Page:Summary Report of Al Capone for the Bureau of Internal Revenue.djvu/30

SI-7085-F the prostitutes were shifted between the Shadow Inn and the Harlem Inn as business demands required them in either place and that both of these places apparently had complete immunity and police protection furnished by the Chief of Police who was frequenting the Harlem Inn. I furnished this information to P. F. Roche, Chief Investigator for the States Attorney's office requesting that the state take action to close these houses and arranged to be present when his force raided both of these places on the night of May 30,1931. Special Agents Tessem, Sullivan and I were present and assisted in these raids in order that we might locate some important witnesses in this tax case known to be frequenting these joints and also to secure any records relating to the business of the syndicate which might be found on the premises. There is submitted herewith as Exhibit No.37-H, a record which we found during this raid, covering the income from prostitutes at the Harlem Inn for a period of five days. It will be noted that the income from this source was $730.65 for that period of five days and on that basis the yearly income from this one house would amount to $52,560.00. It will also be noted that the syndicate had this business so well organized that a printed form was used to keep an accurate account of the income. Louis Consentino, Manager of the Harlem Inn, was arrested during the raid and pleaded guilty when tried. Four women found in the place during the raid were also arrested and pleaded guilty. After that raid the states attorney's office again started action to close the Harlem Inn for operating as a home of prostitution and secured an injunction which became effective on November 1, 1931. Mr. John Blahouse, the owner of the place know as the Shadow Inn, identified Al Capone as the man who negotiated the lease and made some of the monthly payments to him. A copy of a sworn statement made by Mr. Blahouse on June 9, 1931, is attached as Exhibit No. 37-F. The fact that the Capone organization had a machine gun concealed on the premises of the Harlem Inn on May 29th, the day before the raid, was established through a telephone conversation on one of their tapped telephone lines, but it had been removed before a raid could be carried out to capture it. Telephone lines were not tapped by special agents of the Intelligence Unit during this investigation, but through cooperation from other sources we were legally furnished with information relating to and transcripts of telephone conversation over certain lines. There is attached as Exhibit No.37-G, a memorandum prepared by Special Agent James T. Sullivan relative to houses of prostitution under the control of the Capone organization and showing the connection of Al Capone and Ralph Capone with them. At the trial of Al Capone for tax evasion it was not considered advisable to establish his connection with these houses of prostitution and in determining his tax liability we did not take into consideration any income from such sources. - 29 -