After three months the press ridiculed the government for its inability to arrest this member of the Capone organization. The Chicago Association of Commerce then offered a reward of $1,000.00 for information leading to his arrest but without results. United States Attorney Johnson requested our Unit to endeavor to locate Nitto and in October of 1930 I was directed by you to make an effort to apprehend Nitto. At my suggestion Special Agent Malone was ordered to proceed to Chicago to cooperate with me on that assignment. We found that Nitto's wife was driving a Ford auto with a Wisconsin license taken from a stolen auto. The auto with the Wisconsin license was located by Special Agent Malone and trailed to a large apartment building in Benwyn, Illinois. A room was rented across from the apartment and after several days of continuous surveillance by Special Agents Malone and Tessem, the apartment occupied by Nitto was located and it was found that he was home. We immediately called upon Chief Investigator P. F. Roche of the States Attorney's office for some deputies to assist in surrounding the apartment and Nitto was arrested on November 1, 1930. Nitto pleaded guilty in December 1930 and was sentenced to one year and six months in Leavenworth Penitentiary.
In February of 1931 Al Capone was tried in the District Court at Chicago, Illinois, on a charge of contempt of court, arising out of his failure to appear at Chicago, Illinois before the grand jury in February, 1929 in response to a federal grand jury subpoena served upon him at Miami, Florida. At the request of United States Attorney Johnson and Assistant United States Attorney Jacob Grossman, special agents of this Unit engaged on this case at Chicago and Miami cooperated with the Department of Justice in assisting in locating witnesses and securing evidence to establish the contempt. In January of 1931, United States Attorney Johnson and Special Agent in Charge Madden went to Miami and interviewed several witnesses with reference to this case. Special Agent Clarke of our Miami office cooperated by interviewing proposed witnesses at Miami, securing documentary evidence, and he also was a government witness when the case was prosecuted at Chicago. Capone was found guilty in the District Court and appealed to the Circuit Court of Appeals but upon his conviction in the income tax case the appeal was withdrawn.
The investigation established that the winter home of the taxpayer at Miami Beach, Dade County, Florida, was purchased by him in the name of his agent, Parker A. Henderson of Miami, in April 1928, and that it was deeded by Henderson to Mae Capone, wife of the taxpayer, on July 19, 1928. On October 10, 1931, the writer recommended (Exhibit No.165) that a jeopardy assessment be immediately made against the taxpayer and that liens be filed by the Collector of Internal Revenue in Florida in order to protect the interest of
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