Joe Amabile, an agent suddenly realized that a gangland figure who had disappeared could provide vital testimony.

The agent flew to Palm Springs, Cal., where Donald Hanke had set himself up in the restaurant business. Hanke had operated the handbook, cards and juice center in Stone Park for Rocco Pranno, a predecessor of Amabile, until Pranno ordered him to enforce juice payments. In other words, if a borrower doesn't pay up, beat him up, break his leg, threaten his life-whatever you do, get the money, Hanke didn't want any part of it and he took off.

Hanke remembered a meeting the agent wanted him to testify about. He could virtually wrap up the case against Battaglia and the others on trial. Hanke voluntarily came back to testify. He drove the last nail in the case for the IRS, but in the course of his testimony his new address came out.

Hanke was under IRS security while in Chicago for the trial, and as soon as the jury came in, convicting all the defendants, the intelligence agent flew back with Hanke to Palm Springs. They spent two weeks closing up Hanke's restaurant and winding up his personal affairs. Then the agent spirited him out of town, to a new home with a new job and a new identity.

"Within 10 days the restaurant was torched," the agent recalled. "It burned to the ground. And Don didn't have any insurance on it, either." Even if he had had insurance, no doubt Hanke would have depended on the IRS intelligence division to claim it for him.

Gangsters and hoodlums make every effort to locate and silence any witness who endangers their freedom-by threats if possible. Often they will hire private detectives to track down their man. Recently, they made some limited and still unexplained headway.

Frank Terranova, a witness in the tax trial of Anielo [Neal] Delacroce last winter in New York City, was secreted in an apartment known only to IRS intelligence, or so they thought. One day the telephone rang. The caller identified himself as a private detective and asked for a meeting with Terranova.

Terranova swore to IRS agents he had not called or given the phone number to anyone. He was moved to another location. Intelligence agents made the meet proposed by the caller, but no one showed up.

"We've had some close calls, but we've never lost a witness yet," said an intelligence official. "We've never lost a witness we've relocated and given a new identity. But if he's arrested for a crime, we cut ourselves off from him. He's on his own then."

The IRS has about 150 national and international corporations that will cooperate in proving a job to a witness for a new start in life.

When a witness must be moved and hidden, IRS finds him a job similar to his old one. If he was a construction worker, he might wind up in a different phase of construction work. A white-collar worker is placed in a white-collar job. A whole new background life is provided for him. If he is a university graduate, IRS gives him credentials from a different university than from where he actually got his diploma. If he has two or three years of college, the witness' record will be changed to substitute the identical courses at a different college. If he is an ex-convict, that is known to the company that provides him a job.

If for any reason he has to get in touch with anyone from his old community, he writes to a post office box number in one of the nation's largest cities. An intelligence agent there will pick up the letter, transfer the contents to another envelope, and mail it from still another locality.

Often a witness has schoolage children. They receive credentials from other schools and are cautioned against getting in touch with anyone in their old neighborhoods.

Children pose one of the greatest risks for a man given a new identity and established in a new community. They may get homesick for their school chums, or for grandma or grandpa, or Uncle Ed, or Cousin Sam. In this day of direct-dial, long distance telephoning, it is a simple matter to make a call.

The hidden witness may panic after such an incident, but eventually he will do what he is supposed to do under such circumstances-telephone his local contact agent. IRS intelligence then goes to work to determine whether there is any indication in his old neighborhood, hundreds of miles away, that someone knows where he is living. If necessary, the family will be relocated.

"The witnesses we get are, by and large, different from the mine-run the U.S. Marshal's office gets," said an intelligence official. "Our's are more likely to be white-collar people who know how to follow directions and who are not likely to get into trouble."

If a hidden witness must return home for a funeral, he is returned by a devious route designed to hide the trip's origin. While in his old neighborhood, he gets constant protection. If total security is required, as it sometimes is with witnesses during a trial, he will be housed temporarily in facilities known only to the government. In the past, even military installations have been used.

Intelligence agents have even made all the arrangements for a funeral. When the brother of one hidden IRS witness died while the trial was pending, there were no other relatives to make arrangements. So IRS agents did it all, and then accompanied the witness to the funeral.

[From the Chicago Tribune, May 29, 1973]

SURVEILLANCE IS PART OF IRS JOB

(By George Bliss and John R. Thomson)

Sam Battaglia, operating head of the Chicago crime syndicate, would have been unpleasantly surprised if he had paid closer attention to the church belfry a few blocks from his Oak Park home in the winter of 1966-67.

Agents of the Internal Revenue Service's intelligence division had his home under surveillance from that belfry. They knew when he left home each morning, and which one of his drivers was at the wheel of the car or station wagon that called for him.

Sam would have been just as surprised if he had opened the window of the car at 2:30 a.m. some nights that winter and looked overhead as his car sped along the toll road.

He would have seen a helicopter overhead. He might even have seen the IRS agent, clad in electrically heated clothing, but cold nevertheless in the 40-below temperature 1,000 feet overhead, leaning out the helicopter door.

The agent in the sky was in radio communication with the helicopter pilot who was snug and warm in his compartment, and with IRS agents in cars on the toll road. They were following Sam's car as closely as they could to the oasis where Sam and his top lieutenants held their after-midnight meetings, which were never held twice in a row in the same oasis.

Sam should have paid closer attention to the workmen with lunch buckets who descended on the oasis where he held his top-level conferences. Of course, a toll road oasis at 2:30 or 3 a.m. is a busy place. Sam could not be expected to notice that the lunch buckets which were aimed at his table contained hidden cameras. Sam was not surprised, however, when he stopped at a roadside telephone on the way to his 400-acre farm the morning of February 16, 1967. He called a lookout he had at 25th Avenue and Lake Street in Melrose Park and was told he was being followed by a strange car.

This time it was the IRS agents' turn to be surprised. Of the 11 cars each containing two agents that were tailing Sam, all avoided the intersection in Melrose Park except one car containing agents not familiar with the case. Someone had forgotten to tell them Sam had a lookout there.

Joe Rocco, Sam's driver, took evasive action. The agents didn't know it until later, but under the hood of the Ford station wagon Joe drove with such skill was a souped-up Thunderbird engine. Up one street and down another he sped, through one suburb after another.

The agent in the IRS lead car had picked up police cars from Schiller Park, Melrose Park, and Northlake. He was speeding along North Avenue at 90 miles an hour but the Northlake police car was gaining on him. He stopped, ran back to the police car as it pulled up behind him, flashed his badge and shouted, "Federal officer on surveillance."

"Before that Northlake policeman had time to say anything the other 10 cars came whizzing past. He was still standing there beside his car open mouthed, when I got back in the car and started out," said the agent who had stopped.

"We didn't dare lose him. Ed Hanrahan [United States attorney in Chicago at the time] was bringing in the indictment at 2 p.m. and he had told us, 'If you let him get away, it'll be your funeral," the agent recalled.

Newspaper stories of Sam's indictment and arrest said merely that he was apprehended in Marengo by federal agents after a high speed chase on the toll road.

The stories failed to say that Sam and his driver, finally aware they were being tailed, sped through a toll plaza near Rockford without stopping to pay the toll.

Four cars in radio communication were right on his tail. They sped through at 80 miles an hour speed without stopping.

"They started playing games with us, cutting thru to the opposite lanes at emergency crossings and heading the opposite direction. We cut across and followed him at 100 miles an hour. As we all went south we passed state police cars, notified by the toll plaza, heading north.

"He cut across again with us right behind him, and we all headed north, and there on the southbound lanes came the state police cars we had passed when they were headed north," the agent recalled.

Sam finally tired of the game and his driver left the toll road and drove sedately into Marengo, where the agents telephoned Hanrahan, learned the indictment had been returned, and put Sam Battaglia in handcuffs.

The extortion charge which finally put Battaglia in prison, along with gangsters Rocco Pranno, Joe Amabile, and several other persons, including Mayor Henry Neri and crooked aldermen and officials of the village of Northlake, was a byproduct of a classic IRS intelligence tax investigation.

It began in 1963 when reports began to circulate that village officials and gangsters were shaking down companies for building permits and inspections in Northlake. Extortion money is seldom reported on income tax returns, and that meant the government was being cheated, which interested the IRS.

During the course of the investigation IRS agents were the first to learn that Battaglia had supplanted Sam Giancana as operating head of the crime syndicate here, and that Amabile had supplanted Pranno as the hoodlum boss of Northlake and other western suburbs.

Before the case finally was closed with the last of the defendants in prison only two years ago, four persons who had been cooperative witnesses in the IRS investigation were under federal protection and eventually were provided new identities and placed in new environments. A fifth person, girl friend of one of the cooperative witnesses, also was provided protection during the trial, as was the witness' family.

Surveillance does not alway involve auto chases, of course, and it doesn't always stem from a tax investigation or result in a tax prosecution. Three IRS agents were conducting surveillance of hoodlums in the western suburbs in 1968 and followed one from his home to a small pool hall, the Family Amusement Center, in Cicero.

The agents entered to play a game of pool and found themselves lonely, even tho there was a goodly number of people there. Virtually all others were in the rear, where they talked in low voices. At 1 a.m. several known hoodlums were seen closing up the place. The next night the agents went back and found the situation the same. They rented a vacant apartment across the street and set up a surveillance post.

For 45 days, in summer heat that was so great they stripped down to their shorts, agents kept watch at night from the dark apartment, taking pictures of cars driving up to the pool hall and the people entering it.

After nearly two months the IRS investigation pinpointed the pool hall as a center of the juice loan racket. The IRS turned over all its surveillance records, photographs, and even the keys to the apartment to the Federal Bureau of Investigation, which was charged with enforcing the Truth in Lending Law.

The FBI completed the investigation and arrested 11 men for what the U.S. attorney's office called "perhaps the biggest juice loan operation in the United States." A Treasury Department expert testified that interest rates on juice loans at the Family Amusement Center ranged from 215 to 308 per cent.

[From the Chicago Tribune, May 30, 1973]

IRS NAILS DOPE TRAFFICKERS ON TAXES

(By George Bliss and John R. Thomson)

The Internal Revenue Service, called upon for many strange investigative tasks in the past, is now an integral part of President Nixon's war on the nation's drug problem.

For nearly two years IRS intelligence agents have been probing the tax returns and financial affairs of persons suspected of being in the middle and upper echelon of the nation's narcotics traffic who have always pictured the Bureau of Narcotics and the Bureau of Customs as their chief enemies.

"They're inclined to look on tax investigations as a big joke," said an IRS intelligence official. "They don't realize what's coming up behind them."

What's coming up behind them is a corps of almost 400 intelligence agents thruout the nation. With the aid of other law enforcement organizations, including local police departments, they have identified nearly 2,000 "targets" in the drug traffic for tax investigations.

The program was kicked off in August, 1971. More than 700 suspects are now under active investigation. As of March 31, $116 million in tax assessments was slapped on major narcotics traffickers. All resulted from IRS investigations; some in cooperation with other agencies.

Major narcotics dealers from the Great Lakes states to the Deep South have been sent to prison, not for trafficking in narcotics, but for evading taxes on the profits from their sordid trade.

Some, like Apolonio Rios of Chicago, have gone out of business. Rios was known to Chicago authorities as a multiple-kilo importer of heroin from Mexico. The bureau referred the case to the IRS, which quickly found he had failed to file any income tax returns. He was indicted and fled to Mexico, where he remains.

Willie Horton is one of the Chicago men heavily involved in narcotics traffic. In January, 1969, Horton sold narcotics to an informer for the federal narcotics agency, but before Horton went to trial the informant was murdered at 63d Street and Ashland Avenue.

Intelligence agents found the doors and windows barred on Horton's first floor apartment. They rang the door bell and to their surprise he answered it and, after they identified themselves, let them in.

"What are you after me for?" Willie wanted to know. Like so many others in the narcotics trade, he failed to identify IRS agents as a threat to his safety. He was friendly and talkative, and the conversation covered a wide range of subjects. A tax investigation disclosed that his girl friend had an expensive boat equipped with a ship-to-shore radio registered in her name. She swore that Horton bought it.

Willie was convicted of a crime he probably never heard of-falsely registering a radio in violation of federal regulations and was sentenced to 5 years' probation and fined $1,500. He still faces another charge of illegally taking a firearm across state lines. That is not illegal for everyone, but it is for Horton because he has a prior conviction as a narcotics violator.

Alex Beverly, a major narcotics figure on the West Side, managed to avoid the attention of IRS-intelligence until last Nov. 3, when he arrived at an apartment at 737 N. Central Ave. and announced to Chicago narcotics detectives: "This is my place. What's going on here?"

What had gone on was a raid by Chicago detectives who had to batter the door down with a sledge. Mrs. Vercie Lee Carter who lived there shot a detective. Police found marijuana, cocaine, and heroin there, as well as $13,500 in cash and a quantity of business records. The Chicago detectives notified IRS intelligence and agents went to the apartment. On the basis of the amount of cash found. they "terminated" Mrs. Carter's tax year and established tax assessments of $200.000.

The business records indicated two safe deposit boxes were held in an Oak Park bank. Agents got a court order and on April 19 opened the two boxes, which contained a total of $45,000 in cash.

Beverly, for claiming it was his apartment, was charged by Chicago police with possession of narcotics. However, Mrs. Carter is the target of the tax investigation. The IRS is now holding $58,500 of her money. Or Beverly's money, depending on how you look at it. Mrs. Carter may be thrifty, but she was, after all, on welfare and it would have been rather difficult to save that much.

"We hurt 'em where it hurts most-in the pocketbook," says IRS intelligence. "When we start getting a lot of flak from their lawyers, we know they're hurt and scared."

The IRS has arrangements with local police departments conducting investigations of illegal activities such as narcotics and gambling. When the departments come across large amounts of cash or records of illegal activity they notify the IRS.

It can terminate an individual's tax year on the date the cash is seized, and make an assessment for the year, up to the date of the seizure. The assessment goes to the IRS collection division, which presents the individual with the assessment and demand for payment.

If the individual wishes, he can get a trial in Tax Court, and if the case goes against him he can appeal thru the federal courts all the way to the Supreme Court.

Early termination of a tax year, which the average taxpayer seldom encounters, is one of IRS' strongest weapons in narcotics cases.

The value of cooperation between agencies and the effectiveness of IRS civil sanctions was emphasized recently when the Bureau of Customs had two informants who identified two men as responsible for smuggling most of the pure heroin into this country from France.

The two men fled from New York City before they could be aprehended. Italian authorities located and arrested the men. There were 22 forcible attempts to free the two prisoners and Italian authorities moved the prisoners to 15 different locations. They were eventually brought to the United States along with $22,000 which had been seized when they were arrested. The men were held in lieu of $250,000 bail each.

The Boston office of customs notified IRS and a special agent prepared a computation which resulted in jeopardy assessments against them of about $6 million. The $22,000 was seized and the prisoners were then released on bail of $500,000 presented in the form of a bond of an insurance company.

An IRS special agent then served a levy of $500,000 on the insurance company for the collateral given by the defendants' attorney.

With its authority to seize assets, including homes and cars, and to levy on bank accounts to satisfy tax liabilities, the IRS is, in some ways, the most powerful arm of the government.

The biggies in the narcotics racket have been finding it out. Instead of driving Cadillacs and Continentals they've taken to driving old cars.

[From the Chicago Tribune, May 31, 1973]

AGENTS FIND TAX CHEATS COME FROM ALL WALKS OF LIFE

(By George Bliss and John R. Thomson)

Ninety-seven percent of all income taxes collected by the government is paid voluntarily. Enforcement activities of the Internal Revenue Service account for the other 3 percent.

Th IRS intelligence division is, in the words of one agent, "responsible for everything from the corner grocery to the bank president if there is a suspicion of fraud."

Clifford Blount, who is in prison now, is as unlikely a tax cheat as you might find. He is armless. He operated a tax preparation service on the South Side, and IRS intelligence knows him well.

Blount was one of a dozen or so persons arrested in Chicago for preparing false returns in March, when tax preparation time got exceptionally busy.

Blount managed it by creating phony deductions to boost the size of refund checks, which he appropriated after the government mailed the checks to addresses he controlled.

Wardell Dalcour built up a clientele in the Taylor Homes, and took one-fourth to one-half of refund checks which were inflated by phony exemptions, particularly the number of children he claimed for his clients. He's in prison now, too. "Taxes are a mystery to most blacks and Spanish-speaking people in the United States," said an IRS official. "When they find a man who gives the appearance of knowing something, they'll follow his instructions to the letter."

The preparers of phony returns are not limited to men practicing business in the ghetto areas with clients who are largely laborers or unskilled workers.

A certified public accountant with a nationwide clientele was arrested, and his partner surrendered before he too could be arrested, for preparing amended returns for prior years with phony deductions. They dealt with corporation executives.

The sad thing about it, and particularly for people on the lower rungs of the economy ladder, is that the taxpayer personally is responsible for the tax return