Dutch Schultz: Short and Violent Life of Mobster - Mafia Biography

Dutch Schultz is a name associated with organized crime in New York in the Prohibition era. While he died relatively young at just 34, he crammed plenty into a life.

This includes illicit gambling rackets, bootlegging, extreme violence, and buried treasure. Let’s look in detail at the extraordinary story of the notorious Dutch Schultz.

Who was Dutch Schultz?

The name Dutch Schultz is familiar to anyone with even a passing knowledge of organized crime in New York between the World Wars.

He was one of the most infamous gang bosses of that era. But his real name was not even Dutch Schultz…

Early Life

Schultz was born Arthur Simon Flegenheimer in the Bronx in August 1901. His parents were German immigrants and his father, Herman, reportedly abandoned his family when Arthur was still a young boy.

Arthur dropped out of school at an early age to work to support his mother, and by his mid-teens had had a succession of small-time jobs with local companies in the Bronx.

Criminal Beginnings

Arthur’s first ventures into petty crime saw him take up housebreaking. At the age of 17, he was caught and sent to jail for 17 months – the only time he was ever incarcerated.

He was released on parole in 1920, shortly after the Volstead Act was passed, bringing in the prohibition of alcohol. Prohibition led directly to a widespread and lucrative trade in illicit alcohol, and Arthur was only too willing to pursue the riches on offer from such a market.

Change of Name

It was about this time that Arthur changed his name to Dutch Schultz. He had been working for Schultz Trucking, which may have influenced his new identity.

It’s also suggested that he was given it by his criminal associates, after a legendarily violent gangster of the same name. The new Dutch Schultz had shown an appetite for violence during and since his time in jail.

Rise to Prominence

Schultz’s ruthlessness, and comfort with violence, brought him into contact with Joey Noe, a gangster who ran a speakeasy in the Bronx.

As they expanded their operation, ran more booze, and opened more venues, they clashed with rival gangs. Schultz, still in his twenties, relished the confrontation and prevailed through sheer brutality.

Their aggressive business growth saw their operation supplying parts of Manhattan, which brought it into conflict with the powerful New York Mafia, as well as the Irish mob led by Jack “Legs” Diamond.

'Legs' Diamond — The famous Jack “Legs” Diamond – Image: Photographer unknown/Wikimedia Creative Commons

It was a time of bloody violence, and one of the victims was Noe, shot dead by a hitman. Diamond was also badly wounded in a hit and moved out of the city.

The repeal of Prohibition in 1933 left Schultz, like many other organized crime bosses, looking for alternative sources of illicit income.

Battle For Control of New York’s Illegal Gambling Scene

Gambling was big business on the mean streets of the biggest city in the United States. This is because it was many decades before betting on sports was legalized and almost 100 years before being able to visit the best online gambling sites wherever you are in the world.

Inevitably, the main forms of gambling in New York were controlled by gangsters – and one racket in particular was the vehicle that carried Schultz into the ranks of the seriously wealthy.

The Harlem Numbers Game

Numbers, as it was universally known, was hugely popular among the people of Harlem, one of the poorest areas of New York City.

Players could buy tickets at a variety of outlets in the neighborhood, and the way the game worked was that you had to select three numbers.

The winning numbers were announced the next day, and they were determined by the three digits before the decimal point in the daily handle (total amount bet) at the local racetrack, Belmont Park.

Otto Berman, an associate, was a math wizard who could work out instantly how much Schultz needed to wager at the last minute to deliver a particular total.

Armed with this information, Schultz could control the winning numbers – and this ruse earned him millions of dollars.

Dutch Schultz v Bumpy Johnson

Schultz’s involvement with the Harlem numbers game brought him into direct conflict with Bumpy Johnson, well on his way to becoming the Godfather of Harlem.

At this point, Johnson was associated with Stephanie St Clair, then known as the Queen of Numbers.

The war for control was bloody and long, resulting in 40 murders and ended only when Schultz met his maker.

How Dutch Schultz Died

Thomas E Dewey – Image: Creative Commons Licence

Until this point, Schultz had evaded the clutches of the law ever since his teenage incarceration for burglary. But the growth of his illicit empire had attracted the attention of the authorities.

One man in particular, US Attorney Thomas E Dewey, was determined to bring Schultz to justice for non-payment of taxes – the same strategy that had brought down Al Capone in Chicago.

Schultz appeared twice in court on charges of tax evasion, and twice he beat the rap amid strong suggestions that the jury had been bribed.
Schultz proposed to the National Crime Syndicate, a gathering of leading mobsters, that Dewey be murdered.

That proposal was blocked; organized crime bosses felt such an act would lead to a widespread legal crackdown on their activities.

Furious, Schultz vowed openly to target Dewey anyway – with the result that the Mafia decided to eliminate Schultz, their long-time rival. The decision wasn’t easy, however, as it reportedly took six hours of deliberations between the syndicate to reach a verdict to kill him.

Dewey later ran for President in 1994 and 1948, being defeated both times by the Democratic Party nominees.

Dutch Schultz’s Death

Schultz, along with three associates, was gunned down in the Palace Chop House in Newark, New Jersey, on October 23 1935. A brick from the Palace Chop House survives as an artifact to this day.

All four survived the initial attack but died of their injuries. Schultz, who had been hit in the spleen, stomach, liver and intestines, succumbed to peritonitis and passed away the following day. He was just 34 years old.

The assassination was reportedly carried out by members of the infamous hit squad known as ‘Murder, Inc.’, acting on orders from the National Crime Syndicate and Lucky Luciano.

What He Said on His Deathbed

One of the most intriguing aspects of Schultz’s demise is that he made a series of rambling statements while on his deathbed, almost certainly under the influence of his wounds and the strong medication he had been given by hospital staff.

The police were eager to find out from Schultz who had shot him and his ‘colleagues’, and had a stenographer to hand to record his words.

As a result, Schultz’s utterances were recorded for posterity. However, they were rambling and confused. At one point, he said:

“A boy has never wept…nor dashed a thousand kim. 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.”

He was also recorded saying to his associate Bernard “Lulu” Rosencrantz, who had also been gunned down in the shooting: “I’ll get you the cash out of the box…

“There’s enough in it to buy four-five more… Lulu, drive me back to Phoenicia… don’t be a dope Lulu, we better get those Liberty bonds out of the box and cash ’em… wonder who owns these woods? He’ll never know what’s buried in ’em.”

The Unsolved Mystery of Dutch Schultz’s Treasure

Schultz with New York locals — Image: Photographer unknown

Schultz is remembered, nearly 100 years after his death, for more than just his nefarious deeds as a leading New York mobster.

One of the reasons his legend has endured for so long is the mystery of the enormous stash of money and bonds he’s believed to have buried before his death.

The story of Schultz’s treasure has its origins in the fact that the gangster, worried that the law was closing in on him, ordered his henchmen to clean out several bank accounts and put the proceeds in a steel strongbox.

It’s rumored that he and his associate Lulu Rosencrantz then traveled to the Catskill mountains in upstate New York, maybe around the hamlet of Phoenicia, to bury the box.

After Schultz’s death, determined efforts were made to find the treasure. There was said to be up to $7million in the elusive strongbox, which would be worth more than $150million today.

His business rivals made concerted and repeated efforts to locate Schultz’s treasure. Many bounty hunters have taken up the case in the decades since.

Even today, there are people who visit the Catskills regularly in an effort to find that alluring haul. But at the time of writing, this particular mystery remains unsolved.

It is, perhaps, fitting that Schultz’s treasure continues to grip the imagination. Amid the legalization of online gambling in states across the nation, his story represents a vivid link with a more shady past.

Schultz’s life could easily make one of the best gambling movies of all time. And, the continuing hunt for his treasure ensures there will always be interest in one of the most fascinating figures of the Prohibition Age.