Dutch Schultz, (born Arthur 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 such as bootlegging alcohol and the numbers racket. Weakened by two tax evasion trials led by prosecutor Thomas E. Dewey, Schultz's rackets were threatened by fellow mobster Lucky Luciano. In an effort to avert his conviction, Schultz asked the Commission for permission to kill Dewey, which they declined. After Schultz disobeyed the Commission and attempted to carry out the hit, they ordered his assassination in 1935.
Arthur Simon Flegenheimer was born to German Jewish immigrants Emma and Herman Flegenheimer. When he was 14 years old, his father abandoned the family. The event traumatized Schultz; throughout his life he denied that his father had left the family, instead defending the elder Flegenheimer as a respectable man and ideal father who died of disease while at other times denying knowledge of his father's identity. As a result of his father's departure, Schultz left school to find work and support himself and his mother. Between 1916 and 1919, Schultz held legitimate jobs as a feeder and pressman for Clark Loose Leaf Co., Caxton Press, American Express, and Schultz Trucking in the Bronx. While apprenticed to low-level mobsters at a neighborhood night club, Schultz began robbing craps games before graduating to burglary. Schultz was eventually caught breaking into an apartment and sent to prison on Blackwell's Island (now known as Roosevelt Island). A previously unknown photograph of Schultz at age 18, during his first and only incarceration, was published in the 2010 book "New York City Gangland." The prison staff soon found the young inmate to be unmanageable and arranged his transfer to the Westhampton Farms work farm in Westhampton, New York. Schultz escaped from the work farm but was soon recaptured and given an additional two months on his sentence. He was paroled December 8, 1920.
After Schultz's release from the work farm, he went back to work at Schultz Trucking in the Bronx and picked up with his old associates. When the mobsters he was hooking up with asked him what his name was, he said "Dutch" Schultz. Dutch was the nickname of the trucking company's owner's youngest son. "Dutch" was also often used for German Americans actually meaning "Deutsch". With the enactment of Prohibition, Schultz Trucking went into the business of bringing hard liquor and beer into New York City from Canada. Dutch (Arthur) shot his first victim while there. Mr. Schultz was quite upset with the young Arthur Flegenheimer for using his son's nickname and for the shooting; an argument ensued and Arthur left Schultz Trucking to pursue a full-time career working for the Italian competitors of the German-born Schultz. As a result of Prohibition, Schultz, along with other organized crime figures, became a wealthy man.
In 1928, gangster Joey Noe set up the Hub Social Club, a hole-in-the-wall speakeasy, in a Brook Avenue tenement and hired Schultz to work in it. While working at the club, Schultz gained a reputation for brutality when he lost his temper. Impressed by Schultz's ruthlessness, Noe soon made him a partner. With the profits from their speakeasy, Noe and Schultz opened more operations. To avoid the high delivery cost of wholesale beer, the two men bought their own trucks. Frankie Dunn, a Union City, New Jersey, brewery owner, supplied Noe and Schultz with beer. Schultz would ride shotgun on deliveries to protect the beer trucks from hijackers. Noe and Schultz then decided that they would also furnish the beer for their rival speakeasies. If a speakeasy owner refused to buy beer from the Noe-Schultz combine, he would pay a very steep price.
The Rock brothers, who had established a territory in the Bronx while Noe and Schultz were still hanging out on street corners, did not appreciate incursions on their turf and decided to play hardball. However, the Rock brothers underestimated the newcomers. Eventually, elder brother John Rock agreed to step aside, but younger brother Joe refused to give in. One night the Noe-Schultz gang kidnapped and brutalized him. The gang beat him and hung him by his thumbs on a meat hook and then allegedly wrapped a gauze bandage smeared with discharge from a gonorrhea infection over his eyes. His family reportedly paid $35,000 and he was released. Shortly after his return, he went blind. From then on, the Noe-Schultz gang met little opposition as they expanded to control the beer supply for the entire Bronx.
Dutch Schultz was defended by the prominent attorney James Noonan from Albany, where he was acquitted of tax evasion.
The Noe-Schultz operation, which had begun to flourish in Bronx, became the only non-Italian gang able to rival those who would become the heads of the Mafia's Five Families. It now expanded over to Manhattan's Upper West Side into the neighborhoods of Washington Heights, Yorkville, and Harlem. Schultz and Noe moved their headquarters from Bronx to what has been said to be East 149th Street in Manhattan (although no such street actually exists); however, the gang's move to Manhattan now brought them into direct competition with Jack "Legs" Diamond. A full-scale war soon broke out between the two gangs.
Early one morning in 1928, Noe was gunned down outside of the Chateau Madrid on 54th Street. He managed to get off a couple of shots, although he was mortally wounded. Witnesses later reported seeing a blue Cadillac bounce off a parked car and lose one of its doors before speeding away. When police recovered the car an hour later, they discovered the body of Louis Weinberg (no relation to Schultz gang members Abraham "Bo" Weinberg and George Weinberg) in the back seat. Joey Noe managed to survive the ambush but died a month later. Schultz was crushed by the loss of his friend and mentor, and the underworld legend is that he held Diamond responsible.
A few weeks after the Chateau Madrid ambush, Arnold Rothstein was found fatally wounded near a service entrance to the Park Central Hotel. While the most common theory for Rothstein's murder was that George "Hump" McManus killed him over a bad gambling debt, many believed Schultz ordered the Rothstein hit in retribution for the Chateau Madrid meeting. One piece of evidence supporting this theory was that the first person McManus called after the Rothstein shooting was Schultz's attorney, Dixie Davis. After the phone call to Davis, Bo Weinberg picked up McManus and spirited him away from the murder scene. McManus was later cleared of the killing.
In October 1929, Diamond and his mistress were dining in their pajamas in her suite at the Hotel Monticello. Gunmen broke down the door and sprayed the room with machine gun fire, hitting Legs five times. After recovering from his wounds, Diamond left New York for a stay in Europe. During his absence, the Diamond gang was forced to relocate outside the city. When Diamond returned home, he began carving out a new territory for himself in Albany.
"Mad Dog" Coll
Unique among the major gangs in organized crime, Schultz gang members received a flat salary instead of the customary percentage of the take from any operations in which they were involved. In 1930, one of Schultz's enforcers, Vincent Coll, decided that this arrangement was unacceptable and demanded to be made a partner instead. When Schultz refused, Coll formed his own crew with the ultimate goal of murdering Schultz and taking over his territory. During the bloody conflict 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, the Schultz gang lured Coll into a trap. While Coll was talking in a drugstore phone booth, gunmen burst into the store and machine-gunned him to death. The killers may have included Fats McCarthy and the Weinberg brothers.
The Numbers Game
With the end of Prohibition, 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 at the racetrack. Berman was a middle-aged accountant and math whiz who let 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 at the last minute in order to alter the odds. 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 Restaurant Racket
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 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 Bo Weinberg and 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 stolen only $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 Schultz about this, the boss dead-panned, "I cut his heart out."
At the time of the Martin killing, Schultz was busy fighting a federal tax evasion case; U.S. Attorney Thomas Dewey had set his sights on convicting Schultz. Schultz was convicted of the charges, but they were soon overturned. Schultz's lawyers convinced the judge that their client could not get a fair retrial in New York City, so the judge moved it to the small town of Malone in rural upstate New York.
Looking to influence potential jurors, Schultz presented himself to the town as a country squire and good citizen. He donated cash to local businesses, gave toys to sick children, and performed other charitable deeds, a strategy that proved successful. In the late summer of 1935, to everyone's surprise, Schultz was acquitted of tax evasion.
Following his acquittal in the second trial, the outraged mayor of New York, Fiorello La Guardia, issued an order that Schultz be arrested on sight should he return to New York. As a result, Schultz was forced to relocate his base of operations across the Hudson River to Newark.
As the legal and related costs of fighting his tax indictment continued to mount, Schultz found it necessary to cut the commissions of his runners and controllers in order to bolster the "Arthur Flegenheimer Defense Fund." He reduced pay from around 50 percent down to 10 percent for the runners and to 5 percent for the controllers. However, Schultz's poverty plea fell on universally deaf ears, even after his associates began making threats of violence if any serious resistance developed. The runners and controllers hired a hall, held a mass protest meeting, and declared a strike of sorts. Suddenly, fewer and fewer bets were being delivered to the banks, reducing the vast policy inflow to a mere trickle as Schultz's street soldiers lost their zeal. Schultz was forced to back down and restore the status quo, but he had already permanently damaged his relationships with his underlings.
Bo Weinberg, concerned that the drain of money from Schultz's rackets into his legal defense fund was going to ruin the business for everyone else, sought advice from New Jersey mobster Abner Zwillman, who in turn put him in contact with Charlie "Lucky" Luciano. Weinberg was hoping to make a deal whereby he would retain overall control and a percentage, but Luciano instead planned to divide the Schultz empire among his associates, which was to take place in the event of Schultz's being convicted.
Believing that Schultz would be convicted in the second trial, Luciano and his allies implemented their plan to move in on his empire. Given the circumstances of his takeover of the policy racket, the bad feeling created by his attempted pay cuts, and the complicity of Weinberg, his number one enforcer, the takeover would have met with little resistance. Schultz quickly sought a meeting with Charlie Luciano, his erstwhile colleague on 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, only to ensure that everything ran smoothly, and promised that control of his rackets would be returned.
In a weakened position and still under constant harassment from the authorities, Schultz was forced to accept Luciano's version of events. However, Luciano was well aware of Schultz's prior history and would have had no illusions about what the outcome would be in the long term—that as soon as he felt able, Schultz would launch an all-out war to recover what he had lost and get revenge. As for Weinberg, he disappeared without a trace, and it was believed that Schultz had arranged the disappearance.
Gangland legend has it that, still suspicious of Luciano after the Weinberg betrayal, Schultz soon went before an emergency meeting of the Mafia Commission and asked permission to kill his enemy, U.S. Attorney Thomas E. Dewey. While some Commission members, including Albert Anastasia and Jacob Shapiro, supported Schultz's proposal, the majority were against it on the basis that the full weight of the authorities would come down on them if they murdered Dewey, and they voted unanimously against the proposal. Bonanno crime family boss Joe Bonanno thought the idea was "insane." Schultz was furious at the outcome of the vote; he accused the Commission of trying to steal his rackets and "feed him to the law." After Schultz left in a rage, the Commission decided finally to kill him in order to prevent the Dewey hit. Calabrian immigrant Albert Anastasia was ordered to arrange Schultz's assassination and assigned Jewish mobster Louis Buchalter to take care of it.
At 10:15 p.m. on October 23, 1935, Schultz was shot at the Palace Chophouse at 12 East Park Street in Newark, New Jersey, which he was using as his new headquarters. Two bodyguards and Schultz's accountant were also killed.
Schultz was in the men's room when Charles Workman and Emanuel "Mendy" Weiss, two hitmen working for Buchalter's Murder, Inc., entered the establishment. Accounts vary as to what happened next, specifically regarding the order in which the two men killed Schultz and his crew. Workman's later account of entering the bathroom to find Schultz either urinating or washing his hands suggested that he managed to slip past the crew and that Schultz was either the first to be shot or that he and Weiss opened fire simultaneously.
Workman fired two rounds at Schultz; only one struck him, slightly below his heart, and it ricocheted around his abdomen before exiting from the small of his back. Schultz collapsed onto the men's room floor, and Workman joined Weiss in the back room of the restaurant. Both men fired several rounds at Schultz's crew: Otto Berman, Schultz's accountant; Abe Landau, Schultz's chief henchman; and Schultz's bodyguard, Bernard "Lulu" Rosencrantz. Berman collapsed onto the floor immediately after being shot. Despite being mortally wounded (Landau's carotid artery was severed by a bullet passing through his neck, whereas Rosencrantz was struck repeatedly at point blank range with 00 lead buckshot), both men rose to their feet and returned fire against Workman and Weiss, driving them out of the restaurant. Weiss entered the getaway car and instructed the driver to abandon Workman; Landau chased Workman out of the bar and fired the remaining bullets in his gun at him but was unable to strike him. Workman fled the scene on foot and Landau collapsed onto a nearby trash can.
Shortly after Workman fled, Schultz, not wanting to die on a bathroom floor, staggered out of the bathroom, clutching his side, and sat down at his table; he called out for anyone who could hear him to get an ambulance. Rosencrantz, who had collapsed while chasing Workman from the Palace Chophouse, rose to his feet and demanded that the barman (who had hidden beneath the bar during the shootout) give him five nickels in exchange for his quarter. Rosencrantz then placed a call for an ambulance before losing consciousness in the telephone booth.
When the ambulance arrived, medics determined that Landau (who had all but bled to death) and Rosencrantz (who was unconscious in the phone booth) were the most seriously wounded of the four men and had them transported to the hospital first; a call was placed to send a second ambulance for Schultz and Berman. Although Berman was unconscious, Schultz was drifting in and out of lucidity, and while he waited for medical attention police attempted to comfort him and get information about his assailants. Because the medics lacked pain-relieving medication, Schultz was given brandy in an attempt to relieve his suffering. When the second ambulance arrived, Schultz gave one of the responding medics $10,000 in cash to ensure that he received the best possible treatment. After surgery, when it looked as if Schultz would live, the medic was so worried that he would be indebted to the mobster for keeping the money that he shoved the money back in bed with Schultz.
Otto Berman, the oldest and least physically fit of the four men, was the first to die, at 2:20 that morning. At the hospital, Landau and Rosencrantz waited for surgery and refused to say anything to the police until Schultz arrived and gave them permission; even then, they provided the police with only minimal information. Abe Landau died of exsanguination eight hours after the shooting. Meanwhile, Rosencrantz was taken into surgery; the doctors, incredulous that Rosencrantz was still alive despite voluminous blood loss and ballistic trauma, were unsure of how to treat him. He survived for 29 hours after the shooting before succumbing to his injuries.
Before Schultz went to surgery, he received the last rites from a Catholic priest at his request. During his second trial, Schultz decided to convert to Catholicism and had been studying its teachings ever since, convinced that Jesus had spared him prison time. Doctors performed surgery but were unaware of the extent of damage done to his abdominal organs by the ricocheting bullet. They were also unaware that Workman had intentionally used rust-coated bullets in an attempt to give Schultz a fatal bloodstream infection (septicemia) should he survive the gunshot. 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.
Although Schultz's empire 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 concurrent with the Palace Chophouse shooting, and no apparent attempt was made on the life of Irish-American mobster John M. Dunn, who later became the brother-in-law of mobster Eddie McGrath and a powerful member of the Hells Kitchen Irish mob.
Charles Workman was eventually convicted of Schultz's murder and sent to Sing Sing to serve a 23-year sentence. Upon his arrival, Workman requested to see Warden Lewis Lawes. Workman wanted to be housed in the same cell block as several of his old friends who were incarcerated there; his request was not granted. Emmanuel Weiss was electrocuted for an unrelated killing in 1944 on the same evening as Louis "Lepke" Buchalter.
Last words and popular culture
Schultz's last words were a strange stream-of-consciousness babble. They were taken down by a police stenographer. This includes the famous:
- "A boy has never wept...nor dashed a thousand kin."
But the entire text is much more rambling, for example:
- "You can play jacks, and girls do that with a soft ball and do tricks with it.
- Oh, Oh, dog Biscuit, and when he is happy he doesn't get snappy."
One of his last utterances was a reference to "French Canadian bean soup" (French Canadian pea soup is a popular dish that is still produced as canned goods by many food companies).
Schultz's last words inspired a number of writers to devote works related to them. Beat Generation author William S. Burroughs published a screenplay in novel form entitled 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.
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.
By receiving last rites, Schultz was guaranteed interment in Gate of Heaven Cemetery in Hawthorne in 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.
Several actors have played Dutch Schultz in films: Vic Morrow in Portrait of a Mobster (1960), James Remar in The Cotton Club (1984), Dustin Hoffman in Billy Bathgate (1991), Bruce Nozick in Hit the Dutchman (1992), Lance Henriksen in The Outfit (1993), and Tim Roth in Hoodlum (1997).
Schultz's lost treasure
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. 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. Gangland lore held that Schultz's enemies, including Lucky Luciano, spent the remainder of their lives searching for the safe. The safe has never been recovered.
Treasure hunters meet annually in the Catskills to search for the safe. One such congregation was documented in the documentary film Digging for Dutch: The Search for the Lost Treasure of Dutch Schultz.