Al Capone's business structure kept him from ever getting charged for bootlegging.

How tax laws helped the federal government catch mob bosses during Prohibition

The IRS arrested top mob bosses during Prohibition after the Supreme Court ruled illegally-made income could be taxed. The IRS's biggest catch was Al Capone, who was charged with tax evasion and sentenced to 11 years in prison. But Capone wasn't the only bootlegger the IRS nabbed for tax evasion during this era.

There's a myth that Al Capone coined the term 'money laundering,' or the process of disguising the criminal origins of illegally obtained money so it can be used without detection.

How the federal income tax affected Prohibition

In the early 1900s, 30% to 40% of government tax revenue came from liquor, wine, and beer, a reliance that made Prohibition seem like a fiscal impossibility. But the passage of the federal income tax in 1913 changed the calculus, which helped allow the government to ban alcohol production and sales.

The federal government allowed toxic chemicals into alcohol during Prohibition

Industrial alcohol was still legal during Prohibition, and was often used by bootleggers. In an attempt to disrupt the black market, the government required toxic additives to be included in industrial alcohol, leading to more than one death.

A group of daring bootleggers created NASCAR

When Prohibition made alcohol illegal in 1920, it didn’t stop Americans from making and consuming it. The law drove the practice underground. Runners risked their lives to deliver moonshine and began racing among themselves.

The St. Valentine's Day massacre is still unsolved

On Feb. 14, 1929, several men believed to be working for Chicago gangster George "Bugs" Moran, an enemy of notorious mobster Al Capone, were killed by several gunmen dressed as police. No one was ever brought to trial for the murders.

Largely considered to be the inspiration for Gordon Gekko in the movie 'Wall Street,' Ivan Boesky was one of the most high-profile white-collar criminals and faced a $100M fine for insider trading in 1986.

JP Morgan Jr. once angered the nation with his zero-dollar tax bill

In the aftermath of the Great Depression, Congress learned that Morgan and his banking partners had avoided paying any federal income tax in 1931 and 1932. By claiming their losses in the stock market, they seemingly erased what they owed.

Why ‘Shoeless Joe’ Jackson was banned from Major League Baseball

Few baseball stars are more infamous than "Shoeless Joe" Jackson, one of the game's greatest hitters. Jackson was part of the Chicago White Sox team (notoriously dubbed the "Black Sox") accused of fixing the 1919 World Series. This resource breaks down the criminal trial that investigated those allegations. Curiously, Jackson and his teammates were acquitted, but Major League Baseball commissioner Judge Kenesaw Mountain Landis still banned them from the league for life.

In the 1920s, Prohibition helped cement tipping norms in the US

During Prohibition, restaurants lost significant revenue, given that they could no longer legally serve customers high-margin alcohol. As a result, many of these restaurants leaned more heavily on tips to ease the financial pressure of paying employees.

How Prohibition changed beer

This historical survey from The Beer Connoisseur explores the breweries that survived the government's ban on alcohol production. The common denominator? They all pivoted their business models.

Often dubbed the 'king of bank robbers,' George Leonidas Leslie stole an estimated $7M (equivalent to $200M today) and charged other criminals a $20K fee to evaluate their heist plans

Leslie studied architecture and used blueprints of safes and banks to execute meticulously planned bank heists across the Northeast between 1869 and 1878. Although Leslie was an infamous bank robber by night, he posed as a member of high society by day, providing critical intel on the institutions he'd rob and helping conceal his crimes. Months before his largest planned heist, where he planned to turn on his gang, Leslie's body mysteriously washed up along the Hudson River. His killer remains a mystery.

Meet a government agent who laundered millions of dollars for Pablo Escobar.

Anheuser-Busch sold half of its real estate holdings to survive Prohibition

The Budweiser parent company also created and sold out more than 25 different nonalcoholic products during this time, including but not limited to infant formula, frozen eggs, and specialized coffees and teas.

In 1931-32, JP Morgan Jr. paid no income taxes due to his company’s losses

This legally reduced his taxable income under existing laws. Similarly, the Rockefellers leveraged charitable foundations to minimize taxes, allowing them to preserve wealth while directing funds to their preferred causes.

The 1919 Chicago White Sox, later known as the 'Black Sox,' were banned from baseball for fixing that year's World Series despite being acquitted in court.

Created in 1862, the IRS has a scandalous history

From Al Capone's tax evasion to corruption and bribery within the IRS, the government agency has had its fair share of scandals. This article details many of them, outlining corruption that reveals this seemingly boring agency as anything but.

After her arrest, a technicality made it harder for Holiday to perform

The Cabaret Identification Card was required for all performers in New York nightclubs that served liquor. After her arrest and yearlong imprisonment, the New York Police Department revoked Billie Holiday's card, making it extremely difficult for her to earn money. The video features contemporary jazz musician Christian McBride breaking down the history of cabaret cards and how the ban affected Holiday.

Get to know the five families that ran the NYC mafia

In the 1900s, there were five families in New York City who dominated the crime scene. These five families organized expansive criminal operations—ranging from prostitution and price extortion to money laundering—and have inspired stories like "The Godfather."

How organized crime took over post-Soviet Russia

After more than seven decades of Soviet communism, the collapse of the system in the early 1990s opened a path for organized crime to take over the country's newly-privatized industries. As Vladimir Putin centralized power in the subsequent decades, he did not vanquish the mafia, but rather tamed it. This long read explores the subtle, complex ways organized crime flourishes within Putin's state.

Georgia inmate pulls off $11M heist—from inside his cell

Prisoner Arthur Lee Cofield Jr., 31, allegedly impersonated Sidney Kimmel, the uber-wealthy chairman and CEO of a Los Angeles entertainment company, with the help of contraband cell phones from inside his prison cell.

Robber barons, the monopolistic business people of the 19th century, explained

“Robber baron” was a term used to describe 19th-century businesspeople who engaged in monopolistic business practices and didn’t face much business regulation, resulting in significant wealth.

Cocainenomics

How did Pablo Escobar rise up out of the Medellin barrios to become the CEO of a $4 billion business? This immersive look at the global drug trade spawned by the notorious drug lord, who at his peak controlled 80% of the cocaine supply in the US. This deep dive includes visualizations showing how logistics of drug smuggling evolved over the years and traces the economic impact of the industry.

Known as the 'Pecora Hearings,' the widely covered trials following the stock market crash of 1929 generated massive public outrage that forced Congress to impose stricter regulations on Wall Street.

Cartoonist Thomas Nast helped bring down Boss Tweed, one of America's most corrupt political bosses.

Fugazi refused to make merchandise, but that didn't stop bootleggers

The band—formed by members of Minor Threat and Rites of Spring—was known for its innovative post-hardcore music and its high-minded ethics: They released albums themselves through the Dischord label, ensured all shows were $5 all-ages affairs, and refused to make merchandise to avoid commodifying their art. That didn’t stop bootleggers.

The namesake of the Ponzi Scheme, Charles Ponzi made an estimated $15M from running a fake international arbitrage scheme in the 1920s.

Lack of regulation makes cryptocurrency a hotbed for money laundering.

The FBI investigated John Steinbeck, believing he might be a communist.

A Chinese-Mexican alliance marked one of history's largest nonviolent money laundering schemes

In 2019, Chinese-American gangster Xizhi Li was arrested for an expansive money laundering scheme spanning four continents. Li reportedly laundered hundreds of millions of dollars for cartel members, wealthy Chinese Americans, and other foreign countries.

Tesla's lack of business savvy and inability to commercialize led to his obscurity

For decades, despite pioneering technologies for large-scale electrical systems and telecommunications, Nikola Tesla had been forgotten to history. Rather than monetizing his work and becoming more well known, his inventor-first mentality saw him sell off lucrative patents to fund new experiments in the short term.

August A. Busch, Sr. was gifted a six-horse Clydesdale hitch to celebrate Prohibition’s end

This helped reveal the marketing power of a horse-drawn beer wagon, so it invested in a second six-horse Clydesdale hitch. The Clydesdales soon went to New York, where they drew a crowd of thousands en route to the Empire State Building. Anheuser-Busch even gifted a case of Budweiser to New York Governor Alfred E. Smith in thanks for his help in the fight against Prohibition.

Read a profile of Ferdinand Pecora, the lawyer behind the colorful, extensive investigations into the stock market crash of 1929.

Purchasing art is a common money laundering technique

Art is easy to transport internationally, susceptible to price inflation, and usually paid for with cash, making it a frequently used money laundering tactic. Additionally, loose regulations surrounding art transactions allow buyers to remain anonymous, adding an additional layer of ease for people trying to launder money.

Half of the richest people in the US are finding ways around death taxes

One of the main purposes of the federal estate tax is to crack down on generational wealth, so wealth isn't concentrated among a select few. However, the ultra-rich have found ways around paying these taxes. This ProPublica article investigates the practices used by half of the 100 richest people in the US to avoid death taxes.

Learn about loopholes in the American tax code, which involve everything from cat food to death to heavy machinery.

Monopoly was based on the satirical Landlord's Game, which criticized the abilities Monopoly rewarded.

During Prohibition, Pabst Brewing Company switched from brewing its Blue Ribbon beer to making cheese.

There's a legal loophole behind California Champagne

In the late 19th century, sparkling wine production took root in California before France began the fight to own the term “Champagne.” Many American winemakers already used it for easy recognition. The battle continued for over a century before reaching an agreement in 2005, stipulating that American sparkling wine couldn’t be labeled as Champagne unless the producer was already calling it such.

A former financial crime investigator says Hollywood has done a pretty good job depicting money laundering

A former financial crime investigator says "Narcos" and "Ozark" have pretty realistic scenes, but other well-known financial crime depictions like "The Wolf of Wall Street" are off base. Some of the main inconsistencies include overly dramatic gunfights and unrealistic cash amounts.

Although payola was made illegal in 1960, it likely continued on the Billboard charts through the '70s

In his book “Uncharted Territory: What Numbers Tell Us about the Biggest Hit Songs and Ourselves,” music journalist Chris Dalla Riva argues that payola, the music industry term for undisclosed paid publicity, likely continued into the 1970s with the Billboard chart. Dalla Riva cites chart irregularities and reports about Bill Wardlow, Billboard’s then director of sales, who was a known booster for disco label Casablanca Records.

After an estimated $8B in customer funds were lost through a cryptocurrency scheme likened to a Ponzi scheme, FTX founder Sam Bankman-Fried was sentenced to 25 years in prison.

After Bernie Madoff's nearly $65B Ponzi scheme was exposed, the Securities and Exchange Commission was widely criticized for being inattentive and overly lax for not having caught the fraud earlier.

Congress banned banks from paying checking account interest for 80 years

Known as "Regulation Q," the act sought to stop bank competition for customers involving increasing interest rates in the 1930s. This competition led banks to make reckless investment decisions to pay higher interest rates. During the ban, banks competed by focusing on convenience (ATMs, branches), relying on fees, and building relationships.

Racketeering is broad term for running an illegal scheme

Racketeering itself isn't a single crime and prosecutors tend to think about racketeering as a pattern of criminal activities, including kidnapping and money laundering. The term comes from the Racketeer Influenced and Corrupt Organizations Act, known as RICO.

How the government caught Billie Holiday

Louis McKay—who was Holiday's manager and abusive husband—worked with the Federal Bureau of Narcotics to ensure Holiday was caught with drugs. She was eventually put on trial and sentenced to a year in prison, where she briefly got sober.

Art theft is the third-largest source of criminal revenues worldwide.

Despite functioning as guarantors for people who can't make bail, courts rarely require bond companies to cover the full forfeiture of unmet release conditions.

Successful art thieves run into the problem of having a painting too famous to sell

This potentially explains why some robbers hold onto these pieces for years, even decades. Security experts say no reputable art dealers, or even black-market dealers, are willing to sell stolen works by famous artists like Van Gogh or Modigliani.

The 13th Amendment's criminal exception enabled new forms of forced labor

Southern states exploited the amendment's clause allowing slavery "as punishment for crime" to arrest thousands of Black Americans on minor charges, leasing them to private employers through convict labor systems that persisted for decades.