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In the 1980s, while Scalise and Rachel sat moldering in UK cells, the FBI finally turned the tide in its war against the Outfit. Operation Strawman uncovered the Chicago Mob’s secret ownership of Las Vegas casinos and an elaborate scheme to skim cash from the counting rooms. Tony Accardo escaped prosecution, but some of his top bosses, including Angelo LaPietra, were convicted in 1986 and sent to prison.
While a successful government prosecution was bad news for everyone in the Outfit, LaPietra’s fate didn’t engender much sympathy. “LaPietra was not a pleasant guy to most people,” says Wagner. “And like all bosses from that era, he had his tricks for getting back the money he paid to his crews.” For example, according to Mob lawyer Bob Cooley, LaPietra would force soldiers and Mob associates to join his Italian social club and then shake them down for contributions to his bogus charities.
Even more devastating for the Outfit than Operation Strawman was Operation Gambat (for “Gambling Attorney”). For three and a half years, Cooley wore a wire on his contacts at all levels in the Outfit, as well as on their political pawns. Over the course of eight trials from 1991 to 1997, his tapes and testimony convicted not only mobsters but also Fred Roti, then Chicago’s longest-serving alderman; Illinois state senator John D’Arco Jr.; and Thomas J. Maloney, the only judge in United States history ever convicted of fixing murder cases.
With little clout left in the courts, says Wagner, “the hit men weren’t going to put bodies in trunks anymore.” The city of Chicago, which had reported thousands of Mob killings before 1989, has had just a handful since.
During this period, FBI agents in Chicago were becoming increasingly successful in getting foot soldiers to flip. One obvious reason was that stool pigeons were now less likely to be executed by Mob hit men. But another was the growing resentment of the way the Outfit’s bosses were treating the foot soldiers. With the success of federal investigations like Strawman and Gambat, the Outfit had fewer cushy government jobs and less cash to give them, says Wagner.
One of the disaffected wise guys was “the other Jerry.” In 1988, O’Rourke confronted Scarpelli with evidence of gun violations that could have put him away for 15 years. Over the course of several hours, Scarpelli gushed forth with one of the most remarkable confessions in the history of the FBI. He named people who he said were involved in some of the Outfit’s most infamous unsolved murders and robberies, Scalise among them.
Scarpelli “was tired of the life he was living,” O’Rourke recalls, “and felt he had been screwed over by the bosses”—being denied permission to rob and being forced to take on an Outfit partner in his bookmaking operation who cheated him. Scarpelli’s understanding was that his statements would not be made public, O’Rourke says.
But in the spring of 1989, while Scarpelli was still locked up in Chicago’s Metropolitan Correctional Center, surrounded by other mobsters, a judge ruled that O’Rourke’s report on Scarpelli’s confession could be made public. Later that day Scarpelli was found dead on the floor of a prison shower room, reportedly having hanged himself with a rope of plastic bags. Any federal case based on his confession died with him.
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In 1992, when Scalise and Rachel were finally released from the British prison, they returned to a Chicago Mob in full retreat. Due to the Gambat convictions, more of the old bosses were shuffling off to prison. The Outfit’s sphere of influence in the criminal world had shrunk to mainly illegal gambling. Given the much slimmer pickings, the Mob’s old foot soldiers were mostly left to fend for themselves. But the Outfit was no longer taxing them on everything they stole.
O’Rourke, who continued to keep tabs on Scalise, was surprised to find him moving into a ritzy townhouse on the Near West Side that he had bought and rehabbed with his father. (Rachel settled in the townhouse next door.) “When I saw that,” O’Rourke says, “I figured that he must have squirreled away the money from that jewel theft.”
Or he simply had new plans to get income flowing. For Scalise was soon back to “his way”—this time going after the supposedly easy money in cocaine. When a cross-Atlantic drug transaction fell through, according to O’Rourke, he pursued other deals closer to home. In 1998, Scalise walked into the middle of a DEA sting and wound up pleading guilty to intent to distribute cocaine. For that crime he served six and a half years.