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2 former cops, one freed from death row, accused in another extortion plot

Published: Monday, Oct. 29, 2012 9:56 a.m. CDT

(Continued from Page 3)

(MCT) — CHICAGO — Local and federal authorities had thought Steven Manning had gotten away with murder and kidnapping when courts in both Illinois and Missouri threw out convictions and he was freed from death row almost a decade ago.

On Friday, Manning was back in court in handcuffs charged in an eeringly similar plot to kidnap, murder and dismember a businessman flush with cash.

The bombshell charges are the latest chapter in a decades-long saga that has seen Manning go from crooked Chicago cop to convicted murderer, from an exonerated victim of allegedly overzealous investigators to an accused extortionist.

Authorities alleged they foiled a grisly extortion plot involving Manning — who now goes by the name Steven Mandell — and Gary Engel, a former Willow Springs, Ill., police officer who was convicted of a kidnapping in Missouri with Manning decades ago. The two were arrested Thursday evening as they parked near a Northwest Side office in Chicago where they thought the kidnapping target had arrived for a business deal.

For weeks, authorities had been secretly recording discussions about the grisly plot the two intended to carry out in vacant office space. After their arrest, FBI found saws, a butcher knife and zip ties that authorities said they planned to use to restrain and then gut the victim.

To some Manning's arrest in particular was a vindication of sorts for the FBI and other law enforcement personnel who spent years investigating Manning only to see him win his release because of legal errors.

"I always thought he was one of the most dangerous criminals I ever dealt with as a prosecutor," said William Gamboney, a former Cook County assistant state's attorney who prosecuted Manning for the 1990 murder of trucking-firm owner Jimmy Pellegrino. "The feeling was he got away with something."

But during a brief court appearance Friday in federal court, Manning appeared to express that he was being victimized once again. As he sat in the jury box clad in an orange jail jumpsuit, he smiled at a reporter sitting in the courtroom and mouthed the letters "BS" — an apparent reference to his opinion of the charges.

Manning was in his early 20s when he became a Chicago police officer, but the 10-year veteran resigned in 1983 after he was convicted in an insurance fraud scheme. He later was linked to several burglary and jewelry-theft rings in Chicago's underworld. He was convicted of burglary in 1987 and sentenced to four years in prison. He had also worked at times as an informant for the FBI but quit that role by 1986.

In 1990, after authorities received a tip from a reputed Missouri mobster, Manning and Engel were arrested in Chicago and charged with taking part in the kidnapping of two Kansas City drug traffickers six years earlier. Both were later convicted; Manning was sentenced to life in prison and Engel to 90 years behind bars.

While Manning was being held in Cook County Jail on the kidnapping charge, authorities used notorious jailhouse informant Tommy Dye to try to obtain a confession from Manning to the killing of Pellegrino. Dye secretly recorded Manning, but the recording contained no admissions by Manning to the murder. However, Dye claimed Manning had confessed to him during a two-second inaudible gap on the tape.

At trial, Pellegrino's widow, Joyce, testified her husband had told her as he was leaving for a meeting with Manning "that if he turns up dead I should go to (the FBI)" and tell them that Manning killed him. His body was later found gagged and bound with duct tape, shot in the head and dumped in the Des Plaines River.

In urging the judge to impose a death sentence, prosecutors linked Manning to two other murders, including the 1986 slaying of his own father, Boris. Witnesses at the sentencing testified two other underworld associates had gone missing around the time they were supposed to have met with Manning.

Both the kidnapping and murder cases began to fall apart on appeal. The Illinois Supreme Court ruled the judge in the murder trial erred in allowing the hearsay testimony of Pellegrino's wife and granted him a new trial, but prosecutors dropped the case in January 2000.

The Missouri conviction also had deep flaws. The kidnapping ringleader, who testified against Manning as part of a deal with prosecutors, later complained they hadn't kept their promise to pay him for his testimony. A key witness who had identified Manning as the kidnapper changed her story, and an appeals court found incompetence with Manning's lawyer for failing to object to the testimony of an informant.

"The only people to blame for this case is the FBI themselves," Manning told the Tribune on the day in 2004 that he walked out of a Missouri jail, free of both cases after 14 years in custody. "They did it to themselves. They fabricated this whole thing. They didn't have any evidence so they made everything up."

Manning sued, claiming two FBI agents had fabricated evidence and coached Dye to falsely implicate Manning in the jailhouse confession. In a surprise, the federal jury agreed the agents had framed Manning in the murder as well as the Missouri kidnapping and awarded him $6.5 million. However, a judge later threw out the damages, and Dye never saw a penny.

The charges announced Friday alleged the FBI has been secretly recording Manning since last month discussing the plans to abduct and kill a businessman they believed had access to large amounts of cash from real estate holdings — referred to by authorities only as "Victim 1." Mandell speculated that the victim, whom they referred to as "Soupy Sales," generated as much as $100,000 a month in cash from rental properties.

According to the charges, Manning had confided in another individual — referred to as "Individual A" — who apparently tipped off authorities to the scheme.

Manning and Engel planned to pose as police officers and pretend to arrest the victim on a bogus federal warrant. They then intended to take him to a nearby building they called "Club Med," which they had remodeled to include a large sink and a counter that could hold several hundred pounds. The two plotted to extort as much as $500,000 from the man, then kill him, drain the blood from the body and dismember him, the charges alleged.

In one conversation with Individual A, the undercover video showed Manning joining his hands together and covering his eyes, indicating that the victim would be blindfolded and bound in an effort to scare him into paying, according to the charges. Manning was allegedly recorded asking Individual A where they should "do the deed" on the victim.

"You want to get him here on the counter top? You want the two-by-fours over here? Because we don't want to be cutting into here," Manning said.

In another recording, Manning appeared to brag about Engel's prowess at browbeating the victim into giving up his money.

"My guy knows what he's doing, he knows how to waterboard, do interrogation, psy-ops," the charges quoted Manning as saying.

After the arrests, FBI agents searched "Club Med" and seized a loaded .22 caliber semi-automatic pistol and additional ammunition, as well as the saws, a butcher knife and zip-ties used as restraints, according to the charges.

Manning also discussed plans to kill another person — identified in the complaint only as Victim 2, the charges said. "What's our plan for (Victim 2)?" Individual A asked Manning. "Boom boom. It's all over the news," he replied, saying that victim would be shot and killed and his death would receive extensive media coverage.

Manning, 61, of Buffalo Grove, Ill., and Engel, 61, of Homer Glen, Ill., were charged with attempted extortion and conspiracy to commit extortion.

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