Dutch Schultz: Beer Baron of the Bronx

Due to the failure to convict Schultz in the first two trials, Dewey was planning a more substantive case. He wanted to pursue Schultz in connection with his policy empire too. Before Dewey could put a case together, the federal authorities struck first. On October 10, 1935 a federal grand jury indicted Schultz on a variation of the old charges. So as not to create a double jeopardy situation, the felony counts for wilful tax evasion were dropped, and Schultz was charged instead with eleven misdemeanor counts of failing to file tax returns for 1929, 1930, and 1931.

Despite the federal indictment, it was Dewey who had incurred Schultzs wrath. Deweys wife, Frances, began receiving threatening phone calls. One instructed her to go down to the morgue and identify her husbands body. Frances Dewey was almost nine months pregnant at the time; she gave birth to a son on October 18. Dewey heard from street sources that there was a $25,000 price tag on his head. J. Edgar Hoover heard the same rumors and wrote Dewey a letter warning him to be careful. It would take five years for Dewey to find out how close he was to becoming a murder victim of organized crime.

Charles 'Lucky' Luciano

Luciano describes the feelings of the New York underworld when it looked like the government was about to put Schultz away:

One day, during a meeting with Lansky at the Waldorf to discuss the Cuban gambling operations, the talk turned to the odds against Schultz if and when he surrendered. Lanskys estimation was that the odds favored conviction, and many of Lucianos friends, including Zwillman, Adonis and Genovese, were already anticipating that day, for it would mean that the Dutchmans empire would be parceled out under Lucianos direction. I had a lot of different feelins about that. What Meyer was sayin was true, and it really looked like Schultz was gonna take a bath and there wasnt a damn thing anybody could do about it no way to fix it that I could see.

The individual who had the most to worry about if Schultz was acquitted was Bo Weinberg. When the Dutchmans legal problems started to drain his rackets of money, Weinberg became concerned that the Schultz empire would become decimated. He went to see Abner Longy Zwillman, a prominent New Jersey mob boss to seek advice. Zwillman set up a meeting with Luciano. At this meeting Luciano claims Weinberg offered to reveal all of Schultzs interests and turn the empire over intact to Luciano, Zwillman and their allies, who, he knew, were already making moves in that direction.

In return, Weinberg wanted to continue to oversee the operations and collect his fifteen percent of the profits.

Luciano listened to Weinbergs proposal then called a meeting at his Waldorf Towers apartment. In attendance were Zwillman, Joe Adonis, Frank Costello, Meyer Lansky, Lepke Buchalter, Tommy Lucchese, and Vito Genovese:

I explained Weinbergs deal and I told them I felt like a grave-robber in a way. Here we was, tudyin about tudyin up Schultz and he wasnt even in the can yet. Then we got down to cases. The responsibility for breakin up Schultzs territory hadda be mine because thats the way everybody wanted it. And if, by some miracle, he beat the rap, everythin would go back to him. In his division, Luciano gave policy and gambling to Costello and Lansky, liquor to Adonis, restaurant rackets to Lepke and Lucchese, as well as other enforcement operations. Zwillman received the New Jersey operations, after promising to split them with (Willie) Moretti.

As we know, Schultz did beat the rap and soon realized that changes had occurred while he was gone. He requested a meeting with Luciano. What Schultz discussed at that get-together astonished Luciano:
The day Schultz come to see me at the Towers, Vito was with me. The Dutchman was so excited that wed all been so nice to him that he almost started to cry. And then, Ill be damned if he didnt start to talk about the Catholic religion; he wanted to know what it was like to be a Catholic, whether Vito and me ever went to confession, if we knew what a guy had to do to switch into Catholicism from bein a Jew. I almost fell over when he told us that while he was layin low, in all his spare time, he was tudying to be a Catholic. I swear, from that minute on, the Dutchman spent more time on his knees than he did on his feet. He told us he was sure Christ was what helped him get through the bad eighteen months, and what finally got him the acquittal.

Despite the religious revelations, Schultz soon realized who had betrayed him. In New Jersey, Schultz had his men stake out the palatial estate of Longy Zwillman. Allegedly, on September 9, Weinberg was spotted at Zwillmans home. Schultz was notified and arrived outside of Zwillmans to meet Weinberg as he left. Luciano claims that one of Schultzs men on the stake out revealed that he watched the Dutchman kill Weinberg with his bare hands. Another rumor had it that Schultzs men kidnapped Weinberg and encased his feet in cement before dumping him still breathing into the East River. Despite a variety of rumors, Bo Weinberg was never seen again.

By the second week of October 1935, the federal government had indicted Schultz, and he knew Dewey was working on a case involving his policy empire. While the Dutchman was plotting strategy, Luciano claims he received a visit from Albert Anastasia, the Mad Hatter, also known as the Lord-High Executioner of Murder, Inc. Anastasia told Luciano that Schultz asked him to stake out Deweys Fifth Avenue apartment to see how difficult it would be to knock off the Special Prosecutor.

The plot to assassinate Thomas Dewey was revealed to law enforcement by Abe Kid Twist Reles in 1940, some five years after Schultzs death. Assistant Prosecutor Burton Turkus wrote Murder, Inc., in 1951 with Sid Feder, and discussed the plot in detail. Deweys morning ritual was to leave home, accompanied by two bodyguards (these assigned after the threatening phone calls). He would enter a drug store just a few blocks from his home, and while his bodyguards waited outside, he would call his office from a phone booth inside the store. The plan called for a gunman with a silencer to be in the drug store waiting until Dewey was in the booth. The assassin would then kill the prosecutor and the stores proprietor.

There are different versions of what happened next. According to Luciano, he called a meeting, which lasted almost six hours, to discuss the plot and its ramifications. He claims a vote of the Sicilian participants was taken and it was decided that Schultz had to be hit immediately.

What Turkus reported in Murder, Inc. was quite different. He claims that a meeting was called, separate from Schultzs problems with Dewey, and a discussion was held about what to do with the prosecutor. Turkus writes, Following protocol and procedure very carefully, the new democratic order limited discussion to the question of whether Dewey should be stopped and if so, the extent of the stopping. The group decided that murdering a prosecutor was not just any mob job...in order to allow for profound thought, a one-week moratorium was agreed upon.

Albert Anastasia

When the group reconvened, Anastasia presented his plan. After a long discussion, the group, spurred on by Lepkes sage and forceful persuasion, backed by Lucky...decided to permit Dewey to live. Schultz was incensed at the groups decision and decided he was going to execute the murder plan himself. Turkus claims, He boasted that he was going to get the big racket-buster in forty-eight hours!