Arthur Flegenheimer, better known as Dutch Schultz, embodied the violent contradictions of Prohibition-era New York. Born in 1901 to German Jewish immigrants in the Bronx, he was a sloppily dressed, tobacco-chewing figure who rose from street crime to become the last great independent criminal operator in the city, all without ever being formally inducted into the Mafia. His grip on bootlegging and gambling in the Bronx and beyond brought him fortune, fear, and eventually a fatal collision with the law, his rivals, and his own reckless temper. His early life offered little hint of future grandeur.
His father, Herman, disappeared from the family’s life when Arthur was a boy, whether through death or desertion depending on the account, and his mother worked as a janitor and took in laundry to keep her children fed. Arthur left school in the eighth grade to contribute, selling newspapers and transit transfers at a busy Bronx station. By nineteen, he had been caught burglarizing an apartment and served time on Blackwell’s Island, a bleak penitentiary in the East River known for its harsh regime. He was unruly, attempted an escape from a second facility, and was recaptured within hours.
That prison stretch was the only significant time he ever served, but it hardened him. Emerging with a new identity, he adopted the name Dutch Schultz, allegedly borrowed from a feared street fighter. In his early twenties, Schultz served briefly under the notorious Legs Diamond, riding shotgun on liquor trucks and fending off hijackers. The arrangement was short-lived.
Diamond was impulsive, attention-seeking, and violent for its own sake, while Schultz was calculating, businesslike, and allergic to the spotlight. Schultz wanted profit, not publicity, and he soon found a partner who shared that outlook. In 1928, he went into business with Joey Noe, a man whose father cleaned beer pipes and who had realized there was more money in the beer itself than in the cleaning. The two opened a speakeasy in the Bronx, then expanded into supplying beer to competitors, using three old trucks and a deal with a New Jersey brewer.
They needed muscle as well, building a crew that included enforcer Bo Weinberg, the Cole brothers, and others who would become central figures in the years ahead. Growth brought competition. The Rock brothers, John and Joe, had controlled Bronx beer before the newcomers arrived. John stepped aside after initial resistance, but Joe refused to back down.
His defiance ended in a brutal kidnapping and a beating that left him blind, with rumors of a $35,000 ransom paid for his return. By then, Schultz and Noe had assembled a formidable operation, with elaborate distribution points and a network reaching well beyond the Bronx into Manhattan. In October 1928, however, the partnership was shattered. Joey Noe was ambushed outside a Manhattan nightclub, shot multiple times despite a bulletproof vest.
He died three weeks later. Schultz, who had been meeting with rumrunner William Dwyer at the time, inherited the business and expanded it to new heights. Schultz’s inner circle included Vincent Coll and his brother Peter, old acquaintances from the Bronx. Vincent Coll had been a troubled figure since childhood, cycling through reformatories and jail.
He gained Schultz’s trust and became a reliable right-hand man, but in 1930 his loyalty frayed. During a hit on a slot machine racketeer, Coll’s crew botched the operation, shooting an unarmed woman in the crossfire. Schultz, furious at the crude, unprofessional work, berated his men and ordered the Coll brothers and two others out of the organization. The ousted gangsters, believing they had carried out his orders, formed their own crew and began a war over his beer routes in Harlem and the Bronx.
The conflict escalated steadily. Vincent Coll, emboldened, began an affair with another mobster’s wife, using her money to open a speakeasy in Schultz territory. Schultz responded by orchestrating a police raid that shut the bar down, costing Coll heavily. In retaliation, Coll’s men killed two of Schultz’s associates.
On the night of May 30, 1931, gunmen pulled alongside Peter Coll’s car and opened fire, killing him instantly. Vincent suspected the attack was meant for him and avoided his brother’s funeral, watching from a distance. Days later, Coll’s crew raided a garage full of Schultz’s trucks and equipment, ordering his men to destroy their own property with axes and sledgehammers. A running gun battle through the city followed, but neither side scored a decisive victory.
The feud simmered until Coll forfeited the $10,000 bail Schultz had paid for him, a deliberate financial blow that deepened Schultz’s hatred. The war reached its horrifying peak in July 1931. In Harlem’s Little Italy, gunmen in an open touring car opened fire outside a social club, aiming for a mobster who escaped by dropping to the ground. The bullets struck four children, killing five-year-old Michael Vengalli.
The outrage over the so-called Baby Massacre was immense, and Mayor Jimmy Walker branded Vincent Coll a “mad dog. ” The police launched a massive investigation, offering a $30,000 reward, and federal agents raided Schultz’s beer depot in the Bronx. Vincent Coll was eventually arrested and charged with the murder, but at trial his defense demolished the prosecution’s key witness, exposing his criminal past and casting doubt on his testimony. The judge directed an acquittal.
The feud ended in Schultz’s favor on the night of February 7, 1932. Coll, known for his habitual lateness, had arrived at a Manhattan pharmacy and stepped into a phone booth. A gunman entered, pulled out a Thompson submachine gun, and fired a lethal burst through the booth, killing him instantly at the age of twenty-three. The killers were never identified.
Schultz’s attorney later suggested Bo Weinberg had been the getaway driver. With his rival gone, Schultz should have been secure. Instead, he faced a more formidable threat in the form of Thomas E. Dewey, the ambitious special prosecutor who was determined to bring him down on tax evasion charges.
The federal government had begun aggressively pursuing income tax evasion among gangsters, targeting those who lived extravagantly and ignored the tax laws. Schultz, who had earned vast sums from his beer empire, had paid nothing. Offers to settle his back taxes, including $100,000 for the IRS and another $100,000 for President Franklin Roosevelt’s campaign, were rejected. On January 18, 1933, federal authorities issued an arrest warrant for Schultz on income tax charges, and eight days later a grand jury indicted him.
Schultz went into hiding, using multiple apartments and disguises, while law enforcement chased rumors across the country and abroad. In November 1934, with Treasury agents and Mayor Fiorello La Guardia’s administration closing in, he surrendered in Albany. His trial began in Syracuse in April 1935, with the government charging him with evading taxes on nearly a million dollars in illegal income. The prosecution produced wiretap evidence showing his tight control over his beer distribution and his volatile dealings with rivals.
The jury deadlocked, leading to a mistrial. At the retrial in Malone, New York, the jury initially deadlocked as well, but after a dinner break they returned a verdict of not guilty. Schultz’s legal victory was short-lived. He still faced racketeering charges from Dewey, and a conviction could mean a long prison sentence that would allow his rivals to dismantle his empire.
Knowing that Dewey could not be bribed, Schultz proposed a radical solution: assassinate the prosecutor. He approached Murder, Incorporated, the enforcement arm of the Mafia’s governing Commission, and pleaded his case to Lucky Luciano and the other bosses. He argued that Dewey was a threat to all mobsters, that if Dewey could convict him, he could target anyone. The Commission acknowledged the danger but was cautious.
Albert Anastasia reportedly shadowed Dewey for days, discovering that the prosecutor entered a drugstore each morning while his bodyguards waited outside, a vulnerable moment. But Luciano ultimately vetoed the plan. Killing Dewey would trigger a nationwide crackdown and public outrage, and the bosses were confident their lawyers could handle whatever legal threats Dewey posed. They also worried that Schultz, desperate and cornered, might become a government informant to save himself.
Schultz was furious at the decision and vowed to carry out the hit alone, boasting that Dewey would be dead within forty-eight hours. On the night of October 23, 1935, Schultz was dining at the Palace Chop House in Newark, New Jersey, a restaurant near his hotel that served as his informal headquarters. He was joined by his bodyguards and, later, his wife, and he spent the evening calculating profits from his rackets in a quiet back room. At one point he stepped into the restroom.
Two men entered the restaurant, their collars turned up and hats pulled low. One drew a gun, ordered the bartender to the floor, and opened fire on the back room. Bernard Rosenkrantz, Otto Berman, and Abe Landow were hit repeatedly but returned fire as a second gunman, brandishing a shotgun, noticed the men’s room door. He kicked it open and fired twice, catching Schultz in the side, the bullet tearing through his organs before embedding in the floor.
The shootout spilled into the street, stray bullets striking a bus and grazing a passing man. Rosenkrantz, fatally wounded, staggered to a pay phone, despite his injuries managing to dial the operator before collapsing. Landow pursued the attackers into the darkness, firing his empty weapon until he slumped over a trash can. Schultz, clutching his side, emerged from the restroom and asked for a doctor.
At the hospital, surgeons found severe damage to his spleen, stomach, colon, and liver, along with internal bleeding and peritonitis. He survived the surgery and kept his humor, referring to morphine as “bon bons. ” As his wife, mother, and a priest kept vigil, Schultz asked to die in the Catholic faith and received baptism and last rites. Fluctuating between clarity and delirium, he spoke in a fragmented stream of consciousness, and a stenographer recorded his words, hoping they might name his killers.
He died at 8:35 p. m. on October 24, 1935. Before his death, fearing Dewey would imprison him, Schultz had commissioned an airtight, waterproof safe and placed $7 million in cash and bonds inside, equivalent to roughly $160 million today.
He and Rosenkrantz drove the safe to an unknown location in Upstate New York and buried it. Its whereabouts remain unknown. Typically, mob hits went unsolved. But in 1941, more than five years after the killing, a grand jury in New Jersey indicted Charles “the Bug” Workman for Schultz’s murder.
Identified by turncoat mobsters during the Murder, Incorporated investigation, Workman stood trial and pleaded no defense, escaping the death penalty for a life sentence. He was paroled in 1964. Dutch Schultz, the audacious bootlegger who had never joined the Mafia, met his end not at the hands of the law he feared, but through the very violence that had built his empire.