A Cautionary Tale of Crime, Corruption and Construction

It was back in the early sixties. JFK was still in the White House, Sam (Momo) Giancana was running the Chicago mob and Bobby Kennedy had every branch of the Federal Government crawling up his shorts with a flashlight.
The town of Northlake, Illinois was a pokey, little working class suburb to the west of Chicago. It still is. It’s the kind of place that, unless you lived within a few miles, you’ve probably never heard of it.
That was until this happened.
A real estate developer named William G. Riley thought he had an idea that would make him rich.
Swingles Apartments.
You stuff a bunch of crummy little one bedroom apartments into a two story building that looks like a motel. Then you build 30 or 40 of these around a common swimming pool and sell the individual buildings to investors looking for rental property. You make a load of bread up front and keep a piece of the action by managing the apartment complex.
He had already started his first one in Addison and had his eye on a spot for his second project, The King Arthur Apts., in Northlake. It was behind the cemetery, sandwiched between a railroad yard and a retention pond. In April of ’62 he sends his lawyer to meet to Northlake Mayor Henry Neri and Alderman Wayne Seidler about getting the necessary zoning changes. Neri tells him it’s gonna cost $70,000 ($100 per apartment) to grease the municipal wheels.
Riley was used to this kind of extortion. He was already being shaken down by his plumbing contractor on the Addison job. That contractor, Nick Palermo (Mob plumber), thought there was money to be made by riding on Riley’s coattails and to do this he enlisted the aid of Joseph (Joe Shine) Amabile.
Amabile was a midlevel mobster who ran some rackets out of his El Morocco Lounge, a night club on Lake Street in Northlake.
A couple of days later Palermo and Amabile meet with Mayor Neri and tell him that they are taking over the squeeze on Riley and that they could get him $40,000 for his people. Neri asked them for $10,000 good faith money to be delivered before the next Zoning board hearing.
Neri was used to this kind of deal. A year and a half earlier, his people, Alderman Seidler, Building Commissioner Pete Anderson, City Engineer Desoto McCabe, and Police Chief Dan Provenzano, along with Rocco Pranno, were shaking down the International Paper Company to the tune of $20,000 for the necessary permits to build a plant in Northlake.
Rocco Pranno was a Lieutenant in the Chicago mob. He was Momo’s no. 1 goto guy and he had personally been responsible for extending their jukebox and vending machine operations as far west as Elgin. He pretty much ran everything in Stone Park and Northlake and, technically, was Amabile’s boss.
Neri was glad that Amabile had horned in on the action. Pranno had stiffed him on the Int’l Paper payout and he was looking forward to some payback. A few weeks later, Pranno gets wind of the operation and confronts Neri at Alderman Seidler’s house. “You’re not gonna cut me out of this King Arthur deal coming up.” said Pranno. “I want a piece of the action. You cut me out of it and I’ll kill you.”. “I don’t need you anymore.” replied Neri. “Joe Shine is running the deal and Sam is backing him up. You’re all through in Northlake.”
Riley was called to a meeting Palermo’s Melrose Park Plumbing Co. office. There he was introduced to Amabile. Joe Shine informed him of the new arrangement and asked for an immediate payment of $30,000. A week later, Riley is called back and asked for the money. Riley poormouths them and says he can’t come up with it because the project is still in the planning stages. Riley repeats this statement at their next meeting as well.
The Northlake zoning board meeting was on May 28. Riley had not paid yet, so Amabile fronted for him and gave Ald. Seidler $5000 in cash. After the approval was granted at the meeting, later Seidler and Neri counted out 5 stacks of $500 and gave them to each of the five Zoning board members.
Riley was called to a fourth meeting with Palermo and Amabile, The builder again said he couldn’t come up with the money, Nick Palermo offered to make him understand with a baseball bat.
The zoning still needed to be approved by the city council and before the June City council meeting Ald. Seidler warned Amabile that Alderman Leo Shababy would vote against the change if he did not get some money in advance. Eventually, Neri, Siedler, Shababy, and Alderman Joseph Drozd agreed to approve the change and to withhold the building permits until they were paid. Ten days after the council meeting, Amabile fronted another $10,000. Neri, Siedler, Shababy, Drozd and Alderman Angelo Shay each took $1600 with the remainder split between Aldermen George Becker, Fred Bruns and Frank Kinsley.
After a few more meetings with Riley, Amabile made himself understood and in July, Riley ponied up the $30,000.
By September, the boys from city hall had still not seen the second half of the $40,000 they had been promised. Neri and Seidler went to Amabile to see when they would get paid. Joe Shine gave them another $4000 but Neri said that isn’t enough and asked if it would be easier for Riley to pay on an installment plan. Weekly payments of $100 each for Neri and Seidler, for eighty weeks. At about the same time, Riley complains to Amabile that he hasn’t been getting his permits from Northlake. “That’s because you still owe $40,000” said Amabile and tells him that the installment plan is $500 a week. On October 1st, Riley makes his first payment.
Evidently, this installment plan works out well for Riley. 1963 is a good year. He gets his permits in Northlake and they’re selling like hotcakes. His Addison project is fully rented. Things are good enough that he expands. First he tries to build in Palatine, but the zoning board refuses to give him a zoning change after an angry mob of residents object to the “spot zoning”. Undaunted by this, he starts a third “King Arthur Apts.” project in Westmont. Then, he and Joe Shine partner in a piece of property in Justice, IL. Amabile put up most of the $250,000 it cost and used his influence in the town to get it rezoned. When they sold it for $500,000, Amabile also took most of the money. Despite the fact that he was forced to use Palermo’s company on the Westmont project, business was good. By the end of the year he was shopping around for a fourth project.
For Sam Giancana, 1963 was not such a good year. In June the FBI puts him under 24hr surveillance. They were crawling all over him, in front of his house, at his church, cracking wise one hole behind him on the fairway. Things were so bad that he successfully sued J. Edgar Hoover to get some relief. The agents were enjoined to keep a respectful distance, but it did not stop the surveillance. Tony Accardo and the other big bosses, realizing that Giancana could not do his job with this kind of scrutiny, choose Sam (Teetz) Battaglia to manage the day to day business.
Battaglia was on old time mobster. He had come up with Momo since they were kids in the 42 gang that ran roughshod over Taylor St. in the ‘20s and '30s. He was on the same short list that put Giancana in power in the first place. He was, however, the stupidest man to ever run the Chicago mob.
Late in ’63, the IRS starts nosing around Northlake politics, tipped off by a reform minded city manager named James R. Donnelly. A former FBI agent, he had been appointed by a group of Coalition Party aldermen whose election had been backed by the Better Government Association. The first thing Donnelly did, after he got his coffee, was to contact a buddy of his. He had served with Lee Gehrke in Air Force Intelligence. Gehrke was now with the Chicago Police Intelligence Squad. By the end of July, Gehrke had arranged a leave of absence from the Chicago Police and Donnelly hired him to replace the former police chief Dan Provenzano whom he had just sacked.
Word got around city hall that Donnelly might be cooperating with the feds, and the city council acted fast. On the evening of March 10 1964 the city council voted 6-3 to fire Donnelly. Apparently some of the aldermen backed by the BGA had changed their position. The feds realized that the cat was out of the bag, and they acted even faster. The next day after the manager’s firing; the IRS announced its tax probe of the Northlake officials. The day after that, grand jury subpoenas were served on Rocco Pranno and several Northlake officials.
The Grand Jury investigating organized crime was run by United States Attorney Edward V. Hanrahan, an ambitious Chicago lawyer with high political hopes. This Grand jury would end up being the high point of his career. Six years later, all his political aspirations would be scuttled when he organizes the police raid that killed Black Panther leader Fred Hampton.
Gehrke realizes that without Donnelly backing him up he is pretty much powerless and the day after the subpoenas were issued, he resigns his post as the Northlake Chief of Police and returns to his job in Chicago.
In January of ’64, Riley hatches a grandiose scheme to build a “Dream City”. He wants to turn the small (and short lived) Village of Weston into a giant planned community and the 10th largest city in the state. It was shot down by the local residents when they realized that a large portion of it would be a trailer park. A couple of years later, the Village of Weston would vote itself out of existence when the AEC would buy the whole area to build Fermi Lab.
Unfazed by this set back, in April our developer finds the land for his fourth project. It is a 27 acre site in Lansing near Wentworth and 294. By June he has his plan together and asks a longtime employee named Dave Evans to be construction supervisor on the job. He tells Evans to start lining up subcontractors, but to keep the job secret from Amabile and Palermo. He says he can’t make a profit if the boys from Melrose Park horn in.
Evans makes a beeline to Amabile and, a couple of days later, Riley is once again summoned to Palermo’s office. Amabile and Palermo ask the developer when they are going to see the plans on the Lansing project. Riley tells them that Palermo is way behind on the other projects and that he has no intention of using him on this one. This time the mobsters mention that they know where his mother lives and that he “will be walking with a candy cane” (whatever that means). Riley acquiesces and agrees to give Palermo the plumbing contract.
A couple of days later Riley, still not suspecting that Evans is a mole, tells Evans that he needs to find a sewer contractor that is “foreign” to Joe Shine and Palermo.
Around the end of July, Amabile goes to Pranno’s D’or supper club in Stone Park and meets with Pranno and a buddy of Pranno’s named Mike DiVito. While discussing business, the topic of the Lansing squeeze arises and DiVito’s ears perk up. Divito, a sewer contractor by trade asks if there is any work for him in this project. Amabile says maybe but they can’t have DiVito’s name on the contract. After thinking about it for a couple of days, Amabile comes up with a plan. He calls Pranno and tells him that, if they can come up with a “good clean fellow” as a front, he can get them the sewer work in Lansing.
Pranno and Divito put their heads together and pick a guy named Henry LaKey. He had worked as a foreman in sewer construction, so he could talk the talk. More importantly he had a reasonably clean record. For $200 a week and 10% of the profits, Pranno and Divito hire him to be the president of a brand new company, Carlson Construction. In late August or early September, Pranno and DiVito meet with Amabile and Evans at Joe Shine’s Northlake apartment. They tell Amabile about LaKey and the new company and he tells them that they can have the contract if they give him $20,000 off the top. Evans had already drawn up a contract for the work, but when Divito reviewed it, he said there wasn’t enough for them to make a profit after Amabile’s 20 grand. Joe Shine had Evans tear up the contract and write a new one for $40,000 more.
The next time Riley asks Evans for a sewer contractor, Evans says, I got just the guy, Carlson Construction.
Pranno and DiVito give LaKey $13,000 seed money to cover the operating expenses of Carlson Construction and by October, their company is digging trenches at Lansing.
Amabile asks LaKey to do him a favor and to gravel some roads at a farm in Pingree Grove (west of Elgin). LaKey didn’t know at the time that this was Sam Battaglia’s horse farm. Amabile had been going out there on a regular basis. He’d been brownnosing, hoping to take Pranno’s job. While they are out there, Amabile points out LaKey to Teetz and says “This is the guy running the job for us in Lansing”. Within earshot of LaKey, they discuss the project. Battaglia asks why Evans is getting $7500. Amabile told him it was because Evans got them the job but that he would take care of it.
When Pranno hears that LaKey has been out to the farm, he goes ballistic. Pranno tries to slap LaKey but Amabile stops him. “I took him” he said, “The Man says he’s OK”. Pranno was right to be angry. Not only had Amabile co-opted his employee, he had taken a nobody to see “the man”. LaKey’s recollections would end up being the evidence that ties Battaglia to the conspiracy.
In November Amabile asks LaKey, to get the paperwork together for Carlson Construction’s first draw from Riley. On the way to have Evans approve the papers, Amabile tells LaKey that he is going to stiff Evans and only give him $5000 instead of the $7500 he was promised. Evans adjusts to numbers on LaKey’s paperwork to a total of $47,517 and Amabile hands Evans a “wad of bills”. On the 12th Carlson was paid out on the first draw. LaKey pockets $517, gives Pranno $8000 and Joe Shine his $20,000 and deposits the remaining $19,000 in the bank.
By January, Carlson Construction had burned through all the money and Amabile, LaKey, and Evans decided it was time for the second draw. This time it was for $48,512.48. But when LaKey took it to Riley’s comptroller, he refused to authorize the draw. Evans and LaKey went to Riley‘s office, entering separately to keep suspicion off of Evans, and confronted Riley. Riley said that Carlson’s suppliers had been complaining that they weren’t being paid and that he wasn’t going to give Carlson any more money until they got paid. When they informed Amabile about this development he told LaKey to come with him to Riley’s in the morning. When they got there Amabile walked straight past the staff and into Riley’s office. Not long after this heated discussion, LaKey deposited a check for $48,512.48.
After it had a chance to clear, Joe Shine told LaKey to draw out $17,000 and to bring it to him at his Northlake apartment. When LaKey got there, Amabile and a friend were entertaining a couple of girls. Amabile took the money and showed it around. Then he gave $5000 to LaKey and told him to take a vacation. LaKey gave a $1000 of it to Evans and went to Florida.
Meanwhile, Riley has had time to think, and one thing is painfully apparent. Evans has been selling him out. Riley fires him.
Immediately, LaKey is summoned back from Florida so that Amabile can chew him out. Amabile screams “You’re not paying Carlson’s bills.” and “You’re getting Dave Evans fired. You are taking my man right out of Riley's” LaKey shouts back that the reason that the bills aren’t paid is that Amabile has been bleeding the Carlson bank account dry.
This wasn’t entirely true. LaKey had been no slouch when it came to milking the Carlson Construction accounts. Since he started the job, he had bought his wife a full length mink coat, bought seven new cars and put a down payment on a house in Florida. The next day, he and Evans are crying in each others beers and LaKey asks Evans, why he doesn’t get out of the business. Evans replies, "I can't get out. I am in too deep with Joe Shine. I know too much about the other people.” LaKey realizes that he too is in the same boat and decides that his vacation in Florida was a real good idea. He heads down there and won’t come back for a couple of months.
Rocco Pranno wasn’t stupid. He and DiVito could see that the job was falling apart, but they are still in it to the tune of $5000. If they could just get their money back out, they could wash their hands of the whole thing, and put all the blame on Amabile, when it blows up. They try to get it back from LaKey, but he’s lying low in the sunshine state and they can’t find find him. They asked Amabile to find LaKey so that they can get their money back, but after several days of no results they tell Amabile that they are going to “the farm” to see “the man”.
So, it’s back out to Pingree Grove. This time Rocco would make a mistake and bring DiVito along as a witness. When they arrive, Amabile is already there, buttering up Battaglia. Eventually Pranno and Amabile end up in a shouting match in the kitchen that Teetz has to break up. “Joe Shine got us this job and then took Hank LaKey away from us” said Pranno, “ Now I can’t find Hank LaKey to get that $5000.” He also made a point of mentioning, at least twice, that there was supposed to be $20,000 for Battaglia in the Lansing job. He knew that this wasn’t the deal, but he couldn’t resist the opportunity to get Amabile in dutch with the man. It was a waste of time though, it just convinced Battaglia that Pranno was a whiney little twerp.
In June, Hanrahan’s grand jury would slap Giancana in jail. They had given him immunity for his testimony, but he still refused to talk. They charged him with contempt and put him in the county lockup. He would spend a year there and still not say anything. When he gets out he will officially retire and lay low in Mexico. This would solidify Teetz Battaglia’s position as the head of the Chicago outfit. By the end of July, Hanrahan realized that “Momo” wasn’t gonna talk, so he decides to shake the trees and throw around a few indictments. He charges Pranno, Northlake Mayor Henry Neri, and his cronies ex-alderman Seidler and ex-building commisioner Anderson as well as unindicted co-conspirators Drozd, McCabe and Provenzanno with shaking down the International Paper Company. This was considered a violation of the Hobbs Act, which made it a Federal crime to use extortion to interfere with interstate commerce. They also charged Mike DiVito with an unrelated income tax beef.
When he hears this, Riley just about freaks. Carlson Construction’s bills weren’t the the only thing that wasn’t getting paid. Riley hadn’t been completely honest when he filled out his tax returns. The IRS had been looking at his books since 1964 and they had been squeezing him pretty hard. Construction had come to a halt at Lansing. Banks, suppliers and investors are screaming at him. Now, indictments are raining down on the same crooks he has been doing business with. He’s stuck between the mob and a hard place and sees only one way out, to turn states evidence. In September, he takes a ride down to the Federal Building and says “this has been a nerve shattering experience for me sir”. They put him into protective custody.
In March of ’66, Pranno, Neri, Seidler and Anderson would stand trial before Judge Wm. J. Campbell, prosecuted by David Schippers and Sam Betar. The trial lasted a little over a week. Mayor Neri would have his charges dismissed. He had been lucky when Pranno cut him out of the deal. With no money trail, the prosecution failed to make their case against the Mayor. The rest had been found guilty. Pranno was sentenced to 15 years, Seidler to 5 years and Anderson to 3 years. Anderson would fail to show up on the day he was to start his sentence. He would turn himself in later after going on a three day bender.
Pranno and Seidler would Appeal their convictions. They contended that it was not a violation of the Hobbs Act because it was not extortion, but bribery. The appelate court didn’t see the humor in their appeal and ruled that extortion and bribery were not mutually exclusive concepts. Pranno would go to Leavenworth, Seidler would later get his sentence reduced to probation after testifying in a future trial.
With Pranno in jail, Battaglia give Amabile his job. Amabile would continue to be a screwup and Battaglia would regret their association for the rest of his life.
In February of 1967, a grand jury led by Schippers and Betar would indict Battaglia, Amabile, Palermo, Evans, Neri, Shababy and Drozd for Violations of the Hobbs act arrising from their extortion of William Riley.
They arrested most of them at their homes or offices but Battaglia was a little tougher. Around 2:00 am Teetz checked in from a roadside payphone and one of his lookouts at 25th Ave and Lake St. informed him that he had a tail. His driver took evasive action and led a chase that must have been the inspiration for the end of The Blues Brothers. Down North Ave at 90 miles an hour, picking up a dozen cars including Black and Whites from Schiller Park, Northlake and Melrose Park. The Feds along with the locals chased Teetz’ car on to the northwest tollway at a 100 miles an hour where they picked up several State Police cruisers. Eventually Battaglia gave up and pulled over on a side road outside Marengo.
The Indictments would be split into two trials, both before Judge Julius Hoffman.
First up in April, were Battaglia, Amabile and Evans for the shakedowns of Riley’s Lansing project. The trial would last about three weeks with Riley, LaKey and DiVito as the primary prosecution witnesses. All three defendants would be found guilty. Battaglia would be sentenced to 15 years, Amabile to 15 years and Evans to 10 years and a $5000 fine.
They too would appeal their convictions. For a variety of reasons, including the notion that it was not a violation of the Hobbs act because it did not involve interstate commerce. Their appeals were denied. Because Riley had purchased supplies from out of state manufacturers, it was determined that the interstate commerce requirement was satisfied.
In September, Amabile, Palermo, Neri, Shababy and Drozd were put on trial for their part in the permit/zoning squeeze of Riley’s Northlake project. This trial would last seven weeks. Riley and convicted ex-alderman Wayne Seidler would be the primary prosecution witnesses. All five defendants would be found guilty. Amabile and Palermo would be sentenced to 15 years and and a $10,000 fine, Neri to 12 years and $7500, Leo Shababy to 10 years and $5000,and Joe Drozd to 7 years and $5000. Judge Julius Hoffman, true to his reputation as the crabbiest man on the federal bench, called Neri “a sickening spectacle and said that they all were “dangerous to the community”. He also ordered them to pay the cost of their trial.
Amabile, Palermo, Neri and Shababy would appeal their convictions. Drozd would chose not to appeal and this would be a mistake.
This time the appeal went before the newly appointed Judge Otto Kerner Jr.. He would overturn Amabile’s second conviction as double jeopardy. Palermo, Neri and Shababy would get a mistrial. Hoffman’s refusal to question whether the jurors had read about the case in the papers was the grounds. They would be released on bond pending their new trial.
Kerner would come under scrutiny concerning a $50,000 stock transfer he received in 1969, immediately before he made this ruling. No connection was ever proved, but it wouldn’t make much difference. Before long, Kerner would have the dubious distinction of being Illinois’ first Governor to do time in the Federal pen. He would be found guilty of 17 counts stemming from bribery he accepted in the form of stocks while he was Governor.
Why would the mob blow fifty large just to shorten the sentence of a screwup like Amabile? They wouldn’t, but Nick Palermo was another story. Nick was the oldest brother of a close knit family. In 1961, his nephew married the youngest daughter of an influential man who had been a close personal friend of Nick's for over a decade. It was the mob wedding of the century. The father of the bride was Tony Accardo. I don’t imagine the “Big Tuna” would be happy about his baby girl driving her kids to Kansas on holidays, so they could visit “Uncle Nicky” in Leavenworth.
In 1971, before their case would come to trial, Palermo, Neri and Shababy would cut a deal with Assistant U.S. Attorney Samuel K. Skinner and Judge Frank McGarr. They would plead guilty and, in return, Shababy got time served and 3 years probation, Palermo and Neri each got 5 years, the remainder of which was to be served at the minimum security prison in Sandstone, Minnesota.
The town of Northlake would survive. They had voted most of the crooked polititians out in the ’63 election, before any of this became known. They sued to get rid of Neri and Shababy while they were waiting for their appeal. At the next election the town would vote in a decent mayor Gene Doyle. He would serve as mayor for nearly the all rest of his life. He would hire back Lee Gehrke (the Chicago cop that helped start the investigation) as police chief. He would serve with distinction for another 17 years, when he would quit in a labor dispute with Mayor Doyle.
The convicted politicians served their time and faded away. Henry Neri moved back to Northlake after his release and lived there in the same house he lived in when he was mayor. He died in 1997
The Mobsters pretty much dropped like flies. They let Battaglia out of prison in the summer of ’73 because he was dying of cancer. He died at St. Anne’s Hospital a week and a half later.
In 1974 a grand jury investigating organized crime, subpoenaed Sam Giancana and this time Mexico gave him up. After a year of stonewalling the grand jury, he was found in the basement kitchen of his Oak Park home with 6 shots from a .22 in his head.
Amabile died of cancer  in September of ’76. Pranno died in prison in July of ’79.
Nick Palermo would get out of prison and keep a low profile. He would show back up in 1978, when subpoenaed by a grand jury trying to tie Accardo to the torture murders of several burglars suspected of robbing Accardo’s home. Palermo would repay the $50,000 stock transfer by clamming up.
None of this would ever touch Tony Accardo. It probably did him a favor and got rid of a lot of dead wood on the west side. He died of congestive heart failure in a bed at St. Mary of Nazareth Hospital in the spring of ’92. He was 86.
The Apartments in Addison, Northlake and Westmont would all be built. They are still there and they are still crummy. The Lansing project would never get past a bunch of empty basements. They would sit there for years, an eyesore and a health hazard. Eventually someone else would tear them out and build something else.
And Riley? With the help of the witness protection program, he was in the wind. Throughout his testimony and interviews, he gave the impression that he was just a poor little lamb set upon by wolves. In reality he was a weasel of the first order and the feds knew it. While in protective custody, he had been indicted on felony theft charges for falsifying loan documents. He had been fudging the numbers on loan applications since his first project in Addison. He took that S&L for an extra $270,000 on his construction loan. In Lansing, he inflated the purchase price for the land from $140,000 to $756,000 and bribed a bank officer with $25,000 to put the loan through anyway. The fallout from this would be instrumental in the institution’s failure and subsequent liquidation by the FSLIC.
Riley was also running his own version of a Ponzi scheme. He had attracted investors with the notion of a 12% annual return. He was managing the finished apartments and would salt the investor’s income accounts to make them seem more profitable than they were. They would talk it up to the next batch of investors. The batch that put their money in Lansing, pretty much lost it all.
The mob weren’t the only ones after Riley. Bankers, investors, employees, neighbors, the FSLIC, they all got screwed and they all would have gladly waited in line for just a little piece of his hide.
Yes sir, a new identity was the best thing that could have happened to William G. Riley.



See also:
A cautionary tale redux
and:
bibliography

Paul K. Dickman