Officials go after Lifeblood of Chicago Outfit

By targeting mob-owned video gambling and sports bookmaking operations in a grand jury indictment handed down Monday, federal authorities acknowledged the importance of illicit gambling to the Chicago underworld.

"The lifeblood of the Chicago Outfit is illegal gambling and the money and profits that it generates," Byram Tichenor, special agent in charge of the IRS in Chicago, said Monday at a news conference announcing criminal charges against 12 alleged local mobsters and two former police officers.

The indictments offer a unique glimpse into the inner workings of a video gambling ring that netted millions of dollars in proceeds inside bars and private clubs in Cicero and Berwyn over and eight-year period that ended last April.

Authorities did not say how much money was taken in by M&M Amusement Inc. of Cicero, but the business is reportedly very profitable. Proponents of a bill to legalize video gambling in Illinois two years ago estimated the state could rake in $375 million from the 47,000 machines operating in the state.

M&M Amusement, operated by James Marcello and his brother Michael Marcello, allegedly installed an unspecified number of video gambling machines inside Cicero and Berwyn bars, restaurants and fraternal clubs beginning in January 1996.

To the uninitiated or outsiders, these machines were just time-killing amusements like a pinball machine or jukebox. But to bar regulars and other trusted people, the video gambling machines allowed players to accrue electronic credits that could be cashed in for real dollars, the indictment alleges.

Two indicted M&M Amusement employees, Joseph Venezia and Thomas Johnson, allegedly taught bar, restaurant and fraternal group representatives how to pay off winners and how to clear accumulated credits off the machines after the cash payments were made, the indictment alleges.

Venezia and Johnson further "warned the owners, managers and representatives only to pay money to winning customers whom they knew well, and to beware of law enforcement efforts," the indictment says. "Those customers who were not known were to be told that the video gambling machines were for amusement only."

Electronic counters inside the machines kept track of the number of games played, winning credits accrued and total number of credits cleared off each machine. M&M Amusement allegedly divided the proceeds from the machines with bars, restaurants and fraternal groups and reimbursed them for payouts.

The federal indictment does not indicate exactly how much money M&M took in between January 1996 and April 2004, but officials are seeking the forfeiture of $10 million from the defendants. Officials are also seeking to seize M&M Amusement's Cicero office building, which is owned by Michael Marcello.

Authorities gave few details about a sports bookmaking operation allegedly run between 1992 and 2001 by defendants Frank Calabrese Sr. and Nicholas Ferriola. The indictments state it was run in northern Illinois, involved five or more people and was in continuous operation for more than 30 days.

According to previous court filings, M&M Amusement served 44 clients, primarily in the west suburbs. A listing of the customers was found on the body of mobster Anthony Chiaramonti after he was gunned down in Lyons in 2001. Several of the customers were called before the grand jury that handed down Monday's indictment.

According to the previous court filing, one video poker customer said he received between $150 and $400 a week from his machines.

No one answered the door Monday at M&M Amusement's 5533 W. 25th St. property, where there are no business signs. A neighbor said he has not seen anyone working at the property since December.

Thanks to Brett McNeil, Ray Gibson, and Matt O'Connor

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`Clown' Missing from Mob: Joseph Lombardo Vanishes

For more than 50 years, Joseph Lombardo has called the West Town neighborhood his home--at least, whenever he wasn't in prison. An early riser, he was often seen since his 1992 release from prison riding his bicycle with a small cigar firmly planted between his lips. But when federal agents went to the 2200 block of West Ohio Street Monday morning to pick him up, Lombardo was nowhere to be found.

Lombardo was one of just two of the indicted members of the mob not under arrest when the Operation Family Secrets charges were announced Monday afternoon.

Lombardo, 76, has known he has been a target for months. His attorney, Rick Halprin, has said Lombardo was being looked at as a suspect in the 1974 slaying of Daniel Seifert. Seifert was a Bensenville businessman scheduled to testify against Lombardo and others in a Teamster pension fund fraud case.

Halprin has said Lombardo was at a Chicago police station at the time of the slaying. "We will have to wait and see," Halprin said of whether his client would surrender.

Halprin doubted Lombardo would be wearing the famous newspaper mask he made after a 1981 court appearance. It was that goofiness, and Lombardo's flair for the theatrical, that led police to give him the nickname "The Clown."

The indictment does not spell out what role Lombardo allegedly played in the killings. "It is pitifully sketchy," said Halprin.

Lombardo has done two stretches in federal prison. He was released in 1992 after serving 10 years on two separate federal convictions. He was convicted of conspiring to bribe U.S. Sen. Howard Cannon of Nevada for help in defeating a trucking deregulation bill and convicted in a mob scheme to skim $2 million from a Las Vegas casino.

Robert Fuesel, who worked organized crime for 28 years for the Internal Revenue Service, said Lombardo was not only the chairman of the board, but also an enforcer. He said he once surrounded Lombardo's house with 10 agents as he hid inside to avoid being served with a subpoena. Fuesel told Lombardo's wife that the agents were not going to leave, and Lombardo came out a half hour later and accepted the subpoena. But Monday morning, Lombardo was nowhere to be found.

Among federal indictments announced Monday were charges related to 18 unsolved murders and one attempted murder between 1970 and 1986.

1 MICHAEL FRANK "HAMBONE" ALBERGO

Date of murder: August 1970

How he was killed: Disappeared

Motive for murder: Albergo was a mob enforcer who vanished after being charged in connection with a loan-shark operation.

In 2003, FBI agents excavated a parking lot near U.S. Cellular Field on a tip that his bones were buried there.

2 DANIEL SEIFERT

Date: Sept. 27, 1974

How killed: Seifert was killed with shotgun blasts ouside his Bensenville factory.

Motive: Seifert was scheduled to testify against Outfit leaders accused of defrauding the Teamsters' pension fund.

3 PAUL HAGGERTY

Date: June 24, 1976 (in Chicago)

How killed: Not available

Motive: Not available

4 HENRY COSENTINO

Date: March 15, 1977

How killed: His body was found in the trunk of a car at the Chicago auto pound.

He had been killed by blunt force to the neck.

Motive: Not available

5 JOHN MENDELL

Date: Jan. 16, 1978

How killed: He was found dead in the trunk of his car in Chicago after being tortured and having his throat slit.

Motive: He was wanted by police following the murder of a member of a burglary ring.

6/7 DONALD RENNO / VINCENT MORETTI

Date: Jan. 31, 1978

How killed: Both men were found in the back of Renno's car in Cicero with their throats cut.

Motive: Police suspect Moretti's burglary ring was fencing goods in Las Vegas against the mob's wishes.

8/9 WILLIAM DAUBER AND CHARLOTTE DAUBER

Date: July 2, 1980

How killed: The Daubers were gunned down as they drove on a rural road in Will County.

Motive: William Dauber, a suspected mob killer, had been arrested on federal drug charges and Outfit leaders were afraid he'd turn informant.

10 WILLIAM "BUTCH" PETROCELLI

Date: Dec. 30, 1980

How killed: He was found in the back seat of his car in Cicero with his throat slashed and his face burned.

Motive: Outfit leaders reportedly suspected Petrocelli of skimming collection money and shaking down robbers without permission.

11 MICHAEL CAGNONI

Date: June 24, 1981

How killed: A radio-controlled bomb beneath his car exploded as he drove on a tollway ramp at Ogden Avenue and I-294 in DuPage County.

Motive: Sources said he supervised the mob's produce hauling operations and was suspected of holding back some of the profits.

12 NICHOLAS D'ANDREA

Date: Sept. 13, 1981

How killed: He was found murdered in the trunk of his car in Chicago Heights.

Motive: Mob associates suspect he was involved in arranging a hit on mob figure Alfred Pilotto.

13/14 RICHARD D. ORTIZ / ARTHUR MORAWSKI

Date: July 23, 1983

How killed: Both men were shot to death while sitting in a car outside a Cicero bar owned by Ortiz.

Motive: Not available

15 EMIL VACI

Date: June 7, 1986

How killed: He was found shot in the head in a drainage ditch in Phoenix.

Motive: Weeks before his death he appeared before a grand jury investigating the Spilotro brothers in Las Vegas.

16/17 ANTHONY SPILOTRO AND MICHAEL SPILOTRO.

Date: June 14, 1986

How killed: The brothers were beaten, and buried in a shallow grave in a northwest Indiana cornfield.

Motive: Mob bosses allegedly were not happy with how Anthony Spilotro, an Outfit enforcer, was running operations in Las Vegas.

18 JOHN FECAROTTA

Date: Sept. 14, 1986

How killed: Fecarotta, a longtime mob muscleman, was gunned down outside a bingo hall on Belmont Avenue.

Motive: An informant later told federal agents Fecarotta was killed for botching the burials of the Spilotros.

Note: Charges also include the attempted murder of an unnamed victim in Lake County on April 24, 1982.

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Kudos for Detective Robert Moon's Work

When U.S. Atty. Patrick Fitzgerald's office singled out the late Detective Robert Moon for praise during Monday's announcement of sweeping indictments against the mob, the investigator's old friends from the Chicago Police Department were pleased but not surprised.

For 18 years Moon, who died last November, was an awe-inspiring weapon in law enforcement's fight against organized crime in Chicago, his friends and colleagues said. He was a "walking encyclopedia of everything that went on in the mob," said Harrison Area Detective Cmdr. Steve Peterson, who worked with Moon on the federal organized crime task force. "Nobody came even close to what he did in those cases."

Moon died of cancer Nov. 30, months before the case he had worked on with many other detectives and agents for years came to fruition.

His absence was felt by many who were involved in the massive investigation. Prosecutors extended "special thanks" to Moon in Monday's press release. "The investigation would not have been successful without Detective Moon's hard work and dedication," it said.

Moon first began to build his knowledge of the mob in Chicago in the 1980s when he was assigned to a federal task force working on auto theft cases, Peterson said.

Moon was a "bulldog and tenacious, and willing to help with anything," said Chicago Police Deputy Supt. Hiram Grau, who now heads the Chicago Police Department's investigative units.

Thanks to David Heinzmann

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Mob Charges Tell a Story, but More isn't Told: How can the Outfit survive without the help of crooked politicians, judges and cops?

How could the Chicago Outfit prosper and survive without the help of corrupt local police, politicians and judges? U.S. Atty. Patrick Fitzgerald didn't answer me Monday.

"All I'll say is that the indictment alleges that the Outfit, as part of its method of doing business, corrupted law enforcement," Fitzgerald said in his news conference about the FBI's Operation Family Secrets, which led to indictment of mob bosses allegedly responsible for 18 mob hits and the indictment of two cops.

"The indictment doesn't say anything beyond that, and I'm not going to comment about that," Fitzgerald said.

Afterward, I ran into a man who knows him well. "Why did you ask him that? You know he can't answer. It wasn't in the indictment.

"Do you really need an answer to that one?" he asked.

The investigation started when Outfit hit man Nick Calabrese thought he was a target for murder and began talking to the FBI about unsolved hits, taking them on tours around the city, including to a parking lot at Sox Park where enforcer Michael "Bones" Albergo was dumped in 1970.

Fitzgerald wasn't dodging my question. He could only discuss the indictment. Surely, he knows the answer. You do too.

It is why former U.S. Sen. Peter Fitzgerald (no relation) was right to bring Patrick Fitzgerald here, when the bosses of the Illinois political combine and their simpering mouthpieces called the senator crazy for insisting we needed an independent outsider as the federal hammer in Chicago.

With all the praise being larded on City Hall lately, consider this: The Hired Truck scandal at City Hall was crawling with Outfit-connected truckers from the 11th Ward. And the Duffs, some of whom boasted of their Outfit connections, drank with Mayor Richard Daley at the Como Inn. Then, for a nightcap, they got $100 million in affirmative-action contracts.

Mob politicians have been pinched. The late Alderman Fred Roti (1st) went to prison. Roti's boss, mob fixer Pat Marcy, died before trial. The mayor broke up the old 1st Ward, called it the 42nd Ward, but that didn't fool anybody. The Outfit political office simply moved West.

Other experts insist there is no Outfit in Chicago. One was the late FBI chief J. Edgar Hoover. He liked to win at the track yet refused to believe in the existence of the Chicago Outfit.

Recently, other politicians insisted the Outfit is dead. One is State Senator Jimmy DeLeo (D-Chicago), sage adviser to Govenor Rod Blagojevich. When he started in politics, DeLeo once kept tens of thousands of dollars in his freezer. He probably didn't want it to spoil. "What does that mean, `mob associated?'" DeLeo asked rhetorically, in a 2001 Sun-Times story. "In the year 2001, is there really a mob in Chicago?"

Another political expert is state Rep. Angelo "Skip" Saviano (R-Elmwood Park), who echoed DeLeo. "The Italian Mafia is gone," Saviano was quoted as saying. "I don't see it happening around here." He probably meant on Grand Avenue in Elmwood Park. Outfit? What Outfit?

Then there are the county judges, such as the late Frank Wilson and others, who fixed Outfit murder cases. We've had more than 1,000 mob murders here since the 1920s, and few were solved. That can't happen without the judges.

Let's not forget the police brass. Former Chicago Police Chief of Detectives William Hanhardt was sentenced a few years ago for running an Outfit sanctioned nationwide jewelry theft ring, along with his colleague, the reputed hit man Paulie "The Indian" Schiro.

On Tuesday, Schiro was also indicted as part of the FBI's Family Secrets investigation. Other crooked Outfit-connected cops in other investigations include a former lieutenant in the Chicago Police Department's organized crime division who helped another top cop, James O'Grady, become Cook County sheriff in 1986. The Outfit-buster was James Dvorak, known as "The Bohemian," who was made undersheriff and was later convicted of taking bribes from then-Outfit boss Ernest "Rocco" Infelice to protect gambling.

Lt. James Keating, of the Cook County sheriff's office, was sentenced to 40 years on federal racketeering charges. He, like Hanhardt, had been smooched by the media as a hero cop while on the force. Later, Keating was found to have killed the investigation of the 1978 murders of thieves Donald Renno and Vincent Moretti, in Cicero, according to a 1989 Tribune review of the case.

Renno and Moretti were suspected of burglarizing the home of mob boss Anthony "Joe Batters" Accardo. The murders of Moretti and Renno were solved, according to Monday's indictments.

When I first wrote about Nick Calabrese in February 2003, I told you we'd wait for indictments, and they arrived Monday.

You already know the general outline. But the story isn't over. The main question hasn't been answered, specifically, with names on indictments. How can the Outfit survive without the help of crooked politicians, judges and cops?

Thanks to John Kass

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