agent Frank J. Wilson to Chicago to analyze Capone's net worth and net expenditures. Over two years, Wilson compiled a list of Capone's purchases, which included custom-made suits, telephone bills, town cars and limousines, a house on Palm Island, Miami, Florida, with two new docks, a boathouse, and an extra garage.

To connect Al Capone with brothels, gambling, and bootlegging, Wilson moved Special Agent Michael F. Malone, who could be taken for an Italian, Jew, or Greek, into Capone's inner circle.

Malone supplied Wilson with inside information. But getting witnesses would not be easy because, as Wilson wrote in a memo:

… all important witnesses were either hostile and ready to give perjured testimony to protect the leaders of their organization or were so filled with fear of the Capone organization … that they evaded, lied, left town and did all in their power to prevent the government using them as witnesses.… To serve them with subpoenas it was necessary to pick them up on the streets near the Capone headquarters, at Cicero hotels and at nightclubs.

Malone identified a potential witness in the Smoke Shop manager who had quarreled with Capone. Though the manager talked very little, he implied that Chicago Tribune reporter Jake Lingle, who knew more about Chicago's gangland than any other reporter, might have information about Capone. Colonel Robert R. McCormick, the publisher, set up a confidential meeting in the Tribune Building. On his way to it, Lingle was murdered.

By 1931, IRS agent Wilson, who had been living with round-the-clock guards after learning that Capone had brought five New York gunmen to Chicago with a contract to kill Wilson, was ready for the grand jury. It returned three indictments: the first for failure to pay 1924 income taxes; the second (with 22 counts) for not paying 1925 through 1929 taxes; the third (based on information compiled by agent Eliot Ness, citing 5,000 specific offenses) for conspiring to violate the Volstead Act. The last was reserved as an ace in the hole.

"Impossible to Bargain with a Federal Court"

If found guilty on every count, Capone would face a maximum sentence of 34 years. His lawyers negotiated with U.S. Attorney George Johnson, who, considering how tough it would be to get key witnesses to testify, agreed to 2Vz years in exchange for a guilty plea. With good behavior, the time would be short. But an angry Judge James Wilkerson said, "It is time for somebody to impress upon the defendant that it is utterly impossible to bargain with a Federal court." Capone then pleaded not guilty.

Prosecutor Johnson produced witnesses who proved Capone's ownership of the extremely profitable Smoke Shop, which had brought in more than $550,000 in two years and had picked up telegrammed money orders for Capone. A parade of witnesses including decorators, contractors, jewelers, butchers, bakers, brokers who had bought his Palm Beach house and boat for him, and tailors who had sold him pea-green and mustard-brown suits, provided ample evidence of Capone's expenditures.

Capone's defense was gambling losses: He almost never won. The argument was specious, for a taxpayer must have gambling winnings to deduct gambling losses. Defense attorney Michael Ahern, without calling Capone to the stand, concluded, "The evidence in this case shows only one thing against Capone—that he was a spendthrift.'"

The jury found Al Capone not guilty of tax evasion in 1924, but guilty on the counts for 1925 through 1927, and guilty of failing to file returns for 1928 and 1929. He was found not guilty on 17 remaining counts of tax evasion.

Judge Wilkerson imposed sentences totaling 11 years on the various counts, with fines of $50,000 and court costs of $30,000—the strongest penalties on a tax evader to that date. Capone was put in Cook County Jail, where he had a private cell with shower, freely made phone calls and sent telegrams, and entertained visiting gangsters "Lucky" Luciano and "Dutch" Schultz.

Shortly, however, Capone was moved to Atlanta, Georgia, then to the brand-new maximum-security prison on the island of Alcatraz in San Francisco Bay, California, where he enjoyed not one special privilege. By 1938 he was hospitalized with advanced syphilis. Treatment slowed but could not stop the disease. On his release in 1939, partially paralyzed, he settled in his Miami Beach home, where his wife and son had been waiting. There, fat and balding and haunted by imaginary killers, he lived until 1947.

—Bernard Ryan, Jr.