Alterie was born Leland A. Varain in Northern California. The son of Spanish ranchers, Alterie moved to Chicago as a young man. He eventually joined the predominantly Irish North Side Gang, headed by Dean O'Banion. Other prominent North Siders included Hymie Weiss, Vincent Drucci, and George Moran. Befitting his California background, Alterie was a Western enthusiast who wore a ten-gallon hat and two holstered Colt .45 revolvers and owned a ranch near Sedalia, Colorado. As well as being a top gunman for the North Side Gang, he also formed the Theatrical Janitors' Union and used his position as union president to extort money from theater owners.