Charges detail mob crew's brazenness

By Jason Meisner, Tribune reporter

July 26, 2014

The Outfit-connected crew had planned the raid on the cartel stash house carefully, using a street gang member who tipped them to a 40-kilogram shipment of cocaine from Mexico that would be warehoused on Chicago's Southeast Side before being cut up for distribution on the street, authorities say.

But what crew leaders didn't know was that the nondescript gray frame house on the 13400 block of South Brandon Avenue was a setup. The cocaine had been planted by law enforcement officials, who wired the home with video and audio surveillance equipment before giving their informant the go-ahead to set the sting in motion.

As an FBI spy plane monitored the Hegewisch neighborhood from the air late July 16, a team of Chicago police and federal agents on the ground watched as reputed Outfit soldiers Robert Panozzo and Paul Koroluk, posing as law enforcement, kicked in the door and grabbed the stacks of narcotics. When agents swooped in and made the arrest, Koroluk still had a police star dangling from his neck, authorities said.

The dramatic sting was the culmination of a monthslong investigation and led to sweeping racketeering and drug charges unveiled in Cook County criminal court last week against Panozzo, Koroluk and three other alleged crew members. The charges alleged an array of crimes going back to at least 2007, from home invasions and armed robberies to burglaries, arson, insurance fraud and prostitution.

Authorities said the crew — which, according to previous court testimony, has ties to reputed Grand Avenue mob boss Albert "Little Guy" Vena — robbed cartel stash houses of drugs and cash with a remarkable mix of sophistication and brazen violence, tracking drug dealers with GPS devices and wearing stolen police badges and body armor during the raids.

They had Chicago gang members providing tips and acting as lookouts and used a battery service business in their Near West Side neighborhood as a meeting place to divide up the loot, according to the charges. When an associate was nabbed for a home invasion, the crew plotted to kill the key witness before he could testify and even put the Cook County judge overseeing the case under surveillance, according to authorities.

Authorities say Panozzo, 54, and Koroluk, 55, have also been prolific burglars, using country club membership lists, tips from insurance brokers and other intelligence to identify the high-end homes before they hit them, then fencing stolen merchandise through Wabash Avenue jewelers and other professionals on the take.

A search warrant affidavit filed in the case stated that the crew has "surreptitious and unauthorized links (with) certain employees of state and local government, as well as insurance agents, jewelers, currency exchanges, banks, and business owners."

Joseph Ways Sr., the former second-in-command at the Chicago division of the FBI who now is executive director of the Chicago Crime Commission, said the case shows the mob is still "alive and well" despite recent high-profile prosecutions that decimated much of the Outfit's key leadership.

Ways said that while the Panozzo-Koroluk crew allegedly used many traditional mob schemes, it is also accused of a particularly bold and risky tactic: stealing drugs that originate from powerful drug cartels.

"That's a new twist," Ways said. "To go in and rip off a stash house, depending on where it's at in the supply line … if you get too close and the wrong people find out, it could be very hazardous to your health."

Authorities said the investigation into the crew began in October, when the would-be hit man informed police of the plot to kill a state witness who was about to testify against Panozzo's associate.

While the charges identify the associate only as "Individual H," numerous sources have confirmed to the Tribune that he is Jeff Hollinghead, 48, a former union truck driver who spent several years running an auto glass store in Las Vegas. After returning to Chicago about six years ago, he teamed up with Panozzo, whose base of operation was in Hollinghead's old neighborhood.

In October 2009, Hollinghead and three others were charged with kidnapping a wheelchair-bound gang member from his South Side home and holding him for ransom. The man's family called police, who set up a sting with the ransom money, court records show. Hollinghead was arrested by Chicago police and FBI agents as he opened a garbage can in a Bridgeport alley that had been marked with an "X" and removed what he thought was the ransom payment.

When he was arrested, Hollinghead first told authorities he was just looking for a place to relieve himself. Later he told an elaborate story of how he was approached by a man on the street who ordered him at gunpoint to retrieve the bag for him or Hollinghead's wife would be killed, court records show.

According to the search warrant affidavit, police investigating the Panozzo-Koroluk crew got a huge break when Hollinghead began cooperating last November, shortly before he pleaded guilty to the kidnapping charges and was sentenced to 15 years in prison.

Hollinghead laid out the details of the crew's operation, including how Panozzo used connections with the Spanish Cobras and Latin Dragons street gangs for tips on drug suppliers and the location of stash houses, according to the charges. Police said Hollinghead told them that the crew's technical operations wizard, Maher "Max" Abuhabsah — who was also charged with racketeering — ordered GPS tracking devices from a Skokie surveillance store and put them on the cars of their targets so he could track their movements through his smartphone.

Hollinghead told police that while he was free on bond and awaiting trial, he and Panozzo had discussed arranging the murder of the victim in his case, but the victim had gone into hiding and no one could find him, according to the affidavit. Meanwhile, another informant said Abuhabsah had found the victim's brother's address through Internet research, the affidavit alleged.

Then, last July, Hollinghead's lawyer called him to a meeting at a Caribou Coffee on Maxwell and Halsted streets, according to the affidavit. At the meeting, the attorney slid a computerized printout of the victim's name and address across the table.

"Give this to Bob, he knows what to do with it," the attorney allegedly told Hollinghead, according to the court documents. "This is your only problem."

The charges refer to the attorney only as "Individual K," but court records show Hollinghead was represented at the time by longtime criminal defense attorney Joseph Lopez.

Lopez told the Tribune he did meet Hollinghead at the coffee shop but gave him only a copy of his investigator's report, which included a routine public records search that had only outdated addresses for the victim. Lopez said the meeting was part of the normal course of preparing for trial.

"We were trying to locate and interview the victim as part of trial preparations, just like we always do," Lopez said.

A review of court records in Hollinghead's case suggests that eliminating the victim would not have helped him beat the charges. The victim never identified Hollinghead in a lineup, and the main witnesses against him were FBI agents and Chicago police officers who were monitoring the ransom drop site and watched as Hollinghead reached into the garbage can and took the bag, records show.

Raised in the old Italian-American enclave known as "the Patch" on the Near West Side, Panozzo and Koroluk have criminal histories that stretch back decades, court records show.

In 2006 they were both sentenced to seven years in prison for a string of burglaries targeting tony north suburban homes that netted millions in jewelry and other luxury items. Police at the time described the burglars as some of the most sophisticated they'd run across, from the disabling of state-of-the-art alarm systems to the cutting of phone lines before entering the properties. It wasn't until Koroluk slipped up and left footprints in the snow leading to his car that police were able to crack the case.

According to court records, Panozzo got his start as a juice loan collector under former Grand Avenue boss Joseph "The Clown" Lombardo, who was convicted in the landmark Family Secrets trial. Recently, Panozzo was operating a house of prostitution masquerading as a massage parlor in the 800 block of West Superior Street, according to the racketeering charges.

No one answered the door when a Tribune reporter visited the alleged brothel last week. Employees of the hair salon next door said they had been suspicious of the place for months, sometimes spotting beautiful young women dressed in skimpy lingerie escorting men into the building in broad daylight.

The racketeering charges also allege that Panozzo has a history of violence. According to the affidavit in the case, Panozzo has often bragged to associates that he threw an elderly woman down three flights of stairs to her death in 1987 after tricking her into signing over ownership rights to her three-flat in the 2300 block of West Ohio Street.

Public records show that the woman, Lydia Minneci, 77, signed a quitclaim deed to her home in October 1987 to a man named Steven Brantner, who at the time lived with Panozzo a few blocks away on West Erie Street. Minneci was killed shortly after she signed the papers, though no one was ever arrested, records show.

Four years later, Brantner was also killed, records show. According to the affidavit, Panozzo drove Brantner to the hospital, where he died of bullet wounds. No one was ever charged with his slaying.

As authorities were ramping up their investigation into Panozzo's crew earlier this year, his name surfaced in the sensational trial of former Chicago cop Steve Mandell, who was convicted in February of plotting to kidnap, murder and dismember a local businessman flush with cash.

According to trial testimony, Panozzo had introduced Mandell to real estate mogul George Michael during a July 2012 lunch at La Scarola restaurant on West Grand Avenue. At the table was Vena — the reputed Outfit boss who replaced Lombardo after he went to prison — and several other alleged mobsters, according to testimony. Michael, who unbeknownst to his dining companions was an FBI informant, recorded the meeting on a hidden wire, but the recording was never played at Mandell's trial.

Ways, of the Chicago Crime Commission, said it's difficult to tell whether the charges against the Panozzo-Koroluk crew signify a wider investigation of mob activity. With all the recent attention on Chicago's rampant gun violence, organized crime has faded from headlines. But that doesn't mean it's gone away, he said.

"That's the joy of law enforcement," Ways said. "Even if they decide to lay low for a while, you know they'll be back."

jmeisner@tribune.com

Twitter @jmetr22b

Las Vegas-Judge: Police, topless club must work out differences

Club Paradise on Paradise Road in Las Vegas on Monday, June 16, 2014. The club was was temporarily closed on June 6, 2014 so law enforcement could execute a search warrant. (Justin Yurkanin/Las Vegas Review-Journal

By JEFF GERMAN
LAS VEGAS REVIEW-JOURNAL

A district judge ordered Las Vegas police and the closed Club Paradise on Wednesday to work out differences that will let the longtime topless club obtain readable copies of key computer evidence seized in a June 6 raid.

The evidence includes business and customer records on hard drives the club needs to reopen, according to club lawyers Dominic Gentile and Vincent Savarese.

Club Paradise, operating for two decades in the shadow of the Hard Rock Hotel & Casino on Paradise Road, was one of the busiest and longest-running strip clubs in Las Vegas until it shut down 47 days ago. It went dark after police and IRS agents executed search warrants looking for evidence of credit card fraud by a handful of dancers and managers.

This kind of crime is not common in the lucrative topless club business here, according to people close to the Club Paradise investigation.

Gentile told District Judge James Bixler on Wednesday that the nightclub, which he believes is not a target of the investigation, has lost a total of $645,600 since the police raid. That’s roughly $13,700 a day.

Some employees have been forced to seek unemployment compensation, but the club doesn’t have its employment records to substantiate their claims with the state, Gentile said.
Attorney Kathleen Bliss, who represents the Metropolitan Police Department, said the department has turned over copies of the confiscated hard drives to Club Paradise, but Gentile argued there was no retrievable data on the copies.

“All I need is to be able to get the data back in a form that would permit the club to reopen,” Gentile said.

Bixler ordered the two sides to arrange a meeting of their information technology experts to figure out a way to retrieve the data on the hard drives and report back to him Aug. 13.

Gentile said he was told detectives have not submitted a case for prosecution to the district attorney’s office, but employees were given letters indicating they were grand jury targets.

Las Vegas Review-Journal columnist John L. Smith first reported in June that police and IRS agents were investigating the credit card fraud allegations involving the dancers. Customers were alleged to have been overcharged thousands of dollars and some may have been drugged in the credit scheme, Smith wrote.

Gentile and Savarese said in court papers they learned from employees interviewed by police that the investigation was focusing on two to three dancers, who were independent contractors, and three male managers who resigned a week before police showed up at the club. The managers stepped down rather than take polygraphs about a $50,000 theft from a safe at the club, the lawyers said.
Police executed a broad search warrant at Club Paradise on June 6 that sought records of dealings with seven customers who may have been affected. Most of these customers were from out of town and several were regarded as very wealthy.

Those close to the investigation said customers angry about credit card overcharges reported the irregularities to law enforcement authorities.

The search warrant also sought an array of business records, bank statements, credit card accounts, drugs and drug paraphernalia, computers and cell phones and other personal property belonging to 21 dancers and employees.

No records of Club Paradise owner Geralyn Cecola and her key employee, husband Sam Cecola, both of Chicago, were sought by police, according to the search warrant. Sam Cecola, who owns adult businesses in Chicago, has a 1997 tax conviction.

Police also obtained a second search warrant by telephone during the raid to seize $100,000 they found in a safe. Gentile and Savarese contended in their court papers that the money was unlawfully taken and are trying to get it back.

Contact Jeff German at jgerman@reviewjournal.com or 702-380-8135. Find him on Twitter: @JGermanRJ

At a Table with the Turk

Jim Padar posted: "  Billy Gee was a lower echelon mobster with an impossible last name, hence, Billy Gee. He was also a wise guy, smart ass, which did little to impress the police with whom he occasionally came in contact. I was a baby homicide detective when I first"   New post on On Being A Cop   At a Table with the Turk by Jim Padar   Billy Gee was a lower echelon mobster with an impossible last name, hence, Billy Gee. He was also a wise guy, smart ass, which did little to impress the police with whom he occasionally came in contact. I was a baby homicide detective when I first ran across him in an interrogation room on the second floor of Maxwell Street Homicide. I was teamed with a seasoned detective in sort of an informal training program. I forget exactly why we were questioning him, but there is a nice way and a smart ass way to tell us nothing. Billy Gee chose the latter. At the end of the interview, Billy had a self-satisfied smirk on his face. “Just one more thing Billy,” said my partner as he rummaged through some papers. He pulled out a city map printed on legal paper, depicting the six detective areas in the city. “See here Billy? Right now you’re in Area Four. I want you to carry this map with you at all times, you understand?” Billy looked quizzically at the map, his smirk replaced by a puzzled expression. “Ya see, when you get wacked, and you will get wacked, ask them to dump your body anywhere outside Area Four because we don’t want to waste time on your sorry ass murder investigation.” Billy left our offices with a more serious demeanor, almost as if we had personally put a hit out on him. A little over a month later, my partner and I were staring into the trunk of an abandoned auto in an industrial area on Chicago’s west side. The victim’s hands were tied behind his back, his throat had been slit and there appeared to be a single bullet wound in the back of his head. “Is that Billy Gee?” exclaimed my partner as he leaned into the trunk for a closer look. “It kinda’ looks like him,” I said. “But it’s hard to be positive.” A slit throat and a bullet in the head have a tendency to distort most peoples natural appearance. “You guys know him?” asked the mobile crime lab guys as they checked his pockets for any identification. “It might be Billy Gee,” I replied. “Check his pockets for an Area Map.” “He probably forgot to carry it,” said my partner. “He got dumped here.” “There’s nothing in his pockets,” reported the crime lab. “You got the rest of his last name?” “Yeah, back at the office, we’ll call you with the correct spelling and his date of birth. If it’s him, we were just talking to him a few weeks ago. If you can lift some prints from him, he’s the most likely suspect.” “You mean victim,” I said. “Same difference,” replied my partner with a grin. Several hours later the crime lab personnel confirmed that Billy Gee was in fact our victim. Most mob hits in Chicago are not easily cleared. We might be able to develop information on who wanted the victim killed and why, but to build a case against a specific individual was a long shot, no pun intended. Years down the road some people might be willing to talk, but for the immediate future we most likely had a case that was headed for the filing cabinet with other mysteries. When we arrived at the office on the second full day into the investigation we were greeted by members of our intelligence unit bearing a folder full of 8 X 10 surveillance photos of none other than Billy Gee parking on the driveway of an upscale home, entering the house and then returning to his car some twenty minutes later. The dates indicated this was almost a daily occurrence. The homicide commander, my partner and I poured over the pictures. “Where is this?” I asked. “Whose house is it?” “Woodridge,” said one of the intelligence detectives. “It’s Jimmy the Turk’s house.” “You’ll have to interview him,” said our commander. “Boss, he’s a top level guy, he’s not going to tell us anything,” said my partner. “You’re probably right,” said the lieutenant. “But we’ve got the pictures and we can’t ignore them. We have to interview him and file a report.” The intelligence detectives gave us Jimmy the Turk’s private unlisted number. “He’ll be more likely to pay attention to you if you call him on this number.” “Is this the line you’ve got tapped?” I inquired kiddingly. They didn’t take kindly to my remark. This would be a high stakes cat and mouse game; one that we were almost guaranteed to lose, but we had to go through the motions. We emptied the office of spectators and my partner called Jimmy with the boss and me listening on extensions. My partner stated his name and identified himself as a homicide detective. The reaction from Jimmy the Turk was absolute silence. “Jimmy, we need to talk with you,” he continued. “I don’t talk to cops,” replied Jimmy. “Well, we’re going to talk with you.” my partner said in a very calm but authoritative voice. “We can come out to your place, it won’t take very long.” “I don’t like cops in my house.” “Well then come down to the station, we can talk here.” “I don’t like police stations.” “Well, Jimmy, we are going to talk to you. Do you understand?” My partner was using the same calm, authoritative tone, never raising his voice. There was a long moment of silence at Jimmy’s end. “Where’s your office?” he finally answered. “It’s the Maxwell Street Station, on Maxwell just two blocks west of Halsted.” “I know the place,” snapped Jimmy in an annoyed tone of voice. “You know Barney’s?” “Barney’s Market Club at Randolph and Halsted? Yeah we know it.” “Meet me there for dinner tomorrow night at seven.” My partner looked expectantly at the lieutenant and he nodded. “My partner and I will be there,” he responded on the phone and suddenly the conversation was over. “You’re going to dinner,” exclaimed the boss with a big grin on his face. Barney's Market Club Barney’s was an upscale eatery frequented by elected officials, businessmen, mobsters and occasionally cops. As a newly married father with two toddlers at home, I had never been there. Our commander made notifications to our downtown command staff as well as the Intelligence Division and the Internal Affairs Division. If any of them happened to spot us having dinner with Jimmy the Turk they would know why. The next evening my partner and I headed for Barney’s in an old unmarked beat up Dodge sedan. We avoided the VIP spaces at the Randolph Street side and instead parked on a side street nearby. The 8 X 10 photographs were tucked under my arm in a plain brown envelope. “You gotta a credit card that will cover this? I asked my partner as we approached Barney’s. “I do,” he replied. “But I’ll guarantee you Jimmy will pick up the tab. To Jimmy, it’s a matter of saving face and impressing us.” “Saving face?” I inquired. “Yeah, saving face. Remember, he’s number two or three man in the mob and he’s having dinner with us lowly cops. He wants to show anyone in the vicinity that he runs it—maybe even make them think he owns us. So order what you want kid, it will be the best meal you’ll have all month and it’s all on Jimmy.” We entered the restaurant and the maître d’ greeted us before we took two steps inside. “Yes sir Senator! Do you have reservations?” Rick Kogan, Chicago Tribune reporter wrote about Barney’s and the “Yes sir, Senator!” greeting a few years back: “It was long assumed that its familiar slogan was born of the patronage of politicians. Though many elected officials (as well as mobsters, businessmen, cops and others on their way to and from events at the Chicago Stadium) were known to drop in, it was owner Barney Kessel's inability to remember anybody's name that gave birth to the slogan that eventually emblazoned menus, matchbooks and the prominent sign that hung high from the building. He called almost everybody ‘Senator.’" “We’re joining Jimmy for dinner,” said my partner as he glanced around the room and spotted Jimmy the Turk sitting at a round table near the back of the dining room. He was flanked by two associates and two empty chairs awaited us. “Yes sir, Senator,” said the maître d’ without batting an eye as he guided us back to Jimmy’s table. Jimmy introduced his companions simply as Anthony and Vincent. We would learn later that Anthony’s mob nickname was “The Bull” and Vincent was called “Pug,” but only because sinus and adenoid problems made him sound like the dog of that breed. The waiter placed menus in front of us and we made our selections without regard to cost. Salads were served and my partner began to slide the photos out of the plain envelope and Jimmy held his hand up. “We don’t discuss business while we’re eating.” We engaged in polite but totally meaningless chi-chat. When the entrée dishes were cleared, the envelope again came out but once again Jimmy held his hand up. “We don’t discuss business before dessert.” I was beginning to think that we might actually “talk business” at some point. “Dessert” for Jimmy and his pals consisted of giant snifters of Grand Marnier and Cuban cigars. We took a pass on the brandy but each of us lit up a cigar. Turned out the cigar probably gave me more of a buzz than the Grand Marnier would have. The photos came out one last time—it was show time. We passed them across to Jimmy and his friends looked over his shoulder as he carefully examined the pictures. “Billy visited you daily, Jimmy. What’s your connection?” “I never saw this man before in my life,” said Jimmy. “You ever see this guy?” he asked Anthony and Pug. They shook their heads in unison. “I’m really sorry, but I can’t help you.” “Jimmy, this guy came to your house almost every day. These are only a few of the pictures.” “Yeah well, you guys can do funny things with pictures, I know that. I’m really sorry I can’t help you.” Jimmy the Turk stood and shook our hands indicating the meeting was over. He did indeed pick up the check. Like I said earlier, there is a nice way and a smart ass way to tell us nothing. Jimmy chose the nice way. He was not the type of person you would expect to find in the trunk of a car, but he did meet an early demise—he died several years after our dinner, at the age of forty-nine, peacefully at Northwestern Memorial Hospital of cancer. To the best of my knowledge Billy Gee’s murder was never cleared. His file probably still languishes in some file cabinet marked “Not Cleared.” I never lost any sleep over it…

Government closing in on clueless hoodlum Rizzolo

Former Crazy Horse Too owner Rick Rizzolo pleaded not guilty Thursday in federal court to two felony charges of attempting to evade more than $2.5 million in employment and income taxes. (Las Vegas Review-Journal file)

 

By JOHN L. SMITH
LAS VEGAS REVIEW-JOURNAL

Rick Rizzolo figured the federal agents who turned up at his door Wednesday were kidding him. He’s funny that way.

But the agents from IRS Criminal Investigation hadn’t dropped by to exchange one-liners with the former topless cabaret boss and longtime organized crime associate. They’d come to take him into custody following his indictment on two felony tax charges.

Kidding, they were not. But once again Rizzolo appears to be the last guy to recognize that the government long ago grew tired of his scheme to hide assets and duck taxes from what was once a personal skin industry fortune worth many millions.

The government’s case is as specific as its paper trail: From June 28, 2006, to May 31, 2011, Rizzolo is alleged to have willfully avoided paying $1.72 million in employment taxes and in doing so making false statements to IRS agents while attempting to conceal his ownership of property and assets in other names and “and by placing funds and property beyond the reach of process” in violation of federal law.

The second charge is more of the same. From March 31, 2008, to May 31, 2011, Rizzolo is accused of attempting to conceal another $861,000 in assets.

A couple tax charges alleging nearly $2.6 million in evasion is nothing to sniff at. Add it to his previous tax conviction and, if the new charges are proven, Rizzolo is in line to receive substantially more hard time than his first 366-day sentence. (He compounded his misery by being sent back to jail after having his parole revoked.)

Rizzolo pleaded not guilty Thursday before U.S. Magistrate Judge Nancy Koppe.

But he has many problems defending himself against the charges, not the least of which is the treasure trove of potentially damaging evidence compiled during the 15-round civil case filed on behalf of Kirk and Amy Henry. Kirk Henry is the Kansas tourist who had his head nearly wrenched off by one of Rizzolo’s goons outside the Crazy Horse Too in September 2001. Henry was made a quadriplegic, but it’s Rizzolo whose life has been crippled by the relentless litigation effort by the Campbell and Williams law firm and former federal Organized Crime Strike Force prosecutor Stan Hunterton.

That litigation was a spear point that helped secure the original federal indictments and the global settlement, which let most of Rizzolo’s 16 co-defendants plead guilty to income tax charges in exchange for his own guilty plea and an agreement to pay the Henry family $10 million.
Rizzolo signed but didn’t pay.

In fact, he told associates that he’d never pay.

But the pathetic truth is, he’s been paying every day since he took bad advice and decided to cheat the disabled man and his family out of what he owed.

He continues to pay with interest:
He paid when he had his parole revoked and he was sent back behind bars. He paid when he dragged his ex-wife and his son into the middle of the malodorous quagmire, using her as a shill for almost-concealed millions in a Cook Islands bank account. Other Rizzolo family members have paid, too, for receiving and attempting to conceal assets that were meant for the Henry family.
Rizzolo’s not through paying — not by a long shot.

His self-delusion would be downright Shakespearean if the Bard of Avon had penned a gum-snapping Vegas wiseguy with delusions of Gotti grandeur.

Although Rizzolo can now claim to be indigent, it won’t stop the slow wheels of justice from grinding. And if it’s ever discovered that he holds hidden ownership in other businesses or automobiles, then he’ll have even more explaining to do.

To those who say the government is going to an awful lot of effort to get a guy who to date has been personally guilty of only violating the tax code, I’ll make a note of it and say this:
Kirk Henry hasn’t moved his legs in 13 years, and Rizzolo long ago accepted civil responsibility.
There’s nothing humorous about that, but maybe our community’s half-scale Scarface will find a way to keep laughing as he does life on the installment plan.

John L. Smith’s column appears Sunday, Tuesday, Wednesday, Thursday and Friday. Email him at Smith@reviewjournal.com or call 702-383-0295. Follow him on Twitter @jlnevadasmith.

The Chicago Mob vs. Chicago Street Gangs/The Las Vegas Mob Museum Blog site

By Dr. Wayne A. Johnson

 

Editor’s note: Over the Fourth of July weekend, gunfire in Chicago struck 82 people in 84 hours. Fourteen of the shooting victims died. Many decades after Chicago became known for Mob violence – the infamous St. Valentine’s Day Massacre occurred in 1929 – the city continues to be plagued by shooting in the streets. Dr. Wayne Johnson, an expert on Chicago organized crime, is set to speak at 1 p.m. Saturday, September 13, at the Mob Museum. Click here for more details on the event.

In its nearly 100 years of existence, the Chicago Mob, fabled in a multitude of books, movies and TV shows, has had a storied and violent existence that has gained it enormous wealth and power.
Trading in corruption, vice, dope and murder, the Mob continues to suck the very decency out of our society, seemingly untouched and above the law — and at quick glance shows no signs of weakening. But today the mighty and seemingly all-powerful Mobs of Chicago, New York, New England and other places in the United States are threatened by the massive and powerful street gangs that increasingly haunt our cities.

An estimated 70,000 gang members strut through the streets of Chicago today, and their numbers, their might and their presence on the crime scene are growing. One quarter of all the homicides in Chicago are attributable to street gang violence. Nationally, close to 1,000 agencies report growing gang activity, and although not all agencies report on gang-related murders, at least 2,000 gang homicides are reported each year across the country.


Early street gang (Library of Congress)

In Chicago, street gangs have existed for more than 100 years, first appearing on the scene in the late 1860s. Mostly ethnic European in origin and made up of mostly immigrants, they formed in distinct geographic areas to protect themselves from other groups of immigrant gangs looking to victimize the weak and powerless.


Confiscated bootleg whiskey (Library of Congress)

These ethnic gangs eventually became a reliable commodity for political organizations and even plied their fighting skills for warring newspapers at the turn of the twentieth century. Some of the more established gangs, such as the Circus Gang and the 42 Gang, provided talent for growing traditional organized crime groups during Prohibition.
In the early 1960s, the gangs’ demographics changed as did their trade when they moved into the lucrative narcotics business. And then everything changed, as these statistics show:

• Chicago Street gangs/drug activity were responsible for 2,362 murders from 1991 to 2000.
• Chicago Street gangs/drug activity were responsible for 1,879 murders from 2001 to 2010

Although streets gang demographics have changed, and the vice trade has changed along with it, the Chicago Mob, or Outfit, which often recruited its deadly talent from these very street gangs, remains an elusive traditional organized crime entity. And I want to be clear on this point: The Chicago Outfit is just that, traditional organized crime.  It is not the Mafia; it has always been very diverse and operates under the principals of Southern Italian organized crime.

Until the late 1950s it was considered a local problem with little federal intervention. Prohibition turned it into a very profitable and well-run organization but reform movements of the 1920s caused protection agreements to break down, leading to open warfare on the streets of Chicago.


Chicago gangsters Alberto Anselmi and Giovanni Scalise, 1929

Again, we see that as the Mobs changed on the Chicago landscape, the murder rate changed. The Chicago Mobs were responsible for 594 murders from 1920 to 1929. From 1930 to 1939, the Chicago Mobs were responsible for 325 murders.

To answer the growing threat of organized criminal gangs, in 1931 the Chicago Police Department formed one of the first intelligence and organized crime prevention units in the world under the leadership of Captain William Shoemaker. The unit, known as Scotland Yard, was a super-secret group of crack detectives who operated free of political interference.


Frank Nitti, left, Chicago Outfit boss 1932, and Tony Accardo, right, Mob boss (State of Illinois Public Library)

The unit was known for its brutal tactics and soon became focused on the traditional organized crime entity, by this time known as the Outfit and run by Frank Nitti. The members of this unit had limited success over the years until 1952 when they were led by Lt. Joe Morris, a tough and able crime fighter.

Morris’s tactics infuriated the Outfit and led to shootings at police stations and brought multiple lawsuits. He had the audacity to appear at crime boss Tony Accardo’s large July 4^th party posing as an ice cream vendor until recognized by other Outfit members. He was not opposed to illegal surveillance practices and wiretaps.


Virgil Peterson, Chicago Crime Commission director

The end came in 1956 when the unit was accused of bugging Mayor Richard J. Daley’s campaign office, which happened to be in the same building as various mobsters’ offices. At the time, renowned crime fighter Virgil Peterson, operating director of the Chicago Crime Commission, voiced his outrage over this administrative decision.  Under orders of the mayor, the 73 detectives in the unit were scattered into other units throughout the city.

O.W. Wilson, Chicago Police superintendent (Justice Department)

 

The next efforts at traditional organized crime detection came in 1960 under the leadership of O.W. Wilson. Wilson, a renowned criminologist from the University of California, Berkeley, was brought to Chicago to lead a national search for a new police superintendent and was offered the job by the very committee he chaired. He took over a department scarred by scandal and corruption. Seeing the need to combat traditional organized crime, Wilson created a new Intelligence Unit that by the early 1970s was a division of the police department boasting 150 personnel.

This unit worked hand in hand with Federal Strike Force personnel and together made successful arrests and prosecutions. However, these efforts did not go without criticism and political resistance from the so-called West Block, a group of politicians that represented Outfit interests when it came to legislative and police matters.

Over the years the criticisms did not cease, political pressure always loomed and the department reacted with diminishing resources and little support while known mobsters took city jobs, mostly as no-show employees, and had an abundance of political support, as reflected in the recent indictment of John Bills, a relative to several Mob associates and a City Hall insider.

By 1993, when I entered the Intelligence Unit, there were fewer than 50 people in it, and while each squad of eight to ten individuals had different responsibilities, I was assigned to the Organized Crime Squad. We were the only squad still looking at the Chicago Outfit.  By the time I left the unit in 1997 to take the position of chief investigator for the Chicago Crime Commission, there were even fewer. Today, not one member of the Intelligence Unit is actively pursuing the Outfit.

The Organized Crime Strike Forces were created in the late 1960s for the purpose of investigating and prosecuting traditional organized crime as it related to racketeering activities. This effort drew resources from Justice Department lawyers, the FBI, IRS, Postal Service and the Department of Labor. It also received support from other federal and local agencies as needed. Eventually there were 14 strike forces around the country.

The Strike Forces were formed by Congress under the leadership of Senator Robert Kennedy. During their brief time in operation, the strike forces won important convictions of Mob leaders in Boston, Brooklyn, Cleveland, Chicago, Denver, Kansas City, Los Angeles, New Haven, New Orleans, Philadelphia and Rochester. In Chicago, Mob luminary Joey Aiuppa was jailed through the efforts of the Strike Force. It also aided in eradicating corruption from the Teamsters and other major labor unions.

By 2000 the Federal Strike Forces were disbanded by Congress, in favor of state and local efforts to combat traditional organized crime. I find this amusing because by this time major cities were reassigning intelligence personnel to other duties and deferring traditional organized crime cases to the FBI. This pointless circular strategy had been caused by the Bureau’s lack of trust in local law enforcement in matters of traditional organized crime.

Today, the FBI is concentrated almost exclusively on combating global terrorism and has little inclination to go after the Mobs on a local basis. Organized crime squads are underfunded and seldom properly staffed, and all the while the Mobs grow richer and take their deadly toll on our society.

Dr. Wayne Johnson served on the Chicago Police Department from 1973-1997. From 1997 to 2001 he was the chief investigator for the Chicago Crime Commission and later served as police chief for the City of Cicero, Illinois. He is a professor and program coordinator of Law Enforcement Programs at Harper College in Palatine, Illinois. Johnson’s latest book, A History of Violence: An Encyclopedia of 1,400 Chicago Mob Murders 1^st Edition, is available on Amazon.com.