Anna Sage, the 'lady in
red' (CORBIS)

Two people who would play a major role in the demise of John Dillinger outside the Biograph Theatre were Martin Zarkovich of the East Chicago Police Department and Anna Sage, who would become infamous as the "lady in red." There is much mystery surrounding the pair and their connection to John Dillinger, which may have occurred years prior to the Biograph incident. Another disturbing factor in the relationship involving the three is how it tied back to a corrupt political atmosphere in East Chicago and to the Crown Point prison breakout.

Ana Cumpanas was born in 1889 in a small village in Rumania. She married Michael Chiolak and moved to the United States in 1909 and settled in a Slovenian neighborhood around the steel mills of East Chicago, Indiana. Anna Chiolak gave birth to a son, Steve, in 1911. By the end of the decade the marriage was over and Anna was supporting herself and Steve as a prostitute and later as a madam at the establishment of "Big Bill" Subotich's in East Chicago.

It was during this time that she met Martin Zarkovich, a young police officer, six or seven years her junior, on the East Chicago police force. There is uncertainty about their relationship as to whether it was business or pleasure, or both. There is information to support both beliefs including the fact that Mrs. Zarkovich named Anna in her divorce papers.

In 1923 Anna opened a second prostitution operation at the Kostur Hotel in Gary, Indiana. The hotel developed a notorious reputation, as did a saloon that functioned in the basement. The saloon earned the nickname the "Bucket of Blood," while Anna became known as "Katie of the Kostur." Maintaining her two establishments, Anna made a surprising move to Chicago. According to Jay Robert Nash in Dillinger: Dead or Alive:

"...on May 16, 1929, she married Alexander Suciu, a prominent person in Chicago's Rumanian community who later changed his name to Sage. The marriage didn't last. According to Anna, there was trouble between her new husband and her teenage son, Steve Chiolak. Sage later stated that she deserted him on February 4, 1932"

Anna Sage's flat, and the chair
Dillinger would sit in to relax
(CORBIS)

By 1933 Sage was running a house of prostitution out of a bar she operated on North Halsted Street. All the while she kept up her reputation in the Rumanian community, which surrounded the area of her bar. She was said to have attended church regularly and entertained lavishly in her North Halsted Street apartment, located just around the corner from the Biograph theatre.

In contrast, little is known about the early life of Martin Zarkovich. As Zarkovich moved up in rank in the East Chicago Police Department, his relationship with Sage expanded leading to his divorce from his first wife in 1921. Rumors were rampant that Zarkovich and his boss, Captain Timothy O'Neil, had ties to the underworld leaders in Lake County, Indiana. Dillinger nemesis, Captain Matt Leach of the Indiana State Police actually believed that Sage and Zarkovich were involved in Dillinger's escape from Crown Point. Another connection Zarkovich had to Crown Point was his friendship with Judge William Murray who presided over his divorce proceedings in 1921. Whatever relationship there was between Zarkovich and Sage, the police sergeant wanted everyone to believe it was non-existent during the half decade prior to the Biograph shooting.

Zarkovich claimed that he had not seen Sage between the years 1928 and 1934, yet Nash claims there was a photograph taken of the two with Anna's son on the front steps of Anna's Halsted Street apartment. In Dillinger: Dead or Alive, Nash writes:

"There is also evidence that Zarkovich used his political connections to obtain a pardon for Anna from Indiana Governor Harry G. Leslie in 1932. Four times she had been charged with operating a disorderly house in the early thirties. The first case, dating from her arrest on October 25, 1930, was dismissed after she paid a finger-slapping $60 fine. The second arrest resulted in a series of continuances, which never did reach a conclusion. On February 8 and November 16, 1932, she was again picked up in the Kostur Hotel and charged with the same offense. She obtained a full, inexplicable pardon from Leslie on these last two charges."

However, it was the unresolved second offense that would create a dilemma for Sage when the Immigration Department would step in and pass a deportation order against her as an undesirable alien.

On May 24, 1934 two East Chicago police detectives, Martin O'Brien and Lloyd Mulvihill, were brutally murdered as they sat in their car outside Gary. The two officers were present when Dillinger robbed the First National Bank of East Chicago. Both men were hit numerous times in the face and neck and died instantly. O'Brien was the father of three, Mulvihill had six children.

While "a flock of rumors" circulated, only two were given serious consideration. The detectives were rumored to have been investigating corruption in the East Chicago Police Department. It was reported that an official from the Indiana State Police suspected East Chicago Police Captain O'Neil's involvement in the crime, while other rumors persisted that O'Neil and Zarkovich had murdered the men because they had uncovered information linking the two to organized crime in the area. The fact that neither detective had drawn their weapon led to the conclusion that the two knew their assailants.

The second story was that O'Brien and Mulvihill had just left the station with a tip that Dillinger was nearby. The fact that Dillinger was in the vicinity was confirmed by what Arthur O'Leary later told Girardin. The detectives pulled over a red truck in which Dillinger was alleged to have been living. From the rear of the truck Van Meter reportedly opened fire on the two lawmen killing them. However, it would seem unlikely that being in search of the most wanted man in America that the two seasoned detectives would have been sitting there with their weapons not drawn.

After the murders of the two officers, and the rumors that Dillinger was involved, the following day five states — Illinois, Indiana, Michigan, Minnesota and Ohio — put up a $1,000 reward each. Dillinger's time was running out. Sage's time was running out also. She was desperately looking for a bargaining tool to keep herself from pending deportation.