Arnold Rothstein, Dark Genius of the Mob

Charming, aristocratic and worldly were all words that were used to describe Nicky Arnstein. Married to the popular singer and comedienne Fanny Brice, Arnstein was on top of the world in 1920 — but things were about to change.

Beginning in 1918 a series of robberies occurred involving Wall Street security houses. There was a basic pattern to the robberies. A messenger on his way to a bank or brokerage house, carrying as much as several thousand dollars in securities, mostly Liberty Bonds, would be stopped, sometimes beaten, and relieved of the negotiables. Despite the frequency of the crimes no precautions were made by the security houses to provide protection to the messengers. The losers were not the security houses that deployed the messengers, but rather the bonding companies that provided insurance to the brokers. While police seemed helpless in rounding up the thieves, the monetary value of the stolen securities by early 1920 was estimated at $5 million dollars. The police determined that a "mastermind" was at work.

On February 6, 1920 the police broke the gang when they apprehended seven men after $2,500 was stolen from another messenger. One of the men arrested, Joseph Gluck, after spending ten days in jail, felt he had been double-crossed, having been led to believe his bail money and lawyer would be provided by his "employer". Angered by this turn of events, Gluck spilled out the details of the robberies to the authorities. The information revealed that many of the victimized messenger boys were actually involved in the robberies.

Gluck insisted that he knew his employer only as "Mr. Arnold." Detectives flew into a frenzy surmising they had finally obtained information to put away the nefarious Arnold Rothstein. Their excitement was short-lived when Gluck could not identify Rothstein from a photograph. After giving a physical description of Mr. Arnold, detectives provided Gluck with a number of pictures from which he picked out Nicky Arnstein, who had often used the name "Jules Arnold" as an alias.

Detectives who were friendly to Rothstein informed the gambler of Gluck's cooperation. Rothstein contacted Arnstein and advised him to leave town immediately. Arnstein fled to Ohio to hide out. A nationwide manhunt was begun for Arnstein, which, spurred by his marriage to Brice, filled the front pages of newspapers across the country. Meanwhile, as details of Gluck's confession leaked out regarding Arnstein's role as the "mastermind" of the robberies, Fannie Brice was quoted, "Mastermind! Nicky couldn't mastermind an electric bulb into a socket."

While Arnstein was in hiding Rothstein was preparing for his defense and fending off allegations that he was behind the robberies. Rothstein hired the legal team of William J. Fallon and Eugene McGee to handle the case. In a move that was indicative of Rothstein's influence, he was able to establish a bail amount before he negotiated Arnstein's surrender. Arnstein returned and gave up on his own terms, amusing himself by riding with Brice and Fallon down Fifth Avenue in New York's annual police parade.

Rothstein's generosity was not solely out of friendship. Carolyn later revealed that her husband told her, "They're not after Nicky, they're after me. A lot of people would like to tie me into this and some of them think they can get Arnstein to say something that would lead them to me." Rothstein was correct in his thinking; however, Arnstein never revealed a thing. Despite promises of leniency, Arnstein always maintained his innocence.

Fallon successfully argued for the case to be tried in Washington DC as a federal crime punishable with a two year sentence, as opposed to a New York State offense in which Arnstein could face up to twenty-five years. The first trial resulted in a hung jury at which Arnstein did not testify. Before the second trial, Fallon ran off with a woman leaving McGee to handle the defense. McGee failed and Arnstein was convicted and sent to Leavenworth.

Throughout the remainder of Arnstein's life he maintained he never knew the reason why Rothstein had helped him. There is much doubt that Arnstein was truly guilty and that Rothstein was involved in the actual thefts. However, no one doubted that Rothstein was the only man in New York who could have fenced the stolen bonds.