 |
| Map with photo from Liberty Magazine, May 1931. |
How different would South Orange County and North San Diego
County be today if Al Capone had owned much of that land in the form of the
massive Rancho Santa Margarita? It could have happened.
The Rancho Santa Margarita, was granted by Governor Juan
Bautista Alvarado of Alta California in 1841 to Andrés
Pico and his brother, Pio Pico who would later serve as the last Governor of Alta
California under Mexican rule. It was one of the largest land grants in Southern
California. Three years later the Picos were also
granted the adjacent Rancho Las Flores, and the name of the combined properties
became Rancho Santa Margarita y Las Flores. This land today makes up Marine
Corps Base Camp Pendleton in San Diego County.
 |
| Andrés & Pio Pico. Image of Andrés (left) circa 1875, courtesy California State Library. Image of Pio Pico courtesy Bowers Museum. |
In 1864 Pio Pico’s brother-in-law, Englishman-turned-Californio
Juan Forster, paid $14,000 and assumed all of Pico’s
gambling debt in exchange for ownership of Rancho Santa Margarita y Las
Flores. [i] Forster had lived in what remained of Mission San Juan
Capistrano for twenty years. He already owned the Rancho Mission Viejo
and the Rancho Trabuco which today include the cities of Rancho Santa Margarita
and Mission Viejo, the community of Coto de Caza, part of San Clemente, Caspers
Wilderness Park, O’Neill Regional Park, a large swath of the Santa Ana
Mountains, and all the remaining land of the modern Rancho Mission Viejo Company. [ii] Forster also held land patents on Potrero de la Ciénega, Potrero
el Cariso, and Potrero Los Pinos. He
added his new rancho to his existing ones, combining them into one enormous
Rancho Santa Margarita.
 |
| Key ranchos that made up the "supersized" Rancho Santa Margarita." (Map by author) |
After Forster’s death in 1882, the
combined ranch was sold to James Flood – “The King of the Comstock Lode.” In 1906
the Floods gave half ownership to their ranch manager, Richard O’Neill. [iii]
After the deaths of James Flood and Jerome O’Neill (Richard’s
son and successor) only a couple months apart in 1926, it was unclear what
would happen to the ranch. Would the estate administrator subdivide it, sell it
off as one block of land, or find another way to dispose of it? The fate of the
property sat in limbo.
 |
| (L to R) Juan Forster, James Flood, and Richard O'Neill, Sr. |
But one of the few men in America wealthy enough to buy that
much land would get his first look at it soon.
The infamous Alphonse “Al” Capone (a.k.a.
“Scarface”) was the head of the crime syndicate known as the Outfit. This Chicago-based
mob was involved in everything from gambling to protection rackets to brothels.
But its focus and income rested on the bootlegging of liquor. Trying to build and
maintain a near monopoly on alcohol during Prohibition meant years of “Beer Wars,”
bombings, and assassinations between rival gangs. Capone ruled Chicago the way
modern drug cartels rule Mexico.
 |
| Alphonse Gabriel "Al" Capone, 1929 |
In November 1927, Capone thwarted
a well-organized attempt on his life by a rival gangster. Soon after, Chicago
Mayor and would-be Republican presidential nominee Big Bill Thompson told
Capone to leave town so he could claim he finally had control of the city. [iv]
Meanwhile, the press continued their almost daily narrative of Capone’s evil doings
(both real and imagined) as America’s best-known criminal kingpin.
At the beginning of December, Capone
told the press he was leaving for St. Petersburg, Florida and didn’t know if he
was coming back. “Let the worthy citizens of Chicago get their liquor the best
way they can. I’m sick of the job. It’s a thankless one and full of grief.” He
described himself as a misunderstood public benefactor and mused about what the
city would be like once he left. “I guess the murder will stop,” he said.
“There won’t be any more booze. You won’t be able to find a crap game even, let
alone a roulette wheel or a faro game… The coppers won’t have to lay all the
gang murders on me now. Maybe they’ll find a new hero for the headlines. It
would be a shame, wouldn’t it, if while I was away they would forget about me
and find a new gangland chief?”
On December 6th Capone and
two of his bodyguards got on a train for Southern California, not Florida. It
was a trip, he later said, just to see the sights. “This is just a pleasure
trip, and I'm just a peaceful tourist." [v]
 |
| San Diego's business district, late 1920s. |
Newspapers reported that Capone had
barely arrived in Los Angeles when he got on another train heading south, spending
December 9th visiting San Diego and supposedly the races and
bullfights in Tijuana. He had plenty of time to admire the Rancho Santa
Margarita from the windows. The stories also mentioned that he was accompanied
not only by his bodyguards, but also his “wife” on this excursion. [vi]
(Capone’s actual wife of nine years, Mae, had not come with him to California.)
Capone later confirmed that he’d been to San Diego that week. “I had a fine
time,” he said of his trip, “…especially in San Diego where lots of people invited
me to visit them.” [vii]
No evidence has thus far been
unearthed that Capone actually got as far south as Tijuana, suggesting that San
Diego was the focus of his trip. [viii]
The press never stated how Capone spent his time in San Diego, which may
suggest that he was not out “seeing the sights,” where he would have been easily
recognized.
 |
| Marion Karvelis, from her naturalization papers, circa 1937. |
On the way back up to Los Angeles,
on December 10th, Capone again passed through the massive Rancho Santa Margarita and stopped
in San Juan Capistrano. He added his signature to Mission San Juan Capistrano’s
guest register that day: “Al Capone, Chicago.” This signature closely matches other
confirmed autographs of the gangster. The next signature, immediately under Capone’s
in the register, is that of Marion Karvelis of Chicago[ix],
– a 23-year-old, blonde vaudeville dancer who worked in several Chicago-area nightclubs
owned by or connected to Capone and his brother. [x]
It’s likely Karvelis was the woman the press had mistaken for Mrs. Capone the
day before. [xi]
 |
Above: Confirmed Capone signature from a 1923 check. (Courtesty MyAlCaponeMuseum.com)
Below: Signatures of Capone and Karvelis in the Mission Guest Register, Dec. 10, 1927 (Courtesy Mission San Juan Capistrano Museum) |
According to Los Angeles Times
columnist Harry Carr [xii],
Capone visited the Mission’s historic and newly restored Serra Chapel with a “companion”
and tried to buy one of the Stations of the Cross paintings from the padres.
"You'd better put a price on
it," Karvelis told a shocked priest. "When my friend decides he wants
a thing, he gets it."[xiii]
 |
| Serra Chapel with paintings still on walls. (Photo by author) |
At that time, the only priests at
the Mission were the ailing Fr. St. John O’Sullivan – who’d restored the Mission,
made its swallows famous, and inspired the restoration of the rest of California’s
Spanish Missions – and his brother, Fr. Anthony O’Sullivan, who’d been sent to
assist him. [xiv]
The notion of Capone and Karvelis facing off against either of these
clergymen is strange indeed.
 |
| Fr. St. John O'Sullivan (1874-1933) |
As for the stations of the cross, all
but one of the fourteen paintings in this series were brought to the Mission
from Mexico sometime between the 1780s and early 1800s.[xv] The twelfth painting went missing early
in the Mission’s history and had later been replaced with a larger version of the
same scene. [xvi]
It is unknown which scene of the Passion of Christ most appealed to the gangster.
In any case, Capone didn’t get the
painting. He did, however, have another good long opportunity to admire the
surrounding ranch land.
 |
| Roughhouse Brown, L.A. Evening Express, Jan. 31, 1930 |
Capone and his entourage returned
to Los Angeles, checked into the Biltmore Hotel, and quickly found themselves under
heightened scrutiny by the local press and law enforcement. On December 13th,
Capone and his two associates were escorted by police detectives to the Los
Angeles Santa Fe Railroad station and were placed on a train back to Chicago.
Notoriously thugish Los Angeles Police Department (LAPD) Detective Edward D. "Roughhouse"
Brown [xvii]
was the unwelcome chaperone in charge of making sure Capone and his men left
California, pronto. [xviii]
"I just came here for a
little rest," Capone protested. "We are tourists and I thought you
people liked tourists."[xix]
As they put him aboard the train, he continued, “I have a lot of money to spend
that I made in Chicago. Whoever heard of anybody being run out of Los Angeles
that had money? I’m all burned up, but you can’t keep me away…"[xx]
 |
| The San Juan Capistrano train depot - just steps from the Mission. (Courtesy OCA) |
After what the press dubbed his “brief
excursion among the orange juice stands of southern California, [xxi]"
Capone resolved that Los Angeles was the "wrong town" for him. But he
said he liked the countryside and that he intended to return to Southern
California. "...I like the country. I'm coming back pretty soon. …When I
get a little business done in Chicago, I'm going to send out a lot of money
here and have some real estate man buy me a large house. Then I'll be a taxpayer
and they can't send me away. Anyway, when the real estate men find out I've got
money they won't let me go, even if I want to."[xxii]
After a time, Capone began looking
for a real estate broker who could not only handle a transaction as large as
the purchase of the Rancho Santa Margarita, but who’d also be discreet about the
identity of his client. At that point, Capone’s only other significant foray
into buying property outside the Chicago area was in St. Petersburg, Florida during
the mid-1920s. He and fellow mobsters Jake Guzik and Johnny Torrio (Capone’s
mentor) were the silent partners in the deal while their general partner,
Florida real estate broker Robert Vanella, arranged to purchase a good deal of
land with little fuss. [xxiii]
[xxiv]
California wouldn’t be so easy.
“Heads of a local real estate firm
are said to have reported three men representing themselves as agents of Capone
recently offered $200,000 for an option on the [Santa Margarita] ranch… and attempted
to rush the deal...” reported the Associated Press.[xxv]
The trio would not disclose the intended use of the land, but said that “Capone
has a desire to live in California and wants to buy the land before authorities
prevent him, as they did in Santa Barbara.”[xxvi]
 |
| Ed Fletcher, circa 1935 (MSS 81, Special Collections, UC San Diego) |
Within a year or so of his visit,
it seems Capone quietly retained Col. Edward "Ed" Fletcher to facilitate
his acquisition of the Rancho Santa Margarita.
Fletcher was a prominent San Diego
real estate broker, land developer, civic leader, and a central figure in the
early development of the county’s water resources and highways. A mover-and-shaker
in the county’s Republican Party, he would later serve as a California State
Senator. Fletcher’s real estate clients were generally rich men from outside the
San Diego area who provided financing while leaving the logistics to him. [xxvii]
In early July 1929 Fletcher launched
and then led a long and successful campaign to have the tax assessment on the
San Diego County portion of the Rancho Santa Margarita raised dramatically. [xxviii]
This would make the sale of the ranch significantly more appealing to its owners.
Fletcher’s client seemed to have many alternate forms of income – to say
nothing of potential ways to dodge taxes altogether. But true ranchers held
most of their wealth in their land and could little afford major increases in
their property tax.
Just days after the opening salvo
in his tax fight, Fletcher told the San Diego Board of Supervisors (and by extension,
the press) that the ranch should be "offered for sale for $10,000,000 on reasonable
terms... I can sell the property at that figure in a few months, charging only
the usual commission."[xxix]
The Board agreed that the assessment
should be raised by $700,000. [xxx]
 |
| A younger portrait of Charles S. Hardy. (Smyth, 1913) |
From the start, Charles S. Hardy, the
manager of the Rancho Santa Margarita, was the primary opponent to increases in
the ranch’s assessed value.
For over forty years, Hardy had been
among the leading political, commercial and civic figures in San Diego County. He'd
come to San Diego in 1881, managing cattle interests for a butchering company
before opening his own market in 1882, followed by his own meat packing business.
For many years he had a near monopoly on meat within the county, earning him a
fortune. [xxxi]
“Charles S. Hardy understands the
cattle business in every one of its innumerable details from the running,
feeding and fattening of the animals on the ranch to the slaughtering, curing
and selling in the city markets” wrote William Smyth in his 1913 treatise on
San Diego and Imperial counties. “He has been one of the greatest individual forces
in the development and progress of cattle raising and selling in San Diego
county and from prominence in one line of occupation has expanded his interests
to include the broader phases of municipal, commercial and political growth. He
was born in Martinez, Contra Costa county, California, and is the son of Isaac
Hardy, who came to the state in the early [18]50s."[xxxii]
Hardy “was a power in [Republican]
politics in San Diego from 1886 to 1909,” the Los Angeles Times later
recalled, “though he never held public office."[xxxiii]
The Fresno Republican referred to him as having been an "old time
political boss… His influence was felt, not only in San Diego County, where he
was influential in the construction of the first highways, but was extended throughout
the state, especially while J. N. Gillett was governor [1907-1911]."[xxxiv]
(In 1930 Hardy would sell his Bay City Market and presumably his associated meat
packing plant, for over a million dollars while still retaining another
$500,000-worth of local property for himself.)
Hardy had long been a close friend
and business associate of the O’Neills[xxxv]
and was still among the best-connected men and savviest businessmen in the region
when Jerome O’Neill died in 1926. The Santa Margarita’s heirs called upon Hardy
to take over as ranch manager and he accepted. Little did he realize that his
greatest challenge in the job would be facing off against his fellow Republican
politico and roads advocate, Col. Ed Fletcher.
In response to Fletcher’s initial
claims about the ranch’s tax valuation, Hardy said that the ranch's assessed
value had long been set far too high. The Board of Supervisors ignored
Hardy, but he would continue to fight for the lowering of the ranch's taxes
until literally his dying day.
On June 30, 1930, Fletcher wrote a
letter to Hardy which read, in part,
I have been informed that offers
are being considered for the Santa Margarita Ranch.
I have a client who has authorized
me to make a definite offer of $10,500,000 for the Ranch including the holdings
outside the ranch, stock, personal property and crops.
This offer is $100,000 as option money
for ninety days from date, $1,900,000 within ninety days from expiration of
option with a trust deed at that time and deferred payments as follows:
$1,500,000 within two years thereafter;
$1,500,000 in four years, $1,500,000 in six years, $2,000,000 in eight years;
$2,000,000 in ten years with a reasonable release clause, taxes to be pro-rated,
possession to be given when the two million is paid…
If you will make a reasonable discount
for all cash, it is possible I can put thru a cash transaction.
I would appreciate a reply within
one week from date.
Hardy's reply, on July 7, was
cautiously worded. It read, in part,
In view of many circumstances well
known and not necessarily to be recounted, I cannot believe your letter to be
bona fide, but I lay that on one side and reply as though it were.
It is my opinion that the owners
of the Ranch (who speak for themselves) do not desire to sell the same, but if it
can command the price named by you their disposition might well be expected to be
otherwise; but even if they desired to sell, they would not (in my opinion)
consider any proposal made on behalf of an undisclosed principal.
If (a) you will name your client;
and if (b) he is fully able to carry through the purchase of the ranch at the
price named by you; and (c) to pay therefore in cash; and if (d) the offer
seems the property and without ulterior purpose, I feel certain that the owners
of the ranch (who, as I stated speak for themselves) will entertain the proposal,
and be quite willing to sell.
The owners, however (so I think)
will not give any option and will not string out payments on purchase price at
all, and certainly not to the unreasonable lengths named by you.
If your client (upon his identity being
disclosed) should seem to be abundantly responsible and beyond all doubt able
to finance the purchase, the owners might be willing to accept half the
purchase price in cash and leave the balance for a reasonable time secured by
deed of trust, without any release clause.
 |
| Cattle ranching in south Orange County. (Courtesy OCA) |
Fletcher responded on July 8th:
My dear Mr. Hardy:
Answering your insulting letter of
July seventh, will say, my client made a bona fide offer, a reasonable
proposition with a reasonable payment of option money and reasonable payments of
principal, considering financial conditions today.
In fact, the terms of sale are
better than the average sales made last year of real estate in San Diego
County.
I question your sincerity and desire
to sell under any conditions.
I was simply working for the usual
commission in the sale of a piece of real estate. I have been working on this
prospect for months.
I have never been able to get, at
any time, a price from the owners of the Santa Margarita Ranch at which they
are willing to sell.
My client made you a legitimate
business-like offer. There was absolutely no ulterior purpose thought of.
If the owners or you as their
representative will agree to sell the property mentioned in my letter of the thirtieth
for $10,500,000, 25% cash, 25% in two years and the balance in six and you pay
me the usual commission for putting the deal over with 6% on the deferred
payments and a reasonable release clause, you to retain the ownership of the stock
during the two-year period until 50% has been paid, any monies taken in for the
sale of stock to be applied on payment of principal.
I believe a plan can be worked out
along these lines that will be mutually satisfactory and acceptable to my
client.
If you can give me something
definite to work on I would appreciate it and can give you a definite answer one
way or the other within ten days from date.
To Hardy’s irritation, Fletcher still
would not reveal the name of his client. But Fletcher continued to move ahead
as though a deal was possible. In October, Fletcher was still gathering as much
information on the ranch as he could find, hoping to broker its sale to his
"mystery client."
 |
| Capone was at the height of his celebrity in 1930, when Time Magazine featured him on their cover. |
Notable among Fletcher’s papers is
his underlining of paragraphs citing the ease of transportation from the coast,
the many areas of the ranch that lent themselves to the landing of commercial and
private aircraft, the idyllic conditions for building luxury estates in
outlying "rural sections," and the ranch’s direct link to the Roosevelt
Highway (Pacific Coast Highway) which led to both Canada and Mexico. [xxxvi]
If, as it seems, Fletcher was
fully aware of the identity of his client, it was not in keeping with his image
as a “booster” who wanted the best for San Diego County. However, a sizable
commission on a $10.5 million transaction (more than $188 million in 2023 dollars)
and the favor of one of America’s richest men were incentives that would have
been hard to ignore.
Meanwhile, the people of Orange
and San Diego Counties seemed largely oblivious to the whole situation or at
least weren’t taking stories about Capone’s California ventures very seriously.
On Nov. 2, 1930, the Santa Ana
Register ran a front-page editorial promoting a local "dry"
candidate in the impending election. Ironically, it included the following
line: "If William Randolph Hearst, the outstanding leader of the 'wet'
forces,… and Scarface Al Capone of the Chicago gangsters and all who follow in
their train were in Orange County next Tuesday, there would not be one of them
vote for Harry C. Westover for District Attorney..."[xxxvii]
Little did they know that Capone was indeed already packing his bags for
another trip to Southern California.
Capone returned in Los Angeles
under an assumed name on November 9th. The LAPD knew he was in the
area, but admitted they didn’t know exactly where. Capone reportedly hung
around Los Angeles for about a week and then was seen in Santa Barbara and finally
Hollywood. [xxxviii] Rumors
later circulated that Capone had been offered a million dollars by a movie
studio to appear in a film, but he said there was “no deal on for a picture.” [xxxix]
Famed humorist Will Rogers observed, "They say Al
Capone is here in Los Angeles. Guess he is figuring on opening a western branch
here. This branch idea has just got this country by the nape of the neck. Now it
looks like the little home talent bootlegger who lived among us, raised his family
and paid his taxes, is to go the way of the local banker and little grocery
man. There is no chance for personal initiative any more; we are all just a cog
in a big machine that's controlled from New York or Chicago."[xl]
 |
| Al Capone, 1931. |
Meanwhile, Ed Fletcher continued his
efforts on Capone’s behalf. Like Hardy, Hugh Evans & Company – the Los
Angeles investment realty firm which had an exclusive brokerage contract on the
Rancho – also demanded the identity of Fletcher’s client before they would do any
business with him. In a letter to Fletcher on Nov. 20, 1930, the very cordial Walter
D. Smyth of Hugh Evans & Co. wrote:
"...To avoid confusion or duplication
of effort, we ask that you register with the writer the names of such
prospective purchasers as you wish regarded as your clients. We feel a deal of
this magnitude calls for frank cooperation -- and ‘all our cards on the table.’
Even if we have had prior contact with your clients, (proof of which is subject
to your demand), we shall be only too glad to permit you to represent them
wherein the contract you have surpasses ours."
By Nov. 20th, there were rumors in San Francisco
that Capone had come up to the Bay Area on business and that he was “was planning
a palatial home in the millionaire colony of Montecito” near Santa Barbara, “and
that several reputed henchmen were looking over possible sites for a 'winter estate.'" [xli]
While playing horseshoes at another ranch somewhere in
Southern California on November 23rd, Capone entertained reporters.
He’d given up all pretense of hiding his identity, but was still cagey.
"Don't make public where this ranch is located," he told them. Among
other things, he told the newsmen that he planned to buy some California real
estate. Capone sightings had been reported in both Santa Barbara and Hollywood in
the prior week. [xlii]
In late January 1931, the LAPD made
the shocking but rather undetailed revelation that agents for Capone had been trying
to buy the Rancho Santa Margarita. [xliii]
In the Los Angeles Times, Orange County historian and former Santa Ana Register publisher Terry E.
Stephenson wrote, “The fact that the old ranch has thirty-five miles of coast
line where bootleg booze could be landed in secret may not have escaped the innocent
gang Napoleon.” [xliv]
 |
| Map from L.A. Times profile on local rum-running operations. Aug. 8, 1926 |
In fact, this lightly patrolled section of the coast was
already an extremely popular landing spot for rum running boats from Mexico [xlv] or from large smuggling ships anchored several miles out in international waters. There
was not much the authorities could do about it. This contraband was headed for
Los Angeles or other cities. Most of the locals’ supply in southern Orange
County was actually booze stolen from these shipments. [xlvi]
Throughout Prohibition, the closest
thing Southern California had to a “mob” directing bootlegging was a consortium
of the LAPD, politicians, prosecutors and criminals like rumrunner Tony Cornero.[xlvii]
But this consortium wasn’t nearly as powerful or far-reaching as Capone’s Outfit
or the New York mob. Most Southern California bootleggers were just “individuals
trying to bring in extra cash,” writes Southern California organized crime
historian Richard Warner. “Most of the big bootleggers worked together or
respected [each other’s] territories.” [xlviii]
 |
| Boat wrecked at Salt Creek Beach during attempted night delivery of 200 cases of whiskey, 1932. (Courtesy First American Title Co.) |
Historian Pamela Hallan-Gibson related
that deliveries of contraband liquor were hidden in a variety of spots on or
near the Rancho Santa Margarita, including under the sand of dry creek beds and
what’s now the Del Obispo St. bridge over Trabuco Creek. “Once a local found
some hooch hidden on the Santa Margarita Ranch property,” she wrote. “Instead of
stealing it all, he took what he needed, one bottle at a time. The owners [of
the booze], who were not locals, discovered the theft and didn’t take too
kindly to it. They confronted the thief with machine guns and persuaded him
that it would be unhealthy for him to take any more.”
 |
| Orange County Sheriff Sam Jernigan and his men dump confiscated hootch down manholes at the County's Fruit Street Yard, Santa Ana, Mar. 32. 1932. WCTU representatives look on. (Courtesy OCA) |
In another incident, a hunter traversing
the brush near San Onofre stumbled upon a well-dressed man with the top of his
head shot off. The unfortunate man was clutching a shotgun with one expended shell,
had a fake license in his pocket, and had been dead about a month. Officers
believed he’d been killed by the rum runners known to use the coast near San
Onofre and San Mateo Creek.
[xlix]
As a base of operations for bootlegging and other criminal
activities, the ranch was comfortably remote, yet conveniently located. It was
within easy reach of boats from Mexico and a relatively short drive from Los
Angeles. And if things got hot, it was a short run to the border.
 |
| Map of Rancho Santa Margarita with Capone, Los Angeles Times, Mar. 22, 1931 |
Stephenson described the ranch as “so vast that Al Capone
could drop his beloved city of Chicago in the middle of it and all around would
be a wide fringe of cactus and sagebrush in which coyotes and wildcats roam and
in which Capone could put machine guns enough to hold off all the police in the
world.” [l]
In a May1931 article in the
national Liberty magazine, well-known
writer Homer Croy brought much more public attention the LAPD’s claim. He playfully
mixed Chicago mob cliches with old “romance of the ranchos” cliches. And he cheekily
added that Capone wanted to move to Southern California because Chicago winters
wreaked havoc on his “delicate throat” and because his 17-room Florida home was
too small.
Others mused that Capone may have wanted to retire from his
life of crime.
"In the old days robber chieftains often retired... to
placidity under the shadow of a country mansion," wrote one Iowa newspaper
editor. "Will we, do you suppose, yet see the underworld king of Chicago
living out a life of peace on a somnolent country estate?"[li]
Echoing that thought, the gangster’s grandniece, author and
family historian Deirdre Capone writes, “My grandfather Ralph and my Uncle Al
were looking at ranches but not for landing his boats. They wanted out of the
liquor business and were looking at the movie industry and raising horses.”[lii]
 |
| Mission San Juan Capistrano, circa late 1920s (Courtesy OCA) |
But the prevailing belief was that Al Capone was still up to
no good, and the possibility of having him as a neighbor generated a lot of agitation
and discussion in San Juan Capistrano – located in the heart of the ranch. Citizens
were afraid that their sleepy mission town might become the site of gangster
shootouts. Some of the war veterans in the area semi-secretly formed an armed “committee
of vigilance” and made plans to snipe Scarface from the hilltops. [liii]
San Juan Capistrano in 1931 was struggling, like most
communities, with the effects of the Great Depression. But agriculture provided
most residents with at least some employment, which provided a bit of a buffer.
Small town life rolled along. The popular story of the swallows' annual return was
newly in circulation, community sports teams were popular, there was buzz about
a nearby lost gold mine, the crops got some decent rain on them, elections were
held for the Sanitary District board, and a new high school gym was under construction.
Life was pretty good in sunny San Juan Capistrano, and the residents wanted to
keep it that way. While there was certainly some demand for liquor in the town,
most was stolen in small amounts from bootleggers, not brought in and sold by
organized crime. Townsfolk were happy enough to see local rumrunners busted, like Henry D. Nidiffer, who was found with twenty-four
pints of whiskey in his Capistrano apartment. [liv]
The idea of a big-time criminal like Capone in their midst was an outrage.
 |
| Oceanside, 1930s (Courtesy Pomona Public Library) |
By contrast, the response from the town of Oceanside – on the
rancho’s southern border – was quite different. Croy’s article was “interesting
from a fiction point of view," opined the Oceanside Blade-Tribune,
"and incidentally carries some good publicity for this section, as the
[accompanying] map shows the San Luis Rey Mission and shows Oceanside's
relative position to the rancho." [lv]
Shortly after Croy’s article hit the newsstands, Hardy –
echoing his correspondence with Fletcher – publicly denied reports that Capone
had already purchased the property. [lvi] [lvii]
“Whoever buys this ranch, if it is ever sold, will have to
show who he is and what he is going to do with it,” Hardy told reporters. “The
owners of this property realize their obligations to California. Al Capone could
not buy it if he had the necessary money."[lviii]
But then Hardy went on to deny that the gangster had even
shown an interest in the ranch, calling such stories “bosh.” [lix]
 |
| Al Capone, circa 1935 (FBI photo) |
“I am positive,” Hardy said, “that neither Capone nor any of
his men nor anyone representing him has ever made any overtures to purchase the
holdings. I doubt very much that any of the Chicago gangsters ever heard of the
ranch, much less started an attempt to purchase it.” [lx]
In a 1977 Register article, retired Orange County
Sheriff’s Department Investigator Dan Rios – who was in San Juan Capistrano in early
1930s – said Capone’s attempted purchase of the rancho “was a fact” that had
been hushed up. Capone, Rios said, was “pretty subtle about his move and he had
an agency helping him to buy the ranch. But it came out anyway.” Rios said the
O’Neill and Flood families, at the time of the attempted purchase, only dealt
with agents and never knew who was actually making these bids to buy the ranch. [lxi]
The attempted purchase died aborning, although reports
varied as to why. Columnist
Harry Carr thought it was San Juan’s vigilantes who scared off Capone and ended
his "yen to be a California hacendado."[lxii]
Deputy Rios thought Capone was pushed out because “the syndicate
in Hollywood which ran the bootlegging operations along the coast didn’t want
the competition… The Los Angeles police rumored to be involved with the local
syndicate blocked the deal. After the smoke cleared, several officers left in a
hurry for Mexico.”
 |
| James "Two-Gun" Davis served as Chief of the LAPD from 1926 to 1929 and 1933 to 1939. (Courtesy Los Angeles Public Library) |
Indeed, if anyone could have forcibly
put a stop to a West Coast expansion by Capone, it would have been the LAPD and
their criminal allies. [lxiii]
But ultimately, Capone’s dreams of
ranch ownership were dashed, along with the rest of his plans, when he was
indicted on charges of income tax evasion and violating the Volstead Act
(i.e., Prohibition) in June of 1931. In late
November he was given an eleven-year sentence, which – combined with his
declining health – effectively ended his criminal career.
 |
| Al Capone, 1931 (Chicago Detective Bureau photo) |
Even with Capone behind bars, the story of his interest in the
ranch lived on. Robert E. Neeley of the IRS was put in charge of finding the
gangster’s hidden stashes of loot, from coast to coast. Neeley incorrectly told
the press that in addition to Capone’s property in Chicago, Miami, and Wisconsin,
he also owned “the huge Santa Margarita Ranch, including thirty-five miles of
ocean front between Los Angeles and San Diego…” [lxiv]
Neeley’s confusion was understandable. Capone’s financial
transactions were intentionally murky. Internal Revenue Agent W.C. Hodgins,
who’d originally led the team investigating Capone, wrote a letter to his
superiors earlier in 1931, emphasizing the near impossibility of cracking
Capone’s shrewd and secretive dealings to determine what the kingpin actually
owned. “Al Capone never had a bank account and only on one occasion could it be
found where he ever endorsed a check, all of his financial transactions being
made in currency,” wrote Hodgins. “Agents were unable to find where he had ever
purchased any securities, therefore, any evidence secured had to be developed
through the testimony of associates or others, which, through fear of personal
injury, or loyalty, was most difficult to obtain.” [lxv]
For some years, not much changed. Cattle
continued grazing in the hills of the Rancho Santa Margarita. Capone sat in his
cell. And a bit of smuggling continued on the remote beaches even after the 1933
repeal of prohibition. Booze from Mexico, sans tariffs, remained profitable.
 |
| Cattle on Rancho Santa Margarita (Calif. Historical Society Collection, USC Libraries) |
Perhaps tellingly, Ed Fletcher’s fervent
interest in defending and further promoting the raising of property taxes on
the Rancho Santa Margarita seemed to fade dramatically just as Capone went to
prison. After more than two years of taking every opportunity to promote this
cause, Fletcher seems to have dropped the subject entirely – his last minor effort
being made as one among many witnesses at a September 1931 trial regarding the accuracy
of the ranch’s assessed value.[lxvi]
By the late 1930s, the Floods and their kin, the Baumgartners,
still wanted to sell the ranch, but the O’Neills wanted to keep it.[lxvii]
So in 1939, they split up the ranch, setting its fate once and for all. The Floods
and Baumgartners got the southern portion –
the old Rancho Santa Margarita y las Flores – which the Federal government acquired
only a few years later to create Camp Pendleton. The O’Neill family got the
northern portion, to which they applied the old historic name of Rancho Mission
Viejo.
 |
| 9th Marine Regiment marches into the new Camp Pendleton, Sept. 1942 (Dept. of Defense photo) |
Rumors of Capone’s attempted purchase of the ranch continued
to circulate for over ninety years, primarily fueled by Croy’s feature article.
Most, including most historians, doubted the tale because little convincing
evidence had yet been uncovered, much less arranged in such a way as to establish a potentially convincing chain of events.
 |
| Sensationalized "true crime" magazine, 1931. |
Adding more reason for skepticism,
seemingly every corner of North America – from Amityville, New York to Baja
California – invented its own stories about Capone having a secret home,
business venture or hideout nearby. For instance, Capone supposedly worked as an
honest bookkeeper in Baltimore before leaving for Chicago to work for his mob mentor,
Johnny Torrio.[lxviii]
Another false account had Capone owning a home in Cuba. Even Moose Jaw,
Saskatchewan developed a myth in the 1990s that tunnels under their town were once
the backbone of major criminal operations overseen by Capone himself.[lxix]
When the veracity of the Moose Jaw story was questioned, tunnels were quickly
dug to feed the tourist trade, solidifying Capone as the town’s new mascot.[lxx]
[lxxi]
The difference between these many
myths and the Rancho Santa Margarita story is that actual evidence has now been
identified that Capone made a serious effort to acquire the rancho. [lxxii]
Ultimately, however, neither the machinations of Chicago’s malevolent
“Beer King,” nor the punitive taxes promoted by Ed Fletcher would have their
intended effect. [lxxiii] The
southern portion of the rancho became Camp Pendleton and the northern portion paid
off as part of the biggest Southern California racket of all: real estate.
 |
| Grading land for housing tracts, Mission Viejo area, 1985. (Courtesy OCA) |
Having avoided becoming part of Capone’s alcohol-fueled
empire of vice, much of the ranch was developed, beginning in the mid-1960s, into master-planned communities
the City of Mission Viejo, the City of Rancho Santa Margarita, Las Flores, and Ladera Ranch. The developer was
the Mission Viejo Company, which by then was a division of tobacco company
Phillip Morris and operated – ironically enough – under the auspices of their
Miller Brewing Co.
--- --- ---
Acknowledgements:
Over the twelve years of my periodically picking away at
this article, I’ve had a lot of help from others who provided good leads,
suggestions, background information, insights, constructive criticism, and access to important
materials. My thanks to Tony Moiso and Emmy Lou Jolly-Vann of the Rancho Mission
Viejo, to Camp Pendleton Historian Faye A. Jonason, to historian Richard
Warner, to (now retired) California State Parks historian Jim Newland, to Jan Siegel of the San Juan Capistrano Historical Society, to Karen
Wall of the Orange County Public Library, to museum curator Jennifer Ring of
Mission San Juan Capistrano, to author/historian Pamela Hallan-Gibson, and to archivist
Fr. William Krekelberg and his successor Fr. Chris Heath of the Diocese of
Orange. And even greater thanks and love to fellow Orange County historians Stephanie
George, Eric Plunkett, and the late great Jim Sleeper and Phil Brigandi.
[i] “Don Juan Forster,” San Juan Capistrano Historical Society website. Apr. 13, 2021. Accessed 1/14/2023.
[ii] Forster
also owned the smaller Potrero Los Pinos in Orange County’s mountains, and the
Potrero El Cariso and Potrero De La Cienega in Riverside County.
[iii] Stephenson,
Shirley E. John J. Baumgarner, Jr.:
Reflections of a Scion of the Rancho Santa Margarita, California State University
Fullerton Oral History Program, 1982.
[iv]
Schoenberg, Robert J. Mr Capone, William Morrow & Co., Inc., 1992.
[v] "Chicago
Gangster in Los Angeles," United Press, Dec. 13, 1927
[vi] "Scarface
Al in San Diego," United Press, Dec. 10, 1927
[vii] "Scarface
Al Mighty Glad to be Home," United Press/Wisconsin State Journal, Dec. 17,
1927
[viii] Journalist
Maya Kroth went to Tijuana searching for proof that Capone had visited. The
closest she got was a book, Panorama Histórico de Baja California
(1982), in which Elena de la Paz de Barrón -- once a coat-check girl at the
Agua Caliente casino -- claimed Capone had tunnels under the resort for
smuggling liquor. But Kroth learned that the tunnels were for the resort's underground
water and electrical ducts,. (Kroth, Maya. “In Tijuana, Searching for Al
Capone,” Washington Post, 12-31-2014)
[ix] Mission Guest Register Feb. 28, 1927-Feb. 5, 1934, Mission
San Juan Capistrano (Corroborated by Carr, 1934)
[x] E-mail correspondence
to author from Karvelis’ relative and genealogist Bonny Albrecht, 2/26/2023. Albrecht
describes asking Marion’s sister, Stella Karvelis, about the friendship with
Capone. “My aunt Stella (would always change the subject) saying ‘Marion had many
friends and when a taxicab had taken her home early one morning after work and
had an accident and Marion was hospitalized the Marx Brothers sent her a large
fruit basket to the hospital.’ Marion lived with her parents and siblings in an
area of Chicago called Garden Homes, less than three miles from Capone’s house.
Capone, writes Albrecht, “would come to the Karvelis home and would sometimes play
baseball with the men living in Garden Homes or sometimes just send a car for
Marion. …Marion later worked at the Chez Paree Theater Restaurant / Nightclub
in Chicago with many headliners, including Bob Hope, Sophie Tucker,” and Fred
Astaire.” Also see Capone, Diane Patricia, Al Capone: Stories My Grandmother
Told Me, 2019, which describes Al’s wife, Mae, learning about a blonde Al
had been seeing. She retaliated by driving his new Cadillac into a building.
But then went and had her dark hair dyed blonde. The author wonders if the
blonde in question was Karvelis.
[xi] Marion Karvelis
– born Marianna S. Karwjalis in Latvia – would not become a U.S. citizen until
1937. (U.S. Naturalization Record Indexes, Northern District, Illinois,
1926-1979)
[xii] Carr got
some details wrong, including suggesting that the visit took place around 1931 or
1932.
[xiii] In correspondence
with the author via Ancestry.com on Jan. 28, 2023, Bonny Albrecht stated that “Marion
Karvelis was a friend of Al Capone.”
[xiv] The
Roman Catholic Diocese of Owensboro Kentucky, Turner Publishing Co., 1994
[xv] Early
California historian Eric Plunkett – Telephone conversation with the author, Feb.
11, 2023.
[xvii] Brown
became a local legend for throwing Capone out of Los Angeles. Brown was later
arrested and temporarily thrown off the force for extorting and accepting
bribes from bootleggers. (See "Roughhouse to Trial Again" Los
Angeles Evening Express, Jan. 31, 1930. Also "3 Ex-Cops Fate to Jury
Today," Los Angeles Evening Express, Nov. 18.1929)
[xviii] "Los
Angeles Fires Scarface Al," Associated Press, Dec. 13, 1927
[xix] "Request
Capone to Leave Los Angeles," United Press, Dec. 13, 1927
[xx] Daniell,
J. B. "Comment," Venice Evening Vanguard, Dec. 14, 1927
[xxi] "Chicago
Cops Await Return of Al Capone," United Press, Dec. 16, 1927
[xxii] "'Scarface
Al' Came to Play, Now Look --- He's Gone Away!," Los Angeles Times, Dec.
14, 1927
[xxiii] There’s
doubt as to whether Capone primarily wanted to secure a cut of the local
rackets in St. Petersburg, if his investment was made as a favor to Torrio (who
moved to the area), if it was just legitimate land speculation, or if it was a
way to launder money. In any case, Capone was only ever in St. Petersburg himself
once, for a few hours.
[xxiv] Michaels,
Will. "A New Look at Al Capone in St. Pete," Northeast Journal, (Part 1 and Part 2), 2015
[xxv] "Gangs
Said to Plan Big Dope Ring in L.A. Region," Sacramento Bee, Jan.
28.1931. (Note: Other newspaper
accounts cite the offer of a certified check for $50,000 rather than $200,000.)
[xxvi] “Capone Seeks to Buy Orange County
Ranch,” Santa Ana Register, Jan. 28, 1931.
[xxvii] "Biography,"
finding aid, Ed Fletcher Papers, San Diego State University Library Special
Collections
[xxviii] "Stormy
Meeting on Tax Matter." Daily Times-Advocate [Escondido], Jul. 10,
1929.
[xxix] “Sets
10 Million as Ranch Value." Daily Times-Advocate [Escondido], Jul.
15, 1929
[xxx] “Santa
Margarita Value is Raised." Daily Times-Advocate [Escondido], Jul.
16, 1929.
[xxxi] "South
of the Tehachapi." Los Angeles Times, Nov. 16, 1908
[xxxii] Smythe,
William Ellsworth. San Diego and Imperial Counties, California: A Record of
Settlement, Organization, Progress and Achievement, Vol. 2, S.J. Clarke Publishing
Co., New York, 1913
[xxxiii] "Heart
Attack Takes Rancher." Los Angeles Times, Jul. 14, 1931.
[xxxiv] "C.
S. Hardy, Meat Packer, Cattleman, Dies in San Diego." Fresno Morning Republican,
Jul. 14, 1931.
[xxxv] "Complete
Chronicle of One Day’s Doings South of the Tehachapi." Los Angeles
Times, May 10, 1910.
[xxxvi] "Rancho Santa Margarite Y Las Flores Rancho" (draft
prospectus), Allen & Company Realtors, Oct. 1930, Box 67, Folder 1, Ed Fletcher
Papers, San Diego State University Library Special Collections
[xxxvii] "The
Real Fight in Orange County," Santa Ana Register, Nov. 2, 1930
[xxxviii]
"Tracking Capone," Lebanon [Pennsylvania]
Semi-Weekly News, Nov. 13, 1930. (AP
story)
[xxxix] "Fitts
Threatens 'Al' But Gets Laugh from Chicago Gangster," Lubbock [Texas] Morning Avalanche,
March 31, 1931 (AP story)
[xl] Rogers,
Will. "Will Rogers Remarks," Los Angeles Times, Nov. 14, 1930
[xli] "Things
Wise and Otherwise by A.P.B.," Santa Maria Times, Nov. 22, 1930
[xlii]
"Capone Pitches Horseshoes, Chats with Reports About Surrendering," Decatur [Illinois] Evening Herald, Nov. 24, 1930. (United Press story)
[xliv]
Stephenson, T. E., “The Ranch Al Capone Wants to Buy.” Los Angeles Times, March 22, 1931.
[xlv] San Diego Union, June 9, 1968.
[xlvi] Hallan,
Pamela. Dos Cientos Anos en San Juan
Capistrano, Lehmann Publishing, 1975.
[xlvii] Holland, Gale. "A Bit of Digging Unearths Tales
of L.A. Bootlegging, Crooked Cops," Los
Angeles Times, Oct. 11, 2012.
[xlix] “Body
of Man is Found by Hunter,” Santa Ana Register,
Feb. 29, 1932.
[l] Oddly enough,
Al Capone’s estranged older brother, James, would have been a lot more at home
on a ranch than his Chicago brothers. James changed his name to Richard James
Hart, in honor of movie cowboy William S. Hart, and served as a lawman (and prohibition
agent!) in small towns and Indian reservations “out west.” He learned the
Indian languages, wore cowboy hats and western boots, and earned the nickname
“Two-Gun Hart” for his sharpshooting and his pearl-handled revolvers.
[li] "Gentleman
Gangsters," Ames [Iowa] Daily Tribune-Times, April 3, 1931.
[lii] Email
from Deirdre Capone to Chris Jepsen, May 2, 2011.
[liii] Carr,
Harry, “The Lancer.” Los Angeles Times,
July 24, 1932.
[liv] “County
Constables Arrest Seven in Liquor Raids,” Santa
Ana Register, July 20, 1931.
[lv] "Enters
Denial of Rancho Sale." Daily Times-Advocate [Escondido], June 8,
1931.
[lvi] Hardy
died less than two months later of a heart attack. He’d been the ranch manager
for six years. In announcing his death, the
Santa Ana Register (July 15, 1931) described Hardy thusly: “Ruggedly honest,
just in his dealing, he was the typical American who has won his way from poverty
to the millionaire class.” They cited Hardy’s insistence that newspapers
(nationwide) print his denial of the Capone ranch purchase as an example of his
dedication to the truth.
[lvii] "Capone
Deal Denied," Oakland [California]
Tribune, May 29, 1931.
[lviii] "Orange
County, Southland Mourns Death of Business Leader Charles S. Hardy," Santa Ana Register, July 15, 1931.
[lix] “Hardy
Denies Purchase of Margarita Ranch by Capone,…” San Diego Evening Tribune, May 28, 1931.
[lx] "Heavily
Armed Deputies Follow Trail in Search of Desperadoes Linked to
Kidnapping." Los Angeles Times,
January 29, 1931.
[lxi] Wulff,
Stan, “Capone’s Offer for Ranch in South Orange County Refused,” Register, January 2, 1977.
[lxiii] Warner,
Richard. Feb. 1, 2023
[lxiv] “New
Capone Search On,” Los Angeles Times,
June 8, 1931.
[lxv] Letter dated July 8, 1931, from Internal Revenue Agents W.C. Hodgins, Jacque L. Westrich,
and H.N. Clagett to the Internal Revenue Agent in Charge, Chicago, Illinois.
[lxvi] “Many
Are Heard in Rancho Action.” Weekly Times-Advocate [Escondido], Sept. 25, 1931
[lxvii]
Stephenson, Shirley E., pg 29.
[lxxii] Warner,
Richard. Email correspondence with author. Mar. 7, 2023. (A reference to the evidence uncovered by this article.)
[lxxiii]
Ironically, in the mid-twentieth century new property tax rules punishing
agriculture and promoting development all but forced the O’Neills to gradually
sell or develop much of the northern portion of the Rancho Santa Margarita.
