Arthur Simon Flegenheimer (August 6, 1901October 24, 1935), known as Dutch Schultz, was an American mobster based in New York City in the 1920s and 1930s. He made his fortune in organized crime-related activities, including bootlegging and the numbers racket. Schultz's rackets were weakened by two tax evasion trials led by United States Attorney Thomas Dewey, and also threatened by fellow mobster Lucky Luciano. Schultz was shot at a restaurant in Newark, New Jersey, and died the next day.
Early life
Arthur Simon Flegenheimer was born in the Bronx borough of New York City on August 6, 1901. He was the second child of German Jewish immigrants Herman and Emma Flegenheimer (née Neu), who had married in Manhattan on November 10, 1900. He had a younger sister, Helen, born in 1904. Flegenheimer's father apparently abandoned his family, and his mother is listed as divorced in the 1910 United States census. In her 1932 petition for U.S. citizenship, however, she wrote that her husband had died in 1910–though it is unclear whether he died before or after the 1910 census.
This event traumatized young Flegenheimer, who spent the rest of his life denying that his father had abandoned his family. He 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 Schultz Trucking in the Bronx between 1916 and 1919.
Criminal beginnings
thumb|Dutch Schultz 1919 mugshot
Before turning to burglary, Flegenheimer worked at a neighborhood nightclub owned by a small-time mobster, where he robbed craps games. Eventually he was caught breaking into an apartment and sent to the prison on Blackwell's Island (now called Roosevelt Island). His mugshot, at age 18, was published in the 2010 book New York City Gangland. Joe's 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. 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 (no relation to Schultz gang members Abraham "Bo" Weinberg and George Weinberg) in the backseat. 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 crime boss 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 an unpaid 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 individual 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, 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 City 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. 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 in an Albany rooming house at 67 Dove Street by two gunmen in December 1931.
Schultz also had to deal with internecine conflicts within his own gang. In 1930 one of his enforcers, Vincent Coll, demanded to be made an equal partner. This was because Schultz's subordinates 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 attempt committed by his gang. In February 1932, while Coll was taking a call in a drugstore phone booth, gunmen armed with machine guns entered the store and shot him to death. The killers may have included Edward "Fats" McCarthy and the brothers Bo and George Weinberg.
Racketeer
Along with the policy rackets, Schultz began extorting New York restaurant owners and workers. Working through a hulking gangster named Jules Modgilewsky (also known as Julie Martin), Schultz made deals with the leaders of Waiters Local 16 and Cafeteria Workers Local 302 to extort money by forcing restaurant owners to join the Metropolitan Restaurant & Cafeteria Owners Association, an employer association that Schultz had founded. Those who refused to join the Association were faced with exorbitant wage demands from labor unions, followed by strikes and stink bomb attacks. The Association then stepped in to arrange a settlement of the strike with a sweetheart contract for low wages contingent on the employer joining the Association. Martin successfully extracted thousands of dollars of tributes and "dues" for Schultz from the terrorized restaurant owners.
During his tax trial, Schultz 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. Davis related what happened next: