Al Capone and the Rancho Santa Margarita

In late January of 1931, newspapers across the United States published stories with a similar rumor:  That famed gangster Al “Scarface” Capone was bringing his mobsters to Southern California along with plans to purchase the Rancho Santa Margarita. The Los Angeles Times reported that if taken over by Capone, the vast property could be “fortified into an estate defying entrance, with a boat landing where liquor could be landed at will, defying Federal forces.”

Al Capone both terrified and captivated the Nation with his crimes and exploits. Two years prior Capone’s men were responsible for the deadly St. Valentine’s Day Massacre which killed seven men. Although he was not at the scene of the murders, it was believed he ordered it. He was then given the status of “Public Enemy Number One.”

The little town of Oceanside had a population of just 3,500 people. Residents enjoyed a quiet relationship with the owners of the Rancho Santa Margarita. The cattle ranch employed a number of locals and area farmers leased land to grow crops, including lima beans, sugar beets and alfalfa. This would seemingly come to a halt should the Rancho be under the control of the most infamous gangster in America.

Los Angeles law enforcement revealed that among various gangsters in the Southland included Frankie Foster, Baldy Nevins, Louis Frank, Bill Bailey and a brother of Ralph Sheldon. The men were said to be “all known hoodlums from the ranks of the gangster army.”

Charles S. Hardy, the general manager of the Rancho bordering Oceanside to the north, refuted the claims that Capone was buying the vast property. The Oceanside Blade published his statement: “We have had no call from agents relative to the sale of the rancho for some time,” said Hardy, “I am positive 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.”

The Rancho Santa Margarita y Las Flores once belonged to Pio Pico, last Governor of Alta California under Mexican rule. Pico sold his interest to his brother-in-law, John Forster. After Forster’s death in 1882, the property was sold to Comstock silver magnate James C. Flood, who hired cattle rancher Richard O’Neill as manager. Some years after the death of James Flood, Richard O’Neill was given half ownership of the land, 133,440 acres. O’Neill gave his interest in the Rancho to his son Jerome. When Jerome O’Neill died in 1926, the rancho was inherited by his descendants who later hired Hardy to help manage it.

While Hardy’s statement sought to dispel the rumor of Capone’s interest in the Rancho, law enforcement was in fact “on the trail of men described as gangsters” who were associated with a series of recent crimes in Southern California.  The Oceanside Blade newspaper reported that the suspects were believed to be members of the Sheldon gang, a notorious bootlegging gang in Chicago affiliated with Al Capone.  

Despite Hardy’s denials, The Los Angeles Times reported “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 ranch, which has an 18-mile ocean frontage and attempted to rush the deal before authorities could prevent it.” In another article, it was said that the men had a certified check ready to remit as a down payment.

Law enforcement believed a smuggling ring was particularly interested in the historic rancho because of the extensive ocean frontage it provided.  “Long miles of unguarded coast line and Southern California’s easy accessibility to the Mexican border” were attractive to the “racketeers” and had in fact been used by smugglers and bootleggers for many years.

With the onset of Prohibition, boats were often used to transport alcohol that was smuggled from Mexico. The open coastline north of Oceanside was a perfect place to land small boats, and bootleggers made extensive use of the lonely beaches in landing their cargoes. Oceanside Police and other law enforcement were kept busy chasing bootleggers and confiscating liquor.

While authorities downplayed the Capone story near Oceanside, Southern California residents may have been surprised to hear that police admitted that “75 percent of the Hollywood speakeasies [were] under the control of a Chicago gang.” Bootleggers were assigned territories and promised protection as long as they agreed to purchase liquor from the gang. This takeover was described as an “octopus” with strength and muscle to control the area.   The Times also reported that an “influx of Chicago, Detroit, New York, St. Louis and Kansas City gangsters” were an indication that Southern California would soon be a “smugglers’ paradise.”

Whether or not Capone was in the State of California, just two months earlier, Capone was blamed for what was called the “grape juice war” with California grape growers.  It was alleged that Capone warned Fruit Industries, Ltd. to stop selling and distributing juice concentrate in Chicago, which could later be turned into wine and therefore compete with Capone’s illegal liquor sales. The Sacramento Bee reported that Capone had threatened that if sales were attempted against his orders that someone was “going to be bumped off”.

In Washington D.C. an elected official seeking legislation against Capone commented, “When Al Capone can go from Chicago to California and threaten the life of a man who is selling grape juice, something must be done.” Even the Federal Bureau of Investigation monitored the “grape juice war” and is included in the FBI files on Al Capone.

Los Angeles newspaper reporters claimed that they went to a ranch outside Los Angeles to an undisclosed location to speak directly to a man who identified himself as Al Capone (who told them not to divulge the ranch’s location). During the interview Capone denied involvement in the grape juice wars and instead blamed it on the New York mob.

Where was this ranch where Capone was residing in 1930? It may have been in Lancaster, California.  Just days after the news that Al Capone had made an offer on the Rancho Santa Margarita, newspapers reported that there was a mob hideout in Lancaster, about 75 miles north of Los Angeles where bombs and weapons had been found. (It was later rumored but never substantiated that Capone also had a house in Fontana.)

Oceanside residents were rightfully concerned. What would happen if Capone took control of the Santa Margarita? Would local farmers lose access to their crops? Would gangsters seek control over the tiny beach town? Would access via the state highway through the Rancho be hindered? It was a lonely stretch of road that was even lonelier at nightfall.

Fears of the Rancho being taken over by gangsters subsided in February, when Capone was found guilty in Federal Court on a contempt of court charge and was sentenced to a brief stint in the Cook County Jail in Chicago, Illinois.

However, in June of 1931, Homer Croy, a writer from Hollywood, resurrected the story in an article that he wrote for Liberty Magazine. The two page article declared that Al Capone had in fact “acquired a domain in California about two thirds as large as the state of Rhode Island, 35 miles from end to end and with many miles of seacoast.”  A photo of Capone, along with a map of the Rancho Santa Margarita, was included.

Croy wrote that Capone would be well suited to Rancho life and that “horseback riding will do him good, for Al is getting overweight” and added, “Don Alfonso Capone can live on his hacienda, sit in his patio, and smoke and talk to his friends to his heart’s content about real estate.”

The Oceanside Blade Tribune suggested that Croy’s piece was fiction and “some good publicity” as the map provided in the article showed the San Luis Rey Mission and Oceanside’s proximity to the famed rancho.

And while Homer Croy’s article was written either tongue in cheek or for pure sensationalism, it didn’t matter. Liberty magazine boasted a readership of over 2 million, and was sold from coast to coast. The story of Capone purchasing the historic ranch once again attracted national attention and was front page news.

Charles Hardy once again went on the defensive, vehemently denying that the Chicago crime czar had purchased the property.

Whether Al Capone really attempted to purchase the Rancho Santa Margarita is unknown. But if so, Capone would never have a chance to pursue or close the deal. Just days after the Liberty Magazine story was published and circulated, Al Capone pled guilty to tax evasion and prohibition charges under the assumption he would serve a light sentence as before. But on October 17, 1931, he was sentenced to 11 years in prison for tax evasion and he would eventually be sent to Alcatraz. It was the end of his life of crime but he would long reign as America’s most notorious criminal.  

Oceanside residents breathed a collective sigh of relief and a sense of normalcy settled back in. Little would change until a decade later when the historic Rancho became the largest military base in the country, training Marines for World War II.