Evening star., 1951-02-28
Crime Probers Doubt
Real Check Is Made on
Gangsier Tax Returns
CONTINUED From First Page. }

1IlC oCdIlQdl III tIlC ouIcdu VI
Internal Revenue in the California
area may partially explain why
even ordinary care was not used in
scrutinizing the tax returns Of
gamblers and gangsters.
Certain top officials of the In
ternal Revenue Bureau in that
area conceived the brilliant scheme
of selling stock which they owned
in a company that they controlled
to persons who were likely to have
trouble with their income taxes.
The stock was worthless. but its
purchase tended to purchase i'm
munity from a too-careful scrutiny
of income tax returns.
Many Returns Fraudulent.
"One wonders also whether
there was any relationship be-
tween the kind of return that
Harry Sackman filed for his gang
ster clients and the fact that he
took a member of the intelligence
unit of the Bureau of Internal
Revenue into full partnership with
him"
Mr.. Sackman was identified as
the individual who prepared tax
returns for Mickey Cohen, the
West Coast gambling figure. and
other California racketeers.
The committee found it ZAP
parent that many, if not all. OF
the returns submitted for the
gamblers and gangsters are
fraudulent" AS one of several
examples, the report cited gross
income of $14.845 reported for
1949 by Cohen. The report said
Cohen had borrowed" over $50
600 year since 1947. had not re-
ported "these so-called borrow
ings" as income and at least one
Gender" denied under oath max
Ing any loans" to Cohen.
Business without Records.
when it is remembered that
Cohen was the reputed head of a
boakmakers' association with al
most 500 members and is engaged
in other profitable rackets." the
report declared, cit is manifestly
apparent that he has ridiculously
understated his income for 1949."
The committee said it was bas-
ing it's report on testimony taken
in II cities from about 500 wit
nesses. To support its findings,
the committee either offered spe-
cific examples from the testimony
or said it's conclusions were ZAP
parent" from he evidence.
Describing it's 10-month inquiry
os "the most intensive investiga-
tion Of its kind ever attempted,
the committee promised its final
report will go further into several
aspects of interstate crime. Among
these, the report mentioned Malta,
the Sicilian BLACK Hand Society,""
The committee said it already had
a great deal Of testimony that
such a crime syndicate exists in
this country, that its members
have inter-related ties in various
criminal tivities and that these
are so co-ordinated that the Malta
is the adhesive between the major
crime indicates"
2 Major Crime Syndicates.
There is no doubt in the minds
of the members of the committee
that there do exist at least two
major crime syndicates," the COM
mittee declared.
'"There is one with an axis be-
tween Miami and the Capone syn
dicate now headed by Tony Ac-
cardo, the Fischetti brothers and
Jake Guzik. There is another
with an axis between New York
and Miami. headed by Frank Co.'S
tello and Joe Adonis. These axes
have branch lines that extend into
many cities and areas. and there
is apparently gentleman's agree
ment. if the operators of these
mobs can truthfully be called
gentlemen, not to infringe on the
activities of each other.
Between them there are con-
tact and liaison carried on by in
dividuals known to and trusted by
both, and if there can be said to
be one head who sits as an arbiter
Of any disputes between the two,
1t is Charles Lucky Luciano, who
is now in Italy. but who maintains
associations with both groups
through his former racket affili-
ates."
Gambling Leads Crime.
The committee declared that
gambling has supplanted prosti-
tuition and bootlegging as the
chief source of revenue for or
ganiZed crime.
The report said the committee
has found evidence of corruption
at all levels of Government.
Evidence of corruption of Federal
officials, the committee said, was
primarily in connection with en-
forcement of the income tax laws.
Evidence of corruption in State
and local governments, the report
added, is in these five forms:
Direct bribes or protection pay
ments to law enforcement officials
so they will not interfere with
specific criminal activities.
Political influence and pressure
of important officials OF political
leaders used to protect criminal
activities or further the interest
of the gangs.
Law enforcement officers found
with unusual or unexplained
wealth.
Directly Linked to Crime.
Law enforcement officers taking
part directly in the business of
organized crime.
Contributions to the campaign