So now the government heat caused numerous cases of nervous breakdowns and total paranoia within the Chicago Outfit. One of the problems for the mob was that some of the top Outfit guys lived quite lavishly, because what’s the point of being a gangster if you don’t spend the money that you have made, right?! But with that comes a lot of heat from the government and to make things even “better”, Outfit boss Giancana was having his best “second time teenage years” in his life, by humping every possible famous broad that crossed his path. He was having quite flashy type of lifestyle in the wrong time when things were getting quite bad for the Outfit. Alex respected Giancana but he was very concerned due to the fact that Giancana was spending too much time outside the Chicago area and therefore was in no position to attend to his affairs as leader of the Outfit. In fact, Alex was very dissatisfied because he also wanted to spend as little time as possible in Chicago but the problem was that Giancana’s absence made it necessary for Alex to remain in Chicago more often than he desired. In reality, Alex tried to avoid the heat because by now he also had a lot of personal problems, such as his health and marriage, which also disrupted his business operations. This information comes from classified informant and the interesting thing is that it shows that Alex, as a member of the mob, had a very complicated “job” which was slowly destroying his life.
In 1960, Marianne Alex informed her husband that she wants a divorce. During the 15 years of their relationship, Marianne always kept a blind eye on Alex’s activities outside their home. But during the last few years, Marianne was slowly loosing her patience and was in constant quarrels with her husband. She wanted for Alex to get out of the rackets but she was constantly denied. Alex always denied to his wife that there’s no such thing as organized crime. She even received few beatings after accusing her husband for cheating. Once, Alex almost killed his wife after the attempt to leave him forever. Alex was a known “lover boy” around town and was always accompanied by beautiful female models. He was a good looking guy who dressed well and was a considered a real first-class gentleman.
By now 46 year old Alex was having few slight heart conditions and also suffered from insomnia, but the divorce caused further deterioration of his health. He also started having blood pressure problems, nervous breakdowns and all kinds of paranoia and so he received psychiatric treatment in a sanitarium in Connecticut. Because of his run-down feelings, Alex was advised by his doctor to “take it easy” and prescribed him pills known as “Thorazine” which was a tranquilizer with an effect for more than 12 hours. Alex was forced to re-arrange his daily routines and gave orders to his underlings, not to make any phone calls to his residence prior 9 a.m. According to one conversation between Alex and Ferraro, Alex advised that “I took thirteen vitamins. I don’t go nowhere, just to cross the street to eat, and lay on the couch. I bought two dollars worth of quarter cowboy books. I just laid around like a big dirty “n*gger.” I ate, slept and just rolled over.” In reality, Alex was a worrier who was easily upset when he received unwanted publicity. He loved to be well regarded by the individuals that he came in contact with but the bad publicity has affected his contacts in an unfavourable manner.
There are some reports saying that Alex faked his mental problems and in fact he bribed the doctors to make his medical report. Back in 1944, when Alex was drafted to join his fellow Americans in World War II, he pulled out a medical record which said that he suffered from psycho-neurosis and was mentally unstable to serve the army. Back then many gangsters avoided the army because the money schemes were at their home country, not in Europe. For a guy who operated on such a high level within the crime syndicate, psycho-neurosis, high blood pressure, insomnia and on top of that strong pills, were big problems that certainly would’ve destroyed his criminal career. But instead Alex maintained as a star among his fellow mobsters. Also in the end, beside the pills, the doctors usually advised Alex to travel more often and to getaway from the everyday headaches, which came very “handy” in this next example.
Since the mob was getting under attack on national level, the bosses needed to find a way to settle the Outfit’s illegal finances. In hard times, a gangster should always take care first of his huge dirty income. Now with all of these illegal operations the Chicago Outfit began stashing so much dirty cash that they had to find a way to hide it. After the numerous convictions for tax evasion and the gangsters realized that they were too vulnerable to a similar prosecution. To protect themselves, the Outfit transferred the illegal earnings to Swiss bank accounts, where anonymity was assured by the Swiss Banking Act in Switzerland. Reports say that by now most of the cash went first to the Federal Reserve of Chicago and from there was wired to banks in Switzerland, England, Italy, Panama and the Grand Caymans. On April 16, 1960, there was a meeting between Humphreys and Ferraro regarding the “ski trips.” Here’s the conversation:
HUMPHREYS: They’d say where did you get all the money to buy this? Well, I made it over there, right?
FERRARO: Well, you have to prove it, though.
HUMPHREYS: No, you don’t have to prove it. Why do you have to prove anything in Europe? It’s none of their business in Europe, as long as you made it in Europe, and you are a resident of Europe.
FERRARO: So, go over there and…
HUMPHREYS: Get a residence, get a house. You establish yourself as a resident, for over a year.
FERRARO: Then come back here say, with a hundred thousand dollars, and…
HUMPHREYS: Yeah, but you leave the money over there, you write a check here for the Swiss bank. After you’ve been there for a year. They ask you, where did you get this money, you never had it, you say, well, I made it over there. Who did you bank it with, that’s none of your business. I’m a resident over there. So they’re dead.
FERRARO: So, come over here with half a million show money, huh?
HUMPHREYS: Sure can, after a while. You don’t even have to have half a million, you don’t have to have the money over here, you have it there all the time. You write a check out there. That’s what the movie stars tell me. We’ll have to get the Greek (Gus Alex), and tell him to rent a house.
FERRARO: You gotta buy one, don’t you?
HUMPHREYS: No, rent it. What’s the difference? He can buy it, let’s say he buys it, and he stays there for over a year, then he comes back in. He can come back anytime. The same day. You go back and forth. He’s been away all this time, he might just as well have been in Switzerland, establish himself, isn’t that right?
FERRARO: Sure.
So when the bosses invested their dirty cash in Swiss banks, Alex’s job was to take up residence in that country and go back and forth to the U.S. and when home he would begin writing checks on the amount of money deposited in the Swiss bank. And if anyone asked about why Alex was travelling so often, he simply replied that his doctor told him to and if anyone also asked for a medical record, he also had that. It was a beautiful scheme. If Alex really lied to the government about his medical condition then he also swindled his superiors because they all really believed him. Here’s what Humphreys and one unknown individual had to say regarding Alex’s health:
HUMPHREYS: Listen, did Gussie (Alex) go away?
UNKNOWN: Yeah.
HUMPHREYS: He bothers me, you know? There’s something real wrong with that kid.
UNKNOWN: He’ll be all right.
HUMPHREYS: I was just talking to him and he gets hot right away, you know? The kid is worst off then we think he is. He is trying to put up a front.
UNKNOWN: Well, uh, you be patient, and have little more confidence, because, uh… you see we talked to doctors. It takes anywhere from six to nine months for that shit to get out of your system. Take that time in California. He says… the main thing he’s got to do is relax.
HUMPHREYS: Yeah, but we had those things before, you know? The only thing you can’t throw anything at them.
UNKOWN: …so I told him, go away for a while, and relax. So he comes back, and takes whatever they throw at him. Mooney (Giancana), see?
HUMPHREYS: Well, he fights everybody. See, everybody has the same thing, only we have it all day long, all the time. He can’t take it. It’s rough for those younger guys. I tell them for fucks sake, you guys don’t even know what it is.
By now two Outfit members were responsible for the illegal cash, one being Alex, and the other one was Hyman Larner. Larner was responsible for moving the Outfit’s money through South Florida to Panama, and Alex was responsible for the money route to Switzerland and also England and Italy. Alex used to call these travels “Ski trips”. But before going to Europe, Alex had one more thing to do. In March, 1961, his close friend Judge Daniel Covelli, who was a Criminal Court Judge in Chicago, needed to be elevated to the position of Federal Judge of Northern District, Illinois. So Alex called upon D’Arco and Marcy to send a message to Jake Arvey, who was the National Democratic Committeeman, to go and pressure Mayor Richard Daley to make the appointment for Covelli. One day the Mayor was visited by Arvey, D’Arco and Frank Chesrow, Chairman of the Board of Chicago Sanitary Commission. Chesrow filled one of the most important political positions and was also the head of the Sicilian Fraternal Society and godfather of one of Tony Accardo’s children and there were also rumours that he was somehow related to Frank Ferraro. In fact, Ferraro was the one who controlled Chesrow. Alex and Ferraro played a major role in the appointment of Covelli as Federal Judge who took only important cases and only for important members or associates of the Chicago Outfit. So Alex even more distanced himself from Covelli by placing the Outfit’s attorney group as overseers of Covelli. Attorneys George Bieber and Michael Brodkin accompanied Covelli on daily basis. Both Bieber and Brodkin took their orders from Alex and his old pal Sidney Korshak. This is the right example and definition of organized crime and its infiltration in the upper world. Chicago’s criminals controlled the judiciary and political systems in the city for almost a century and now Alex was the one who continued the “tradition.”
On one of the first travels to Zurich, Switzerland, Alex was accompanied by Outfit boss Tony Accardo and one corrupt police lieutenant known as Tony DeGrazio. In fact, the two Tonys were making a European tour of their own. So the trio decided to meet at the Baur Au Lach Hotel in Zurich. The local police in Zurich reported that Accardo and Alex had very mysterious huddle during their stay in the city. The Swiss authorities already had Alex on surveillance because they suspected him of being linked to a $100,000 jewelry robbery in St. Moritz, Switzerland. According to mob author Gus Russo in his book “The Outfit”, he talks about the same situation of Alex’s travels to Switzerland, but he also included that in fact Virginia Hill, the infamous mob moll and alleged spy for the Chicago mob who by now lived in Zurich, was the contact person over there and received the Outfit’s pension money and that Alex was the one who contacted her.
Zurich, Switzerland with the snowy mountains in the background
By now Alex was single, and hated to travel alone. So during their visits of the Playboy Club, Alex and his old friend and business associate Eddie Vogel met their new ladies. Arnold Morton, who was the general manager of the Playboy Club, was a very close friend of Alex so he always provided the gangsters with his best “products.” Alex’s new girlfriend was a hot blond German known as Suzanne Fueger, who was one of Playboy’s bunnies and Vogel also had a girlfriend from the same place, known as Peggy Strak. In fact, Vogel often gave Peggy to Alex for his own entertainment. As for Suzanne Fueger, she came from Munich, Germany, and was married with one Helmut Fueger. But the thing was that Helmut was just a regular guy, and Alex was something else. Alex was something which many young, wild and foolish beautiful girls always dreamed of. He bought Suzanne many expensive gifts, such as new model cars, jewelry and fur coats and also introduced her to Chicago’s crime elite. Suzanne was not like his ex-wife, because she loved the excitement and the adrenalin and also enjoyed in the spoils. She was extremely good looking and Alex was very proud of that.
So in December, 1962, Alex, together with his new paramour, began travelling extensively to Europe. The lovely pair usually first took an airplane to Zurich, Switzerland, and rented an apartment and from there they went skiing in St. Moritz for three weeks. After that, the pair rented a car and rode off to Italy. There they visited Rome, Milan and Naples and stayed for another three weeks. From Italy they took a boat and went to Greece and stayed in Athens for two weeks. On their way back, they took a flight from Athens to Genoa, Italy, where they rented another car and drove to Munich, Germany, where Suzanne visited her mother Elrose Fueger. After a week in Munich, they retuned to the U.S. Alex continued doing these travels for the next several years, and sometimes changed his routes to England or France. The FBI immediately informed the Interpol about Alex’s reputation and his constant travels and because of that Alex was on constant surveillance by the international police group. Also on some of the U.S. airports on few occasions Alex was strip searched by the custom agents because of the suspicion that he was serving as a mob courier. One time, under Alex’s shirt, the customs officers found a money belt containing $10,000 in cash. So the next few trips, Alex switched ports of entry in an effort to avoid the embarrassment of strip searches.
But after finishing one of his travels, Alex developed a problem. During their travel, the 47 year old gangster and the 25 year old blond always toted their own 16-millimeter movie camera across the continent, taking colour films all the way. In this case, Alex had assembled eight 50-foot rolls of film. When the pair took a flight back from Paris and landed in Boston, the U.S. customs officers promptly seized their movies. Alex howled protests and so did his lawyers after Alex’s arrival in Chicago, thus leaving his movies in the hands of the customs officers. So now the films were viewed by agents of several agencies, such as the Immigration and Naturalization Service, the Internal Revenue Service, and the Justice Department. The first shot that appeared in the movies was Alex in front of the Schloss Hotel, near St. Moritz in Switzerland. Also, in sleighs and on the ski slopes, Suzanne posed for the gangster cameraman. She was clad in one fur after another. The films showed Alex, a novice on skis, wobbling down gentle slopes in a red parka with a canary-yellow waistband. Later he appeared in baby blue ski togs to pet a St. Bernard dog. On another much funnier occasion, posing beside a horse-drawn sleigh, both Alex and the horse wore red. Alex topped his costume with a scarlet hat and a crimson pom-pom was fixed to the horse’s bridle. Another role of movies showed the pair in Rome, Italy. According to the IRS and Interpol, some mysterious strangers came to Rome’s Hotel Hassler to confer with Alex. Neither of the agencies was able to identify the men. After that the movies showed Alex and Suzanne on a steamer boat across the Adriatic and also showed their adventures in Greece.
So now rumours spread around that because of the movies, the government planned on preparing an income tax case against the pair. According to some reports from Interpol, for only two weeks, Alex shelled out more then $25,000 (or $200,000 in today’s money) during this specific European tour. Also the cost of furs and gems which were displayed on Suzanne, were estimated at another $20,000. Italian authorities also disclosed that for just few days, Alex went through $2,500.That’s why the federal investigators asked the question on where did Alex and Suzanne get the money from. The feds knew that Suzanne was unemployed and Alex had a year salary of $25,000 which still wasn’t enough for this kind of expenses. Alex’s lavish travels are at the best explained by Jimmy Celano, who one time accompanied him. Celano said that the trip from Chicago to Paris lasted for four and a half days that cost $3,100 for just one person and also added that Alex got him a suite with a sitting room and a bathroom as big as his office at the tailoring shop, all in marble. He then made the comment “Gus (Alex) had to buy me three cashmere sweaters going over.” After their tour in Paris, Celano said that they went to Rome, Italy, and visited a casino known as Rappola’s and spent a lot of cash. By now the “secret” was out, and Alex was revealed and humiliated within the Chicago Outfit as a gangster in danger of being snared on a tax rap with his own movie film. But luckily for Alex, on May 1, 1963, the government disclosed that he was not the subject of any tax evasion case and that there was no contemplated indictment. Also after three weeks, the government returned the movies to its rightful owner.
Even his older brother Sam had his own clashes with the government. Sam got himself in trouble with the postal authorities in Cassopolis, Michigan. Sam was threatening the postmaster and the security guards, because he suspected them for secretly checking his mail and he was probably right. But the problem was that he reacted too much violently so he got himself arrested by the police.
When in Chicago, Alex continued to show his skills in granting favours to key individuals. For example, Judge Joseph Wosik was backed and placed in judgeship through the efforts and financials of Alex himself. In fact, Wosik became judge in the traffic court after contributing the necessary funds to the Democratic Organization in Chicago. So now Alex had a connection to fix any traffic case that involved a member or associate of the Outfit. The same period Alex also attended a high profile mob meeting with the Outfit’s boss Sam Giancana at the Town Hotel in Cicero in room 207. Giancana told Alex to get in touch with John D’Arco and to order him in getting support for Sam Workman to win the alderman seat of the 43rd Ward on the Republican ticket. Alex and Giancana preferred to have one Republican and one Democrat in the ward to work together, thereby insuring both sides of the fence in case Alex’s candidate did not win. Besides granting favours in the upper world, Alex also pleased his fellow gangsters at any given time. Joe Fusco was an old Capone mobster who made a fortune during Prohibition and by now he still held a very lucrative liquor, wine and beer distribution network in Chicago. In the old days Fusco was one of the main money makers for the Capone mob, and because of that he still commanded huge respect among the younger generations such as Alex. But now Fusco had a problem with the Gallo Wine Company, which had threatened to take away Fusco’s account away and give it to the Moran Brothers distributorship. The Moran Brothers Company was headed by Mike Romano, a close associate to Paul Ricca and Tony Accardo. In reality, Romano was backed by the two bosses in the takeover of Fusco’s distributorship in Chicago. With nowhere else to go, Fusco reached to Alex through Jimmy Celano, and asked for help. After hearing the problem, Alex instructed Celano to contact Romano and to advise him to back off and under no circumstances Romano was to entertain any thoughts of taking the Gallo Wine account. As expected, Fusco continued with his distributorship in Chicago for the Gallo Company.
If we look at Humphrey’s organization as a separate “crime family” we will have him as boss of the family and Vogel, Alex, Pierce, Larner, Joseph Corngold, Francis Curry, Leonard Patrick and Lester Kruse as the capos. Alex, Pierce and Kruse controlled many of the handbook operations from Chicago’s South Side to Indiana, as far as Indianapolis. Kruse ate, breathed, and slept gambling. He and his father Arnold used to work for the gambling magnate Moe Annenberg. By now Kruse controlled everything illegal in Lake County and was also highly regarded by Chicago’s underworld because he also had a job for controlling some of the Las Vegas casino interests through one of his associates known as John Drew. Giancana, Battaglia, Ferraro, Humphreys, Alex and Kruse were the ones who carried on the negotiations with Cleveland mobster Moe Dalitz, regarding the Outfit’s interests or takeover on the Las Vegas casinos. Also on November 5 and 6, 1960, Dalitz had a meeting in Chicago with Giancana, Alex and Kruse regarding the Vegas interests. In the following years, Kruse even spread his gambling operations in the Dominican Republic by making frequent travels through Florida every two weeks. Over there Kruse established huge slot machine operation at the Hispaniola Hotel in Santo Domingo with the help Hy Larner and two of his associates Carmine Bastone and Albert Meo. Their main connection over there was Porfirio Rubirosa, the former Dominican Ambassador in the U.S. It was a perfectly legal operation, which draw the attention of mobsters from around the country including mob legends like New York’s Meyer Lansky, Tampa’s Santo Trafficante and Detroit’s Pete Licavoli. For example, Kruse together with one of Lansky’s close associates Walter Lenroot, held gambling interests in Jamaica also.
Leslie “Killer Kane” Kruse with his wife back in the 1940’s
Kruse also owned the Vernon Country Club in Deerfield, Illinois, which was a front for a huge gambling operation. He was also closely associated with Rocco Fischetti, Gus Liebe and William McGuire. McGuire and Liebe were chief lieutenants for Kruse in gambling and extortion and Fischetti was the boss of Chicago’s Southwest Side territory but he was slowly giving it away to Kruse. In fact, Fischetti was Kruse’s boss. Alex and Kruse knew each other since the 1940’s when they both gained notoriety as a result for the killing of a former police captain William Drury. Shortly before his death, Drury advised that he had seen Alex, “Kid Kane” (Les Kruse), Ralph Pierce and another hoodlum enter the office building before the shooting occurred. The duo also often travelled to business meetings in Miami, Florida and Las Vegas, Nevada and they even played the stock market through a well known brokerage firm named Thompson and McKinnon.
Eddie Vogel controlled the coin machine business mainly in the Cicero and Melrose Park areas. In the old days he had the whole city for him and also had operations outside of his home town. According to police reports, back in the 1940’s Vogel’s coin machine business raked in a gross amount of $4,000,000 a year. So Vogel was like Humphreys and my opinion is that he also held high position within the non-Italian faction or the Outfit in general because he had his own crew, huge list of associates and generated a lot of cash. Plus he was one of the old timers who witnessed and even took part in the birth of the Capone mob. Vogel had a ruthless Sicilian collector under his rule who went by the name of Anselmo Pacini. In the old days even Alex himself temporary worked for Vogel as collector for slot machines around Fox Lake and Lake Zurich. By now Vogel was high up in the game and secretly controlled the Apex Cigarette Service Inc., Ajax Phonograph Company and also the Deluxe Cigarette Service Inc. So Alex was employed at the Ajax Phonograph Company and at the same time at the Deluxe Inc, for a double salary of $26,000 a year and plus he also received limitless cash flow from Vogel’s coin operations. Alex placed Vogel’s jukeboxes and cigarette vending machines, all around the First Ward and South Side in general. These machines were located primarily in mob-controlled restaurants, bars and shops. Alex, Vogel and Larner controlled numerous other cigarette vending companies such as the General Smokers Cigarette Service Inc., Preferred Cigarette Service and the Zenith Vending Company. The gangsters never performed any identifiable services for these companies but instead they drew heavy salaries, expenses and dividends.
The Jewish boss of the coin machine racket in Chicago, Edward “Eddie the Dutch” Vogel
Alex and Vogel became so close that they both lived in the same apartment building at 4300 North Marine Drive and also had beautiful female models under their arms. The two gangsters frequented the Postl’s Health Club at 188 West Randolph Street, on daily basis and the place became their main meeting spot with other gangsters such Phil Alderisio. Alex, Vogel and Alderisio shared few operations in the Cicero area. Both Alex and Vogel were very influential and often spent time at the First Commercial Bank on Chicago’s North Side. These guys acted like bankers and moved around as if they owned the place. They sat in the office of the bank’s president and most of the employees appeared to be frightened by these individuals. When Sam Alex came back to Chicago, he, his brother Gus and Vogel often had dinners at the Armoury Lounge, the infamous headquarters of Outfit boss Sam Giancana.
By now the main guys who literally controlled the multi-million dollar coin machine racket in Illinois, were Sam Giancana, Joe Mendino, Eddie Vogel, Gus Alex, Hyman Larner, Lester Kruse, Frank LaPorte, Francis Curry, Joey Aiuppa and the English brothers, Sam and Charles. By controlling the jukebox racket, the organization also got involved in bootlegging music records, which also happened to be a very lucrative business. They even created the Chicago Independent Amusement Association or the CIAA. They saw success because the association has grown steadily and their membership numbered almost 100 operators and distributors, which was over one third of the total industry in Chicago. Larner was placed as executive secretary and general manager of the association and he played it smart by changing his name into Thomas Waterfall. Every operator paid from 1 to 10 dollars per machine, weekly and if someone didn’t pay up, he or she was visited by guys like Jim Rini or Alex Ross. So back in 1959, during the McClellan Committee, Larner was uncovered for what he really was and the same year the Chicago Independent Amusement Association broke up. But this was just a small sacrifice for the Outfit because the rest of the vast coin machine operations remained untouched. After that Larner became the main “muscle man” for Vogel and Alex. For example, Bill Vasios who was a coin machine operator started making trouble for the Outfit by taking over their spots. Larner called Vasios for a meeting and calmly told him to stop stealing cigarette machine locations from the General Smokers Cigarette Service Inc. or else. Larner wasn’t some big, strong and ruthless guy but instead he was a very gentile and polite individual, which made him more mysterious and scarier.
Hyman “Red” Larner
