Dutch Schultz, c.1931
Arthur Simon Flegenheimer
August 6, 1901
|Died||October 24, 1935 (aged 34)|
|Cause of death||Peritonitis from a gunshot|
|Resting place||Gate of Heaven Cemetery, Hawthorne, New York|
|Known for||Murder, Bootlegging, Numbers game, Extortion, Racketeering|
|Net worth||$7 million|
|Opponent(s)||The Rock Brothers, Bronx |
U.S. Attorney Thomas Dewey
|Allegiance||New York City's Five Families (nominally)|
Dutch Schultz (born Arthur Simon Flegenheimer; August 6, 1901 – October 24, 1935) was a New York City-area German-Jewish-American mobster of the 1920s and 1930s who made his fortune in organized crime-related activities, including bootlegging and the numbers racket. Weakened by two tax evasion trials led by prosecutor Thomas Dewey, Schultz's rackets were also threatened by fellow mobster Lucky Luciano. In an attempt to avert his conviction, Schultz asked the Commission for permission to kill Dewey, which they refused. When Schultz disobeyed them and made an attempt to kill Dewey, the Commission ordered his murder in 1935.
Arthur Simon Flegenheimer was born on August 6, 1901, to German Jewish immigrants Herman and Emma (Neu) Flegenheimer, who had married in Manhattan on November 10, 1900. He had a younger sister, Helen, born in 1904. Herman Flegenheimer apparently abandoned his family, and Emma is listed as divorced in the 1910 census. (In her 1932 petition for U.S. citizenship, however, she wrote that her husband had died in 1910.) The event traumatized the young Flegenheimer who spent the rest of his life denying that his father had abandoned his family. Flegenheimer dropped out of school in the eighth grade to help support himself and his mother. He worked as a feeder and pressman for the Clark Loose Leaf Company, Caxton Press, American Express, and the Schultz Trucking in the Bronx between 1916 and 1919.
When Flegenheimer began working at a neighborhood night club owned by a small-time mobster, he started robbing craps games before turning to burglary. Eventually he was caught breaking into an apartment and sent to the prison on Blackwell's Island (now called Roosevelt Island). Flegenheimer/Schultz's mugshot, aged 18, was published in the 2010 book New York City Gangland. He proved to be such an unmanageable prisoner that he was transferred to a work farm in Westhampton, Long Island. After he was recaptured following an escape, he had an extra two months added to his sentence.
Flegenheimer was released on parole on December 8, 1920 and went back to work at Schultz Trucking. With the enactment of Volstead Act and the start of Prohibition in the United States the shipping company began smuggling liquor and beer into New York City from Canada. This led Flegenheimer to start associating with known criminals. It was also during this time that Flegenheimer became better known as "Dutch" Schultz (Dutch is a corruption of "Deutsch"). Following a disagreement, he left Schultz Trucking and went to work for their Italian competitors.
In the mid 1920s, Schultz had begun work as a bouncer at the Hub Social Club, a small speakeasy in the Bronx, owned by a gangster named Joey Noe. Noe was impressed with Schultz's ruthlessness and reputation for brutality when he lost his temper, and made him a partner. Together they soon opened more illegal drinking joints around the Bronx. Using their own trucks to reduce high delivery costs, they brought in beer made by Frankie Dunn, a brewer in Union City, New Jersey. Schultz often rode shotgun to guard the trucks from hijackers.
Schultz and Noe soon had to deal with the brothers John and Joe Rock who were already running a bootlegging operation in The Bronx. Initially the brothers refused to buy beer from Noe and Schultz, but eventually John, the elder brother, agreed to cooperate; however his younger brother Joe refused. One night the Noe-Schultz gang kidnapped Joe, beat him and hung him by his thumbs from a meat hook. They then allegedly wrapped a gauze bandage smeared with discharge from a gonorrhea infection over his eyes. His family reportedly paid $35,000 for his release. Shortly after his return, he went blind. From then on, the Noe-Schultz gang met little opposition as they expanded across the entire Bronx. Bootlegging during Prohibition made Schultz very wealthy.
The Noe-Schultz operation, which had begun to flourish in the Bronx, soon became the only gang able to rival the network of Italian crime syndicates that became the Mafia's Five Families. When the gang expanded from the Bronx over to Manhattan's Upper West Side and the neighborhoods of Washington Heights, Yorkville, and Harlem, they moved their headquarters from the Bronx to East 149th Street in Manhattan. However, this brazen move led to a bootleg war with New York's Irish Mob led by Jack "Legs" Diamond.
In the early hours of October 16, 1928 Noe was shot several times outside the Chateau Madrid, a speakeasy at 231 West 54th. Although seriously wounded, he managed to return fire. A blue Cadillac was seen hitting some parked cars and losing one of its doors before speeding away. When police found the car an hour later, they discovered the body of a Louis Weinberg in the back seat (no relation to Schultz gang members Abraham "Bo" Weinberg and George Weinberg). Noe's wounds became infected and he died on November 21. Schultz was left angry and distraught by the loss of his friend and mentor.
Retaliation started a few weeks later when Arnold Rothstein, a kingpin in the Jewish mob, was found fatally shot near the service entrance to the Park Central Hotel on November 6, 1928. Although George "Hump" McManus supposedly killed Rothstein over a bad gambling debt, Schultz is believed to have ordered the killing in retribution for Noe's death. This theory is supported by the fact that the first person McManus rang after the killing was Schultz's attorney, Dixie Davis. Schultz's trusted lieutenant, Bo Weinberg, then picked up McManus and drove him away from the murder scene. McManus was later cleared of the killing.
On October 12, 1930, Legs Diamond was shot and wounded at the Hotel Monticello on Manhattan's West Side. Two gunmen forced their way into Diamond's room and shot him five times before fleeing. Still in his pajamas, Diamond staggered into the hallway and collapsed. When asked later by the New York Police Commissioner how he managed to walk out of the room, Diamond said he drank two shots of whiskey first. Diamond was rushed to the Polyclinic Hospital in Manhattan, where he eventually recovered. On December 30, 1930, Diamond was discharged from Polyclinic. After recovery from his wounds, he left New York for a lengthy stay in Europe. During his absence, his gang was forced to leave the city. When he returned home, Diamond began carving out a new territory for himself in Albany. He was killed there by two gunmen in December 1931.
Schultz also had to deal with internecine conflicts within his own gang. In 1930, one of Schultz's enforcers, Vincent Coll, demanded to be made an equal partner. This was because Schultz gang members received a flat salary instead of the customary percentage from the take - a unique arrangement compared to other major gangs in organized crime. When Schultz refused, Coll formed his own crew with the ultimate goal of murdering Schultz and taking over his territory. In the bloody gang war that followed, Coll lost his older brother Pete and earned the nickname "Mad Dog" from the press after a child was killed during a botched assassination committed by his gang. In February 1932, Coll was lured into a trap. While he was taking a call in a drugstore phone booth, gunmen entered the store and machine-gunned him to death. The killers may have included Edward 'Fats' McCarthy and the brothers Bo and George Weinberg.
With the end of Prohibition, Dutch Schultz needed to find new sources of income. His answer came with Otto "Abbadabba" Berman and the Harlem numbers racket. The numbers racket, the forerunner of "Pick 3" lotteries, required players to choose three numbers, which were then derived from the last number before the decimal in the handle (total amount bet) taken daily at Belmont Park. Berman was a middle-aged accountant and math whiz who helped Schultz fix this racket. In a matter of seconds, Berman could mentally calculate the minimum amount of money Schultz needed to bet at the track in order to alter the odds at the last minute. This strategy ensured that Schultz always controlled which numbers won, guaranteeing a larger number of losers in Harlem and a multimillion-dollar-a-month tax-free income for Schultz. Berman was reportedly paid $10,000 a week for his valued insight (the equivalent of $143,000 in 2016).
Along with the policy rackets, Schultz began extorting New York restaurant owners and workers. Using strong-arm tactics such as beatings and stink bomb attacks, Schultz merged all the local unions under his Metropolitan Restaurant & Cafeteria Owners Association. A hulking gangster named Jules Modgilewsky, also known as Julie Martin, served as Schultz's point man in this operation. Martin successfully extracted thousands of dollars of tributes and "dues" from the terrified restaurant owners.
During Schultz's tax trial (see below) he began to suspect that Martin was skimming from the shakedown operation; Schultz had recently discovered a $70,000 disparity in the books. On the evening of March 2, 1935, Schultz invited Martin to a meeting at the Harmony Hotel in Cohoes, New York. At the meeting, at which chief enforcer Bo Weinberg and mob lawyer Dixie Davis were also present, Martin belligerently denied Schultz's charges and began arguing with him. Both men were drinking heavily as the argument continued and Schultz sucker-punched Martin. Finally, Martin admitted that he had taken $20,000, which he believed he was "entitled to" anyway. Dixie Davis related what happened next:
Dutch Schultz was ugly; he had been drinking and suddenly he had his gun out. Schultz wore his pistol under his vest, tucked inside his pants, right against his belly. One jerk at his vest and he had it in his hand. All in the same quick motion he swung it up, stuck it in Jules Martin's mouth and pulled the trigger. It was as simple and undramatic as that—just one quick motion of the hand. Dutch Schultz did that murder just as casually as if he were picking his teeth.
As Martin contorted on the floor, Schultz apologized to Davis for killing someone in front of him. When Davis later read a newspaper story about Martin's murder, he was shocked to find out that the body was found on a snow bank with a dozen stab wounds to the chest. When Davis asked about this, Schultz replied dead-pan "I cut his heart out."
In the mid 1930s, U.S. Attorney Thomas Dewey had set his sights on convicting Schultz for non-payment of federal taxes. Although he was initially convicted in a Manhattan court, the verdict was overturned on appeal. Schultz's lawyers then successfully argued that their client could never get a fair retrial in New York City. The appeal judge agreed and moved the second trial to the small town of Malone in rural upstate New York.
With the case going to a second trial, Schultz quickly set about presenting himself to the townspeople of Malone as a country squire and good citizen. He donated cash to local businesses, gave toys to sick children, and performed other charitable deeds. The strategy worked because he was acquitted of tax evasion in late summer 1935. The mayor of New York, Fiorello La Guardia, was so outraged at the verdict he issued an order that Schultz should be arrested on sight should he return to city. As a result, Schultz was forced to relocate his base of operations across the Hudson River to Newark.
As the defense costs to fight his tax case mounted, Schultz had found it necessary to reduce the commission he paid to those running his policy rackets in order to bolster what he called the "Arthur Flegenheimer Defense Fund." This tactic angered the runners and the games' controllers, who despite being threatened with violence for showing any dissent, hired a hall, held a mass protest meeting, and declared a strike of sorts. Very quickly the cash flow dried up and Schultz was forced to back down. This permanently damaged the relationship between his gang and their associates.
Chief lieutenant Bo Weinberg was so concerned about the amount of money that Schultz was taking from the rackets to fund his legal defense, he sought advice from New Jersey mob boss Longy Zwillman, who put him in touch with Sicilian-born gangster Charlie "Lucky" Luciano. The deal Weinberg wanted was to retain a percentage and keep overall control of the Schultz gang. However, Luciano instead planned to break up the gang's rackets and territory among his own associates once Schultz was convicted of tax evasion. Believing that a guilty verdict was a foregone conclusion at the second trial, Luciano and his allies implemented their plan to take control. Their plan met little resistance because of the ongoing bad feelings over the attempted pay cuts and the support of Weinberg.
However, when Schultz was acquitted he quickly arranged a meeting with Luciano through The Commission in order to "clarify" the situation. Schultz even converted to Roman Catholicism to cozy up to Luciano. Luciano placated Schultz with the explanation that they were just "looking after the shop" while he was away to ensure that everything ran smoothly, and that full control of his rackets would be returned to Schultz once the heat died down. Publicly Schultz was forced to accept this version of events because of the ongoing attention from law enforcement agencies and U.S. Attorney Thomas Dewey. But Luciano knew Schultz's volatile character; he was well aware that when the time was right the Bronx gangster would launch an all-out war to recover what he had lost and seek revenge. A month after his acquittal, his own Chief lieutenant Bo Weinberg was never seen again after walking out of a Midtown Manhattan nightclub.
Schultz soon went before an emergency meeting of the Mafia's The Commission to ask permission to kill his legal enemy, U.S. Attorney Thomas Dewey. While some Commission members, including Albert Anastasia and Jacob Shapiro, initially supported Schultz's proposal, most were against it because they feared the full power of the American law enforcement apparatus would come down on them if they murdered a federal official. After Joseph Bonanno, the boss of the Bonanno family called the idea "insane", the Commission voted unanimously against the proposal. Schultz reacted furiously to their decision, accusing the Five Families of trying to steal his rackets and "feed him to the law."
A few weeks later notorious Murder, Inc killer Albert Anastasia approached Luciano with information that Schultz had asked him to stake out Dewey's apartment building on Fifth Avenue. Although the contract was supposed to be secret, Anastasia, who was a Calabrian immigrant, told Luciano out of respect for the Sicilian. On hearing the news, the Mafia's Commission held a discreet meeting at a Midtown Deli to discuss the matter. The group decided its decision had to be unanimous because it would be the first sanctioned killing of a high-ranking mob boss since Joe Masseria in 1931. Schultz was popular and still had friends within the Mafia. After six hours of deliberations the Commission ordered Louis Buchalter to eliminate "The Dutchman".
Schultz was shot at 10:15 p.m. on October 23, 1935 while he was at the Palace Chop House restaurant at 12 East Park Street in Newark, New Jersey with Otto Berman, his accountant; Abe Landau, his new chief lieutenant; and his personal bodyguard, Bernard "Lulu" Rosenkrantz. While Schultz was in the men's room, two Murder, Inc. hitmen named Charles "The Bug" Workman and Emanuel "Mendy" Weiss, entered the establishment. (Workman was later sentenced to 23 years in Trenton State Prison for the crime. In 1944, Weiss was electrocuted for an unrelated killing at Sing Sing Correctional Facility on the same night as Louis Capone and Louis "Lepke" Buchalter. The building that housed the Palace Chop House was torn down in 2008.). 
Workman and Weiss entered the back room of the restaurant where they fired numerous times at the Schultz gang members. Berman collapsed immediately after being shot. Landau's carotid artery was severed by a bullet passing through his neck, while Rosencrantz was hit repeatedly at point blank range. Nevertheless, despite their injuries, both gangsters rose to their feet and returned fire driving the assassins out of the restaurant. Weiss jumped into the getaway car and ordered the driver to abandon Workman. Landau chased Workman out of the bar and emptied his pistol at him, though he missed. After Workman had fled on foot, Landau finally collapsed onto a nearby trash can.
Witnesses say Schultz staggered out of the bathroom, clutching his side, and sat at his table. He called for anyone who could hear him to get an ambulance. Rosencrantz rose to his feet and demanded the barman (who had hidden during the shootout) give him five nickels in exchange for his quarter. Rosencrantz called for an ambulance before he too lost consciousness.
When the first ambulance arrived, medics determined Landau and Rosencrantz were the most seriously wounded and needed to be taken immediately to Newark City Hospital. A second ambulance was called to take Schultz and Berman. Berman was unconscious, but Schultz was drifting in and out of lucidity, as police attempted to comfort him and get information. Because the medics had no pain relievers, Schultz was given brandy to relieve his suffering. When a second ambulance arrived from Newark City Hospital, Schultz, gave an intern in the ambulance $3,000 in cash because he thought he was dying saying it was not going to do him any good where he was going. After surgery, when it looked as if Schultz might live, the intern was so worried about Schultz's coming back for his cash that he handed in the money. Landau and Rosencrantz refused to say anything to the police until Schultz had given them permission after arriving in the second ambulance. Even then, they provided the police with only minimal information.
At 2:20 that morning, Otto Berman, the oldest and least physically fit of the four men, was the first to die. Abe Landau died of exsanguination at 6am. When Rosencrantz was taken into surgery, the surgeons were so incredulous that Rosencrantz was still alive despite his blood loss and ballistic trauma, they were unsure of how to treat him. He eventually died from his injuries 29 hours after the shooting.
Schultz received the last rites from a Catholic priest at his request just before he went into surgery. Schultz lingered for 22 hours, speaking in various states of lucidity with his wife, mother, a priest, police, and hospital staff, before dying of peritonitis.
By receiving last rites, Schultz was permitted interment in the Roman Catholic Gate of Heaven Cemetery in Hawthorne, Westchester County, New York, although, at the request of his Orthodox Jewish mother, Schultz's body was draped with a talit, a traditional Jewish prayer shawl.
Schultz's last words were a strange stream-of-consciousness babble, spoken in his hospital bed to police officers who attempted to calm him and question him for useful information. Although the police were unable to extract anything coherent from Schultz, his rambling was fully transcribed by a police stenographer. These include:
Schultz's last words have inspired a number of writers to devote works related to them. Beat Generation author William S. Burroughs published a screenplay in novel form titled The Last Words of Dutch Schultz in the early 1970s, while Robert Shea and Robert Anton Wilson connected Schultz's words to a global Illuminati-related conspiracy, making them a major part of 1975's The Illuminatus! Trilogy. (In Wilson's and Shea's story, Schultz's ramblings are a coded message.) In his 1960 anthology Parodies, Dwight Macdonald presents Schultz's last words as a parody of Gertrude Stein. In the novel Billy Bathgate, the protagonist used clues from Schultz's deathbed ramblings to locate his hidden money.
Although Schultz's gang was meant to be crippled, several of his associates survived the night. Martin "Marty" Krompier, whom Schultz left in charge of his Manhattan interests while he hid in New Jersey, survived an assassination attempt the same night as the shootings at the Palace Chop House. No apparent attempt was made on the life of Irish-American mobster John M. Dunn, who later became the brother-in-law of mobster Edward J. McGrath and a powerful member of the Hells Kitchen Irish mob.
After Schultz's death, it was discovered that he and his wife had never gone through an official marriage ceremony, and the possible existence of another wife emerged with the discovery of letters and pictures of another woman and children among his effects at the hotel where he was staying in Newark. This was never resolved, as his common-law wife refused to talk about it and the mystery woman never came forward. Two other women also called at the morgue to receive his effects, but their identities were never established. Though he was estimated to be worth $7 million when he died, no trace of the money was ever found.
Shortly before his death, fearing that he would be incarcerated as a result of Dewey's efforts, Schultz commissioned the construction of a special airtight and waterproof safe into which he placed $7 million in cash and bonds (the equivalent of $130,875,985.40 in 2019 dollars). Schultz and Rosencrantz then drove the safe to an undisclosed location somewhere in upstate New York and buried it. At the time of his death, the safe was still interred; as no evidence existed to indicate that either Schultz or Rosencrantz had ever revealed the location of the safe to anyone, the exact place where the safe was buried died with them. Schultz's enemies are said to have spent the remainder of their lives searching for the safe. As the safe has never been recovered, treasure hunters have annually returned to look for it in the Catskills. One such meeting became the documentary film Digging for Dutch: The Search for the Lost Treasure of Dutch Schultz.
Several actors have portrayed Dutch Schultz in film and television.
On television, in the 1959 The Untouchables episode "The Dutch Schultz Story", Schultz was played by Lawrence Dobkin. In the 1993-1994 series The Untouchables, he was portrayed by Si Osborne in the 1993 episode "Attack on New York".
Jack (Legs) Diamond, human ammunition dump for the underworld, was killed in a cheap rooming house at 67 Dove ...(subscription required)
Arthur (Dutch Schultz) Flegenheimer was acquitted of income tax evasion charges here at 8:55 o'clock tonight after the jury had been out 28 hours and 23 minutes. It was his second trial. ...(subscription required)
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