The Chicago Syndicate: Michael Marcello

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Montana West World
Showing posts with label Michael Marcello. Show all posts
Showing posts with label Michael Marcello. Show all posts

Wednesday, August 08, 2007

Dentist and Lawyer in Heated Courtroom Exchange

Friends of ours: Joey "The Clown" Lombardo, Anthony Spilotro, James Marcello, Nicholas Calabrese
Friends of mine: Michael Spilotro, Michael Marcello

Joey "the Clown" Lombardo spent months eluding federal authorities after he was indicted in the Family Secrets mob-conspiracy case, but he couldn't outrun the pain of an abscessed tooth.

So in January 2006, he quietly made arrangements to see his dentist, Patrick Spilotro, after Spilotro's Park Ridge practice had closed for the night. But Lombardo didn't know that Spilotro was an FBI tipster, hoping to help solve the murders of his reputed mobster brothers, Anthony and Michael Spilotro.

Testifying Tuesday at the Family Secrets trial, a sometimes tearful Patrick Spilotro said he told the FBI about a second clandestine appointment a few days later with the fugitive -- this time to adjust a bridge.

"They knew the exact time" of the visit, he testified in the Dirksen U.S. Courthouse, providing the most complete account yet of how Lombardo was captured after nine months on the lam. The reputed mob boss was arrested in Elmwood Park that same day.

Lombardo is one of five men on trial in the sweeping conspiracy case involving 18 previously unsolved murders, including the Spilotros' killings in 1986.

During the visit for dental work, Spilotro said he pressed Lombardo again about what had happened to his brothers. Lombardo, who was in prison when the slayings occurred, had always told him the slayings wouldn't have happened if he had been free, Spilotro said. But this time the answer changed. "I recall his words very vividly," Spilotro testified. "He said, 'Doc, you get an order, you follow that order. If you don't follow the order, you go too.'"

Lombardo occasionally leaned over on his cane to talk with a lawyer during Tuesday's testimony.

Upon cross-examination, Lombardo's lead attorney, Rick Halprin, asked Spilotro whether the person he treated was simply an old man with a bad tooth. Lombardo, whose defense strategy suggests he is preparing to testify on his own behalf, contends he is only a mob-connected business man, not an Outfit boss.

U.S. District Judge James Zagel is expected to ask each of the five defendants whether they plan to testify as soon as Wednesday.

Spilotro also testified that his brother, Anthony, was in his office on June 12, 1986, just two days before he vanished. While there he had access to a phone, and apparently called the home of defendant James Marcello, according to phone records displayed Tuesday.

Marcello, the reputed leader of the Chicago Outfit, already has been blamed in the Spilotro killings by the trial's star witness, mob turncoat Nicholas Calabrese. And Michael Spilotro's daughter has testified that Marcello called her father at home the day he and his brother disappeared.

Patrick Spilotro's testimony Tuesday led to one of the most heated cross-examinations to date in the trial.

Marcello's lawyer, Thomas Breen, asked Spilotro about his decision to clean out Anthony Spilotro's hotel room before he had been reported as a missing person and before police had searched the room for fingerprints.

"It's what I did at that time," said Patrick Spilotro, who seemed to struggle with his emotions throughout his testimony. "I really didn't have my whole head on at that time."

Breen asked what would have happened if the Spilotro brothers had returned to the room and thought there had been a burglary. They had been missing for barely 24 hours when Patrick Spilotro cleaned out the room.

"That would've been a blessing for me then," said Spilotro, who said he knew enough at the time to guess that his brothers would never be coming back. His sister-in-law, Ann, had told him that her husband, Michael, believed he could be in danger.

"She told me where they went," Spilotro said, raising his voice slightly. "They went with Marcello."

At that remark, Breen paced around the lectern, then walked up to Spilotro. Breen told Spilotro his sister-in-law never mentioned Marcello by name during her testimony. "You were the first person to ever share that, doctor," Breen said sarcastically. "Ever report that to the FBI?"

"The FBI was aware that Marcello had called there and [my brothers] went to meet him," Spilotro answered.

"Yeah, right," Breen shot back. "That's the problem when somebody does [their own] investigation."

Prosecutors ended the day by playing recordings made while Marcello was being visited by his brother, Michael, at a federal prison in Michigan. The men, who did not know they were being recorded, spoke about the Family Secrets investigation with code and hand gestures.

Allegedly referring to Nicholas Calabrese as "Slim," authorities said the men can be heard speculating about whether Calabrese is cooperating with them.

In a later video from January 2003, the brothers are seen sitting side-by-side in a prison visiting room. They are heard discussing a source -- who authorities contend was a U.S. marshal (John Ambrose) working a witness security detail. The source had confirmed for the brothers Calabrese's cooperation with the authorities.

The source had seen a summary from Calabrese outlining the participants in some 18 homicides, including the slayings of the Spilotro brothers, which the Marcellos referred to in code as "Zhivago."

"All your names are on that [expletive]," Michael Marcello could be heard to say.

"You're kidding," his brother replied.

Thanks to Jeff Coen

Tuesday, June 19, 2007

Guilty Pleas on Eve of Family Secrets Mob Trial

Friends of ours: Nicholas Ferriola, Frank Calabrese Sr., Joseph Venezia, Michael Marcello, James Marcello, Frank "The German" Schweihs

Two men accused of working with the Chicago mob pleaded guilty on the eve of the city's biggest organized crime trial in years.

The guilty pleas leave five defendants in the racketeering conspiracy case, scheduled to go to trial on Tuesday. The case is based on an FBI investigation of 18 long unsolved murders that federal prosecutors tie to the Chicago Outfit, the city's organized crime family. Neither man was among the most prominent defendants.

Nicholas Ferriola, 32, pleaded guilty to racketeering, bookmaking and squeezing extortion payments from a Chicago restaurant. He admitted he was part of the mob's South Side or Chinatown crew and that he worked with Frank Calabrese Sr., a defendant and reputed to be one of the city's top mob bosses.

Joseph Venezia, 64, pleaded guilty to running a gambling business and hiding the proceeds from the Internal Revenue Service.

No sentencing date was set. The men are to return to court Aug. 10.

The federal indictment presents a panoramic picture of the Outfit, which it says consists of six "street crews," each with a franchise over organized crime in its respective sector of the city and suburbs. The indictment details murder, gambling, pornography, extortion and loan sharking among the Outfit's activities.

The number of defendants has dwindled steadily as the date for jury selection has drawn closer.

Last week, Michael Marcello — brother of James Marcello, described by federal prosecutors as one of the top leaders of the Outfit — and two other men pleaded guilty to racketeering and other charges.

U.S. District Judge James B. Zagel also tentatively dropped reputed mob extortionist Frank "The German" Schweihs from the trial last week for health reasons.

Championcatalog.com (Sara Lee)

Monday, June 18, 2007

Family Secrets Mob Trial Capsule

The Judge

U.S. District Judge: James B. Zagel

A Reagan appointee, Zagel is generally considered a good draw for the prosecution and one of the brightest judges on Chicago's federal bench. He is also among the most experienced, marking his 20th year on the federal bench this month. Zagel, 66, was once married to TV investigative reporter Pam Zekman, wrote "Money To Burn," a fictional thriller about a plot to rob the Federal Reserve Bank, and played a judge in the 1989 movie "Music Box."

Who's on Trial?

Fourteen alleged mobsters and associates were indicted in the case in 2005, but only five are expected to go on trial. Two of the original defendants died, one is too ill to face trial, four have pleaded guilty and two more are set to plead guilty as soon as Monday.

Joey "the Clown" Lombardo

A reputed capo in the Grand Avenue street crew, Lombardo has been alleged to be a mob leader who committed murder while controlling pornography and other Outfit business in the city. Known for his alleged penchant for violence and an odd sense of humor, he once took out a newspaper ad to publicly announce that he was officially retired from the mob. He is charged in connection with the murder of Daniel Seifert in September 1974. He was separately convicted of attempting to bribe a U.S. senator and conspiring to skim $2 million from the Stardust casino in Las Vegas along with mob bosses Joseph Aiuppa, John Cerone, and Angelo LaPietra.

James Marcello

Marcello, 65, was described by Chicago's top FBI agent as the boss of the Chicago Outfit when the Family Secrets indictment came down in the spring of 2005. The Lombard resident had previously been convicted in 1993 on federal charges of racketeering, gambling, loan-sharking and extortion. Authorities have alleged he passed on money to the family of mobster Nicholas Calabrese to try to buy his silence on gangland slayings. Federal agents recorded conversations he had with his brother, Michael, while James was in a federal prison in Michigan. The men allegedly discussed gambling operations and Calabrese's possible cooperation with law enforcement.

Frank Calabrese Sr.

The one-time street boss of the mob's South Side or 26th Street crew, the 70-year-old Calabrese once was alleged to be the city's top loan shark. He is charged in connection with the 1980 murder of hit man William Petrocelli in Cicero as well as a dozen other slayings. Calabrese pleaded guilty in 1997 to using threats, violence and intimidation to collect more than $2.6 million in juice loans. He was in prison when the Family Secrets indictment came down. His brother, Nicholas, is the key turncoat witness in the case, and Calabrese's son, Frank Calabrese Jr., also is expected to testify against his father.

Paul "the Indian" Schiro

A 69-year-old mob enforcer who is charged in one of the gangland killings, Schiro was an alleged associate of murdered mobster Anthony Spilotro. At the time of his Family Secrets indictment, he was in prison for taking part in a jewelry-theft ring headed by William Hanhardt, a former Chicago police chief of detectives.

Anthony Doyle

Doyle, also known as "Twan," is a former Chicago police officer. He is charged in the conspiracy for allegedly passing messages from the imprisoned Frank Calabrese Sr. to other members of the Outfit. Calabrese was trying to find out if his brother was cooperating with authorities, and Doyle allegedly was keeping him up to date on a law enforcement investigation into the murder of mob hit man John Fecarotta, authorities alleged. The 62-year-old was arrested at his home in Arizona as federal prosecutors and the FBI were announcing the Family Secrets case.

Thanks to Jeff Coen

Chicago Mobster Pleads Guilty

Friends of ours: Michael Marcello, James Marcello, Sam Carlisi, Nick Calabrese

Mobster Michael Marcello, half-brother of James Marcello, the man prosecutors say is the head of the Chicago Outfit, pleaded guilty today to racketeering and gambling charges on the eve of his trial.

Marcello, 56, admitted he was associated with the "Melrose Park Crew" of the Mob, reporting at various times to Sam Carlisi and James Marcello.

Further, he admitted he ran M&M Amusement, a Cicero vending company that altered amusement video poker games to make them into gambling machines, which they then distributed to bars and restaurants, giving those owners a cut and then collecting the rest of the proceeds.

More importantly, Marcello admitted that he tried to hush up mob turncoat Nick Calabrese, the man primarily responsible for supplying agents with the evidence for the upcoming trial that begins Tuesday with jury selection. Calabrese turned on his brother, Frank Calabrese Sr. of Oak Brook and other mobsters, telling the government of various murders he said he was aware of, including murders he said he committed personally.

Michael Marcello said he relayed $4,000 a month from James Marcello to the family of Nick Calabrese when Nick Calabrese was in prison in an effort to placate Nick Calabrese and keep him from going to the feds.

After prosecutor Mitch Mars described the above acts, U.S. District Judge James B. Zagel asked Marcello, "Is what he said true?"

"Yes, your honor," replied Michael Marcello.

Catherine O'Daniel, who, along with attorney Arthur N. Nasser, represented Michael Marcello said he "is a good man and has accepted responsibility for the conduct in the indictment."

She also denied published reports that Marcello has been having problems while inside the Metropolitan Correctional Center. "He is just eager to put this behind him," said O'Daniel.

Michael Marcello faces 70 to 108 months in prison. Zagel will rule within a week whether he will sentence him soon, as Nasser requested, or wait until the trial is over, as prosecutors have requested.

Thanks to Rob Olmstead

Sunday, June 10, 2007

When it Comes to the Chicago Mob: Who's the Boss?

Friends of ours: Al "Pizza Man" Tornabene, John "No Nose" DiFronzo, James "Little Jimmy" Marcello, Michael Marcello, Anthony "Little Tony" Zizzo, Frank Calabrese Sr., Nick Calabrese

Who will be the new Tony Soprano of the Chicago mob?

With so many mob leaders on trial or dead, the Chicago Outfit is in disarray, law enforcement sources say.

It could be the "Pizza Man" acting as caretaker.

Or "No Nose" could still be pulling the strings, some Outfit watchers believe.

The "Pizza Man" is Al Tornabene, the 84-year-old former owner of a suburban pizza parlor. He has kept an extremely low profile for a reputed mob leader and has never been arrested by the FBI. Recently, his name has come up in conversations the FBI secretly recorded in prison between reputed top Chicago mob boss James "Little Jimmy" Marcello and his younger brother, Michael Marcello.

Tornabene has been seen eating in Rush Street restaurants with another top reputed mobster, Anthony "Little Tony" Zizzo, who was last seen leaving his Westmont home in August last year and hasn't been heard from since. Zizzo was responsible for overseeing one of the Outfit's most lucrative enterprises, the illegal video poker machines in bars throughout Chicago.

Tornabene has long been a mob leader, authorities say. In 1983, for instance, he presided over a ceremony at which several mobsters were inducted into full membership rights of the Outfit, court records show. Among the men who were made were Zizzo, reputed mob hit man Frank Calabrese Sr. and his brother, Nick Calabrese, who has admitted in a plea agreement with the feds that he killed at least 14 people for the Chicago Outfit. He is cooperating with the FBI.

"No Nose" is the much better known John DiFronzo, who is in his late 70s and has long been reputed to be a respected elder of the Chicago Outfit. DiFronzo is known for his business acumen and wide range of investments, including car dealerships. Some mob watchers think DiFronzo has long been rivals with James Marcello and is not overly upset over his arrest.

Tornabene hung up during a phone call Friday when asked if he was running the Outfit.

DiFronzo could not be reached for comment.

Thanks to Steve Warmbir

Wednesday, January 31, 2007

U.S. Marshal Pleads Not Guilty of Mob Leak

Friends of ours: James Marcello, Michael Marcello
Friends of mine: John Ambrose

A deputy U.S. marshal pleaded not guilty Wednesday to federal charges that he leaked confidential information that a mob hit man was cooperating with the FBI against organized crime.

John Ambrose was charged last month with telling a family friend that Nicholas Calabrese, the only member of the Chicago Outfit ever to become a government informant, was releasing details of gangland slayings.

Ambrose's alleged role as the inside source came to light in cryptic conversations between imprisoned Outfit boss James Marcello and his brother, Michael, that were secretly recorded by the FBI.

Following Wednesday's arraignment, Ambrose's lawyer, Francis Lipuma, said he has been told that federal officials plan to place Ambrose on unpaid leave from his job, but Lipuma intends to fight the move. He is currently on paid leave.

Ambrose, 38, a 10-year veteran of the U.S. Marshals Service, is free on bail.

Wednesday, January 17, 2007

Ex-Cop Denies He Passed Info to the Mob

Friends of ours: James Marcello, Michael Marcello, Nick Calabrese, John "No-Nose" DiFronzo
Friends of mine: William Guide, John Ambrose

Speaking publicly for the first time, a former cop accused of receiving sensitive information about the mob from a deputy U.S. marshal denied he did anything wrong.

William Guide became agitated Tuesday when asked if he passed on to a reputed mobster sensitive information he got from deputy U.S. Marshal John Ambrose. "I didn't do anything," an emphatic Guide told the Chicago Sun-Times on Tuesday. "I didn't do anything wrong. You don't know the whole story. You're making me out to be the bad guy in this whole thing."

Guide was responding to a story in Tuesday's Sun-Times in which Ambrose's lawyer, Frank Lipuma, said if the government's allegations were true, Guide "may or may not have taken advantage of Mr. Ambrose."

Ambrose, 38, was charged last week with theft of information after the government said he leaked confidential material about protected mob witness Nick Calabrese to "Individual A." Sources say that is Guide. Guide has not been charged in the case.

His lawyer, Rick Beuke, said Guide looks at Ambrose as a son. Beuke said he doesn't believe there was anything sinister going on between Ambrose and Guide, two longtime friends. If Ambrose talked about anything sensitive, he may have just been bragging, Beuke said. "He wanted to impress Guide like he'd want to impress a father," Beuke said. "It's like a kid coming home and saying: 'Dad, I hit a home run.' "

Ambrose twice briefly guarded Calabrese, who is set to testify in a mob trial this spring, when he was in Chicago. Shortly after, the feds say Ambrose revealed to Guide confidential facts he obtained from a file on Calabrese.

That information made its way to mobsters, the government alleges. The feds released transcripts of prison surveillance tapes in which reputed mobsters -- Jimmy and Michael Marcello -- can be heard discussing specifics about Calabrese's movements in Chicago and his cooperation. In coded language, they refer to both Guide and Ambrose, the FBI said. Information about Calabrese came from a file Ambrose had accessed, the feds allege.

The Marcellos refer to getting information from the "baby-sitter," whose father was a cop convicted in the Marquette 10. Federal authorities say that's specific information identifying Ambrose.

They allege that a third party passed the information to mobsters and do not allege that Ambrose disclosed sensitive information intending it to go to the mob. Ambrose denies wrongdoing.

Guide briefly served prison time with reputed mobster John "No Nose" DiFronzo.

Guide was a Chicago Police officer when he was convicted in the Marquette 10 scandal in the 1980s along with Ambrose's father, Thomas. Thomas Ambrose died in prison at age 37. Since then, Guide and John Ambrose have been close friends, talk often and share a love for wrestling, both of their attorneys said. "John was seeking out Bill's approval. He wanted Bill to be proud of him as a marshal," Beuke said.

Beuke said Guide and DiFronzo know each other. But he doesn't believe there's an ongoing friendship. Beuke said Guide, a South Sider, runs a pizza business and is too busy working to be a mob associate. "I don't think there's any evidence of Bill passing along any information to the mob," Beuke said.

Thanks to Natasha Korecki

Monday, January 15, 2007

Department of Justice Details Felony Charge Against US Marshall

Friends of ours: Nick Calabrese, Frank Calabrese Sr., James Marcello, Michael Marcello

A Deputy U.S. Marshal was taken into custody today on a federal felony theft charge for allegedly illegally disclosing highly sensitive, confidential information about a federally- protected organized crime witness. The defendant, John Thomas Ambrose, was charged in a criminal complaint filed today with theft of government property for allegedly revealing information relating to the status, substance of cooperation, and travel of cooperating witness/defendant Nicholas Calabrese, while Calabrese was in the United States Marshals Service's Witness Security Program (WSP), also known as "WITSEC."

Ambrose, 38, a deputy marshal since January 1998, was a supervisory inspector of the U.S. Marshals Service's Great Lakes Regional Fugitive Task Force. He was placed on administrative leave last September when he was questioned by federal agents conducting this investigation. He was scheduled to appear at 1:30 p.m. today before U.S. Magistrate Judge Michael Mason in U.S. District Court. He surrendered voluntarily earlier today at the FBI's Chicago office, announced Robert D. Grant, Special Agent-in-Charge of the Chicago Office of the Federal Bureau of Investigation, Gary S. Shapiro, First Assistant United States Attorney for the Northern District of Illinois, and U.S. Marshal Kim R. Widup.

"While this defendant's conduct in revealing closely guarded and highly sensitive information regarding a protected witness constitutes an egregious breach of his law enforcement duties, the investigation, so far, has not uncovered any evidence that either this witness or any other was ever in danger, and there is no evidence that any attempt was made to harm any protected witness," Mr. Shapiro said. "I remain confident in the integrity of the United States Marshals Service and the government's Witness Security Program, and am grateful for the Marshals Service full participation in the investigation with the FBI, which allowed the investigation to reach this successful outcome."

Mr. Grant said: "I am also confident that the Witness Security Program remains a vitally important resource for law enforcement and that its effectiveness is not diminished by this isolated problem. The Marshals Service participation was integral to this investigation and we didn't hesitate to ask them to join the investigation once it began to focus on this defendant."

According to the FBI's detailed complaint affidavit, Nicholas Calabrese admitted to the government that he was a "made" member of the "Chicago Outfit" (also known as the "Chicago Mob") and has provided federal law enforcement with the most expansive overview ever of Chicago Outfit murders. In 2002, he agreed to cooperate in the investigation of alleged Outfit members, including his brother Frank Calabrese, Sr., and brothers James and Michael Marcello. Nicholas Calabrese was formally admitted to the WSP in August 2002, and he was moved to a secure prison facility within the U.S. Bureau of Prisons, based upon an application prepared by federal agents and prosecutors detailing his ability to testify about 16 murders in which he participated and 22 other murders about which he had some secondary information from others. The application also provided an analysis of the significant danger posed to Nicholas Calabrese by members of the Chicago Outfit.

The ensuing investigation resulted in the April 2005 indictment of 14 defendants in U.S. v. Nicholas Calabrese, et al., 02 CR 1050, which alleges, among other crimes, a 40-year racketeering conspiracy involving 18 previously unsolved Outfit murders, often of suspected government cooperators and witnesses, between 1970 and 1986. The case against 12 remaining defendants (two others are deceased) is scheduled for trial in May 2007.

As part of his cooperation, Nicholas Calabrese was brought to the Chicago area by WSP Inspectors on two occasions: first, on October 31 - November 1, 2002, for his then-sealed court arraignment, and, second, on May 20-22, 2003, when he assisted the FBI in locating some of the murder scenes and other relevant locations. Both of these trips involved highly secret travel details to which only a handful of government personnel were privy. During both of Nicholas Calabrese's stays in Chicago, Ambrose served on the night shift security detail assigned to protect him. The affidavit explains that the role of and chain of command of WSP Inspectors is distinct from that of Deputy U.S. Marshals. WSP Inspectors occasionally request supplemental security services from Deputy U.S. Marshals, such as Ambrose, but the Deputy Marshal's role is restricted to providing a limited support function.

Between January and June 2003, the government intercepted 11 prison conversations between James and Michael Marcello when Michael visited James, ordinarily once or twice a month, at the federal prison in Milan, Mich., where James was incarcerated. The conversations indicated that Michael Marcello had an inside source of information concerning Nicholas Calabrese. The affidavit states that James Marcello was highly interested in learning the nature of the government's continuing investigation into his alleged criminal activities. The content of the intercepted cryptic conversations indicated that Michael Marcello's source of information was someone within federal law enforcement who had access to WSP protectees. The content of the conversations also confirmed that the source of information had access to documents and material that only a small number of individuals within the federal government would be in a position to retrieve.

In approximately five of the recorded conversations, large portions of which were coded and whispered, Michael Marcello reported to James Marcello information relating to Nicholas Calabrese that allegedly was obtained from Ambrose -- including information concerning Nicholas Calabrese's whereabouts, his status as a cooperator, and the level of his cooperation. These conversations -- excerpts of which are contained in the affidavit -- took place on January 30, March 6, March 24, April 24, and June 12, 2003.

The affidavit states that the intercepted conversations captured Michael Marcello providing James Marcello with current details concerning Calabrese's cooperation with the government, including non-public, sensitive matters regarding organized crime homicides that were the subject of Nicholas Calabrese's May 2003 trip to Chicago. This information would have been known to a very limited number of people, including federal law enforcement officers involved in providing security to Nicholas Calabrese on that trip.

In a recorded conversation on March 24, 2003, Michael Marcello identified his inside source of information regarding Calabrese as Ambrose, not by name, but by a description that could fit no other law enforcement officer. Michael Marcello told James Marcello that this source, whom he referred to as "the Babysitter," was the son of a deceased defendant prosecuted in the so-called "Marquette 10" case with then Chicago police officers Frank DeRango and Individual A. Ambrose's father, Thomas Ambrose, was the lead defendant, and Frank DeRango and Individual A were co-defendants, in U.S. v. Ambrose, et al., a police corruption case commonly referred to as "the Marquette 10" case. Thomas Ambrose died in prison while serving his sentence after being convicted of bribery.

According to telephone records cited in the affidavit, on May 23, 2003, (the last day of the second Calabrese detail) Ambrose placed a 14-minute phone call to Individual A's work telephone number. The call was made within hours of Ambrose completing his last night shift of the Calabrese protection detail, and phone records show no other calls over three minutes between Ambrose and Individual A for months prior to and after this 14-minute call, according to the complaint.

During other recorded conversations, Michael Marcello indicated that his source had access to information provided to the government by Nicholas Calabrese. According to the complaint, Ambrose's fingerprints were recovered just last summer from the originals of the confidential documents maintained by WSP personnel in a secure location. These highly-confidential documents were within Nicholas Calabrese's WSP file, which included details provided by Nicholas Calabrese regarding organized crime. The January 30, 2003, recorded conversation between James and Michael Marcello was the first time that they were heard discussing Nicholas Calabrese's cooperation. During Nicholas Calabrese's October 31 - November 1, 2002, visit to Chicago, records concerning him, including his background, criminal history/involvement, names of individuals about whom he had provided information, murders about which he had provided first and second-hand information, and names of individuals who could potentially pose a threat to him, were maintained in a locked cabinet within the control room located inside the secure WSP facility in Chicago.

According to the affidavit, on June 22, 2006, WSP personnel provided the FBI with the secured WSP Production File concerning Nicholas Calabrese. The FBI performed a latent fingerprint examination of the paperwork contained in this file, and two latent fingerprints identified as Ambrose's were found on two of the original WSP documents. One of the documents was included in the WSP application for Nicholas Calabrese's admission into the WSP, and Ambrose's fingerprint was found on the last page which included the signature of the U.S. Attorney.

The government is being represented by Assistant U.S. Attorneys T. Markus Funk, John Scully and Mitchell Mars.

If convicted, each charge carries a maximum penalty of 10 years in prison and a $250,000 fine. The Court, however, would determine the appropriate sentence to be imposed.

The public is reminded that a complaint contains only charges and is not evidence of guilt. The defendant is presumed innocent and is entitled to a fair trial at which the government has the burden of proving guilt beyond a reasonable doubt.

Lawyer Says US Marshall is no Hoodlum

A deputy US marshal is charged with revealing information about a mob informant in the witness protection program. The ABC7 I-Team has learned there are serious questions about the deputy's background. He has family ties to the Marquette 10 Chicago police scandal back in the 1980s.

The deputy charged is John Thomas Ambrose. His father Tom Ambrose served prison time in the Marquette 10 police scandal.

There is a hit movie out right now called "The Departed" starring Jack Nicholson as a mob boss. It centers on a cop who is actually working for the mob. It is fictional story. But in Chicago that same scenario is playing out in real life, with a 9-year veteran lawman accused of helping the outfit by secretly leaking information that might have compromised the biggest outfit case in Chicago in 20 years. "No system is perfect. Much of what we do depends on trust and confidence and honor," said Gary Shapiro, US. state's attorney.

According to federal prosecutors, 38-year-old John Thomas Ambrose broke the trust, compromised that confidence and dishonored his oath to uphold the law. Ambrose appeared Thursday afternoon before US Magistrate Michael Mason on federal theft charges.

According to the FBI, Ambrose fed Chicago organized crime bosses, including Jimmy "the Man" Marcello, a steady diet of "highly sensitive, confidential information" about a key witness in the federal investigation of more than a dozen unsolved Chicago mob killings. "The breach could have put at risk the life of one of the most important witnesses ever developed in Chicago against the Chicago Outfit. It could have put at risk US Marshal's, and family members of that witness," said Robert Grant, FBI special agent in charge.

Conversations between Marcello and his brother at the federal prison in Milan, Michigan, had been secretly recorded by the FBI. The conversations included coded references to "the status, substance of cooperation and travel" of Nicholas Calabrese, a defendant and key witness in the FBI's Operation Family Secrets.

Federal agents say they had to break the mob code, deciphering that Ambrose was "the babysitter." The FBI was "polizia." Mob leader Joey "the Clown" Lombardo was Pai-Achi, the name of a clown in a famous Italian opera. The Spilotro brothers who had been tortured and buried alive in a cornfield were "shivago," and the code for wife, "moolieri."

Ambrose's lawyer contends, he's no hoodlum. "He is not connected to the mob at all. It rests on impressions and opinions of an FBI agent who wrote that affidavit. She said so herself and she is interpreting what they are saying," said Frank Lipuma, Ambrose's attorney.

Ambrose's father Thomas was a disgraced Chicago cop, a key figure convicted in the Marquette 10 police corruption case 20 years ago.

Authorities believe that while the father was serving time at the downstate Marion penitentiary, he renewed a boyhood friendship with Chicago mob king John "No Nose" DiFronzo , and that after Thomas Ambrose died, his son john, the deputy US marshal, struck up a relationship with DiFronzo , all leading to questions about why Ambrose was hired in the first place.

When interviewed by the FBI, Ambrose said he understood he made a mistake but that his intention was to ingratiate himself to DiFronzo and others to help his career. He thought they might help him locate fugitives including the recently captured Joey "the Clown" Lombardo.

Ambrose has been on leave from the US Marshal's Office since September and faces a maximum of 10 years in prison. He is out on $50,000 bond.

Thanks to Chuck Goudie

Friday, January 12, 2007

Marcello's Loose Lips Result in Arrest of US Marshall

Friends of ours: Michael Marcello, James Marcello, Nicholas Calabrese

Reputed U.S. Mob boss Michael Marcello apparently didn’t watch crime shows on television - otherwise he might have known the FBI often listens in to conversations in prison visitors rooms.

In 2003, the unsuspecting Marcello dropped broad hints about his source inside the U.S. Marshals Service during visits to his brother in the prison in Milan, Michigan.
FBI agents heard every word about the man Marcello called "The Babysitter." As a result, Deputy marshal John Thomas Ambrose surrendered on Thursday to FBI agents who say he was the source who told Marcello secrets about a federally protected witness.

"This defendant’s conduct in revealing closely guarded and highly sensitive information ... constitutes an egregious breach of his law enforcement duties," said First Assistant U.S. Attorney Gary S. Shapiro.

Ambrose is accused of leaking information about the whereabouts of reputed mobster Nicholas Calabrese, a key witness in a murder conspiracy case. Fourteen reputed mobsters and their associates are charged with at least 18 murders. Ambrose appeared briefly before a judge who scheduled a hearing for Jan. 30. Defense attorney Francis C. Lipuma told reporters that his client denied the accusations. "John Ambrose is not connected to the mob at all," Lipuma said.

Prosecutors said that between January and June 2003 they intercepted 11 conversations that took place when Michael Marcello visited his brother, James, at the Michigan prison.

Thursday, December 21, 2006

Mob Boss Warns About Wire in Advance

Friends of ours: James Marcello, Michael Marcello, Frank Calabrese Sr.
Friends of mine: Frank Calabrese Jr.

Two years before the information became public, the head of the Chicago mob warned that the oldest son of a Chicago mobster was wired up.

In a secretly tape-recorded conversation top Chicago mob boss James Marcello told his half-brother, Michael Marcello, in the visiting room of a federal prison not to talk around Frank Calabrese Jr.

"The oldest guy, the son, he's got one of these things on," James Marcello told his brother, pointing to his chest and mid-section during the Jan. 9, 2003, conversation. "So, if he comes around be careful," James Marcello warned.

The dialogue is quoted in a recent government filing in what's been called the most significant prosecution of the Outfit in Chicago history. Among those charged include both Marcellos and Frank Calabrese Sr., who is accused of having a role in 13 mob murders out of 18 charged in the case.

It's unclear how James Marcello found out about the closely guarded secret that Frank Calabrese Jr. was cooperating with the feds and had worn a wire on his father. The fact was reported first publicly in the Chicago Sun-Times in February 2005.

Federal authorities had no comment on the matter Tuesday.

Both Marcello brothers and reputed mob hitman Frank Calabrese Sr. are in federal prison awaiting trial in May.

Frank Calabrese Jr., who is not charged in the current case, put his life on the line by secretly recording his father while they both were in prison on another matter.

Frank Calabrese Sr. allegedly talks about mob murders on the tape-recordings, and his talkativeness has sparked great ill feelings toward him among his fellow mobsters awaiting trial with him at the Metropolitan Correctional Center in Chicago.

Frank Calabrese Sr.'s brother, Nick, is also cooperating, and the Marcellos are heard talking about his cooperation as well. That talk was spurred, in part, after Nick Calabrese did not return home from prison as scheduled in November 2002.

Michael Marcello was visiting his brother in prison in Milan, Mich. They want the secret tape-recordings barred from trial, but prosecutors argue that the brothers had no expectation of privacy while inside the prison and that the conversations are relevant to the case.

Thanks to Steve Warmbir

Saturday, November 11, 2006

FBI Has Mole within Chicago Mob

Friends of ours: Michael "Mickey" Marcello, James "Little Jimmy" Marcello

For 20 years, the FBI has had an informant in the Chicago Outfit who apparently is a "made" member and has taken part in major crimes, according to a court filing in a federal prosecution of top mobsters.

The information is in a court motion by lawyers for Michael "Mickey" Marcello, the half-brother of Chicago's reputed mob boss, James "Little Jimmy" Marcello. Attorneys Catharine O'Daniel and Arthur Nasser want the 2005 indictment against Michael Marcello dismissed because of the FBI's continued reliance on the informant.

The major federal prosecution involving 18 mob-related killings allegedly involving top organized crime figures is scheduled for trial in May.

In their motion, the defense attorneys blast the government for allegedly "cavorting with and protecting a 'made mob member' who still must be active in the commission of 'mob' criminal activities."

"No court should sanction the government's use of ... a past and current made member of the 'Chicago Outfit' as a confidential informant in this case," the motion argues.

A spokesman for the U.S. attorney's office in Chicago had no comment on the defense filing.

The defense attorneys do not try to guess the identity of the informant. He's referred to in court papers as CI-1 and is part of a sworn statement by an FBI agent in 2002 that asks for court permission to tape the conversations of James Marcello when he receives guests in the visiting room at the federal prison in Milan, Mich.

The defense motion appears to make some assumptions based on the FBI agent's affidavit. It assumes the informant is a so-called "made" member based on his associations with top mobsters and his criminal activity with them. And it assumes that the FBI is still using the person, even though the affidavit is four years old.

Nasser, Michael Marcello's attorney, declined to comment on the filing.

Michael Marcello also wants barred from use at trial any tape and video recordings made when he was talking to his brother in the prison visiting room.

The Chicago Sun-Times first reported on the contents of some of those conversations in February 2005. The brothers talked about the benefits of a proposal to legalize video gambling in Illinois as well as the progress of the federal case against Michael Marcello, who at the time was out of jail.

James Marcello's questions about the investigation were nothing more than "brotherly concern," according to Michael Marcello's motion.

Thanks to Steve Warmbir

Chicago Mobster is FBI Mole Charges Defense Lawyers

Friends of ours: James "Little Jimmy" Marcello, Michael "Mickey" Marcello

The federal prosecution of organized crime figures in Chicago for 18 mob-related slayings has revealed the presence of an FBI mole, a report contends.

A court motion filed by lawyers for the half-brother of reputed Chicago mob boss, James "Little Jimmy" Marcello, says that for 20 years the FBI has had an informant in the Chicago mob who apparently is a "made" member, Chicago's Daily Southtown reports.

Lawyers for Michael "Mickey" Marcello are asking that the 2005 indictment against him be dismissed because of the FBI's continued reliance on an informant who allegedly has taken part in major crimes.

The defense attorneys criticize the government for what they contend was "cavorting with and protecting a 'made mob member' who still must be active in the commission of 'mob' criminal activities."

"No court should sanction the government's use of ... a past and current member of the 'Chicago Outfit' as a confidential informant in this case," the defense motion argued.

A spokesman for the U.S. attorney's office in Chicago had no comment on the defense filing.

Thursday, November 17, 2005

Illinois Gaming Board and Emerald Casino

Friends of Ours: Sam Giancana, James Marcello, John DiFronzo
Friends of Mine: Donald Stephens, Vito Salamone, Joseph Salamone, Nick Boscarino, Peter DiFronzo, Michael Marcello

Recommendations to the Illinois Gaming Board
In the Matter of Emerald Casino, Revocation of License Proceeding
Abner J. Mikva
Administrative Law Judge.

This matter officially commenced on March 6, 2001 when the Illinois Gaming Board (IGB, the Board) formally revoked the license of Emerald Casino, Inc. (Emerald) pursuant to Section 5(c) of the Illinois Riverboat Gambling Act (The Act) and Subpart K of the Rules of the IGB (Rules). Emerald duly answered (Answer) the complaint for disciplinary action (complaint) and an Administrative Law Judge (ALJ) was appointed to hear the matters in dispute concerning the revocation.

Protracted hearings were held by Herbert Holzman, ALJ, until August 4, 2004 when he recused himself from further proceedings o the matter. On April 14, 2005 the undersigned was appointed as successor ALJ and continued the hearings until their conclusion. A short procedural history of Emerald and its Owner's license follows.

On July 9, 1992, Emerald, then known as H.P. Enterprises, was issued a three - year Owner's License by the IGB for a riverboat gaming operation in East Dubuque, Illinois. Subsequent renewals of that license were granted in July, 1995 and July, 1996.

On December 1, 1994, the Board issued a disciplinary complaint against Emerald for its failure to obtain prior Board approval to change its equity and debt capitalization and for failure to notify the Board of its source of funds. Emerald had entered into various loan agreements in July, 1994 that were not timely disclosed to or approved by the Board. Emerald was fined $30,000.00.

In June, 1997 IGB denied Emerald's renewal application for its failure to submit a responsive renewal application, significant compliance shortcomings and failure to adhere to the overall requirements of the Act. Emerald stopped gaming operations in July, 1997. Emerald requested an administrative hearing regarding the denial of its renewal application and in 1999, at the conclusion of hearings, the ALJ concurred with the Board and recommended that the Board take final action to deny the renewal of Emerald's license.

However, before the Board acted on the ALJ's recommendations, the Illinois General Assembly amended the Act by adding a provision that "A licensee that was not conducting Riverboat Gambling on January 1, 1998 may apply to the Board for renewal and approval of relocation to a new home dock location ... and the Board shall grant the application and approval upon receipt by the licensee of approval from the new municipality or county as the case may be in which the licensee wishes to relocate...". This provision, Section 11.2 of the Act, became effective June 25, 1999.

Emerald accordingly applied for renewal of its license and for relocation for its operations to Rosemont Illinois. IGB undertook an investigation of Emerald and its key persons and proposed stockholders. The Board denied the renewal of Emerald's license on January 30, 2001. Emerald took an appeal from IGB's denial of the license and the case was heard both by the Appellate Court of Illinois and the Supreme Court of Illinois. Both these courts agreed with Emerald's contention that "shall" is mandatory in Section 11.2 of the Act and that the Board had no discretion in terms of the renewal of the license. However, both courts specifically upheld IGB's authority and discretion in all other respects under the Act and specifically told IGB that it could pursue the revocation hearings, which had previously been instituted. (Philip N. Crusius v. The Illinois Gaming Board, et al., Case No. 98351 September 22, 2005) IGB accordingly modified its directive to the undersigned to pursue only the revocation proceeding and to discontinue any reference to the denial of the renewal which had been previously been heard as part of the same proceeding. The findings of fact and conclusions of the law, which follow, pertain, therefore, to the revocation.

Two lengthy and complete staff reports were prepared pertaining to the Board's revocation action. Both of those reports are included in the record and made available to Emerald as part of this proceeding. There were 59 hearing days in this matter. The record consists of 6498 pages. The Board offered 440 exhibits and Emerald offered 112 exhibits, all of which are made a part of this record. All subpoenas requested by Emerald were carried out except that I rejected efforts to call Chairman Jaffe as a witness in this proceeding, since he is one of the ultimate adjudicators. (R. 5223) The Inspector General also resisted a subpoena as to one of its investigations of a board employee. Emerald conducted interrogation as to that investigation through another witness. And in both instances Emerald made offers of proof which are part of the record. The Board made an offer of proof in lieu of cross-examining one of Emerald's witnesses. I did not deem any of the allegations in any of the offers of proof to be pertinent to the outcome of this proceeding.

I recommend to the IGB that it confirm its order of revocation against Emerald and that order be made final pursuant to the Act. My Findings of Fact and Conclusions of Law are as follows:

FINDINGS OF FACT

1. EMERALD AND ITS PRINCIPALS DISSEMBLED ABOUT ITS PLANS TO MOVE THE LICENSE LOCATION TO ROSEMONT, ILLINOIS.

Emerald's gambling operations at East Dubuque, Illinois had been financially unsuccessful for some time. At least since 1995 Emerald had been making efforts to move those operations either by obtaining permission from IGB or by lobbying to get legislation passed, which would allow such relocation. IGB did not have the legal authority to authorize such relocation.

(R. 2846)

In November, 1997 an entity known as Lake County Riverboat LP entered into negotiations with Emerald to create a joint venture for gaming operations in Lake County, Illinois. (R. 1880) On or about November 6, 1997, the parties entered into a non-disclosure agreement. (R. 1887) On November 12, 1997, the parties entered into a joint venture agreement. Neither of the agreements were ever disclosed to the IGB and were not discovered by the IGB until subsequent litigation between Emerald and the Davis Companies. (R. 473-75, 485-88, 2963) These negotiations were largely conducted by Joe McQuaid and Kevin Flynn on behalf of Emerald. Their roles in this matter will be further discussed below.

In 1997, Kevin Flynn and Victor Cassini, on behalf of Emerald met with Rosemont Mayor Donald Stephens at the mayor's office (R. 393, R. 5301-5304). At that meeting, Flynn and Stephens discussed the possibility of relocating the Emerald Casino operation to the Village of Rosemont, according to Stephens in his sworn statement and in his testimony in this hearing. (R. 395-96) Kevin Flynn acknowledged that he met with Mayor Stephens, but testified that they only talked about the Flynn's Blue Chip operation in Indiana. Kevin Flynn's testimony in this aspect was not credible. (R. 2431-32)

In October, 1998 Kevin Flynn and David Filkin, then Vice President and General Counsel of Duchossois Industries, met with other representatives of Duchossois to discuss legislative efforts which would allow the relocation of the Emerald Casino. (R. 1783) Kevin Flynn commented that the Village of Rosemont was "a no brainer" as far as relocation. (R. 1785-86) At or about that same time the Davis Companies of California were also interested in owning or investing in a casino in Illinois, particularly in Rosemont. Michael Colleran was a Vice President of the Davis Companies. (R. 1789) In December, 1998, Kevin Flynn agreed to sell an ownership interest in the Emerald operation to the Davis Companies and to the Duchossois group. The Davis Companies would purchase 37.5 percent of the Emerald operation, while the Duchossois group would purchase 20 percent of the Emerald operation. The parties agreed to cooperate to pass legislation that would allow the casino to relocate. (R. 1806-07) This was all set forth in the First Amended Complaint in the Davis litigation. In addition to the three way split between the Flynns, the Davis Companies, and the Duchossois group , a 5 percent ownership interest in the casino was reserved for "local investors". (R. 1806-07) In Mayor Stephens sworn statement to IGB of September 2000, Mayor Stephens testified that as to the 5 percent designated for local investors, "that was for me". (Stephens sworn statement at 69-70) At or about that same time, Filkin telephoned Kevin Flynn and Kevin Flynn confirmed to Filkin the terms of the agreement. (R. 1809-10) The IGB was not notified of any of these agreements at any time until the Davis Companies tried to enforce the agreements through litigation. (R. 1844-45)

Throughout 1998 and 1999, the Duchossois group and the Davis group were actively involved in and supported the legislative initiative to authorize Emerald's relocation. (R. 1815-16) The Village of Rosemont and Mayor Stephens also participated in the lobbying efforts in 1998-99 to pass the legislation allowing relocation of Emerald's license. (R. 5352) In his sworn statement Mayor Stephens stated "you get a bill down there and I can probably kill it with people that I know in the forty-five years I have been around. I can convince enough people to squash your bill unless it is something the public really wants." (Stephens sworn statement at 47).

Emerald repeatedly told IGB that it never considered Rosemont as its prospective site until after Section 11.2 of the Act was passed by the General Assembly. As late as the filing of its Verified Answer in this proceeding, paragraph 15, it maintained that position. Everybody else seemed to know differently. The legislative history of the debate during which Section 11.2 of the Gaming Act was approved, was replete with references to Rosemont as the designated city for the relocation.

Representative Hoeft said "We're [taking the riverboat] and putting it in Rosemont and anyone here that tells me that we're not doing that, pardon the pun folks, but you want to make a bet, because that is where this boat is going." (Transcript from May 21, 1999, Illinois House of Representatives debate on SB 1017, at 102). Senator Shaw said: "and most of us do not come from such rich districts as up in Rosemont and up in Arlington ...I do not have anything against Rosemont... [Now] the argument is going to be, but do I know it is going to Rosemont. Let me tell you this; Those of us who are elected to this Body we did not come out of the dust closet to get here: we understand this process." (Transcript from May 24, 1999, Illinois Senate debate on SB 1017 at 117)

Senator Welsh stated, "the question that we have to ask is why it is going where it is going. Is that really economic development or are we just cutting a deal that started out being dock site gambling for ---- to keep a few boats going... [W]e've come to some kind of - secret agreement that it is going to Rosemont. And to get it there, another person, who wanted it up in Arlington Heights, agreed to give up his contention that he deserved it in exchange for a piece of the pie... what we have here is akin to a run-away train." (Transcript from May 24, 1999, Illinois Senate debate on SB 1017 at 123)

It was not until July, 1999, that Emerald's attorney advised IGB that it intended to move its operation to Rosemont. (R. 182, 183)

In October, 1999, the parties who had cooperated to see that the legislation allowing the new location had passed were still cooperating with each other and with Mayor Stephens. A fundraiser for the Donald E. Stephens Committeeman Fund produced the following contributions:

a. American Trade Show Services Inc. -donated $25,000 to the Fund. Nick Boscarino- husband of a new Emerald investor, Sherri Boscarino, is a principal of that company. The Boscarino interests, persons who were called to testify in these hearings, asserted their Fifth Amendment rights and refused to answer any questions. The Individuals contributed $21,000 to the Fund.

b.
D & P Construction, which ended up a contractor for Emerald,
contributed $5,000 to the Fund.
c.
The Davis interests contributed $20,000 to the Fund.
d.
The Duchossois interests contributed $21,000 to the Fund.
e.
The Flynn interests contributed $25,000 to the Fund.

Loans to by Parkway Bank to the Fund were extensive. Apparently there was one gift of over $208,000 (R. 6095) As will be detailed below, principals of Parkway were included as secret investors in Emerald. These included its president, Rocco Suspenzi. Mr. Suspenzi as well as Jeffrey Suspenzi were subpoenaed to testify in this proceeding, but exercised their Fifth Amendment rights.

The refusal of Mr. Rocco Suspenzi and Mr. Jeffrey Suspenzi to testify at these board proceedings, notwithstanding their secret investment in Emerald, and notwithstanding their closeness to Mayor Stephens and his activities, entitled IGB to draw inferences from these political loans and contributions, notwithstanding the "legality" and "timing" of such loans and contributions.

Counsel for Emerald insisted that all of these contributions were legal and indeed they are. Illinois has no limit on contributions nor does it prohibit contributions from investors or would-be investors in the gaming industry. However, IGB was entitled to infer from contributions and their timing and the lobbying efforts acknowledged by the parties involved that there was indeed an agreement in 1998-99 to get such legislation passed through the General Assembly, to relocate the Emerald gaming operations to Rosemont, and to divide the pie in some kind of secret arrangement.

2. THE RENEWAL APPLICATION FILED BY EMERALD ON SEPTEMBER 28, 1999 WAS NEITHER ACCURATE NOR COMPLETE.

Joe McQuaid testified that as the responsible official of Emerald, he completed and filed the Renewal Application. He testified that he reviewed the instructions for the application carefully. (R. 3176-77) As would be detailed, Mr. McQuaid had extensive experience as the Chief Enforcement Officer and Interim Administrator of IGB for many years immediately prior to being employed by Emerald. Indeed he was the official of IGB who signed the first disciplinary action against Emerald in 1994, which resulted in the $30,000 fine against Emerald.

Notwithstanding Mr. McQuaid's experience and his testimony that he had reviewed the instructions, the application stated that none of the shareholders were public officials or relatives of public officials. A list of stockholders submitted to IGB included a relative of State Representative Ralph Caparelli, one of the prime movers of the relocation amendment to the Act, as well as two other public officials. McQuaid never asked any of the persons involved whether or not they were public officials and testified that he thought that it was not important to ask such questions because none of the stock purchased and transferred to these public officials had ever been approved by the IGB. Therefore, even though the proceeds of such sales and others were used by Emerald, McQuaid's position was that it was of no consequence who the stockholders were until the IGB finally approved the transfer. Neither McQuaid nor anyone else at Emerald had ever examined the Personal Disclosure Forms (PDF) which were submitted to the Board directly.

The application also requested that Emerald submit "all agreements, arrangements, and commitments related to proposed gaming facility and related projects". Emerald submitted five agreements, none of which were pertinent to this inquiry and stated it had not executed any other agreements. In fact, Emerald had executed a letter of intent with the Village of Rosemont; Emerald made no reference to any of the arrangements that it had made with the Davis interests (which were about to lead into a law suit filed by Davis).

The application specifically asked whether the licensee or any of its affiliates had been a party to any legal action, including pending or threatened litigation. Emerald did not include any information about the threatened litigation by the Davis companies, even though the Davis companies had already planned a complaint and notified Emerald of that fact.

One of the questions asked whether any current or proposed shareholders had been arrested, charged, indicted, convicted etc. of any felony or misdemeanor. Emerald answered by saying it relied on the PDF's that were submitted directly to the Board. Emerald thus sought to absolve itself of any responsibility for the identity of the stockholders other than perfunctory interviews by Mr. McQuaid. As will be detailed below, several proposed stockholders were covered by that question, but not disclosed to IGB.

In July and August 1999 Rosemont and Emerald entered into several letter agreements relating to the development of the proposed casino on the Rosemont property. (R. 3229) These letter agreements were not disclosed to IGB until sometime in 2000. IGB became aware of these letter agreements with Rosemont in September, 2000, pursuant to a letter received from the attorney for Rosemont. Emerald did not disclose these agreements with IGB until December, 2000. (R. 3220)

3. EMERALD FAILED TO NOTIFY IGB OF ITS CONSTRUCION ACTIVITES OR ITS LEASE AND DEVELOPMENT AGREEMENT WITH ROSEMONT IN A TIMELY FASHION.

It would appear that after Emerald and its principals were successful in obtaining the amendment to the Act from the legislature pertaining to relocation, it decided that the rules and procedures of IGB need not be given too much concern. On July 21, 1999, Rosemont and Emerald had entered into a Letter of Intent regarding the construction of a casino at the site agreed upon between them. The Letter of Intent was "intended to memoralize key items that had been agreed to which are to be incorporated into a lease and development agreement". (R 1235-36) This Letter of Intent was extended and augmented by various letter agreements signed in August 1999 and December 1, 1999. Emerald did not include the Letter of Intent or any of the documents previously signed with Rosemont in its September 24, 1999 application. Indeed none of those agreements were sent to IGB by Emerald until December, 2000 more than one year after commencing construction and after IGB had obtained these letters from the Village of Rosemont in September, 2000. (R. 1235-36)

On February 10, 2000 Emerald submitted a fully executed copy of the Lease and Development agreement between Emerald and Rosemont. That Agreement contained many of the identical terms originally memoralized in the July 21 Letter of Intent. This February submission to IGB was long after Emerald had commenced construction at the site, and Rosemont had commenced construction of a parking garage. Indeed, on or about February 29, 2000 Emerald informed IGB that it had ceased all construction activities at the site as of that date.

The Lease and Development Agreement contained many provisions violative of IGB's rules and procedures. That Agreement allowed the Village of Rosemont to waive the requirement that Emerald obtain necessary regulatory approval from IGB prior to commencing construction of the casino. That Agreement committed Emerald to fund the construction of the parking garage addition even though Emerald did not have sufficient financing dedicated to do so. That Agreement failed to provide Emerald the ability to exercise appropriate control or supervision over the management of the contractor or sub-contractors for the casino and parking garage construction project. At the hearings, Emerald took the position that submission of construction contracts or review of construction contractors was not necessary because IGB would always have an opportunity to reject anything that had been built in the final instance before the "casino" became a "casino". Such a position is contrary to the statute.

At least one of the subcontractors doing work on the casino construction project was a company known as D & P Construction. The FBI in its memorandum of April 16, 2003 identified D & P Construction as controlled by Peter and John DiFronzo. The Memorandum stated that D & P obtained contracts through illegal payoffs or intimidation (IGB Exhibit 397). During the hearings, none of the witnesses, either for Emerald or for any other party would admit that they hired D & P Construction.

4. KEVIN FLYNN, AS A MAJOR STOCKHOLDER AND PROPOSED CHIEF EXECUTIVE OFFICER OF EMERALD, CONSISTENTLY DISSEMBLED TO IGB AS TO HIS ACTIVITES ON BEHALF OF EMERALD.

Kevin Flynn identified himself as a stockholder of Emerald in December, 1996. However Kevin Flynn, both in sworn statements and letters to the IGB, insisted that he did not become involved in the activities or management of Emerald until June of 1999 when he was appointed to the new post of Chief Executive Officer of Emerald.

As far back as November, 1997 Kevin Flynn had negotiated on behalf of Emerald with the Lake County Riverboat L.P. to discuss a joint venture for a riverboat in Lake County Illinois. Kevin Flynn acted as the primary spokesman for Emerald in those negotiations. (R. 1890-91, R. 1900-01) In November, 1997 Emerald and Lake County Riverboat entered into a nondisclosure agreement and a joint venture agreement to pursue a Lake County operation. (R. 1887) These agreements and Kevin Flynn's role in negotiating these agreements were not disclosed to IGB. IGB only become aware of the circumstances through a review of material produced in the Davis litigation at a much later time. (R. 473-75, R. 485-88)

In 1997, Kevin Flynn met with Mayor Stephens at the Mayor's office. They discussed the possibility of moving the Emerald Casino operation to Rosemont. (Stephens' sworn statement at 12; R. 5301-04) Kevin Flynn insisted that Rosemont "was not anything considered as far as I know until the legislation passed" in 1999. (R. 2439) Kevin Flynn lied about his 1997 meeting with Mayor Stephens and the possibility of moving to Rosemont.

In October, 1998, Kevin Flynn met with representatives of Duchossois Industries including David Filkin, Vice President and General Counsel for Duchossois. Kevin Flynn stated at that meeting that Rosemont was a "no brainer" as to relocation. (R. 1785-86) While Kevin Flynn testified that he was just there listening, that he "had no role" as to Emerald. (R 70) Filkin and others testified that Kevin Flynn was the primary spokesman for Emerald. (R 1785-86) In the Fall of 1998 Kevin Flynn told Filkin that any negotiations or deal among Emerald, Davis, and the Duchossois group, need be kept secret. (R. 1802-03) Kevin Flynn had meetings with representatives of the Davis Companies around the same time.

(R. 1793-98) At a meeting on December 1, 1998, Kevin Flynn agreed or reached an understanding to sell an ownership interest in the Emerald operations to the Davis Companies and to the Duchossois group. (R. 246364, R. 1799-1801) (R. 1806-07) In addition to agreeing about the division between the three groups at the meeting, a 5 percent interest was reserved for "local" investors. (R. 1806-07) Mayor Stephens in his sworn statement to IGB testified that the 5 percent designated for local investors, "that was for me." (Stephens sworn statement 69-70)

After talking to the parties representing Davis, Filkin called Kevin Flynn and Kevin Flynn confirmed that the terms of the agreement that had been outlined to Filkin were correct. (R. 1809-10)

In 1998 and 1999 the Duchossois group and the Davis Companies were actively involved in lobbying the legislature to allow Emerald to relocate. (R. 1815-16)

After the legislation was passed which allowed the relocation, Filkin learned that Emerald might not abide by the agreement that had been reached in December 1998. (R. 1814-15) McQuaid advised Filkin in the summer of 1999 that the Duchossios group would be able to invest in Emerald but that the Davis Companies may be cut out of the deal. (R. 181617)

On September 20, 1999, Emerald organized a meeting with the Duchossios group. At the meeting Kevin Flynn told the Duchossios group that they would not be given the opportunity to invest in Emerald regardless of the prior agreement or understanding. Kevin Flynn stated that, "things change." (R. 1817) (R. 2495)

Notwithstanding all these negotiations and agreements, Kevin Flynn repeatedly denied that he had made any kind of deal with the Davis Companies or the Duchossios group. (R. 423-24; Kevin Flynn sworn statement 107-08) Indeed, in all his presentations to IGB and in subsequent litigation with the Davis Companies, Kevin Flynn insisted that he had nothing to do with running Emerald until June, 1999.

Kevin Flynn attended four of the five Emerald Board of directors meetings held between April, 1997 and April, 1999. Kevin Flynn insisted that the only reason he was at the Emerald meetings was because they coincided with the dates of the Blue Chip Casino Board meetings. Kevin Flynn testified that at some Emerald meetings he would get up and leave and sometimes he would stay. Donald Flynn gave similar testimony about Kevin Flynn's attendance at board meetings. Donald Flynn, father of Kevin and principal stockholder of Emerald, was not in town often and apparently relied heavily on his son to represent his interest. In fact, only one of the five Emerald Board of Directors meetings coincided with a Blue Chip Casino Board of Directors meetings. (R. 499-501; R. 2451)

In sum, the record is replete with clear and convincing evidence that Kevin Flynn dissembled to IGB about his activities on and in behalf of Emerald prior to June of 1999. Whether his reasons for such dissembling was to establish deniability of responsibility for agreements reached with such groups as the Davis Companies and the Duchossios group or negotiations with other dissenting stockholders or to deny how long Emerald was involved in its desire to relocate to Rosemont, he did not tell the truth to IGB.

Between April 1996 and 1999 Kevin Flynn was the CEO of Blue Chip Casino, a gambling boat operating in Michigan City, Indiana. In 1999, Blue Chip was sold to Boyd Gambling. (R. 5704-05) On June 27, 1999 as part of the sale of Blue Chip to Boyd, Kevin Flynn created a company known as Field Street. That company entered into a consulting and lobbying agreement with Boyd. Under this agreement, known as the Field Street Agreement, Kevin Flynn agreed to lobby to prevent tribal gambling from entering into southwest Michigan; such gambling would compete with Blue Chip in Michigan City. The agreement was also to cover activities in Indiana and Illinois. (R. 5726-27) Under the agreement Kevin Flynn was to be paid $500,000 a year plus expenses. If Kevin Flynn was successful in keeping tribal gaming out of southwest Michigan for five years, he would be paid five million dollars as a bonus. One of the activities that Kevin Flynn agreed to pursue was to facilitate the funding of money from Boyd to grass roots anti-gambling interests that were opposed to gambling and the expansion of gambling in Michigan. (IGB Exhibit 306, page 129, R. 572627)

Neither Kevin Flynn nor Boyd disclosed the existence of the Field Street Agreement either to Indiana or Illinois authorities. The Indiana authorities determined that it was Boyd's responsibility to disclose the agreement and for such non-disclosure the Indiana Gaming Board fined Boyd the equivalent of one million dollars. IGB first learned of the Field Street Agreement in late 1999 on receipt of a telephone call from the Indiana Gaming Commission. (Supplemental staff report at 63) Kevin Flynn did not disclose the existence of the Field Street Agreement until June 29, 2000. (IGB Exhibit 210) Whether such an agreement would or would not be against public policy under Illinois precedents, such a contract could affect the gaming industry and the reputation of persons in the gaming industry in Illinois.

5. EMERALD FAILED IN ITS OBLIGATION TO PREVENT INELIGIBLE INTERESTS FROM INVESTING IN ITS CASINO. AS A RESULT, NUMBEROUS INELIGIBLE INTERESTS WERE SOLD STOCK IN THE CASINO AND THE PROCEEDS OF SUCH SALES WERE USED TO FINANCE CONSTRUCTION OF THE NEW CASINO FACILITY AT ROSEMONT.

Throughout these proceedings Emerald insisted that it was IGB's obligation to investigate the eligibility and background of investors in the casino, since no stock purchase was complete until IGB approved it. It claimed its only responsibility was a very perfunctory review of the eligibility of the proposed stockholders; it caused such stockholders to fill out a Personal Disclosure Form 1 (PDF) and submit it directly to IGB. Emerald insisted that it could not look at the PDF's, since they were confidential. As a result, at least three of the individuals to whom stock was sold were ineligible because of their status as public officials or relatives of public officials. (R. 233) This has been covered above.

In addition to persons ineligible to be stockholders as a result of the public official disqualification, several persons and interests who had some association with organized crime were allowed to purchase stock in Emerald. In a complicated transaction involving a trust instrument with his daughter and a loan from Parkway Bank in the amount of $1,500,000, Nick Boscarino was allowed to acquire an interest in Emerald. Boscarino did business with the Village of Rosemont and was a partner in a company with Mayor Stephens' son, Mark Stephens. The company cleans office buildings including the Rosemont Exposition Center. Mayor Stephens acknowledged that he had been close to Nick Boscarino until Boscarino was indicted and convicted for defrauding the Village of Rosemont. (R. 5330-32)

Boscarino, his mother Ida L. Hansen, and his wife were all subpoenaed to testify in this proceeding; all of them took the Fifth Amendment and refused to answer questions regarding the transactions or anything else about their background.

Vito Salamone was identified by the FBI as being close with members and associates of organized crime. (R. 1353) The stock certificate issued by Emerald was originally in the name of Vito Salamone but was changed to Joseph Salamone, his brother. Whatever the effect of this crude change of ownership, there was in fact a secret memorandum of agreement, not provided to the Gaming Board, which showed that both brothers, as well as officers of the Parkway Bank and Trust Company, were sharing in the ownership interest purchased in the name of Joseph Salamone. Rocco Suspenzi was the chairman of Parkway Bank and Trust, and he as well as the Salamone brothers and Jeffrey Suspenzi were all subpoenaed to testify in this proceeding. All of them refused to testify, claiming their Fifth Amendment rights when asked questions about the secret agreement or any other questions pertaining to Emerald. Parkway Bank served as Mayor Stephens' bank in many other transactions.

Agent John Mallul (Mallul) testified as a special agent employed by the Federal Bureau of Investigations since 1986. In 1988, Mallul was assigned to an organized crime squad and has been assigned to that position since that time. For the last two years Mallul has been a supervisory special agent within the organized crime division of the FBI. (R. 2178) Mallul testified as to various terms used to describe organized crime in Chicago. (R 2182-85) Mallul directed the preparation of five letterhead memorandums, which were introduced into evidence. (R. 2186-94) These memoranda, from confidential sources, provided information regarding Nick Boscarino and the Salamone brothers and their relationships to organized crime. They also described activities of Peter DiFronzo and Joseph DiFronzo and D & P Construction Company, one of the contractors performing work at the Rosemont casino site. (IGB Exhibit 251, 252, 397, 396) Agent Mallul testified that he was satisfied as to the veracity and credibility of the source information which was used in these memoranda. (R. 2199-2200) Agent Mallul's testimony was credible and the FBI had determined to its satisfaction that the sources of the material contained in the memoranda were credible. IGB was entitled to use this information to make decisions concerning Emerald's conduct and its relocation move to Rosemont. This is particularly true since most of the individuals identified in the FBI memoranda that were involved in stock ownership in Emerald or construction activities in Rosemont refused to testify in these proceedings.

Mayor Stephens, who was identified in several of the FBI memoranda, vigorously denied any associations with organized crime. He stated that he severed his personal relationship with Mr. Boscarino after Boscarino was indicted. He acknowledged knowing Mr. DiFronzo (Sworn statement at 99-100) and others identified by Mallul. Mayor Stephens acknowledged that he at one time purchased a hotel from Sam Giancana who was then the head of the Chicago Outfit. (R. 5368-71) Mayor Stephens acknowledged that he had brushes with law enforcement early in his career.

(R. 5337) However, he vigorously denied that he was present at a meeting where organized crime figures planned their involvement in the Rosemont Casino. He also denied that he had anything to do with selecting shareholders in Emerald or contractors that Emerald hired for the construction. He did not make any effort to explain his earlier statement to IGB that under the arrangement that Emerald made prior to the amendment allowing the relocation to Rosemont, 5 percent of the stock was set aside for him. (Stephens statement at 69-70).

It is not necessary to resolve the conflicts between Mayor Stephens' testimony and the information provided by the FBI. It is not even necessary to resolve the conflict between Mayor Stephens testimony as to the selection of shareholders at the hearing as compared to his earlier sworn statement. There was sufficient credible evidence about Emerald's stock transactions, about its construction activities and about its lack of candor in its statements and submissions to IGB to warrant the revocation action taken by IGB.

Similarly it is not necessary to rely on the tape of a conversation between James and Michael Marcello, which has been recorded by the FBI pursuant to court authorization. (R. 5921-24) James Marcello is a member of organized crime and was in prison at the time the tape was made. Michael Marcello was visiting his brother and the tape of the conversation was made at that time. An approximate two and one half minutes portion of recorded tape was presented at the hearing and agent Mallul stated that no other portion of the conversation pertained to Mayor Stephens or the casino in Rosemont. (R 5932) The tape and the accompying testimony of agent Mallul were not useful in resolving any of the controversies involved in this proceeding. The tape itself had very poor fidelity and the brothers were speaking in some kind of cryptic code. Agent Mallul had to testify as to the words and as to the true meaning. Even if he were confident as to both fidelity and his interpretation of code words and phrases, there is no way that anybody could verify the facts related in the conversation. The brothers may have been puffing their own exploits and influence to each other, or they may have been deliberately trying to confuse law enforcement or anybody else that might be overhearing their conversation. In any event, notwithstanding the admissibility and relevance of agent Mallul's testimony concerning this conversation, I give it no weight in my findings of fact.

6. THERE WAS NO EVIDENCE OF BIAS ON THE PART OF THE STAFF OR OF THE MEMBERS OF IGB IN THIS REVOCATION PROCEEDING.

Throughout the proceedings, attorneys for Emerald insisted that staff and members of IGB were biased against Emerald. These bias challenges raised questions about everyone from former Governor James Edgar to Chairman Aaron Jaffe to the staff of the U.S. Attorney's office, to the various ALJ's that were involved in this proceeding and to numerous members of the IGB staff. No evidence was presented to back up the charges. Emerald presented some evidence concerning a "voodoo doll" which was given to a departing employee on the day of her departure from IGB. She allegedly stuck a pin into it and stated that the pin was for Joe McQuaid. (R. 4481-82) There was never any connecting evidence to show that if this incident took place, it was anything more than jest or an expression of irritation against Mr. McQuaid who had previously been the employee's supervisor. There was nothing to indicate that this employee did anything, said anything, or wrote anything which affected the decision to revoke Emerald's license because of any bias.

It is always unfortunate when lawyers decide to challenge the tribunal or the process rather than present their case. In this instance, Mr. Ficaro, then attorney for Emerald, delivered his opening statement in this proceeding by turning his back to the presiding officer, ALJ Holzman, and announcing to the assemblage of reporters and others who were present in the room "I would like to welcome everybody to Kangaroo Court. This proceeding is a sham." At the same time, various computers were displayed to the audience showing kangaroos jumping on the screen.

Four separate motions to disqualify previous ALJ Holzman were made; he granted the fourth one. I denied three separate motions to disqualify me; two were taken to the Gaming Board for review. Motions were made to disqualify Chairman Jaffe, and add him as a witness. The motions were all denied. On two occasions I had to remonstrate with Mr. Clifford to behave in a professional manner. (R 4919-20, 5084-85)

CONCLUSIONS OF LAW

1. When gambling was first authorized in Illinois in 1990, the Legislature

declared, that gambling would only be good for Illinois

"if public confidence and trust in the credibility and integrity of the gambling operations and the regulatory process is maintained. Therefore, regulatory provisions of this Act are designed to strictly regulate the facilities, persons, associations and practices related to gambling operations pursuant to the police powers of the State, including comprehensive law enforcement supervision." (230 ILCS 10, Riverboat Gambling Act)

2. IGB rules adopted pursuant to the Act provide that licensees shall be subject to revocation of their licenses

"for any act or failure to act...that is injurious to the public health, safety, morals, good order and general welfare of the people of the State of Illinois or that will discredit or tend to discredit the Illinois Gaming industry of the State of Illinois. (IGB Rules 3000.110(a))

As examples of such acts which can lead to revocation, the rule provides

in subsection 5:

"associating with, either socially or in business affairs, or employing persons of notorious or unsavory reputation or who have extensive police records, or who have failed to cooperate with any officially constituted investigatory or administrative body and would adversely affect public confidence and trust in Gaming."

Section 3000.140(a) of such Rules states that "Board licensees and applicants for licenses issued by the Board shall have a continuing duty to disclose promptly any material changes in information provided to the Board." Section (b) of that same rule requires licensees to disclose agreements, whether oral or written relating to "construction contracts", "agreements with or involving Key Persons", "agreements to sell… or otherwise transfer or share", "agreements in lieu thereof, relating to ownership interest or interest in an owner's license."

Subsection (c) of the same rule specifically provides that the failure to meet the requirements of subsection (a) or (b) may result in discipline "up to and including revocation of a license."

Emerald insist that revocation of its license was too harsh a remedy even some or all of the alleged conduct occurred. It suggests that transgressions of other riverboat gambling licensees were disciplined by settlement short of revocation of their licenses. Indeed, the instant matter was tentatively settled at one point and the hearing process was held in recess; however Emerald violated the terms of the tentative settlement, and the hearings were resumed. In any event the Board has discretion to judge the seriousness of the transgressions and the fitness of the penalty that should be applied. The fact that no license had been revoked before would not cause the revocation authority of the Board to lapse.

The record discloses that numerous lawsuits were filed in both federal and state court seeking to halt or terminate these proceedings and to challenge the Board's authority to act. As previously indicated, both the Appellate Court of Illinois and the Supreme Court of Illinois specifically found that IGB had continued authority to engage in these disciplinary proceedings for revocation notwithstanding the action of the legislature in making the renewal process for Emerald a mandatory matter. Most recently, Judge Thomas P. Quinn of the Circuit Court of Cook County and Judge Matthew T. Kennelly of the United States District Court for the Northern District of Illinois specifically refused to halt these proceedings or to intervene. (Emerald Casino, Inc. v. Aaron Jaffe, et al Case No. 05 C 4077, October 12, 2005)

3. Section 3000.1140(a) of the Rules states "the licensee bears the burden of

rebutting the charges contained in the complaint by clear and convincing

evidence." Section 3000.1145(a) states that

"the hearing need not be conducted according to technical rules of evidence. Any relevant evidence may be admitted and shall be sufficient in itself to support a finding if it is the sort of evidence on which responsible persons are accustomed to rely in the conduct of serious affairs, regardless of the existence of any common law or statutory rule which might make improper the admission of such evidence over objection in a civil action."

Hearsay evidence, which might normally be inadmissible in a civil action, thus was allowed to be admitted into evidence. Specifically, the FBI reports and the testimony accompanying such reports by agent Mallul were admitted under the evidence rules adopted by IGB. The reports which were identified as reliable by agent Mallul and which were made in the course of law enforcement procedures of the FBI, were admitted and given appropriate weight. The tape conversation between the Marcello brothers, while admitted, was not given weight because of the circumstances described above.

4. Case law of this state and of other states where gambling is allowed, is replete with statements of reviewing courts that the regulatory authorities of gambling have wide discretion in exercising their judgement on matters relating to licensure and revocation thereof. See Archview - Casino Cruises Inc. v. the Illinois Gambing Board 263 ILA 3rd 375 (1994); Balmoral Racing Club v. Illinois Racing Board 240 ILA 3rd 112 (1991); Oklahoma Park Inc. v. Oklahoma Horseracing Commission 716 P2d 666 (1986); Circuit Court of Virginia v. City of Richmond and Harold R. Wall, 1982 WL215-291 (VA Circuit Court, (1982)).

Section 3000.1105 of IGB Rules provides that "All Board licensees have a continuing duty to maintain suitability for licensure. A Board license does not create a property right, but is a revocable privilege granted by the State contingent upon
continuing suitability for licensure." This provision has been in the Rules since 1993 and makes clear IGB’s authority to revoke a license if it finds that the licensee is not suitable to maintain its license.

At least since 1997, when Emerald first lost its license, it and its principals have played fast and loose with the law and with the rules and regulations of IGB. Its modus operandi seemed to be "Catch me if you can", rather than abide by the legal and ethical standards that the law imposes on those privileged to get a gambling license.

Kevin Flynn flat - out lied and others dissembled as to when Emerald first attempted to move its gambling operations to Rosemont. Instead of advising IGB of its plan to sell interests in it s operations to others, Emerald claimed that "Letters of Intent" do not count as anything and that Kevin Flynn did not have "authority" to make such deals. When Emerald was confronted with undeniable facts that persons ineligible by law to be stockholders because they were public officials or related to public officials, Emerald said it was IGB's responsibility to determine such facts. When Emerald was confronted with evidence that persons associated with organized crime had obtained interests in Emerald's operation, Emerald's defense was that it was IGB's responsibility to determine such facts and that such stock transactions were not binding. When asked about making Joe McQuaid its principal enforcement officer even before he had gone off the State Police payroll for his terminal leave, (R. 2607) Emerald insisted that it was not against the law at that time. When Emerald was asked about the propriety of the Field Street Contract and why it was not reported to either the Indiana or the Illinois authorities, Emerald insisted that it was somebody else's responsibility, not Kevin Flynn's.

Any one of these defaults probably would have been sufficient to justify IGB's action in revoking Emerald's license. The sum of the parts far exceeded the making of a prima facie case against Emerald's suitability. The rebuttals by Emerald were wholly insufficient. The operation of gaming by Emerald in Rosemont would greatly undermine "public trust and confidence in that credibility and integrity of the gambling operations and of regulatory process" in Illinois.

I recommend that IGB make permanent its order of revocation and that any efforts by Emerald to engage in gambling in Illinois at any location be denied.

Dated : November 15, 2005

Abner J. Mikva
Administrative Law Judge

Thanks goes out to Jim McGough, Director of the Laborers for Justice, for bringing this to my attention. You can find a lot more additional information at IPSN .

Monday, October 03, 2005

Profile: Harry Aleman

He's known as the ultimate iceman -- a cool, calculating mob killer whose brains and brutality are matched only by his stubborn refusal to rat out others. But to hear it from reputed hit man Harry Aleman -- whose dark, penetrating eyes once struck terror into hearts -- he's really an old softy, just trying to get by while serving a 100- to 300-year prison sentence.

He breaks into a smile at the thought of his first great-grandchild paying a recent visit ("It was something to see"), shakes his head at the hurricane devastation in New Orleans ("A f------ shame"), contemplates Jesus' suffering in the movie "The Passion of the Christ" ("This guy had balls this big") and longs for freedom and living out his final years with his family ("They sustain me").

During an exclusive interview with the Chicago Sun-Times at the Western Illinois Correctional Center, about 250 miles from Chicago, the convicted killer spoke about his personal and professional lives and admitted being affiliated with the Chicago mob -- when it existed. "It's over," he insists. "It's done."

He also says he has never killed anyone and is doing time for someone else's crime.

In fact, Aleman hints that new evidence pointing to his innocence will emerge in an upcoming court filing. One of his lawyers later explained that Aleman will be seeking a new trial based on "newly discovered evidence" that he won't yet discuss.

Authorities regard Aleman's claims of innocence and a frameup as ridiculous. "I think he's convinced himself he's a victim, which people often do when they've been locked up for as many years as Harry has," said Cook County prosecutor Scott Cassidy. "There was evidence that he was a hit man for the mob, and I think he relished that role."

In a landmark case handled by Cassidy, Aleman was convicted in 1997 of shotgunning to death a Teamsters union steward who once was married to Aleman's cousin. It remains Aleman's sole murder conviction, although he once was indicted in another case and is suspected in 15 to 20 or more slayings. "Never, never," he said, when asked if he has ever killed anyone. "And they know who killed them -- but he's dead. They don't get raises or elevated blaming a dead person."

Aleman said he was framed because he would never flip on fellow hoodlums as local and federal officials pressed him to do. He said he maintained that obstinate attitude during more-recent prison visits by investigators.

It's not totally clear why Aleman -- a thin but taut man of 66 with graying, combed-back hair and well-groomed nails -- agreed to speak. A reporter wrote him many months ago, and Aleman recently agreed to talk. He said he has never granted an interview before. But the three-hour sit-down came as Aleman lays the groundwork to get a new trial, he faces a December parole hearing, and a massive federal investigation bears down on some of his old mob associates for crimes stretching back decades.

"I could be a target; I don't know what's in the FBI's mind," said Aleman, who's prone to gesturing and raising his voice when trying to make a point.

"For all I know, they're going to keep indicting me for murders" until he flips.

Thawing out

Harry Aleman wants hot chocolate.

Technically it's still summer, but the frigid rain pelting Aleman's medium-security prison, population 1,900, indicates otherwise. Aleman suggests that the reporter who came to visit him go to the vending area and get a hot chocolate -- and a coffee for "yourself." Then he remembers: You need a special vending card, so that's not an option.

He's hungry, apparently having missed lunch for this meeting. But he's still polite and friendly. "What can I do for you?" he asks after small talk about a long-ago hunting and fishing excursion out West.

Aleman is reminded it was he who wrote the reporter earlier in the month saying he had something "exceptionally newsworthy" to discuss.

"Where's the letter?" he asks.

In the car.

"Did the FBI send you?"

No.

The meeting is taking place in a small office with a desk, typewriter, phone and a few filing cabinets. The walls are tan cinder block. The floors are pale tile. Aleman is wearing a blue button-down prison-issued shirt tucked into darker prison-issued pants. He's carrying a coat. He and the reporter are alone, but just outside the closed door is another desk and, at times, a guard. There'll be no trouble, however. Aleman isn't regarded by corrections officials as problematic.

Aleman begins speaking about himself, claiming he was "out and out railroaded" and prosecuted for no other reason than "just to get Harry."

William Logan, the Teamsters official, was murdered in 1972, and an eyewitness, Bob Lowe, testified during a 1977 trial that Aleman was the trigger man.

Aleman was acquittedWhen Corruption Was King: How I Helped the Mob Rule Chicago, Then Brought the Outfit Down, and later it was determined that the judge had been bribed with the help of mob lawyer Bob Cooley, who later became an informant.

Although the law bars "double jeopardy" -- trying someone for the same crime twice -- Cook County prosecutors won a new trial as the courts determined there was no "jeopardy" the first time because the case was fixed.

Aleman still is indignant over the ruling, noting that two white men who once denied killing black youngster Emmett Till in 1955 and were acquitted in his race-inspired murder later confessed in a magazine article. But they couldn't be retried because of double jeopardy.

Aleman was tried again in 1997 -- again with Lowe's help -- and convicted. A book about Lowe and his long road to justice, Everybody Pays, came out a few years ago.

Aleman, though, questions Lowe's credibility, mentioning his personal troubles and asking a "hypothetical" question: If a killer "in the movies" made eye contact with an eyewitness to a murder, what do you think would happen to that eyewitness? "You kill him," not let him go, Aleman says.

'I didn't feel nothing'

Aleman's other allegation -- raised unsuccessfully by his defense team in the 1997 trial, at which Aleman never testified -- was that William "Butch" Petrocelli really killed Logan. Petrocelli had been secretly dating Logan's ex-wife, and he and Logan had fought, Aleman said. Petrocelli also was a reputed hit man. Aleman said they once were best friends, and he described Petrocelli as "my partner." Petrocelli disappeared in late 1980, and his mutilated body was discovered several months later.

Although Aleman was jailed at the time -- he has spent most of the last 27 years in custody for various crimes -- questions have been raised about whether he ordered the hit because his old pal was holding back money meant to take care of his family.

Aleman dismisses that theory, saying, "If he was holding back money, I wouldn't have known about it because my family was taken care of."

Theories about Petrocelli's murder also have centered on Petrocelli possibly shaking down people in a mob boss' name, without his knowledge, then keeping the cash.

Aleman, though, claims Petrocelli was killed by mobsters because it was found out he was a "rat."

How was that discovered? "People in the neighborhood" began asking questions about why Aleman got sent away on a particular beef and Petrocelli didn't, Aleman said, and "it got to the right ears."

Whose?

"Whoever," Aleman says.

Aleman believes -- it's not clear exactly why he believes this -- that Petrocelli was in trouble with the law in the late 1970s, so a relative, a policeman, persuaded him to flip. And then the government didn't want to admit Petrocelli was the Logan killer, Aleman says.

Cassidy, the Cook County prosecutor, said, "I have no information to support that allegation" of Petrocelli being an informant. The feds wouldn't comment. "The government wants everybody to be a stool pigeon ... and I'm never going to become a stool pigeon," Aleman said. "I don't want to disgrace my family."

The government doesn't "respect" that stance "because they've had so much success turning over hard-core guys," Aleman says. "The guys out there [still on the street] I have to think twice about. You're not stupid."

How did he feel when Petrocelli died? "I didn't feel nothing," Aleman says. "I wish they would have got him and made him confess, then exile him. Killing him didn't help me at all. I'm still languishing in prison."

No more mob

The feds hope to solve 18 old mob hits as part of their ongoing probe. One of those is Petrocelli's murder.

The indictment fingers notorious loan shark Frank Calabrese Sr. as a participant, saying he "and others committed the murder of William Petrocelli in Cicero."

Aleman has not been implicated in any of the 18 killings, or any of the other crimes listed in the indictment, but curiously, he is mentioned in the document as being among the "criminal associates who reported at various times to [late hoodlum] Joseph Ferriola."

The feds are basing much of the information in their racketeering case on the word of mobster-turned-witness Nick Calabrese, Frank Calabrese Sr.'s younger brother. Aleman says Nick Calabrese and he served time together at the federal prison in Pekin. He describes Nick Calabrese, now in protective custody, as "a regular guy," quick to add that "I didn't pal with him or anything like that. ... You never ask a guy questions." He heard about Nick Calabrese flipping "in your paper."

Aleman doesn't know if he'll be pulled into this probe in some way, and the feds won't talk. "Who knows what Calabrese could say," he says. What could he say? "It's not anything 'on me' [that Nick Calabrese has], it's what they want him to say," Aleman says, referring to the feds.

To that point, federal prosecutor Mitch Mars later said, "We never tell any of the witnesses to say [something]. It's suicidal for us. . . . Nick will say whatever he's going to say."

Aleman looks at the floor when asked about Frank Calabrese Sr. He refuses to discuss him, changing the subject to the reporter's shoes, marveling that they had cost just $17 on sale. When pressed, he says, "Go talk to him."

Likewise, Aleman would rather not talk about reputed mob boss John "No Nose" DiFronzo, who was not indicted in the feds' current case. "I don't know what anybody does," Aleman says.

Asked about the severity of one Calabrese brother turning on the other, Aleman says, "I don't think about them things. If he did it, he did it." But he adds that the increasing number of mob informants is one of the reasons "no new people [are] coming into the mob.

"The reporters and newspapers have to keep it alive, but there ain't nothing in Chicago, no street tax, no extortion, no nothing," Aleman says. "There might be some old guys languishing around, but it's moot.

"The younger generation doesn't want no part of the mob; it's over." Aleman adds that young men would rather go to college and not take a risk they'd end up like him.

"There's no dice games, no card games, no bookmaking, if there's any bookmaking, it's just with the Jewish people on the North Side," he says, adding that even if that's happening, there's no street tax on the money changing hands.

"There's nobody who wants to do the job; this isn't the '30s or '40s," he recalls. "Is there a mob running over, putting people in trunks? . . . No, nobody wants to be part of it because of the feds. ... And these guys don't want to go to no jail like Harry.

"Whoever they locked up recently, they locked them up for their past performance, because they haven't been doing anything for the past 10 or 15 years."

While it's true the murders in the feds' case are old, authorities accuse reputed mob chief Jimmy Marcello and his brother Michael "Mickey" Marcello, among others, of running an illegal video gambling operation in recent years.

Aleman readily admits knowing the heavy hitters in that indictment. His take on the Marcellos, after being told about the alleged video gaming racket: "Mickey's a legit guy . . . his brother wouldn't make him do anything stupid like that. He has a catering business or a vending business."

Aleman said he only knew Jimmy Marcello was in trouble by catching a glimpse of the WGN-TV news one day.

Aleman also knows reputed mob overlord Joey "The Clown" Lombardo, who was accused of murder in the feds' current case but is on the lam.

Aleman says he didn't know Lombardo had taken off. "Joey ran away? Good for him," he says. "I hope they don't find him because he's a real good guy. He'd help anyone. ... He was known for helping out everyone in the neighborhood.

"He's not a monster at all; he helped more people in this area; he's the softest touch around -- 'Hey Joe, can you loan me $20?' Newspapers, what they can do to you."

Regrets? He's had . . . very few

Aleman indicated that it was the black-knight image of hoodlums that led him into the mob.

Sure, his dad was a criminal, a "regular thief," he says. But it was the guys in the shiny cars and slick suits who would act as "Robin Hoods," watching over the neighborhood and paying the grocery bills when a family couldn't, that got Aleman excited. "Some guys want to be like that; some want to be a tailor" like one of Aleman's grandfathers, he says. "I wanted to take care of my family. . . . I'd do anything to support them, anything. Like many other guys did before me."

Aleman, who says he tries to "slough it off" when people call him a cold-blooded killer, was asked several times if he has any regrets about his chosen profession or anything he might have done in the past. "The only regret I have is not being with my family and not being with my grandkids," Aleman replies the first time.

Later, when asked again, he gets a serious look -- something that often entails a clenched jaw -- and says, "The only regret I've got is I broke my mother's heart, and she died prematurely. . . . All I try to do is try to stay healthy and see my family and talk to them . . . all you've got left is family."

And lastly: "The only regret I have is not being able to sit down and eat with my family on a daily basis."

Family dinner

Family is a recurring theme with Aleman. Not "family" in a mob sense, but his family at home.

Some believe he cynically fosters this image of a devoted family man to soften his reputation -- to jurors, investigators, the public. But Cassidy, the prosecutor, believes there really is a strong mutual love between Aleman and his family. "Unfortunately, he has another side to him," Cassidy added.

Whatever the case, Aleman's family has remained devoted to him, weathering a four- to five-hour drive from the Chicago area to visit him.

Aleman has no biological children. But long ago, he married a woman, Ruth, with four kids. Their biological father, also a hoodlum, had been murdered. Aleman notes: "I didn't know my wife at the time he got killed."

Ruth died in 2000. Aleman helped her raise two boys and two girls as his own, and believes their fusion as a family unit was serendipitous.

As a teenager, Aleman had a nasty accident. While washing his dad's car in a family friend's garage, Aleman stepped on one of those sewer caps, it flipped up, and he came down hard on it, right between the legs. His scrotum was torn open, and he was rushed to the hospital. Aleman was patched up and recalls being told he still could have kids some day. But much later, he found out he was unable to have children, so finding a "ready-made" family was "destiny," he says.

Aleman emphasizes the importance of having dinner every night -- when his dad wasn't in jail -- with his family growing up around Taylor Street.

When his dad was in jail, Aleman was sent to live with grandparents and an aunt, while his brothers stayed with their mom. He lived there as a youngster. He became quite close with the aunt, Gloria, often curling up with her to sleep. And so, when she ended up marrying Joseph Ferriola, the fearsome mobster, Aleman became close with him, too.

Aleman says he wasn't really involved in anything heavy, and cites Uncle Joe as evidence. "They make me part of the mob because of my uncle . . . which is not true because the last thing he wanted me to do is join," Aleman recalls. "My Aunt Gloria, she made sure he didn't make me do anything like he was doing."

Still, there's ample evidence of Aleman's ferocity. Before being sent to state prison, he did prison time for home invasions and other racketeering-related crimes.

For years, Aleman was accused of working as an illegal "juice" loan collector, pursuing deadbeats who didn't pay what they owed the mob, said Vic Switski, the former Aleman case agent on the FBI/Chicago Police organized crime task force.

Once, Aleman was accused of shoving a woman through the glass door of a lounge, then beating a Chicago Police commander's son who tried to intervene.

Because his frame was always slight -- he's 5-foot-8, 140 pounds -- Aleman said he felt he sometimes had to fight to prove himself. In high school, he and a friend brawled against others every day one semester, he said.

'You have no idea'

Aleman once sent ripples of terror throughout the underworld, and segments of legitimate society, but his own fears appear much different. They don't seem to involve the joint because he says he has no real trouble, from guards or other inmates. People treat the older guys with some deference, he says, and he and the other old-timers are known as "pops" by the younger, mostly black prison population.

One of the few times he alluded to fear came in a childhood story involving his beloved aunt, who "dressed me up and walked me to school," he says. "I was afraid to go to school."

He admits to being scared seeing his little great-granddaughter; he was worried about the long drive and his family getting into a car accident. The wife of a fellow inmate in Atlanta once was killed that way, driving to see the inmate, he says. "It's etched in me," he adds, simmering about his 2003 transfer from Dixon, which is closer to Chicago, to this current facility in the sticks, south of Macomb.

Aleman also hints at some frightening characters in his past. "You have no idea the guys in Chicago who never got their names in the newspapers and are the most f------ dangerous guys I knew," Aleman says. He declines to identify them.

Most of all, though, as the interview with the reporter nears completion, Aleman seems worried about the impact a story might have. He says he's not optimistic about getting paroled -- at more than one point, he says he's resigned to dying in prison -- but he's clearly thinking toward the possibility of freedom. "My fate was cut out . . . to raise my four kids and to be in prison for the rest of my life," he says. "I've got the love of my kids ... what else could I ask for? Of course, it would be nice to be with them."

"Don't hurt me," Aleman later implores.

IN AND OUT OF COURT

1975: Bookie Anthony Reitinger is murdered; Aleman indicted years later, but it never goes to trial

1977: Put on trial for 1972 murder of William Logan; acquitted because judge is bribed

1978: Convicted of interstate home invasions, goes to federal prison

1980: Reputed hit man and Aleman friend William "Butch" Petrocelli is murdered

1989: Aleman gets out of prison, albeit briefly

1990: Hit with new racketeering charges, sent to prison to await trial

1992 : Convicted in that case, gets 12 years

1997: Retried for Logan murder. Convicted, sentenced to 100 to 300 years

2002: Denied parole

2005: Major mob indictment comes down, Aleman not charged; awaits parole hearing


ALEMAN'S EARLY RECORD

A snapshot of Harry Aleman's early rap sheet

YEAR ARREST/CHARGE
1960 malicious mischief
1961 gambling
1962 possession of burglary tools
1962 assault, criminal damage
1965 aggravated assault
1966 grand theft auto
1966 armed robbery
1968 criminal damage to property
1969 aggravated kidnapping
1971 violating Federal Reserve Act
1975 keeper of gambling place

Thanks to Robert C. Herguth - Chicago Sun Times

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