Joe Bruno's Mobsters - Six Volume Set (50 page)

By the time Dewey was ready to prosecute Schultz, it was alleged that District Attorney William C. Dodge was not aggressively going after the mob and crooked politicians, and in New York City there were plenty of both. In 1935, Dewey got a bump up in rank, when Governor Herbert H. Lehman, bypassing Dodge, appointed Dewey as Special Prosecutor in New York County (Manhattan). With the backing of Governor Lehman, Dewey assembled a crack staff of more than 60 assistants, investigators, process servers, stenographers, and clerks. New York Mayor Fiorello H. La Guardia
contributed 63 of his best police officers to the cause, and Dewey was on top of the prosecutorial world.

Dutch Schultz, born Arthur Flegenheimer on August 6, 1902, was the most visible mobster in New York City. However, Schultz was only one of a nine-member National Crime Commission which included Italians gangsters Lucky Luciano and Frank Costello, as well as fellow Jewish mobsters Meyer Lansky, Bugsy Siegel, and Louis “Lepke” Buchalter.

During Prohibition, Schultz made millions in the sale of illegal beer and was nicknamed “The Beer Baron of the Bronx.” In the early 1920s, Schultz bulldozed his way into the Harlem numbers rackets, pushing aside notable black number kings Madame Stephanie St. Clair, Bumpy Johnson, and Casper Holstein.

Noted crime author and former cop Ralph Salerno once said, “Schultz asked the black numbers to a meeting in his office. When they came in, Schultz put his forty-five on the desk and said, ‘I'm your partner.'”

Holstein backed off quietly, but St. Clair and her muscle Johnson, decided to fight back against Schultz. Johnson went as far as to visit Lucky Luciano downtown in Little Italy to plead his case. Luciano admired the spunk of Johnson, but he told Johnson that Schultz was his partner in other endeavors and that he had to back his partner. Luciano advised Johnson to tell St. Clair it was in their best interest to work under Schultz in the Harlem numbers game. St. Clair refused at first, but after the word was put out on the Harlem streets that St. Clair was to be shot on sight, she agreed to Luciano's proposition.

Schultz also made a ton of cash taking illegal bets on sporting events. Schultz owned the Coney Island racetrack in Cincinnati, Ohio, where the daily three-digit Harlem number was derived from the last three digits of the total mutual handle for that day. Schultz was able to manipulate those daily numbers by having his numbers wiz
, Otto "Abbadabba" Berman, determine which three-digit numbers were bet heavily that day. Then Berman would call the track before the last race to change the last three digits to numbers which were bet lightly, or maybe not at all. Schultz also had a vast array of illegal slot machines placed all over New York City, which pumped out cash like water gushing down Niagara Falls.

As much money as he had accumulated, Schultz dressed like a broken-down valise.

Luciano once said of Schultz, “He has all the money in the world, but he dresses like a bum.”

Schultz claimed he never spent more than two dollars for a shirt in his life.

“Only queers wear silk shirts,” Schultz said.

The Feds had their first shot at Schultz, when they indicted him
for income tax evasion. But the wily Schultz went into the wind for several months, and when he did turn himself in, his lawyer was somehow able to move the trial venue to the sleepy upstate town of Malone, New York.

Schultz went to Malone months before the trial
, and he contributed money to local causes like he was the Salvation Army. Schultz, a non-practicing Jew, even converted to Catholicism in order to garner the support of the Malone locals, who were overwhelmingly Catholic.

The trial was a slam dunk for Schultz, and he walked out of the Malone courtroom with a loopy smile on his face,
as a free man.

However, a prosecution captained by the mighty Dewey was a dif
ferent proposition for Schultz.

When Schultz got word that Dewey had
him in his crosshairs, Schultz called for an emergency meeting of the nine-man National Crime Commission.

At this meeting Schultz said, “Dewey will not stop until all of us Commission members are in jail.” Schultz then slammed his hand on the table for emphasis, “We have to take Dewey out!”

The other commission members were skeptical of Schultz's demands. But they decided to table Schultz's request to see how easy it might be gunning down Dewey. They gave the chore to Albert Anastasia, a ruthless killer, and one of the bosses of Murder Incorporated. Anastasia was known on the streets as the “Lord High Executioner.”

In order to clock Dewey's movements, Anastasia borrowed a baby from a friend for several days. Anastasia pushed the baby in a carriage around 214 Fifth Avenue, the posh apartment building where Dewey lived. As Anastasia strolled the streets pushing the baby carriage, he was able to ascertain Dewey's exact weekday morning movements.

Dewey exited the apartment building at 8 a.m. sharp every weekday morning. Surrounded by a phalanx of bodyguards, Dewey would walk a few blocks to a neighborhood drug store for his morning coffee and to make a phone call from a pay phone in the back. While Dewey was alone in the back of the drug store, his men stood guard like mastiffs out front.

Anastasia figured he could be waiting at the counter when Dewey entered,
and then kill Dewey before Dewey could reach the pay phone in the back. Other Murder Incorporated killers would take care of Dewey's bodyguards in front of the drug store.

The following week, after Schultz was asked to leave the room, Anastasia presented his plan to the rest of the Commission. Even though the deed could possibly be done, it was decided that if they did kill Dewey, all hell would break loose on their rackets. The only one, besides Schultz, who voted for the hit was Gurrah Shapiro.

Manhattan D.A. Frank Hogan later said, “I suppose they figured the National Guard would have been called out if Dewey was killed. And I guess they wouldn't have been far wrong.”

When Schultz was called back into the room and told the bad news, he exploded into a rage.
“Dewey's got to go!” Schultz said. “I'm hitting him myself within 48 hours.”

This did not please the rest of the Commission members too much. They immediately decided that Schultz, for the greater good of the Commission, was the one who had to go.

Luciano and Lansky figured that since Schultz was Jewish, Jewish gangsters were the proper choice in ending the life of a Jewish mob boss. Lansky decided to use two of Murder Incorporated's best men: Charlie “The Bug” Workman and Mendy Weiss. The place for the hit was set to be Schultz's hangout: The Palace Chop House in Newark, New Jersey. A nobody named Piggy, who was familiar with the Newark streets, was selected as the getaway driver.

On October 23, 1935, at approximately 10:15 p.m., Piggy parked a dark sedan outside The Palace Chop House. Workman and Weiss exited the car, guns drawn. They entered the restaurant and found the front room empty, but there was lively chatter coming from the back room. When the killers entered the back room,
they spotted Schultz's top men, Lulu Rosenkrantz, Abe Landau, and Abbadabba Berman finishing the remains of their last supper.

With blazing guns in both hands, Workman and Weiss opened fire. Landau and Rosenkrantz returned fire after they were hit, but
they were turned into Swiss cheese and rendered quite dead.

“It was like a Wild West S
how,” Workman said later.

However, Dutch Schultz was nowhere to be found.

After Workman emptied his .38, he dropped it to the floor, and then he rushed, holding his .45, into the bathroom where he found Schultz in a stall. Workman fired the .45 twice. Schultz ducked the first slug, but the second slug found its mark just below his chest. The bullet blasted through Schultz's stomach, large intestine, gall bladder, and liver, before falling on the floor next to him.

Schultz was rushed to the hospital, and
he was in the state of delirium, talking utter nonsense, until he passed away the following evening.

Before Schultz died, a telegram was delivered to his death bed. It read, “As ye reap, also shall ye sow.”

It was signed “Madame St. Clair.”

With Schultz out of the way, and Dewey still very much alive, Dewey turned his sights on the second-most visible mobster in New York City: Charles “Lucky” Luciano.

Luciano was a high-ranking member on the National Crime Commission, and he metaphorically spat in Dewey's face by showing up almost every night in swank nightclubs all around town with a knockout broad on each arm.

The problem was, Luciano, along with his close friend Meyer Lansky (who was a quiet homebody and didn't irk Dewey as much as Luciano did), were almost untouchable, because of the several layers of insulation they had placed between themselves and the crimes committed on the streets by their underlings. Plus, both Luciano and Lansky had several legitimate business interests, with savvy accountants, who made sure the proper amounts of taxes were paid to the government.

So what was Dewey to do?

Simple. 
Deway decided to frame Luciano for one of the few crimes Luciano wasn't committing.

At the time, Luciano lived in a swank apartment (room 39D) at the Waldorf-Astoria
, under the name of Mr. Ross. Dewey was cutting a wide swath through New York City; first going after the gambling rackets and then setting his sights on prostitution.

On January 31, 1936, Dewey ordered his men to raid more than 80 brothels, pick up every prostitute in sight (even ones walking the streets), arrest pimps of all colors and nationali
ties, and bring them one-by-one into his office in the Woolworth Building.

The broads were hardened hookers with colorful names like Sadie the Chink, Jennie the Factory, and Polack Francis. The pimps were low-level street hustlers who kicked up their money to mobsters, who in turn kicked it up the ladder, until some of it allegedly m
ade its way into the hands of a “Mr. Ross.”

All of the arrestees had one thing in common: they did not want to go to jail.

So even though Luciano detested prostitution and never had his fingers in its dirty pie, it was possible that some of the dough kicked up to him by his captains had originated in sex dens. All Dewey had to do was to prove it in a court of law, whichever way he could.

In mid-1936, spurred on by
the testimony of hookers and pimps who had never even met Luciano, Dewey ordered a warrant for Luciano's arrest on the charge of running a huge prostitution ring. Luciano, outraged at being charged with something he had nothing to do with, dodged the warrant by traveling down to Hot Springs, Ark., to a resort run by his old pal Owney “The Killer” Madden. After making untold millions in the rum running and gambling enterprises, Madden had retired from the rackets, and re-invented himself in Hot Springs as a successful businessman and hotelier.

If it had been a gambling pinch, Luciano would have lawyered up with the best attorneys in town, turned himself in, and he would have stood a decent chance of beating the rap. But prostitution was uncharted territory for Luciano.

His pal Lansky would later say, “Charlie had the same revulsion about running brothels that I did. He believed no respectable man ever made money from a woman in that horrible way.”

It took four months for Dewey to locate Luciano, and when he did, he sent 20 Arkansas Rangers to Madden's resort, where they cuffed Luciano and threw him on a train back to New York City.

It was a three-week trial, and Luciano never stood a chance.

Dewey paraded hooker after hooker, and pimp after pimp onto the witness stand. The hookers told of the degradation they had suffered toiling in the field of their choice. And the pimps testified that the money the hookers handed over to them was kicked up the ladder to M
r. Ross – a.k.a. Lucky Luciano.

When Luciano took the stand, his
coarse manner stood in stark contrast to the intelligent and erudite Dewey, who had been training for this moment all his life. When the verdict came in, Luciano was found guilty of 558 counts, and he was sentenced to 30-50 years in prison; the longest prison sentence ever rendered for prostitution in United States history.

There was immediate outrage in the ranks of organized crime throughout America. All the top gangsters knew for sure Luciano never had a thing to do with prostitution. Dewey had broken the rules, and he showed no shame in doing so.

In 1941, the imprisoned Gurrah Shapiro sent a note to his pal Louie Lepke, who was awaiting the electric chair.

The note said,
“I told you we should have killed Dewey when we had the chance.”

In Rich Cohen's book
Tough Jews,
Cohen said crime writer and former cop Ralph Salerno had once told him on this subject; “The gangsters said to us: Don't frame me. Don't drop a little envelope in my pocket, then run up and say 'I caught you with narcotics.' That's a frame-up. That's a no-no. That's what I demand of you, Ralph. But what I give you in return is, if you ever catch me right, I go to jail and do my time. And they don't drag me out of the courtroom saying, 'You son of a bitch, you and your family are dead.' None of that crap. I'm a professional. And if you be a professional too and catch me right, then it's not personal.”

Luciano did a little over 10 years in the slammer. But after World
War II, he was freed from jail. As part of his deal with the government for having his men protect the waterfront from enemy sabotage, Luciano was deported to Italy. One of the men who signed off on this deal was New York Governor Thomas E. Dewey. It was also alleged, in 1944 and again in 1948, when Dewey was running for President of the United States, Luciano's pals had contributed $600,000 to Dewey's campaign coffers.