Investigation of Ruby co-signing bank loans

Greg, this is a wonderful tidbit, thank you. I've been thinking something along these same lines - that the possibility exists that Ruby was actually being paid by the CIA. If that were the case... it's why I've been interested in Ruby and "counterfeit money".

From a banking standpoint, Ruby's ability to co-sign loans would depend on his credit at the bank, and so I would guess (just "off the cuff") that these loans probably preceded Ruby's troubles with the IRS.

And, it's also clear that Ruby had considerably more cash going through his hands, than he was reporting. The mere idea that he could stand in line at the bank with 7000 dollars in his hand, and then "not deposit it", ... is very suspicious. Definitely odd behavior, even on Preludin. Anyway, if he had some place to put the money "other than the bank", it might suggest we should be looking for some form of laundering mechanism.

Civello and the Campisis were the local laundry, correct? What do we know about them, in this context? Do we know anything about their bank dealings, and which banks they were using? I don't suppose any of them had accounts at Republic National?

Brian, short answer for  now. I don't think ruby's tax debt was real. I'm looking more at treasury Intel unit here. More later.

• Ruby's debt commenced when an attorney advised him that the Vegas Club was not a "cabaret" for IRS purposes and he therefore was not subject to federal excise. Ruby set his prices accordingly.
  
• No action was taken against the attorney for this advice, and no action was taken to appeal the IRS assessment.
  
• The debt was assessed at over 40k and accumulated between 1956 and 1962. 
  
• The IRS agreed to allow Ruby to pay the debt off and did not add any penalties - despite knowing Ruby was a bad risk given the parlous state of his accounting.  
  

The IRS definition of "cabaret"
Any roof garden, cabaret or other similar place which furnishes a public performance for profit, but not including a place where merely
live dramatic or musical arts performances are offered in conjunction with the serving or selling of food, refreshment or merchandise, so long as such serving or selling of food, refreshment or merchandise is merely incidental to such performances.


What is the definition of "incidental"?
 While petitioner's place of business constitutes a cabaret or "similar place" where a public performance is staged for profit, it must also be determined that petitioner's sales of refreshments are more than incidental to its provision of entertainment. The Division is correct in looking to Federal case law for assistance in determining the meaning of "incidental" since this provision is derived from the former Federal excise tax on cabaret charges (see, IRC งง 4231, 4232; see also, Matter of Tralfamador Cafe [TSB-A-95(42)S]; Matter of Empire Management and Productions [TSB-A-96(9)S] ). In determining whether sales of refreshments are only incidental to the furnishing of entertainment, one of the primary factors reviewed in the Federal cases is the ratio of sales for refreshments to gross sales (see, Roberto v. United States, 357 F Supp 862, affd 518 F2d 1109; Dance Town U.S.A. v. United States, 319 F Supp 634). In the present case petitioner's refreshment sales constitute 48% of its total sales. This percentage by itself illustrates that the selling of refreshments was not merely incidental to petitioner's business, but was an integral part of that business (see, Dance Town U.S.A. v. United States, supra).

Were Ruby's "refreshments" an integral part of his business? I have no idea. But it does underline that it could have been tested in court.

I have no evidence for this, but I do have information from someone I believe to be reliable that Ruby was associated with the Capone gang as a runner at the time the gang was infiltrated by Treasury investigator, Mike Malone. Further, Malone was operating in Los Angeles when Ruby moved there selling race guides and whatever else. Lastly, Malone allegedly ran a network of informants who were in "trouble" with the IRS.