Dutch Schultz

• 1. Introduction

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  Dutch Schultz, born Arthur Simon Flegenheimer, lay in an ambulance in Newark, New Jersey, with gunshot wounds, when he pushed $3,000 in cash into an intern's hand. He told the young man the money would do him no good where he was going. Then surgery went well enough that Schultz seemed likely to live. The intern grew so anxious that the gangster might return for his cash that he turned it in. Schultz had been a powerful New York mobster in the 1920s and 1930s, with fortunes built on bootlegging and the numbers racket. How did a school dropout from the Bronx rise that far? Why did the order to kill him come from the leaders of organized crime itself? And what became of his wealth?

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• 2. From the Bronx to Bootlegging

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  Herman and Emma Flegenheimer, German Jewish immigrants, married in Manhattan on the 10th of November 1900. Their son Arthur was born in the Bronx on the 6th of August 1901, and a sister, Helen, followed in 1904. His father apparently abandoned the family, and the 1910 census listed his mother as divorced. Yet in her 1932 petition for citizenship, Emma wrote that her husband had died in 1910. Which of those versions is true remains unclear. Arthur reportedly took the loss hard, and for the rest of his life he insisted his father had never walked out.

  In 1916, Arthur began a string of jobs after leaving school in the eighth grade to support himself and his mother. Between then and 1919, he worked at the Clark Loose Leaf Company, Caxton Press, American Express, and Schultz Trucking in the Bronx.

  His path into crime began at a neighborhood nightclub owned by a small-time mobster, where he robbed craps games. He moved on to burglary and was caught breaking into an apartment. The sentence sent him to the prison on Blackwell's Island, now called Roosevelt Island. A mugshot taken at age 18 was later published in the 2010 book New York City Gangland. He proved so unmanageable that officials moved him to a work farm in Westhampton, Long Island. After he escaped and was recaptured, two months were added to his term.

  On the 8th of December 1920, he was released on parole and returned to Schultz Trucking. Prohibition had arrived with the Volstead Act, and the company began smuggling alcohol into New York City from Canada. The work put him among known criminals, and around this time he became known as "Dutch" Schultz. After a disagreement, he left the firm to work for its Italian competitors.

  By the mid-1920s, Schultz was a bouncer at the Hub Social Club, a small Bronx speakeasy owned by a gangster named Joey Noe. Noe admired Schultz's reputation for brutality and made him a partner. They opened more illegal drinking spots around the Bronx and used their own trucks to hold down delivery costs. Their beer came from Frankie Dunn, a brewer in Union City, New Jersey, and Schultz often rode shotgun to fend off hijackers.

  Two brothers, John and Joe Rock, already ran a bootlegging operation in the Bronx. John eventually agreed to cooperate, but the younger Joe would not. One night the Noe-Schultz gang kidnapped Joe, beat him, and hung him by his thumbs from a meat hook. They allegedly covered his eyes with a bandage smeared with infected discharge. His family reportedly paid $35,000 for his release, and he went blind soon after coming home. With the Rocks cowed, the gang met little opposition across the entire Bronx, and bootlegging made Schultz very wealthy.

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• 3. Wars With Rivals

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  Outside the Chateau Madrid, a speakeasy at 231 West 54th Street, Joey Noe was shot several times in the early hours of the 16th of October 1928. Although badly hurt, he fired back. A blue Cadillac struck some parked cars, lost a door, and sped off. Police found it an hour later with the body of a man named Louis Weinberg in the back seat. He was no relation to the Schultz gang members Abraham "Bo" Weinberg and George Weinberg. Noe's wounds became infected, and he died on the 21st of November. Schultz, left angry and distraught, had lost his friend and mentor.

  The gang had by then pushed out of the Bronx into the Upper West Side, Washington Heights, Yorkville, and Harlem. It moved its headquarters to East 149th Street, a bold step that started a bootleg war with the Irish mob led by Jack "Legs" Diamond. At that point the Noe-Schultz gang was the only one able to rival the Italian syndicates that became the Five Families of the Mafia.

  On the 6th of November 1928, Arnold Rothstein, a crime boss in the Jewish mob, was found fatally shot near the service entrance of the Park Central Hotel. George "Hump" McManus supposedly killed him over an unpaid gambling debt. Schultz is believed to have ordered the killing as payback for Noe's death. One clue supports that theory. The first person McManus phoned afterward was Schultz's attorney, Dixie Davis. Bo Weinberg, Schultz's trusted lieutenant, then collected McManus and drove him away. McManus was later cleared.

  On the 12th of October 1930, two gunmen forced their way into Diamond's room at the Hotel Monticello and shot him five times. Still in pajamas, Diamond staggered into the hallway and collapsed. Later, the police commissioner asked how he had managed to walk out. Diamond answered that he had first drunk two shots of whiskey. He recovered at Polyclinic Hospital and was discharged on the 30th of December 1930. In his absence, his gang had been forced out of the city. Diamond carved out new territory in Albany, where two gunmen killed him at a rooming house at 67 Dove Street in December 1931.

  Trouble also came from inside Schultz's own ranks. In 1930, an enforcer named Vincent Coll demanded to be made an equal partner. Schultz paid his subordinates a flat salary rather than the usual percentage of the take, which was unique among major gangs. When Schultz refused, Coll started his own crew, aiming to kill Schultz and seize his territory. In the war that followed, Coll lost his older brother Pete. The press dubbed him "Mad Dog" after a child was killed in a botched attempt by his gang. In February 1932, Coll was taking a call in a drugstore phone booth when gunmen with machine guns entered and killed him. The suspected killers included Edward "Fats" McCarthy and the brothers Bo and George Weinberg.

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• 4. The Restaurant Racket

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  Jules Modgilewsky, a hulking gangster also known as Julie Martin, ran one of Schultz's most profitable schemes. Alongside the policy rackets, Schultz was extorting New York restaurant owners and workers. He founded the Metropolitan Restaurant & Cafeteria Owners Association and struck deals with the leaders of Waiters Local 16 and Cafeteria Workers Local 302. Owners who refused to join faced punishing wage demands from the unions, then strikes and stink bomb attacks. The Association would step in to settle the strike with a sweetheart contract of low wages, on condition that the owner joined. Martin collected thousands of dollars in tributes and "dues" from terrified restaurateurs.

  Schultz began to suspect Martin of skimming. He had found a $70,000 gap in the books. On the evening of the 2nd of March 1935, he invited Martin to a meeting at the Harmony Hotel in Cohoes, New York. Chief enforcer Bo Weinberg and the mob lawyer Dixie Davis were both there. Martin angrily denied the charge, and the two men argued as the drinking continued. Schultz sucker-punched him. Martin finally admitted to taking $20,000, saying he felt entitled to it anyway.

  Davis described what came next. Schultz carried his pistol under his vest, tucked in his pants against his belly. One tug of the vest put the gun in his hand. In a single motion he pushed it into Martin's mouth and fired. In Davis's words, Schultz committed the murder "just as casually as if he were picking his teeth."

  As Martin writhed on the floor, Schultz apologized to Davis for killing a man in front of him. Davis later read a newspaper account saying the body had been found on a snowbank with a dozen stab wounds in the chest. When he asked Schultz about it, the gangster answered with a flat "I cut his heart out." The suspicion that set off the killing had taken hold while Schultz was in the middle of a federal tax trial.

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• 5. Dewey and the Tax Trials

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  In January 1933, Schultz was indicted in New York, and he promptly became a fugitive. United States Attorney Thomas Dewey had set out to convict him for failing to pay federal taxes. Schultz surrendered in Albany in November 1934, as part of a plan to move his trials from New York City to upstate. His first trial, in Syracuse, ended with a hung jury, and many speculated that he had bribed the jurors. A retrial was set for Malone.

  In Malone, Schultz worked to present himself to the townspeople as a country squire and good citizen. He gave cash to local businesses and handed out toys to sick children, among other charitable acts. The strategy worked, and he was acquitted in late summer 1935.

  New York Mayor Fiorello La Guardia was so outraged that he ordered Schultz arrested on sight if he ever came back to the city. Schultz was forced to shift his base across the Hudson River to Newark, New Jersey. La Guardia also named Dewey a special prosecutor, so the man who had failed to convict Schultz kept the pressure on.

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• 6. The Commission Decides

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  Schultz called it the "Arthur Flegenheimer Defense Fund." As legal bills in the tax case piled up, he cut the commissions paid to the people running his policy rackets to feed it. The runners and the games' controllers had been threatened with violence for any dissent. Even so, they hired a hall, held a mass protest meeting, and declared their own version of a strike. The cash flow dried up fast, and Schultz had to back down. The episode permanently damaged the bond between his gang and its associates.

  Bo Weinberg, Schultz's chief lieutenant, worried about how much money Schultz was taking from the rackets. He sought advice from New Jersey mob boss Longy Zwillman, who put him in touch with the Sicilian-born Charles "Lucky" Luciano. Weinberg wanted to keep a percentage and overall control of the gang. Luciano had a different plan. He intended to split the gang's rackets and territory among his own associates once Schultz was convicted. Everyone expected a guilty verdict, so Luciano and his allies moved to take over, and they met little resistance.

  Then came the acquittal. Schultz quickly arranged a meeting with Luciano through the Commission. Luciano told him they had merely been "looking after the shop" in his absence. Control, he said, would return to Schultz once the heat died down. With law enforcement and Dewey watching closely, Schultz had to publicly accept that explanation. A month after the verdict, Bo Weinberg walked out of a Midtown Manhattan nightclub and disappeared.

  Schultz next proposed to the National Crime Syndicate that Dewey be murdered. Luciano objected that killing such a prominent prosecutor would bring a massive crackdown. The Commission voted unanimously against it. Furious, Schultz announced he would do it anyway and walked out. Soon after, Albert Anastasia, a leader of Murder, Inc., told Luciano that Schultz had asked him to stake out Dewey's apartment building on Fifth Avenue. The Commission met quietly to weigh the news. After six hours of deliberation, it ordered Louis Buchalter to eliminate "The Dutchman."

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• 7. Night at the Palace Chop House

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  At the Palace Chop House, a restaurant at 12 East Park Street in Newark, Schultz sat down on the 23rd of October 1935 with three men. They were his accountant Otto Berman, Abraham "Abe" Landau, his new chief lieutenant, and his bodyguard, Bernard "Lulu" Rosenkrantz. Schultz went to the men's room. Two Murder, Inc. hitmen, Charles "The Bug" Workman and Emanuel "Mendy" Weiss, came in. Workman walked the length of the bar, opened the men's room door, and shot Schultz, who dropped to the floor. Workman and Weiss then entered the rear dining room and fired repeatedly at the others.

  Berman collapsed at once. A bullet through Landau's neck severed his carotid artery, and Rosenkrantz was hit several times at point-blank range. Both men nonetheless got to their feet, returned fire, and drove the killers out. Weiss leapt into the getaway car and told the driver to leave Workman behind. Landau chased Workman into the street and emptied his pistol, but missed. Workman escaped on foot, and Landau dropped onto a nearby trashcan.

  Back inside, Schultz staggered from the bathroom, clutching his side, and sat at his table. He called for anyone who could hear him to fetch an ambulance. Rosenkrantz demanded change from the barman, who had hidden during the shooting, then phoned for help before passing out.

  The first ambulance carried Landau and Rosenkrantz, the most seriously hurt, to Newark City Hospital. A second was sent for Schultz and Berman. Berman was unconscious, but Schultz drifted in and out of lucidity as police tried to comfort him and draw out information. The medics had no painkillers, so Schultz was given brandy. Landau and Rosenkrantz would tell police nothing until Schultz gave permission, and even then they offered very little.

  Berman, the oldest and least fit of the four, died first, at 2:20 am. Landau died of blood loss at 6 am. Surgeons could hardly believe that Rosenkrantz was still alive, and they were unsure how to treat him. He died twenty-nine hours after the shooting. Months earlier, he had driven with Schultz to bury a safe.

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• 8. Last Words and Lost Money

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  Just before going into surgery, Schultz asked a Catholic priest to give him the last rites. He reportedly believed Jesus had helped him beat the indictment, and that he had promised to convert. He lingered for almost a day, talking, in varying states of clarity, with his wife, his mother, a priest, police, and hospital staff. He died of peritonitis on the 24th of October 1935. He was permitted burial at the Roman Catholic Gate of Heaven Cemetery in Hawthorne, Westchester County, New York. At the request of his Orthodox Jewish mother, his body was draped with a talit, a Jewish prayer shawl.

  In 1941, Workman was convicted of killing Schultz and sentenced to life in prison. He was paroled in 1964. The building that housed the Palace Chop House was torn down in 2008.

  The gang was meant to be crippled that night, but several associates survived. Martin "Marty" Krompier, whom Schultz had left in charge of his Manhattan interests, lived through an assassination attempt on the same night. Apparently no attempt was made on the Irish mobster John M. Dunn, who later became brother-in-law to the mobster Edward J. McGrath and a power in the Hell's Kitchen Irish mob.

  Schultz's personal life proved murky too. Afterward it emerged that he and his wife had never been through an official marriage ceremony. Letters and pictures of another woman and children turned up among his belongings at the Newark hotel where he had been staying. The matter was never settled, because his common-law wife would not discuss it and the mystery woman never stepped forward. Two other women also came to the morgue for his effects, and their identities were never established.

  What Schultz said in the hospital became famous. His last words were a strange, rambling stream of consciousness, spoken to police who were trying to calm and question him. They got nothing coherent, but a police stenographer transcribed all of it. Among the lines: "A boy has never wept...nor dashed a thousand kim." Another runs: "Oh, Oh, dog Biscuit, and when he is happy he doesn't get snappy."

  Writers seized on the transcript. In the early 1970s, the Beat Generation author William S. Burroughs published a screenplay in novel form called The Last Words of Dutch Schultz. In 1975, Robert Shea and Robert Anton Wilson made the ramblings a coded message in The Illuminatus! Trilogy, tied to a global Illuminati conspiracy. Back in 1960, Dwight Macdonald had included the words in his anthology Parodies as a parody of Gertrude Stein. In E. L. Doctorow's novel Billy Bathgate, the title character uses clues from the deathbed babble to find Schultz's hidden money. Dustin Hoffman played Schultz in the 1991 film adaptation, and Tim Roth took the role in Hoodlum in 1997.

  The real hidden money is stranger still. Schultz was estimated to be worth $7 million at his death, yet no trace of it has ever been found. Fearing prison because of Dewey, he is said to have commissioned an airtight, waterproof safe and filled it with $7 million in cash and bonds. He and Rosenkrantz drove it to an undisclosed spot in upstate New York and buried it. Nothing shows that either man told anyone the location, or even that the safe existed. Schultz's enemies are said to have spent the rest of their lives looking for it. Treasure hunters still return each year to search the Catskills, and one such gathering became the documentary Digging for Dutch: The Search for the Lost Treasure of Dutch Schultz. On the 18th of November 2020, PBS premiered a Secrets of the Dead episode, "Gangster's Gold," about the hunt. In July 2022, an Expedition Unknown episode titled "The Bootlegger's Millions" joined the search.

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