Mob trial witness: Hoods squeezed me for 'street tax'

A federal informant testified Monday that he paid a hefty ''street tax'' to Chicago mobsters for permission to operate an adult bookstore while secretly gathering evidence against them as an FBI mole.

FBI mole William ''Red'' Wemette told Chicago's biggest mob trial in years that he got a sharp warning when he grumbled to a street-tax collector that he didn't see why he had to pay half his profits to the mob.

''He said he had nothing against me personally but I could have an accident, my building could burn down, all of these things,'' Wemette testified.

And he pointed to Joseph (Joey the Clown) Lombardo as the head of the Chicago Outfit's Grand Avenue street crew, whose permission he needed before he could open his Peeping Tom bookstore in Chicago's Old Town.

''I want you to look around the courtroom and see if you can point out the man you knew as Joseph Lombardo,'' prosecutor Mitchell A. Mars said.

''He just stood up,'' said Wemette, pointing to the grinning Lombardo.

Lombardo, 78, is one of five defendants charged with taking part in a racketeering conspiracy that included 18 organized crime murders as well as extortion, illegal gambling, loan sharking and assorted other offenses.

James Marcello, 75, Frank Calabrese, 70, Paul Schiro, 70, and retired Chicago police officer Anthony Doyle, 62, also are charged in the case.

Federal prosecutors say Lombardo, Marcello and Calabrese are major members of the Chicago Outfit -- the name of city's organized crime family.

All five defendants deny that they took part in any conspiracy or in any of the mob murders outlined in the eight-count indictment.

Wemette opened the adult bookstore business in 1974 and got out in 1988. He said that while he was in operation all the adult bookstores and gay bars in the neighborhood a mile north of downtown were paying street tax to mob extortionists. He said he split his profits fifty-fifty with a succession of collectors from the Grand Avenue street crew.

Wemette had testified at a previous mob trial and also played a role in the investigation of the October 1955 murders of three boys, John and Anton Schuessler and Bobby Peterson, which sent shock waves across Chicago. Kenneth Hansen, a horse trainer, was finally convicted in 1995.

Wemette told the latest trial that he frequently saw Lombardo and other members of the Chicago Outfit at a bail bond office near the city's former police headquarters on State Street.

He said a sign on the wall of the bail bond office referred to a loan from the Teamsters Central States Pension Fund.

Millions of dollars from the huge union pension fund were used to build Las Vegas casinos in the 1960s and authorities say much of the money found its way into the pockets of Chicago mob bosses.

Lombardo was convicted in federal court in Chicago in 1982 along with then International Brotherhood of Teamsters President Roy Lee Williams of conspiring to bribe then Sen. Howard Cannon, D-Nev. That trial and a subsequent one in Kansas City put a spotlight on misuse of pension money.

Earlier, the government's leadoff witness, Chicago Crime Commission President James Wagner, outlined for the jury the history of the Chicago Outfit, a criminal empire launched by Al Capone in the Roaring Twenties.

Asked on cross examination by Marcello attorney Joseph Lopez if the mob is smaller these days, Wagner said: ''If you mean made members I don't think that's changed in the least.''

He said ''made'' members of the mob are ones who have received special recognition and gone through a ceremony in which they take an oath to remain loyal to the mob for life.

Wagner said the mob rules by fear and that among the most fearsome of all mobsters are loan sharks who prey on gamblers who get into debt and can't go to a bank for a loan. He said threats are generally used when borrowers fail to pay, but things get worse if they persist.

''Ultimately their true collateral is their body and they understand that,'' said Wagner, who studied the Chicago Outfit for 25 years as an FBI agent specializing in organized crime.

Wrapping up opening statements Monday, attorney Ralph Meczyk brought an antique-looking yellow wooden trash wagon into the courtroom to illustrate what he claims former policeman Doyle was doing while prosecutors say he was acting as a loan shark under orders from Calabrese.

Meczyk said far from being a loan shark, Doyle was a street sweeper for the city Department of Streets and Sanitation, pushing such a wagon while collecting refuse with a broom and a dustpan.

''When this trial is over, I believe you're going to do this with this indictment,'' Meczyk said, tossing a copy of the indictment into the wagon.