When Al Capone Tried to Buy the Rancho Santa Margarita

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 6^th 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 9^th 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 10^th, 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.

Two of the Serra Chapel's Stations of the Cross. (Photo by author)

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 13^th, 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]

Roughhouse Brown, L.A. Evening Express, Jan. 31, 1930

"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.

This photo of Charles S. Hardy appears in Ed Fletcher's memoirs.

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 9^th. 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. 20^th, 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 23^rd, 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.

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 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.

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[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 Mae went and had her dark hair dyed blonde. The author wonders if the unknown 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.

[xvi] Ring, Jennifer. "Station of the Cross XII: The Crucifixion Painting Conservation," Mission San Juan Capistrano blog, May 2013, Accessed Feb. 4, 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) LAPD Officer William J. "Sledgehammer" Jolin -- who was busted in the same bribery case and also had a track record of brutality -- claimed to have been Brown's partner in throwing Capone out of L.A. "We told Capone his vacation was over," Jolin recalled upon his retirement in 1944. "Al says, 'O.K., boys, let's go.' We walked him down to the station." (See "Policeman Who Ran Al Capone Out of City in 1929 to Retire," Los Angeles Times, May 12, 1944.) 

[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)

[xliii] “Gangs Said to Plan…”

[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.

[xlviii] Warner, Richard. Correspondence via Facebook Messenger with author. Feb. 1, 2023.

[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.

[lxii] Carr, 1932.

[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.

[lxviii] Feton, Justin. "Al Capone's Baltimore Ties," Baltimore Sun, Sept. 21, 2010. 

[lxix] Krauss, Clifford. "Did Al Capone have a Moose Jaw Hang Out?," New York Times, Nov. 18, 2004 

[lxx] Jensen, Philip. "Moose Jaw's Urban Legend," The Beaver, June-July 2001 

[lxxi] Walter, Ron. "Are the Tunnels from Moose Jaw’s Notorious History Real or Not?," Moose Jaw Today, Feb. 26, 2019. 

[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.