Chicago Outfit Bosses Dive for Cover as Enforcer Nick Calabrese Talks

Editor's note: John Kass broke the story of the federal investigation dubbed "Operation Family Secrets" in February 2003.

Until recently, the bosses of the Chicago Outfit felt relatively safe, with their connections in politics and local law enforcement. But now, they're on the verge of FBI-inspired paranoia.

They're not concerned where fellow mob boss Joey "The Clown" Lombardo is hiding these days. There's a good reason for The Clown to keep a low profile: Formerly imprisoned mob loan shark and enforcer Nick Calabrese is talking to the FBI, sources said.

Investigators are being given a road map through crime and time, including unsolved Outfit murders going back over decades.

FBI agents have spread out across the country armed with search warrants to collect DNA evidence, hair cuttings and oral swabs, from dozens of Outfit bigwigs. Sources familiar with the investigation said search warrants for the mob DNA have been sealed.

This must aggravate some folks, including imprisoned Chicago street boss Jimmy Marcello, convicted of bookmaking and loan sharking. Marcello hopes to be released from a 12-year federal prison term in a few months.

Marcello, Calabrese and Calabrese's brother, Frank Calabrese Sr, a convicted loan shark, spent years together inside. When old friends talk in prison, they reminisce about dis and dat and dat other ting, don't they?

The U.S. Bureau of Prisons said Thursday that Nick Calabrese's federal prison records had disappeared. My highly educated guess is that he is now in the witness protection program.

"No comment," said the U.S. attorney's office. "No comment," said the Chicago FBI.

Some of the victims of unsolved Outfit hits being discussed with FBI agents might be familiar to you.

They include Anthony Spilotro and Michael Spilotro, the vicious gangster brothers beaten to death and dumped in an Indiana cornfield in 1986. If you saw the movie "Casino," you know how it happened. Joe Pesci, one of my favorite actors, played Tony. And if you're a faithful reader of this column, you know why the Spilotros were available to be murdered. A few weeks earlier, they beat a federal criminal case against them in Las Vegas.

The key federal witness against them had his testimony undercut by a then-heroic former Chicago police chief of detectives, William Hanhardt.

Hanhardt's surprise testimony as a top cop and defense witness undercut the credibility of hit man-turned-government informant Frank Cullotta. (Frankie got a bit part in "Casino," too, as a hit man).

During the Spilotro trial, Hanhardt was a hero cop, with friends in the newspapers and in Hollywood, where he was glorified in the TV show "Crime Story."

Now, though, Hanhardt is serving a long federal prison term for running an Outfit-sponsored jewelry theft ring. Still, Hollywood may make a movie about him. But nobody made a movie about hit man John Fecaratta. He was killed outside Brown's bingo parlor on Belmont Avenue three months to the day after the Spilotros' bodies were found. The Spilotros weren't supposed to be found. Federal investigators figured Fecoratta was punished for botching the planting of the Spilotros.

Outfit enforcer Billy Dauber and his wife, Charlotte, left a Will County courtroom in 1980. They were hacked to pieces by shotgun blasts during a high-speed chase along a lonely country road.

Daniel Siefert was murdered in front of his family at his plastics manufacturing plant in 1974. Siefert was a key government witness in a federal case against Lombardo, in connection with a scheme that bilked the Teamsters Union pension fund out of millions of dollars.

Siefert was with his wife and 4-year-old son when the Outfit came for him. He ran a short distance after the first shot, but it knocked him down. A gunman walked up to the fallen Siefert, pressed a shotgun against his head, pulled the trigger.

Lombardo and six others were acquitted two months after Siefert's murder.

Nick Calabrese is not as flashy and as loud as his brother, Frank. Nick is quiet. He was to be released this year. Then a strange thing happened. His prison records disappeared. They don't exist, according to the U.S. Bureau of Prisons.

Carla Wilson, a bureau spokeswoman, was helpful Thursday in finding Frank Calabrese, and prison records on his sons, Frank Jr. and Kurt. But no Uncle Nick.

"If he were in the witness protection program, then we would not be able to access that information," she said. Then she said she had to check something and later had a different story about Uncle Nick's vanished records.

"I really can't speculate about that," she said. "All I can tell you is that I don't have any public information on him."

That's OK. We'll wait.

Thanks to John Kass

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Is Al Capone's Pizzeria Haunted?

74 years ago last Friday, the infamous St. Valentine's Day massacre occurred on the north side, cementing Al Capone's legacy as a ruthless mob figure. Of course it is well-documented that Capone and his gang spent a lot of time in Willow Springs. One of those places, we learned, is now a pizzeria. By the way, before you ask, this is not another Al Capone's vault story. But it is, perhaps, another slice of mob life.

At Cavallone's West Pizzeria the bar is always packed, the pizza is piping hot. But the cold reality, according to Cavallone's owner, Rob Degen, is that this is an infamous mob hang out dating back to the 1920's. "I wonder how many times Capone hid in here," Degen asks?

That's right Al Capone. Degen claims that this is where Al's gang spent at least some of its time. Al's picture is on the wall next to the entertainers of the day. He's seen in one picture with his lawyer.

Back in the 20's Cavallone's was called Old Henry's. It was part speakeasy, part brothel part murder and gambling. For author and tour guide Richard Crowe it's always been alluring. "Well you know you always hear stories about tunnels but when you can actually find them and see where the tunnels lead through the walls and they're caved in that's more than legend, there's actually something to that," Crowe said.

Ah yes, the tunnels. There are three in Cavallone's basement. They're boarded up now but when the ground freezes to six feet, rob believes it will be safe to explore them. "So what they would do is put ice picks in the holes and open up the wood," Degen said.

One apparently was a hiding place, another used to funnel booze to a nearby ballroom, and the third? Legend has it that one of the tunnels led to a mausoleum at a cemetery several hundred yards away. The name white was apparently one of Al Capone's pseudonyms and because the mausoleum is actually empty, it was welded shut back in the mid 1930's. "Whenever they were raided if they couldn't get to the secret room, they would run out there through the woods."

The secret room, is just behind the tunnel, you have actually walk through another door, and crouch down to get there. According to Degen, it was used to hide patrons during raids and more. "The room was mainly used to hide money, guns, and bodies if they didn't have time to dispose of them in the woods."

The Secret room is where Degen says he found a decorative, elaborate gaming table. "Take the top off, and then you take the second layer off, and then you open up the table, this is all made of nickel, we have all of the original chess pieces."

Then there are the stories of love and murder. Like the jealous boyfriend of a prostitute named Christina. "The boyfriend found out that she was having an affair with the bartender so he went downstairs and killed the bartender, then came upstairs and strangled Christina in this room."

To this day, Degen says Christina and the bartender haunt Cavallone's along with other restless souls. Which brings us back to Richard Crowe, who is also a ghost hunter. "Under test conditions we've been able to capture things that we can't readily explain," Crowe said. Like several orbs, unexplained energy sources, from a tape Crowe provided to ABC7 News. Though on the night ABC7 cameras were at Cavallone's there was no such luck. "When we have a big crowd we usually won't pick something up," Crowe said.

Even though Crowe's team of ghost hunters shot video of areas they scanned with high tech equipment, looking for otherworldly electromagnetic fields. They got just a scant reading near that gaming table. "We were getting a 3.0, but now we're getting zeroes, its like they showed up. yeah they come and they go."

This pizzeria and potential mob relic provides Degen and his wife Susette a unique vocation, though she refuses to spend the night with their 2 year old daughter in the living quarters upstairs. "Not a day goes by when I flip a switch on and think I'm either going to see something or when I flip it off something's going to grab me or something," Susette Degen said.

For those who take the tour it's an unforgettable slice of Americana. As for Rob Degen its about fun...and whatever he might find once his digs through those tunnels. "What could be in there, what could be on the other side? They never did find Al Capone's money," Degen said with a laugh.

Friday for Valentine's Day, Degen had a group of fifty in for pizza, a tour, and some ghost hunting. But he also sponsors events like séances where psychics try to summon the spirits that allegedly haunt his pizzeria.

Thanks to Rob Johnson

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Did Feds Kill Off the Mob?

A mere decade ago, the Chicago Outfit's political wing still had an address: Room 2306 of the Bismarck Hotel, at Randolph and LaSalle, the 1st Ward offices of Committeeman John D'Arco Sr. and Ald. Fred Roti, a made member of the mob. Downstairs at Counsellors Row Restaurant, D'Arco and Roti held court with mob-friendly aldermen, judges and state legislators like John D'Arco Jr. The feds installed a hidden camera at Counsellors Row and wired lawyer Bob Cooley (When Corruption Was King: How I Helped the Mob Rule Chicago, Then Brought the Outfit Down). They caught D'Arco and Roti discussing mob business such as rigging elections, bribing judges to fix cases and greasing zoning and license deals.

"Yes sir," the judges and aldermen--some still in office--told ward Secretary Pat Marcy, and rushed off to get him a liquor license or whatever he asked for.

Roti and D'Arco Sr. went to jail and have since died. Counsellors Row was torn down and the old 1st Ward mapped out of existence. Even the Bismarck has a new name: Hotel Allegro. At the same time, the feds took over some of the most mobbed-up unions to try to clean them.

So did the feds kill the mob? Are local pols right to call mob influence in Chicago "ancient history?" Have the mobsters gone straight and quit trying to cultivate friends in government? Mob-watchers and cops say, "No."

The mob has always wanted friendly judges on the bench for help on cases and cops on the force to keep some crimes unsolved. Controlling unions provides jobs for flunkies and money for pols. Friendships with legislators prevent bills cracking down on video poker, which some say nets $100 million a year for the mob.

Most of all, the mob wants friends in government for jobs and contracts. The mob doesn't offer health insurance--mob lackeys need day jobs for that. "It used to be you'd give him $200 a week to get the [illegal betting] books--now you get him a city job," a city worker said at a Northwest Side coffee shop as he looked around cautiously and sipped coffee on his 11 a.m. break. "There's a lot of power with jobs," said Terrance Norton, the Better Government Association executive director.

A slew of convictions this year shows the downsized mob has just diversified and moved west. And the video poker games stay in the bars.

Stone Park Mayor Robert Natale went to prison this year for taking mob bribes to allow illegal video poker gambling at mob-linked bars.

Cicero Town President Betty Loren-Maltese, widow of convicted mobster Frank Maltese, will be sentenced next month for an insurance scam that skimmed $4 million from employee policies. The firm behind the scam gave $21,000 to Gov. Ryan, state Rep. Angelo "Skip" Saviano (R-Elmwood Park) and others.

Union boss John Serpico--appointed and reappointed by Gov. Jim Thompson and Gov. Jim Edgar to head the state port authority even though Serpico testified in 1985 he regularly met with mob boss Joe Ferriola--was sentenced this year on a loan scheme. Serpico showered union money on pols.

Still, elected officials whose campaigns benefit most from the generosity of businesses the state Gaming Board or the Chicago Crime Commission call mob-tied say the mob is dead: "I don't think there's a mob around anyway to run anything," said state Rep. Ralph Capparelli (D-Chicago). "They're still talking about 1924 and 1930. I think you use the word 'mob' because some guy has an Italian name." Saviano and state Sen. James DeLeo (D-Chicago) have made similar statements.

If a mob-linked legitimate business does good work and offers the low bid, why shouldn't it get the contract, one west suburban mayor asked.

With no official address or go-to guy in local government, it's hard to know the mob's legislative agenda. Mob-watchers say a new casino in Rosemont, or better yet, downtown Chicago, tops the list, along with more video poker.

The state Gaming Board refused to allow a casino in Rosemont, finding mob-linked firms already working on the site. Former Crime Commission chief investigator Wayne Johnson blasted twice-indicted, never-convicted Rosemont Mayor Don Stephens for ties to men the commission says are associated with organized crime, such as Sam Giancana and Bill Daddano.

Stephens sued Johnson for libel but admitted the ties to Giancana and Daddano in court filings. Stephens' suit silenced Johnson, the most vocal mob-watcher in town. Johnson left the commission and has been advised by attorneys not to discuss Stephens' alleged mob ties.

Mayor Daley has not cut all ties to the mob-linked Duff family, which donated $8,875 to his campaigns and reaped $100 million in local government contracts. Patriarch John F. Duff Jr. was a character witness for mob boss Tony Accardo. "I just know them. That's all," Daley said. "I'm not personal friends with them. I know them. So what?" A federal grand jury subpoenaed records of Duff contracts with local governments.

Daley's main ally in pushing a downtown casino in the early '90s was Ed Hanley, who had to give up control of the Hotel and Restaurant Workers union amid a federal probe of mob ties.

William Hanhardt was convicted this year of running a jewelry theft ring that stole more than $5 million while Hanhardt climbed the ranks of the Chicago Police Department to deputy superintendent. Cooley warned officials more than a decade ago that Hanhardt was the mob's main plant on the force, getting mob lackeys hired and promoted.

Police Supt. Matt Rodriguez quit five years ago after admitting a close friendship with a mob-linked felon questioned in an oil executive's murder.

Chicago police have watched as powerful ward committeemen still in office today huddled with mob higher-ups such as Vincent "Jimmy" Cozzo.

"What does the mob want from government? No. 1, money, and No. 2, power," Cooley said. "Nobody could ever get a city job or a promotion without the approval of the 1st Ward. They had all the jobs in McCormick Place, all the city jobs, police, sheriff's, state's attorney."

Mobbed-up unions provide an entree for mob types to get jobs in departments like Transportation and Streets and Sanitation that hire union members. A raid at Streets and Sanitation found 37 employees AWOL, including Chucky Miller, who was robbing a Wisconsin jewelry store of $250,000 on city time.

Transportation Department 'worker' James Vondruska, whom the commission calls a mob associate, pleaded guilty this year to playing the horses on city time. WBBM-TV reporter Pam Zekman taped him and other mob-linked workers playing hooky.

Mob-watchers say the mob wants to unionize workers at any new casino that opens in Rosemont or Chicago to work their way into the operation there. "John Serpico was out there with John Matassa 'cause they were going to unionize all the workers at the casino," one mob-watcher said.

The feds have taken over one union after another, from the Teamsters to the Laborers and Hotel and Restaurant Workers' locals, to try to purge them. Serpico was kicked out of the Laborers Union, then committed his loan fraud at Central States.

"The attraction of a union to a mob organization is the union's pension fund investments and medical plans, which are supposed to go to benefit union rank and file, most of whom could never enter the same restaurants ... as Hanley and his syndicate friends," said Combined Counties Police Association President John Flood. "And the main attraction of a union like that controlled by Hanley to the politicians also is the ability to dish out cash contributions."

Thanks to ABDON M. PALLASCH

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Franklin Park Police Officer Robert Urbinati Linked to Chicago Mob

A former Franklin Park police officer acted as an important communications link between a high-ranking mob boss in prison and his minions on the outside, a federal prosecutor disclosed in court Tuesday.

The fresh details about former officer Robert Urbinati, 60, came at a court hearing in which he was sentenced to 33 months in prison for his role in a suburban, mob-run video poker empire.

Urbinati admitted in February to taking $500 a month as a Franklin Park officer to protect the video poker machines in local bars. But he also would reach out in the early 1990s to Michael Marcello, the brother of convicted mobster James "Little Jimmy" Marcello, who was in prison. Urbinati would relay Outfit problems to Michael Marcello, who would visit his brother James in prison and get answers, Assistant U.S. Attorney Scott Levine said. Urbinati is related to the Marcellos, but the family relationship wasn't specified in court.

When James Marcello gets out of prison next year, he is expected to lead the Chicago Outfit, law enforcement sources have said.

Urbinati's attorney, Joseph Lopez, disputed the government's contention that Urbinati was an important link in the mob's communication network, calling the accusation "highly speculative" and without a basis in solid evidence.

Prosecutors, though, have pointed to a transcript of a secretly recorded conversation in which Urbinati and another player in the conspiracy, Thomas Tucker, talk about problems they are having with Robert Natale, then the mayor of Stone Park, who wanted a larger bribe payment for his services to the mob. Both Tucker and Natale were convicted as part of the investigation.

In the recorded transcript, Urbinati tells Tucker that he "was with Mickey [Marcello] last night. I explained everything to him, he's going to talk to Jimmy, but he said, even he said . . . you know that guy [Natale], he was supposed to get something."

Michael Marcello was not charged in the case. And Lopez called James Marcello "a model prisoner."

The sentencing of Urbinati wraps up the current case. The investigation, though, into illegal video gambling in the suburbs continues.

The machines are a cash cow for the Outfit. One machine alone can rake in $100,000 in profits a year, with the mob splitting the take 50-50 with the bar owner. And there are hundreds of such machines in the Chicago area.

U.S. District Judge Robert Gettleman said the crimes Urbinati committed were "very disturbing," especially since his sentencing came when Americans were commemorating the dedication and sacrifice of so many of its men and women in uniform in relation to Sept. 11.

"He was a crooked cop," the judge said of Urbinati, who wore a badge in Franklin Park from 1968 to 1995.

Thanks to Steve Warmbir

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How Mobsters Live the High Life without Getting Caught

On The Sopranos, TV mobster Tony Soprano runs the Bada Bing strip club and a garbage hauling firm.

Real-life mobster Tony Centracchio, who died last year while facing charges he oversaw a video gambling empire, was slightly more diversified. Over the years, Centracchio, who lived in Oak Brook, owned a jewelry shop, a carpet store and an abortion clinic, sources say.

Why the different businesses? To hide the ill-gotten cash.

Successful mobsters such as Centracchio need legitimate ways to explain the good life they're living. The kind of life that includes nice houses, fancy cars, big vacations, private schools for the kids. Centracchio oversaw an illegal video gambling operation that pulled in more than $22 million over two decades, the feds say, and he could hardly just throw all that money into a savings account. The Internal Revenue Service, if not the folks next door, might ask questions.

Legitimate businesses provide a quiet way for mobsters to hide money, make more money (a good restaurant will turn a profit for a devil as readily as for an angel) and, when opportunity calls, blend the legit with the illegit. Centracchio's jewelry store sold legally purchased jewelry as well as the stolen stuff, authorities said.

In all, the Chicago Outfit rakes in an estimated $100 million in pure profit each year, law enforcement sources say, and while that's nowhere near what Al Capone took in--more than $1 billion a year in today's dollars--it's a hefty amount that has to be put somewhere.

John "No Nose" DiFronzo, for instance, put some of his money into a car dealership, authorities said.

As for Capone, he spread his wealth around. The bill for his suites at the Metropole Hotel in the 1920s ran him $1,500 a day, according to one biography. He burnished his public image by feeding thousands of people through soup kitchens. When it came to spending his loot, he was flashy. Which may have been his downfall. When Capone was finally sent to prison, it was not for bootlegging, but income tax evasion.

Chicago's street gangs, as described last April in the first installment of the Chicago Sun-Times Crime Inc. series, follow in Capone's spirit. Flooded with cash from illegal drug sales, street gang leaders have invested in ostentatious suburban homes, private jets and vanity motion pictures about their lives. But the Chicago mob, often called the Outfit, will have little of that. It prefers a lower profile, the better to stay out of jail.

Chicago mobsters buy car dealerships and limousine companies. They start up construction companies, private investigation firms and car washes. They buy strip clubs, dirty bookstores and restaurants. They start trucking companies--a natural for them, given their long ties to the Teamsters union. And, in one of the mob's more extravagant moments, it even bought a golf course in Wisconsin, with dreams of opening a casino. That particular mob dream was behind an insurance scam that on Friday brought down Cicero Town President Betty Loren-Maltese and six others. A jury brought in a verdict of guilty against the seven.

While the mob simply buys its way into many businesses, it strong-arms its way into others. About 10 years ago, for example, the owner of a west suburban pest control company racked up a $6,000 gambling debt. The businessman, hooked on video poker, couldn't pay it back, so he took out a juice loan from a man who worked for Centracchio, former Stone Park chief of detectives Thomas Tucker, court documents show. Tucker, ironically, also was responsible for overseeing the very video poker machines the man blew his money on.

For the juice loan, the businessman had to pay $300 in interest. Not per year or per month. Per week. At one point, the business owner told Tucker he couldn't pay back the money, so Tucker gave him a five-month reprieve--with a price. Tucker and two other men demanded to buy into the man's business for a low price, then eventually bought him out altogether for a pittance. The onetime business owner wound up working for them.

Once a wise mobster owns a business, however, he tries to pretend he doesn't own it, usually by putting it in the name of someone he trusts. That way, if the feds haul him in and convict him of a crime, the business is safe from being seized by the government, or at least safer than if it were in his name.

The late mob boss Sam Carlisi and top mobster James Marcello, who is now in prison, bought real estate through a former Chicago cop, William Galioto, who is Marcello's brother-in-law, to hide their ownership, the feds believe.

Galioto's name came to light most prominently in 1995 when Mayor Daley scotched a low-interest city loan to him and his partners to build a West Side movie studio. Galioto has denied any wrongdoing. But for a really vivid picture of how the mob launders money, one needs to look no further than Loren-Maltese, alleged Cicero mob chief Michael Spano Sr. and a handful of their pals, who were found guilty Friday of running an insurance scam that siphoned more than $12 million out of the town.

Two of the key players were Spano and his business partner, John LaGiglio. They ran a trucking firm and knew zip about insurance. But that didn't stop them from starting up Specialty Risk Consultants, an insurance company that had one big customer, the Town of Cicero.

LaGiglio had dreams of going after the insurance business of other trucking firms, strip clubs and bars owned by his buddies, but the Town of Cicero was the only client necessary, authorities said. The town kept paying and paying, no questions asked.

LaGiglio didn't actually own Specialty Risk Consultants, not officially. The IRS was on his tail for back taxes, and if it became known that he owned a profitable insurance business--bam, here comes the IRS with its hand out. So LaGiglio's parents owned the business, at least on paper, the feds say.

To run the business, LaGiglio hired a guy named Frank Taylor, who knew insurance and, more importantly, was a crook himself. Over the years, Taylor has had a hand in everything from pornography to financial fraud. But Taylor had his own tax problems, making it difficult for him or LaGiglio to be seen getting salaries.

So they played the name game again, the feds say, this time setting up a company called Plaza Partners. The "partners" in Plaza Partners were the wives of LaGiglio and Taylor.

Every week, giving some reason, Specialty Risk Consultants would shift cash to Plaza Partners, prosecutors say. Then the wives would collect their weekly paychecks from Plaza Partners and hand the money right back to their husbands, the feds say.

Plaza Partners wasn't the only shell company set up to hide the money being stolen from Cicero. There was also Specialty Leasing Inc. It was a car leasing company.

Customers--some of the defendants and their families and friends--set their own payments, with Cadillacs being the favorite vehicle. And there was Specialty Financing, a loan company.

Here's how it worked, according to the feds:

No collateral?

No problem!

You don't want to pay all the loan back? No problem!

Spano's son-in-law got a $40,000 loan.

Didn't pay all of it back.

The brother of top mobster Marcello, Michael, got a $16,000 loan for a boat.

Didn't pay all of it back.

In all, nearly $2 million of Cicero's money went to Specialty Finance, IRS investigators estimate. And millions of dollars more were funneled through various other shell companies, making it possible for Spano to buy a Wisconsin vacation home, for the LaGiglios to buy an Indiana horse farm, and for that purchase of the Wisconsin golf course, the feds allege.

Attorneys for the alleged key players have disputed the prosecutors' version.

Loren-Maltese didn't know about any theft from the town, her attorney says. And where was the bribe to her to allow such thievery?

Other defense lawyers have emphasized that key government witnesses have cut deals for reduced sentences or lied under oath before.

One of the oddest cases of mob money laundering involved a friend of Spano's, loan shark James Inendino. Inendino goes by the nickname "Jimmy I," which stands for his last name, and for ice pick, which he reportedly once used on a man's eye.

In the early 1990s, according to court documents, Inendino helped launder millions of dollars in cash belonging to the late Outfit boss Anthony Accardo.

Why so much cash? Accardo, who was once Al Capone's bodyguard, had stashed it in his River Forest house, apparently for decades. Some of the money was so old--dating back to the Capone era--that the mobsters apparently feared it might no longer be accepted as legal currency.

Thanks to Steve Warmbir

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