Wednesday, October 30, 2013

Dutch Schultz: A Malone Acquittal


Dutch Schultz Armored Car
Dutch Schultz Armored Car (Photo credit: www78)
When he was acquitted on August 1, 1935, the crowd outside the courtroom cheered. Judge Bryant “who was visibly astonished, disappointed and thoroughly exasperated. In fact, he practically ‘lost his cool.’ ‘Your verdict,’ he declared, ‘Is such that it shakes the confidence of law-abiding citizens in integrity and truth. It will be apparent to all who followed the evidence in this case that you have reached a verdict not on the evidence but on some other reason. You will go home with the satisfaction, if it is indeed a satisfaction, that you have rendered a blow against law enforcement and given aid and encouragement to people who would flout the law. In all probability they will commend you. I cannot!’” (Franklin County Review, vol 12, pg. 27).

Schultz tried to shake hands with the jurors. The first he tried said, “Mr. Schultz, I wouldn’t shake hands with you under any circumstances—especially here!” (Franklin County Review, Vol 12, pg. 27).

But the jury felt the government hadn't proved its case despite having called sixty-nine witnesses to the defense's seventeen.

Perhaps the biggest blow to the prosecution was that “Judge Bryant, at the request of the defense staff, ruled that the famous black ledger containing all the incriminating details of the Schultz organization’s operations had been illegally seized and directed that it be returned. The ledger being the core of their case the Government lawyers were stymied and practically futile without it” ( Franklin Historical review, vol. 12, 1975, p.26 ). This ledger had been meticulously kept, down to the penny, and in impeccable penmanship.

Then during the trial, defense attorney George Moore proclaimed, “the beer business was a hazardous business—our local bootlegger never made much money.”  (Kill the Dutchman by Paul Sann pg. 253).

The above obviously played into the acquittal. Foreman Chapin said, “I am sure that no man on the jury approves of racketeering or anyone connected with it. In fact the jury considers Schultz to be a public enemy. But the fact that he was a racketeer and in the beer business could have no bearing on the case. We felt that the Government did not prove its case. The whole discussion centered around whether or  not he was guilty of willfully evading tax payments We were instructed to follow the evidence that that’s what he did. Pre-trial influence had no bearing whatsoever on the verdict, which was 9 to 3 for acquittal.”

And according to Schultz, “An easy acquittal" (ibid).

Dutch Schultz showed the same generosity to Malone after his exoneration as before his trial.

At Moore’s office, two secretaries accepted five pound boxes of chocolates (pg 27 Review). 
And according to Fredrick Seaver who wrote the quintessential historical guide to Malone, more than one farmer had new cows after the trial.

Schultz tried to shake hands with the jurors. The first he tried said, “Mr. Schultz, I wouldn’t shake hands with you under any circumstances—especially here!” ( Review, Vol 12, pg. 27).

Beyond these things, Schultz did not stay in Malone long.Knowing that Dewey still had it in for him, he set up his enterprise in Newark, New Jersey.

Shortly before his death, fearing that he would be incarcerated as a result of Dewey's efforts, Schultz commissioned the construction of a special airtight and waterproof safe, into which he placed $7 million in cash and bonds. Schultz and Rosencrantz then drove the safe to an undisclosed location somewhere in upstate New York and buried it. At the time of his death, the safe was still interred; as no evidence existed to indicate that either Schultz or Rosencrantz had ever revealed the location of the safe to anyone, the exact place where the safe was buried died with them. 

Gangland lore held that Schultz's enemies, including Lucky Luciano, spent the remainder of their lives searching for the safe. The safe has never been recovered.


Treasure hunters meet annually in the Catskills to search for the safe. One such congregation was documented in the documentary film Digging for Dutch: The Search for the Lost Treasure of Dutch Schultz” (Wikipedia).
  
Schultz was gunned down October 23, 1935 at the Palace Chop House in Newark, New Jersey.

He survived the initial shotgun blasts and was whisked into surgery. “Before Schultz went to surgery, he received the last rites from a Catholic priest at his request. During his second trial, Schultz decided to convert to Catholicism and had been studying its teachings ever since, convinced that Jesus had spared him prison time. Doctors performed surgery but were unaware of the extent of damage done to his abdominal organs by the ricocheting bullet. They were also unaware that Workman had intentionally used rust-coated bullets in an attempt to give Schultz a fatal bloodstream infection (septicemia) should he survive the gunshot. Schultz lingered for 22 hours, speaking in various states of lucidity with his wife, mother, a priest, police, and hospital staff, before dying of peritonitis” (Wikipedia)

So instead of living safely in jail and running his empire, the events in Malone, New York actually contributed to his death.


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Monday, October 14, 2013

Dutch Schultz: The Malone Trial

Dutch Schultz
Dutch Schultz (Photo credit: Wikipedia)
After living as a free man for his Malone trial, Dutch Schultz was remanded to jail on July 23, 1935. For the first day, he had to endure the same food as the other prisoners. This included sardines, boiled potatoes and cabbage, tea or water--certainly not the fare we serve today. However, after the first day, Schultz could order out.

The jurors for Schultz's trial included many names still prominent in the area today:

  1. Arthur Quinn from Malone--a farmer
  2. Hollis Child from Malone--a farmer--his daughter stated her father said, "(t)he majority, seven jurors, felt that Judge Bryant brought the trial up here so he'd have a bunch of dumb farmers, and get what he wanted." (Adirondack Life,  August 1991, p. 30).
  3. Ralph E. Westcott from Malone--a farmer
  4. Hugh F. McMahon from Malone--a farmer
  5. L.P. Quinn from Tupper Lake--school superintendent
  6. Charles Bruce from Santa Clara--a manager
  7. Leon A. Chapin from Bangor--a farmer--and the foreman of the jury
  8. John Ellsworth from Ft. Covington--a farmer--the last to hold out for acquittal
  9. Arthur J. Riedel from Malone--a baker and related to the baseball commissioner
  10. Hugh Maneeley from Malone--a farmer
  11. Floyd Brown from Owls Head--a farmer
  12. Frank Lobdell from Saranac Lake--a guide
His defense team:

  1. James M. Noonan
  2. J. Richard "Dixie" Davis--“whose task was made more tolerable by the presence of a very well-endowed, red-headed show-girl name Hope Dare, who became the center of attraction and distraction in the crowded courtroom during the trial” (Franklin County Historical Review, vol 12, 1975, page 24). He eventually married and then divorced her.
  3. George Moore from Malone
  4. Robert G. "Bud" Main from Malone
The prosecution:
  1. Martin Conboy--a protege of Thomas Dewey who had vowed to get Schultz/in order to undo the travesty of his earlier trials.
  2. John Burke Jr.
The judge was a former Malone resident: Judge Frederich H. Bryant

For a while, it appeared this jury would be deadlocked. At 7:30 p.m., Aug. 1 as word leaked out of a 9-3 decision for acquittal. Later, only one juror held out against acquittal, John Ellsworth. After 28 hours and 20 minutes, the jury came back with a not-guilty verdict.

Judge Bryant “who was visibly astonished, disappointed and thoroughly exasperated. In fact, he practically ‘lost his cool.’ ‘Your verdict,’ he declared, ‘Is such that it shakes the confidence of law-abiding citizens in integrity and truth. It will be apparent to all who followed the evidence in this case that you have reached a verdict not on the evidence but on some other reason. You will go home with the satisfaction, if it is indeed a satisfaction, that you have rendered a blow against law enforcement and given aid and encouragement to people who would flout the law. In all probability they will commend you. I cannot!’” (Franklin County Review, vol 12, pg. 27).

In the answer to last week's quiz, the Rev. John R. Williams, the pastor of the First Congregational Church, made the national news as he spoke out against Schultz. He said, “the tendency of certain humans to desert spiritual for material gains” (p. 25 Franklin Historical Review, vol 12, 1975), he found it deplorable “that men in high places would fawn over gangsters and that communities would hail them with rejoicing because their arrival meant money.” (Kill the Dutchman, p. 245)

Quiz: How did Schultz's win turn out to be his loss?

Next week: the fallout from the trial



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Monday, October 7, 2013

The Dutch Schultz and Malone: Part 1

Prohibition ended in 1933, but Malone's last hurrah with it came in the summer of 1935 when the gangster Dutch Schultz came to town.

Schultz, whose real name was Arthur Flegenheimer, made his fortune bootlegging. He dodged $92,000 in taxes on $481,000 income. He said he was told he didn’t have to pay taxes on it because it was illegal income.

Judge Bryant, a native of Malone, decided to take him to his home town because he believed Schultz could be convicted. Unfortunately, the jurors disagreed. According to Jean Child, daughter of one of the jurors, Hollis Child, "(t)he majority, seven jurors, felt that Judge Bryant brought the trial up here so he'd have a bunch of dumb farmers, and get what he wanted." (Adirondack Life,  August 1991, p. 30).

In July, members of Schultz's mob began migrating to Malone. They took up residence in the Flanagan Hotel--a suite of rooms on the fourth floor for Schultz, the first floor for the defense team which included local lawyer, Bud Main. Immediately the gangsters began to buy the town.

Schultz arrived on July 17, 1935 with his chauffeur and body-guard, Lulu Rosencrantz.

He played up his role as a wonderful, misunderstood man by making sure:

  1. People knew he served as a deputy sheriff at Long Lake. He had, at one time, for about six months.
  2. Was seen with locals such as Harold Main and Mayor Ralph Cardinal
  3. He went horseback riding with Main's son Robert. There were stables behind his house on Elm St.Young Main and Schultz would ride along a bridle path by the Salmon River.
  4. He'd pick up tabs for everyone in bars such as the Hillview and other nightspots.
  5. He'd leave $100 tips in restaurants.
  6. He'd buy new jerseys for our baseball teams. At this time we had a semi-pro team named the Stars that appeared to play at the Fairgrounds. Schultz shared Mayor Cardinal's box seat.
  7. He'd bring toys to children
And the town loved him, seeing him solely as a man on trial for tax evasion. Even though he was known as a bootlegger, most people, especially near the end of Prohibition, had made and/or sold their own liquor, so they saw Schultz as just a regular guy.

He dressed well. Was mild-mannered. And if he was so bad, why was he only being tried on tax evasion--especially as he had tried to pay the back taxes?

On July 23, 1935, his bail was revoked the trial began.

Answers to last weeks quiz: Who were the two gangsters in the North Country? Obviously, Dutch Schultz in Malone. The other was in Saranac Lake--Legs Diamond.

Next quiz: Which local person made national headlines speaking against Schultz and Malone's buyout?

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