High Country hideouts | VailDaily.com

High Country hideouts

Kathy Heicher
Courtesy/Denver Public Library/Western History Department

Nevertheless, for about seven memorable years between 1927 and 1935, a racketeer-turned cowboy, fleeing from Chicago’s bloody bootlegging wars, tried to find peace in the tranquil mountain hideaway just across the border from Eagle County.

The effort didn’t really work. Louis “Diamond Jack” Alteri, a man Denver newspapers later dubbed “Colorado’s pet resident gangster” just couldn’t shed his gangland connections and ways. The man described as a mild and amiable fellow when sober, but a violent and dangerous bully when he was drunk, kept local, state, and national newspaper headlines screaming.

Area residents, many of whom still pass on stories of Diamond Jack, were alternately bemused and shocked by his gangster-wannabe-cowboy lifestyle. Historical records reveal that Diamond Jack lived a prohibition-era gangster’s lifestyle; and ultimately died a gangster’s death.

Cowboy roots

Locally, Diamond Jack’s name first popped up in the newspapers in April of 1927, when a page one article in the Eagle Valley Enterprise reported that the Chicago man, who was affiliated with the Dion O’Banion gang, had purchased some property and intended to open a dude ranch at Sweetwater Lake.

“Diamond Jack” was just one of many names that Alteri was known by during his gangster years. His birth name was Leland Varain. Nicknames he picked up in later life included, “Cowboy,” “Two Gun Louie”, and Louis Alteri.

He actually did have something of a cowboy background, having grown up on a ranch in California. Newspapers reported he could ride, rope and bulldog a steer along with any western cowboy. When he first came to Colorado in the late 1920s, Alteri staged rodeos that earned extensive newspaper coverage.

Described as a 6-foot tall, 200-pound man who wore his hair combed in a straight-back pompadour, Alteri was a flashy dresser. He was known to sport red silk cowboy shirts, woolly white chaps, and Tom-Mix style cowboy hats while in the west and expensive, pin-striped suits he in Chicago.

The “Diamond Jack” nickname undoubtedly came from his penchant for wearing a gold, diamond-studded belt buckle, and a diamond-encrusted watch and chain, and diamond rings. The gun belt that Alteri favored when he lived at Sweetwater also leaned to the garish side, with metal studs spelling out his name.

Local historian Frank Doll of Avon remembers that once, when he was a kid, he and his father passed along to Diamond Jack a catalogue featuring mail-order, hand-made boots. The next time they bumped into the gangster, he was wearing a pair of those boots, decorated with white hearts on the front and back, and little red flowers all around the top, with five rows of stitching. Diamond Jack had his pants stuffed into the boots, the better to show off the fancy leatherwork.

Alteri at one time competed as a heavyweight in a small town boxing circuit, where he was billed as “Kid Haynes” or “Clyde Ways.” He surfaced in the Chicago underworld in the 1920s, probably starting out with the O’Banion gang as a bodyguard.

For 20 years, Alteri was part of the Chicago underworld, including an 11-year stint as president of the Chicago Janitor’s Union, a loosely-disguised racketeering operation where “tens of thousands of dollars passed as casually in a week’s business as one dollar bills in a country grocery store,” according to a December,1929 article from an unnamed magazine in the archives of the Frontier Historical Museum in Glenwood Springs.

Alteri and fellow gangster Hymie Weiss reportedly perfected the “rented ambush” murder technique, whereby the assassins rented a flat within shotgun range of the home of the marked man, then blasted him when he stepped out the door. Diamond Jack was ultimately the victim of a similar ambush.

The Janitor’s Union work also had its risks. Three of Diamond Jack’s predecessors had reportedly been “bumped off” while serving in that position. Alteri likely fled to Colorado to avoid the same fate, but in reality was living on borrowed time.

Back in the saddle

By the time Alteri arrived in Colorado, he already had a long police record, including charges of burglary, hijacking, homicide, kidnapping, and other strong-arm type crimes. Still, he had never been convicted. Victims and witnesses had a way of forgetting the details of the crime when it came time for a trial.

When he saw the Sweetwater Lake property, which has a single entrance through a narrow, granite-walled canyon, Alteri recognized it as an ideal refuge, and purchased the property.

In a 1929 magazine article, Alteri stated that his goal was “to be a peaceful rancher, with persons of culture around him.” He raised cattle, hay and grain, and operated the property in summer months as a dude ranch. The magazine describes his clientele as judges, bankers, business executives and socialites.

But aside from friends and family, Alteri also brought along thug-like bodyguards. Locals recall that when he came to town on business, he was always accompanied by some rough-looking guys, and all the men carried guns.

The menace of the Chicago underworld apparently extended into Colorado. Historical accounts indicate Alteri ordered steel fencing for the ranch “strong enough to keep out human rats” as well as well as wolves, coyotes, bears and elk. Rumor had it that he harbored an arsenal of more than 250 weapons of various types at the resort, and two machine gun nests were hidden in the rocky precipices at the entrance.

Lee Stewart, 73, of Grand Junction, was a child living on his dad’s ranch at Sweetwater in the years that Alteri resided at the lake. Although he was very young at the time, he does have a distinct memory of Diamond Jack’s car.

“He drove a Lincoln convertible with a set of longhorn steer horns mounted on the front of it. It was a beautiful car,” says Stewart.

Alteri proved to be a gracious neighbor.

“He was kind of like a Robin Hood in Sweetwater valley. If anybody needed something, he pretty well took care of it,” says Verain Stewart, 53, Leland’s son, who was actually named after Diamond Jack’s real name. He recalls that his grandfather admired Alteri.

“Even though he was a bad guy, he was a good guy in many ways,” Stewart adds.

Doll says that friendship with the neighbors paid off. Diamond Jack’s security system included the party-line telephone that served the Sweetwater community at the time. When a strange car drove up the road, the man who owned the property that is now Anderson Camp on the Colorado River would phone the next neighbor up to report the stranger. That pattern would continue until word ranched the lake, and Alteri could dispatch his bodyguards to make sure all was well.

Alteri claimed to pull a salary of $50 per week from the Janitor’s Union. However, bank tellers in Glenwood Springs reported that he would frequently cash $3,000 Western Union checks – a significant chunk of money during the Depression.

Gangster goes west

That 1929 magazine article describes Diamond Jack as a peaceable and interesting fellow who entertained his guests around the campfire with stories of his exciting life. Newspaper stories of the day indicate differently.

Alteri’s wife, Ermina, was the daughter of Mike Rossi, a well-known bootlegger. Thus, the resort had a guaranteed liquor supply, and guests and the owner imbibed freely.

Along with socialites and bankers, Alteri’s guest list included Chicago gangster Al Capone and Legs Diamond. (Alteri reportedly became affiliated with Capone’s gang in the 1930s.)

Gangsters O’Banion and Weiss reportedly visited the resort every fall to hunt deer. Local legend has it that one balky dude-ranch horse suffered a gangster-style punishment after it dumped off its racketeer rider. Alteri and his companions pumped the horse full of lead.

Once, while en route to Gypsum via train with a beautiful blonde traveling companion, Alteri somehow realized that the woman was a bottle blonde rather than the real thing. He reportedly kicked her off the train.

One summer, Alteri and his brother, Bert, were at the resort when they argued over a horse race. Bert shot Alteri with a blast of birdshot. Ermina rushed her husband to the hospital in Glenwood Springs, where doctors removed 146 pellets from his left arm and shoulder.

Alteri refused to identify his assailant. When the Garfield County sheriff paid a visit to the patient, he found a pistol stashed under the pillow of Alteri’s hospital bed.

Bert also had a reputation for shooting mallards off of Sweetwater lake with Luger-style pistols with 18-inch barrels.

Risky recreation

Alteri would allow the public to fish at the lake – but only if they rented a boat from his dock. Boaters who entered the lake from the public access side opposite Alteri’s ranch were running the risk of being shot at. Alteri’s own motor boat reportedly was equipped with a machine gun on the bow.

Doll remembers the court trial that ensued after Alteri shot a boat being used by Public Service Company employees. At the trial, the boat, riddled with bullet holes, was displayed on an evidence table.

The gangster-turned-dude-rancher frequently blurred the boundaries between his private resort property and the surrounding National Forest. In 1931, he was charged with criminal assault with a deadly weapon after he shot at and pistol-whipped two men who attempted to put a boat on Sweetwater Lake. He was also accused of beating up a porter at a Glenwood Springs hotel. Again, Alteri was acquitted.

Among the souvenirs in the Glenwood Springs museum is a gilt Christmas card depicting a peaceful, snowy ranch scene engraved with the message “Wishing you a very merry Christmas and a bright and happy New Year. Mr. and Mrs. D.J. Alteri.” Attached to the card is a note indicating the greetings were sent to the members of Alteri’s trial jury during the 1931 holiday season.

“He had a temper. He did get into trouble,” recalls Lee Stewart. At the same time, however, Alteri is remembered as being particularly kind to the children who lived on Sweetwater, handing out lavish gifts at Christmas and making impromptu gifts to the neighbors.

While he lived at Sweetwater, Alteri made frequent trips back to Chicago on “union business.” Some reports suggest he may have provided information that led police to break the kidnapping case of Charles Boettcher III in Denver.

Alteri himself was the defendant in a Chicago kidnapping case in 1932. The victim was a bookmaker, whose family paid $8,000 for his release. Alteri, then living at Sweetwater, fiercely fought extradition to Chicago for the trial. Ultimately the court case crumbled when the victim suddenly was unable to identify his kidnapper.

Borrowed time

Ultimately, Alteri ran into problems with the Internal Revenue Service. As his financial problems compounded, his behavior became increasingly drunken and surly. He lost the resort in 1932 when he could no longer pay the taxes.

Alteri’s last memorable act in Colorado happened on Nov. 8 of that year in Glenwood Springs. In a foul mood after an evening of drinking at the Denver Hotel, Alteri picked a fight with a stranger. Unfortunately for Diamond Jack, the stranger proved to be a former prize fighter, Whitney Hutton, who came out on the winning end of the beating. Enraged, Alteri went to his hotel room, and returned with two guns.

Mistakenly thinking Hutton was hiding in a room, he barged in and shot two traveling salesmen. One man recovered, but the other died two months later of his injuries.

This time, Diamond Jack was not acquitted. He pled guilty to six felony accounts of assault. Judge John T. Shumate fined him $1,250, and gave him a choice: one to five years in the state penitentiary; or leave the state forever. He chose to leave, which proved to be a death sentence.

Alteri and his wife returned to Chicago. On July 18, 1935, Diamond Jack was gunned down on a Chicago street as he and his wife left their hotel to go to a barber shop. Alteri was felled by two gunshot blasts. His blood splattered onto his wife, but she was not injured.

Alteri’s change in allegiance from the O’Banion to the Capone gang may have been a factor in his death. His assailants were never found.

Diamond Jack is not forgotten. Verain Stewart has Alteri’s famous gun belt at his home in Grand Junction. It was passed down through the family from the late Tom Jackson, a long-time Sweetwater resident and friend of the Stewart family.

“I’ve got the belt on a piece of oak wood,” says Stewart.

Sources for this story, which first appeared in the Eagle Valley Enterprise, included the Frontier Historical Society in Glenwood Springs, the Colorado History Museum archives, the Eagle County Historical Society archives, and interviews with local residents.

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