CRIME: Bronx Boy

Before Arthur (“Dutch Shultz”) Flegenheimer went on trial last week at Syracuse, N. Y. for evading $92,103.34 in income taxes on $481,637.35 made in 1929-31 from “various unlawful business enterprises and rackets,” he volunteered to reporters a partial biography. He is 33, was born in Manhattan’s Yorkville, quit grammar school after the sixth grade, became a printer and pressman, then a roofer, a trade he abandoned when he was 17. Here the onetime master of The Bronx beerage, reputed boss of the policy game racket and the last of the great Prohibition Era gangsters left alive or at liberty, stopped, grinned. “You fellows will have to fill in the rest for yourselves,” he said.

Forthwith, a good deal of the filling in was done by John H. McEvers, special assistant to Attorney General Cummings who had been sent from Washington to clean up the last big gangster tax case left on the Federal docket. Prosecutor McEvers passed over Flegenheimer’s novitiate in crime, which began when he served an apprenticeship under the late Jack (“Legs”) Diamond, was interrupted when Flegenheimer went into hiding after his indictment two years ago, and officially ended when, terrified by the Government’s bloody drive against the nation’s mobsters, he gave himself up at Albany last Thanksgiving Day. What Prosecutor McEvers had to reveal was one of the most minutely recorded criminal business stories yet to emerge from a gaudy, vanished period in U. S. history.

“In 1928,” Mr. McEvers opened for the Government, “this defendant had no known business, so far as we could learn, and had no bank accounts in his name. In June of 1928 he entered into partnership with Joe Noe, who ran a speakeasy . . . in The Bronx.” Five months later Joe Noe was murdered. Flegenheimer took over the business.

“About that time the defendant opened a bank account. He operated that Bronx speakeasy . . . and then branched out. He took over a speakeasy [on] Third Avenue. He opened a new account under the name of Joseph Harmon. . . .

“About [June 1929] he and a fellow named Rocco Delarme operated a beer distributing business with offices at … East 149th Street. They got a telephone and ran a private extension over to the Third Avenue speakeasy so that the defendant could direct his business from there. They operated under the name of Harmon & Delarme, distributing beer on a major scale. … In November of 1929 he entered into a partnership with Stevens and Ahearn [two bootleggers indicted with Flegenheimer but missing] and began operating on a very major scale.”

The Flegenheimer business offices, finally raided by New York police in 1931, were as complicated as they were safe. Behind armored doors and bullet-proof glass peepholes, two characters named Dick Wolf and George Yarlasvetsky ran what purported to be an automobile financing company on the third floor, but spent most of their time tending the beer syndicate’s 100-man payroll and general bookkeeping on the floor above.

The jury of farmers and small merchants sat bug-eyed when the prosecutor concluded: “We will show that from November in 1929 up to the last of that year they did a total business of $135,000 with a net of $45,000; that in the year 1930 they grossed over $2,000,000. We will show that [Flegenheimer] had a net of $579,000 out of that $2,000,000 and that in 1931, from the first of the year up to the time of the raid … he had grossed $728,000 with a net of $237,000.”

In its trade war with the late Vincent (“Mad Dog”) Coil’s gang, the “Shultz” mob lost at least 15 men. But “Dutch Shultz” in his prime was not the bloody equal of “Al” Capone. One of the detectives who arrested him testified that the bootlegger, white & shaky from an exchangeof gunfire, had whimperingly offered two detectives $50.000 apiece to let him go. Nor did “Dutch Shultz” surround himself with expensively bound books and stained glass windows as did his elegant fellow-townsman and fellow-bootlegger, Irving (“Waxey Gordon”) Wexler. What most distinguishes Flegenheimer from Capone and Wexler, both of whom were also caught evading taxes, was his extreme lack of caution. Police had Flegenheimer’s wires tapped for ten months. And the prosecution was able to bring into court bales of bank deposit slips, checks and memoranda in Flegenheimer’s handwriting to connect him with a profitable business that paid no taxes. Flegenheimer had also made the mistake of entering his trans-actions in a secret ledger. Capone and Wexler did all their deals in strictly anonymous cash.

Surprise of the trial’s first week was the defense’s open admission that the handwriting was Flegenheimer’s. This jibed with the prisoner’s whole attitude of good-natured repentance and humility. Once he sprang up to shake the prosecutor’s hand, declaring that he knew Mr. McEvers was a “fair man.” And to the Press, Arthur Flegenheimer begged: “Don’t forget to refer to me as a public benefactor instead of a public enemy.” Caught flatfooted, it was apparently the defense’s intention to admit everything, plead for mercy on the grounds that Flegenheimer was merely a product of a defunct, unpopular national law.