Dutch Schultz's reign on the streets of New York was marked by a lucrative bootlegging operation and violent gang wars — but it all came to an end when Murder Inc. hitmen took him out in 1935.
Library of CongressDutch Schultz, born Arthur Simon Flegenheimer.
New York City in the 1920s and 1930s was the Wild West of organized crime. Gangs were growing in numbers, vying for control of the city’s underground, and Prohibition provided a golden opportunity for mobsters looking to get rich. You had to be ruthless to make it big, and there was perhaps no one more ruthless than Dutch Schultz.
Schultz made a name for himself early on in the Bronx, first working as a bouncer at a speakeasy. His boss, gangster Joey Noe, was impressed with Schutlz’s ruthlessness and brutality, and the two eventually became partners, opening several more illegal drinking joints in the area. Schultz’s brutal nature proved to be a boon for their operation when the gang wars broke out — and Noe’s murder was a tipping point that put Schultz over the edge.
Dutch Schultz quickly proved that he wouldn’t hesitate to eliminate anyone who posed a threat to his operations, and this allowed him to maintain tight control over his territory. Schultz’s brutal enforcement tactics worked well for him in the beginning, but they also proved to be his undoing once the Commission was established and certain rules began to be enforced within the mob.
Once Schultz threatened to murder Thomas Dewey — who would later become the governor of New York — members of the Commission realized “The Dutchman’s” rage might cause serious issues and bring unwanted attention. He needed to be taken out.
From Arthur Flegenheimer To Dutch Schultz
Dutch Schultz, born Arthur Flegenheimer to German immigrant Jews in 1902, grew up in the slums of The Bronx. After his father left the family as a teenager, the impressionable young man turned his impoverished state into a life of crime as a professional gangster. His violent life caught up with him, eventually, but not before leaving behind a trail of blood, mayhem, and perhaps a buried treasure.
Dutch Schultz began his criminal career with petty burglaries and theft, which led to his arrest at the age of 17. Schultz served 17 months in prison for burglary after he was caught breaking into an apartment — the only prison time he ever saw in his life.
It was during his time in prison that he eschewed his birth name and became Dutch Schultz because, as he put it, Flegenheimer was too long to for newspaper headlines.
Public DomainDutch Schutlz’s mugshot from 1931.
Once out of prison, Schultz connected with organized crime bosses Lucky Luciano and Legs Diamond. At the same time, Schultz was cultivating a relationship with another gangster by the name of Joey Noe, working as a bouncer at Noe’s Hub Social Club. Noe found himself impressed by Schultz and offered to become business partners. Soon enough, the two were opening a series of underground pubs all across the Bronx before expanding into other territories.
Schultz and Noe ran into a bit of trouble with another gang of bootleggers in the Bronx, however. Brothers John and Joe Rock had their own thing going on, and they refused, at first, to buy any product from Schultz or Noe. John eventually acquiesced, but Joe remained adamant in his refusal to do business with Schultz and Noe.
So, to teach him the errors of his ways, Noe and Schultz allegedly kidnapped Joe Rock, beating him and hanging him by his thumbs from a meat hook. Then — and fair warning, this next part is incredibly gross — they reportedly wrapped a gonorrhea discharge-soaked gauze over his eyes, causing him to go blind. Noe and Schultz received $35,000 from Rock’s family for his release, but nothing would repair the damage Joe Rock suffered.
Everett Collection Historical / Alamy Stock PhotoDutch Schultz emerging from doorway of Malone County jail, where he was on trial for federal tax evasion.
Dutch Schultz’s illegal operations were no small feat. By 1928, he was supplying speakeasies in The Bronx with $2 million worth of alcohol, which translates to $28.8 million in 2018 dollars. At the height of his empire, Schultz brought in $54,126 of profit per month, or $780,000 in contemporary money. That kind of money doesn’t go unnoticed for long.
Gang Wars Throw A Wrench In Schultz’s Operations
While Schultz and Noe’s gang had amassed tons of wealth and power, they weren’t the only ones vying for control of the New York underground. Business in the Bronx was good, but business over in Manhattan was even better. Schultz and Noe wanted a share of it.
Unfortunately, Manhattan was already a tumultuous market, with the Italian gangs that would eventually become the Five Families each making their own bids for control. Meanwhile, Jack “Legs” Diamond’s Irish Mob didn’t take too kindly to the Schultz-Noe gang moving into their territory.
Public DomainJack “Legs” Diamond.
In October 1928, The New York Times reported on a shooting that occurred outside of the Chateau Madrid speakeasy. Joey Noe was shot several times, though he managed to get a few shots of his own in, too. However, Noe’s wounds ultimately became infected, and he died roughly one month later, on November 21.
Noe’s death came as a particular blow to Schultz, who viewed him as both a friend and a mentor. Unsurprisingly, Schultz wanted revenge.
Just five days after Noe’s death, Arnold “The Brain” Rothstein’s body was found near the Park Central Hotel’s service entrance, with some claiming Rothstein had been killed over a gambling debt and others suggesting Schultz may have orchestrated it. In either case, the loss of Rothstein — who mentored Lucky Luciano, Meyer Lansky, Frank Costello, and Bugsy Siegel among others — was a major blow to the Jewish Mob.
Jack Benton/Getty ImagesArnold “The Brain” Rothstein.
Schultz wouldn’t get his revenge on Diamond, though, until October 12, 1930, when two gunmen burst into his room at the Hotel Monticello and shot him five times. The men fled, and Diamond, still in his pajamas, stumbled out into the hallway — a feat he managed by, he told police in an interview, drinking two shots of whiskey first.
Diamond was rushed to the hospital and managed to recover from his injuries, finally being released on December 30. But there wasn’t much for him to return to. His gang had been effectively cast out of the city, and although Diamond tried to re-establish himself in Albany, he was gunned down for good in December 1931.
Wikimedia Commons Vincent Coll, middle, leaving court in New York.
Schultz also faced conflict among his own ranks, with one of his top enforcers, Vincent Coll, splitting off to form his own crew after Schultz refused to make him an equal partner. The result was a bloody war between his new gang and Schultz’s. One unfortunate casualty of this conflict was a five-year-old boy named Michael Vengalli, who was killed during an attempted assassination on Joseph Rao, one of Schult’z men.
The incident led the press to give Coll the nickname “Mad Dog,” and though he was ultimately found not guilty of the child-killing — due to the sole witness’ testimony being called into question — the incident would follow him to the grave. Schultz eventually put out a $50,000 bounty on Coll’s head, and Coll was gunned down in a drugstore phone booth on February 8, 1932.
The Law Closes In On Dutch Schultz
By this point, the federal government had begun to pursue Schultz. Rather than rely solely on bootlegging illegal alcohol, Schultz entered into the illegal gambling market to diversify his interests. His group ran slot machines and a policy racket (a lottery) for a few years until the Feds indicted Schultz in 1933 on income tax evasion charges.
Everett Collection Historical/Alamy Stock PhotoDutch Schultz (left) leaving jail in Albany, New York.
The gang leader then went into hiding before turning himself in November 1934. He stood trial twice for tax evasion, but two juries could not convict him. Rather than leave well enough alone, New York’s special prosecutor Thomas E. Dewey wanted to prosecute Dutch Schultz for his illegal policy racket.
Somewhere among all of this chaos, there were rumors of buried treasure in the Catskill Mountains in upstate New York. Locals in Phoenicia, New York, said they saw fedora-wearing men with shovels along Esopus Creek near Phoenicia. Allegedly, there is a steel box filled with millions of dollars on the banks of this idyllic waterway near a small, innocuous town. Treasure hunters come to the town looking for the booty, which has yet to be found.
Now, Dutch Schultz turned his ire away from rival gangs and blamed Dewey for his business downturn as he awaited trial for tax evasion. The feds indicted Schultz again in October 1935, and Schultz was furious. He put out a hit for Dewey himself, and rival mobsters decided Schultz was done.
Gangsters hired the infamous group Murder Inc. to carry out a hit on Schultz on Oct. 23, 1935. One man shot Schultz right below the heart in the bathroom of Newark’s Palace Chophouse restaurant.
Everett Collection Historical/Alamy Stock PhotoDutch Schultz, wounded in the city hospital in Newark, New Jersey, after being shot.
Even in death, Schultz refused to go quietly. He dragged himself out of the bathroom and slumped onto a table at the restaurant. At the hospital, he gave a doctor $10,000 to ensure good care.
The doctor returned the money to the mobster’s bedside, fearing he would owe the gangster a debt later in life. In and out of consciousness, Dutch Schultz died 22 hours after the shooting. He muttered a mostly incomprehensible statement to the police, but he refused to name his murderers. Allegedly, Dutch Schultz’s last words were: “Oh, oh, dog Biscuit, and when he is happy he doesn’t get snappy.” He was just 33.
Much like his last words, the rumors of a buried treasure in upstate New York are fanciful notions put forth by an angry man who could never get past his inner demons.
Next, check out these facts about another notorious gangster, Al Capone. Then, take a look at Mickey Cohen, a Jewish-American gangster who took over Los Angeles.
