At 10:15 on the evening of October 23rd, 1935, Dutch Schultz excused himself from his dinner table at the Palace Chop House in Newark, New Jersey, and walked toward the bathroom at the back of the restaurant. His three most trusted associates remained in the main dining room, unaware that two gunmen had just entered through the front. Before anyone could react, Mendy Weiss opened fire on the table where Abba Landau and Otto Berman sat, while Charles Workman followed Schultz into the bathroom and shot him once in the left side with a . 45 caliber revolver.
Schultz staggered back into the dining room and collapsed into a chair, conscious but gravely wounded, as his bodyguards lay bleeding on the floor around him. Workman calmly searched the bodies, found over four thousand dollars in Schultz’s wallet, and left the restaurant. His getaway driver had already abandoned him, so he walked through the streets of Newark until he made his way back to New York. Schultz survived the night and the surgery that followed, lingering for twenty-two hours in the hospital before dying at 8:40 in the morning on October 24th.
He was thirty-three years old. The circumstances of that night and the years leading up to it form one of the most studied episodes in American organized crime. Arthur Simon Flegenheimer was born in the Bronx on August 6th, 1902, the son of German Jewish immigrants. His father abandoned the family when Arthur was young, and the boy left school and drifted into street gangs.
At seventeen he was arrested for burglary and sent to Blackwell’s Island, where he proved troublesome enough to be transferred to a work farm, from which he escaped. Recaptured and given an extended sentence, he emerged with a new name borrowed from a dead street fighter known for dirty tactics. The name fit, and he took it as his own. He partnered with a friend named Joey Noe and built a bootlegging business in the Bronx by walking into speakeasies and announcing that they would now buy from him or face destruction.
By 1928 the operation was one of the most profitable in the borough. When Noe was killed by Legs Diamond’s crew, Schultz went to war. He fought Diamond and then Vincent “Mad Dog” Coll, a former associate who had gone freelance and earned notoriety after a drive-by shooting killed a five-year-old child. Schultz cornered Coll in a phone booth and had him machine-gunned, while Diamond was eliminated separately.
He entered the 1930s as the beer baron of the Bronx, controlling bootlegging across the borough and parts of Manhattan with revenues in the tens of millions. He was not easy to work with. Associates described a man of violent, unpredictable temperament, capable of laughter and generosity one moment and murderous rage the next. In March 1935 he shot his own associate, Jules Martin, in the face at point-blank range over a discrepancy in the books.
The murder happened in front of his lawyer, who later testified that Schultz returned to his drink before Martin hit the floor. It was this quality, the violence that arrived without warning or deliberation, that would eventually make him impossible for the organized crime commission to tolerate. In January 1933 Schultz was indicted on federal tax evasion charges and went into hiding for nearly two years. While he was underground, Lucky Luciano moved on his territory.
The commission approached Schultz’s acting boss and brought the operation under syndicate control. By the time Schultz surrendered in Albany in November 1934, much of what he had built was gone. His first tax trial ended in a hung jury, and speculation immediately spread that he had bought it. The second trial was moved to Malone, a small town near the Canadian border, where Schultz staged an extraordinary public relations campaign.
He rented a room above a diner, ate at local restaurants, donated cash to businesses, gave toys to sick children, attended church, and hired locals during the trial. He was acquitted in the summer of 1935. The verdict enraged New York Mayor Fiorello LaGuardia, who ordered that Schultz be arrested on sight in the city. This was the situation when Thomas Dewey entered the picture.
Dewey was thirty-two when Governor Herbert Lehman appointed him special prosecutor in 1934, charged with dismantling organized crime’s grip on New York. He was precise, ambitious, and relentlessly effective, securing seventy-two convictions out of seventy-three prosecutions of leading criminals. After Schultz’s acquittal, Dewey began building a case against his numbers racket in Harlem, an illegal policy operation generating millions per week. Schultz concluded that Dewey was not a problem to be managed but a problem to be eliminated.
He brought the idea to the commission. Some members agreed that Dewey was a threat, and Albert Anastasia was assigned to track the prosecutor’s routine. He reported that the hit was entirely doable. Dewey left his apartment every morning with two bodyguards, stopped at a drugstore on the corner, called his office from the phone booth, and walked to work.
A shooter positioned correctly could reach him at that corner every single morning. The obstacle was Louis Lepke Buchalter, the man who ran Murder Incorporated. Lepke argued that the worst Dewey could do was pursue the New York rackets, but if a mob boss murdered the special prosecutor in a phone booth on a Manhattan street corner, the federal government would descend on organized crime with a force no amount of bribery could contain. Killing Dewey, he said, was bad for business.
The commission voted against the hit. Schultz went ballistic, screaming that if nobody else would do it, he would do it himself, and boasted that Dewey would be dead within forty-eight hours. He stormed out of the meeting. Once the door closed, Lepke moved that Schultz should die for the sake of the syndicate.
The motion carried. Schultz was heavily armed and always surrounded by bodyguards, so Murder Incorporated’s two best killers were required. Mendy Weiss and Charles Workman were contracted for the job. By the autumn of 1935, Schultz was effectively barred from New York City and operating from Newark, where he ate most evenings at the Palace Chop House.
The routine was what killed him. In the hospital, Schultz drifted in and out of consciousness for twenty-two hours while police officers sat at his bedside hoping for a name. What they got instead was a rambling stream of disconnected speech that would be transcribed, studied, and analyzed for decades. He mentioned a buried safe, fragments of old conversations, and addresses investigators could not identify.
He said, “I’ll get the cash out of the box. ” He said, “There’s enough in it to buy four or five more. ” He said, “Wonder who owns these woods? ” He never named his killer.
Before the shooting, Schultz had a custom-built, airtight, waterproof safe constructed and filled it with an estimated seven million dollars in cash, bonds, and gold. He and Rosenkrantz drove it to an undisclosed location near Phoenicia, New York, in the Catskill Mountains and buried it. No map was made. No second person was told the exact location.
The safe has never been found, and treasure hunters still search the Catskills for it nearly a century later. Schultz was buried at the Gate of Heaven Cemetery in Hawthorne, New York, draped at his mother’s request with a traditional Jewish prayer shawl. Thomas Dewey did not learn until 1945 that Schultz had been planning to have him killed. He found out when a gangster told investigators about the commission meeting, the assassination proposal, and Lepke’s argument that had saved his life.
The mob protected him not out of mercy but because killing him was bad for business. Dewey continued his career, becoming district attorney of New York County in 1937, governor of New York in 1942, and the Republican nominee for president in 1944 and 1948. He died on March 16th, 1971. Lepke Buchalter, the man who saved Dewey’s life and ordered Schultz’s death, was eventually arrested, convicted, and executed in the electric chair at Sing Sing prison on March 4th, 1944.
He remains the only organized crime boss in American history executed by the state. Workman served twenty-three years of a life sentence, was paroled in 1964, and lived quietly in New Jersey until his death in 1975. He never spoke publicly about the Palace Chop House.
The safe is still in the ground somewhere near Phoenicia, seven million dollars, ninety years, and nobody has found it.
