There = a place, a moment, ect.
"There was a lot of bootlegging back then"
Their = of more than 1 person's
"Their criminal ways earned them reputatble names and political positions in Chicago."
They're = they are.
"And it seems like they're growing larger by the penny-drop."
I really liked the beginning. I was getting irriated at the dump the guy's living in, but you went into a mistake of saying, "Not to mention the pilot light always goes out so you are lucky if you get a hot shower." At this point, we're still talking about Fred, so it should still be "he".
And yes, the Fred Fred Fred part. I swear, when I was reading that part, it felt like I was some obsessed teenage girl reading about her favorite lead of a boyband.
"“Come on, Come on, pick up, pick up...” Fred said" I think at this moment he'd be "mumbling" or "whispering under his breath". Isn't "said" just a tad boring?
The ending... I can see the short-storiness (rofl go made up words!) in it and the purpose of it, but I was expecting something even more heart-wrenching like he never gets out of jail, but his mother continued her wait, having faith in that her child would come home some day even after she receives news of his death. Or even that she felt that he'd really come home after he died in jail.
If your teacher helped you with the ending, I could see why she would rather see the happy ending than the cruel one. I personally think cruel ones make you think more while the happy ones just kinda relieves you
I liked it, overall, keep writing