Murder Incorporated

Thursday, May 04, 2006

Arnold Rothstein

Known by many names - A. R., Mr. Big, The Fixer, The Big Bankroll, The Man Uptown, and The Brain - Arnold Rothstein seemed more myth than man. He was the inspiration for Meyer Wolfsheim in The Great Gatsby, and Nathan Detroit in Guys and Dolls. He was rumored to be the mastermind of the "Black Sox" scandal, the fixing of the 1919 World Series. Arnold Rothstein was gambling, and Arnold Rothstein was money. He was Mr. Broadway and had his own booth at Lindy's restaurant in Manhattan where he held court.

In 1914 Rothstein was already on his way to becoming the go-to-guy for lay-off betting in the bookmaking business. Since its early years, America has had a love affair with horse racing - and betting on horse races. As placing wagers on the sport became more popular, especially in the country's larger cities, the art of bookmaking, also known then as pool operating, became popular too. It was not until Rothstein came along to organize the various bookmakers that it became a huge money making venture. By the mid-teens Rothstein's ever-growing bankroll allowed him to set the terms for what became known as the lay-off bet. This is the process of evening out a bookie's slate when one horse has so much money riding on it that the results can break the bookie's bank. He simply bet's the other way with someone with enough money to handle the bet and the two split the winning percentage from the bets placed.

Rothstein was soon known from coast to coast as the man who could handle any lay-off bet. Assembling a loyal group of men who worked around the clock for their master, Rothstein's ability to take care of this type of betting would last until his death. Meanwhile, as the country moved through the 1910s, Rothstein's gambling contemporaries in New York fell by the wayside. Having one of the few reputable gambling houses in the city Rothstein decided to close up shop because it had become too well known. In 1916 he opened a new casino in Hewlett, Long Island where the cost of "protection" was not nearly as high as in Manhattan. Both the building and the land the gambling house occupied were owned by a state senator who was recognized as a major political figure in the area. The casino was lavishly furnished and provided the gamblers, who arrived by invitation only, with the best in food and drink. All of the casino's employees were required to dress in appropriate eveningwear.

Rothstein took advantage of what he termed "snob appeal" for his gambling den. "People like to think they're better than other people," Rothstein once told Damon Runyon. "As long as they're willing to pay to prove it, I'm willing to let them." For three years he allowed them to "pay," to the tune of $500,000 in profits, before he closed the club in 1919 after the local authorities became greedy. Rothstein did not remain out of the casino business for long. In 1917 he was approached about bankrolling a gambling house at Saratoga, which he did until closing his Long Island operation. Rothstein then opened his own place in Saratoga, which he named the "Brook." The combination cabaret, gambling casino, nightclub and restaurant was described as one of the grandest of its kind. The Brook drew the wealthiest gamblers in the country. Katcher claims, "Rothstein wanted only the best people as customers. To him 'best' and 'wealthiest' were synonymous. He had no other gauge than money by which to judge."

After the 1922 racing season was completed a reform mayor was elected in Saratoga. The candidate ran on a platform to rid the area of bookmakers and gamblers. Shortly after the election an "emissary" of the mayor-elect contacted Rothstein to let him know the new city leader was "willing to forget some of the promises he made." "How much?" barked Rothstein. "You can take care of it for $60,000," came the reply. Rothstein shot back, "You go back and tell him to go to hell. Anyone who'd sell out a whole town wouldn't hesitate to double-cross one man." The Brook was sold and, while Rothstein stayed clear of owning anymore casinos at Saratoga, he continued to bankroll various operations until he died. One of these gambling houses was the "Chicago Club," which came into the possession of a group of investors headed by Charles "Lucky" Luciano.

The Mafia Encyclopedia defines Prohibition as "the greatest day for organized crime in America." Little did Rothstein know at the advent of the Volstead Act that he would be one of the founding fathers of organized crime in the United States. In fact, Rothstein actually believed the new law would be effective.

When Prohibition began on January 16, 1920, Rothstein had many of the component parts of organized crime in place. Leo Katcher explains: "Rothstein was one of the first rumrunners. He made the smuggling of uncut diamonds and narcotics a side enterprise. "He operated one of the largest bail bond businesses in New York. Each man for whom he provided bail had to give Rothstein his insurance business. "Rothstein had 'pieces' of many night clubs and cabarets. This was a bonus he took for financing them, at his usual rate of interest. His 'partners' found that they had to purchase or rent such equipment as silver and linens from firms that Rothstein owned. They also had to place all their insurance with Rothstein's firm. "Rothstein financed many retail outlets for bootleggers. His realty firms negotiated rentals and leases. "He bankrolled many bootleggers and provided them with trucks and drivers to transport their illegal cargo. "Rothstein's main function though was organization. He provided money and manpower and protection. He arranged corruption - for a price. And, if things went wrong, Rothstein was ready to provide bail and attorneys. He put crime on a corporate basis when the proceeds of crime became large enough to warrant it."

One of Rothstein's first ventures into rum running came after a meeting with Waxey Gordon (Irving Wexler) and Detroit bootlegger Maxie Greenberg. While in Detroit, Greenberg began smuggling in whiskey from Canada. Realizing how profitable this venture was, he wanted to expand and needed $175,000 to do so. He traveled to New York in hopes that through Gordon, he could obtain financing from Rothstein. Gordon knew Rothstein from having worked for him in the garment district as a labor enforcer.

Rothstein met the two in Central Park. Sitting on a park bench, he listened to their plan to smuggle in Canadian whiskey. The following day the three men met again, this time in Rothstein's office where he made a counterproposal. Rothstein would finance the venture, but the liquor would be purchased and brought in from Great Britain. Gordon, who was acting as a middleman, asked to be included in the deal and was cut in for a small "piece." From this "piece," Gordon would launch a successful rum running empire and become a wealthy man. After Rothstein ended his partnership with the two in 1921, he continued to help finance them. Gordon took over two large warehouses when they split, one in the city and the other on Long Island. Rothstein would later use Gordon's speedboats to smuggle in diamonds and dope.
Rothstein reached his pinnacle during the wild days of the "roaring twenties." Despite his wealth, power and influence - outside of his fictionalized participation in the 1919 World Series fixing - Rothstein will be remembered most for the future underworld leaders he helped tutor. In addition to the aforementioned Waxey Gordon other major underworld personalities that came under Rothstein's wing were Jack "Legs" Diamond, Charles "Lucky" Luciano, Meyer Lansky, Frank Costello and Lepke Buchalter.
A Arnold Rothstein Chronology

1882 - Born, East 47th Street, New York City, son of Abraham and Esther Rothstein (Jan. 17).

1899 - Leaves home; takes job as traveling hat and cap salesman.

1904 - Makes first trip to Saratoga Springs aboard Cavanagh Special; strands Abe Attell.

1908 - Meets showgirl Carolyn Green at Hotel Cadillac (Sept.).

1909- Marries Carolyn Green at Saratoga Springs; pawns her jewelry (Aug. 12).- Borrows $2,000 from father-in-law to open W. 46th Street gambling house.- Wins $4,000 against Jack Conaway at John McGraw’s pool hall on Herald Square (Nov. 18).

1910 - Charles G. Gates loses $40,000 in one night at Rothstein’s (Nov.).- Buys out West 46th Street gambling house partner, Tammany ward leader Willie Shea.

1912 - Murder of gambler gambler Herman Rosenthal at the Metropole Hotel on W. 43rd Street (July 16).- NYPD Lt. Charles Becker found guilty of ordering murder of Herman Rosenthal.- Tammany leader Charles Francis Murphy increases Rothstein’s influence in politics.

1913 - Bankroll reaches $300,000; closes house on W. 46th Street.- Opens gambling house at Hewlitt, Long Island.- Begins relationship with showgirl Bobbie Winthrop.

1914 - Begins laying off bets for fellow bookmakers.- Moves into real estate, insurance.- Lt. Charles Becker's conviction overturned (Feb. 24).- Dago Frank Cirofici, Whitey Lewis (Jacob Seidenschner), Lefty Louie (Louis Rosenberg), and Harry "Gyp the Blood" Horowitz executed for murder of Herman Rosenthal (April 13).- Becker again found guilty of ordering Rosenthal's murder (May 22).

1915 - New York State Court of Appeals affirms Becker guilty verdict. - Becker executed at Sing Sing for ordering murder of Herman Rosenthal.

1917 - Begins bankrolling Saratoga Springs gambling house owner Harry Tobin.- Robbed at Hotel St. Francis crap game (May 16).- Arch Selwyn opens Selwyn Theatre at 229 W. 42nd Street; bankrolled by A.R. (Oct. 2).- Wins $300,000 on Hourless at Laurel (Oct. 18).

1919 - Opens The Brook in Saratoga Springs.- Robbed of $11,000 in floating crap game (Jan.).- Middleman for Charles A. Stoneham’s purchase of New York Giants (Jan. 19).- Charged with assault after police raid crap game at 301 W. 57th St. (Jan. 19).- Bankrolls first edition of George White’s Scandals (June 2).- Fixes 1919 World Series between Chicago White Sox and Cincinnati Reds.

1919-20 - Intervenes in garment industry labor disputes; places Little Augie Orgen in charge.

1920 - Henchman Nicky Arnstein (husband of Fanny Brice) in hiding for Wall Street Liberty Bond thefts (Feb-May). - Furnishes bail for Arnstein; Monk Eastman steals Fanny Brice’s car, returns it on mention of Rothstein’s name (May 16).- Subway Sam Rosoff loses $100,000 in one night at The Brook.- Bankrolls Waxey Gordon’s rum running operation.- Begins work with Meyer Lansky and Lucky Luciano.- Wins between $850,000 and $900,000 on Sailing B at Saratoga (Aug. 27).- Grand jury convenes in Chicago to investigate baseball gambling (Sept. 7).- Billy Maharg implicates Attell and Rothstein in Philadelphia North American article (Sept. 27).- Announces retirement from gambling (Oct. 1).- Testifies before Chicago grand jury investigating World Series fix (Oct. 26).

1921 - Black Sox confessions and waivers missing (Feb. 14).- American League President Ban Johnson alleges Arnold Rothstein told him Benny Kauff offered to help fix the 1919 World Series (Mar. 8).- Ban Johnson charges Rothstein stole confessions from the State’s Attorney’s office; Rothstein threatens to sue Johnson for $100,000 (Mar. 14).- Wins $850,000 on Sidereal at Aqueduct (July 4).- Wins $500,000 on Sporting Blood in Travers Stakes (August 20).- Loses $270,000 on single race at Aqueduct (fall).- Enters Bahamian rum running scheme with Dapper Dan Collins.- Begins association with Frank Costello.- With Gene McGee discovers "padlock" loophole in Mullen-Gage Law.

1922 - Sells The Brook to Nat Evans (alternate date:1925).- Pays income tax of $35.25 for 1921; declares gross income of $31,544.48, net of $7,257.29 (Mar. 15).- Helps finance Anne Nichols’ Abie’s Irish Rose (opens May 23 at New Victory Theatre).- Fences $300,000 in jewels stolen from Mrs. Hugo A. C. Schoelkopf.- Borrows $20,000 from Irving Berlin.

1923 - Showgirl Dot King found murdered in Rothstein-owned apartment (Mar 15).- William Randolph Hearst's New York American links Rothstein to bucket shop scandals.- Closes Long Beach gambling house.- Collyer’s Eye insinuates Rothstein might be involved with Cincinnati Reds in throwing games (Aug. 18).- Testifies before Referee in Bankruptcy re: E. M. Fuller & Co. (June 25, Oct. 8).- Jack Dempsey-Luis Firpo fight; A.R. helps Lucky Luciano pick out a new wardrobe for the event (Sept. 14).- Bankrolls swindler “Jake the Barber” Factor.

1924 - Indicted for concealing E. M. Fuller assets (April).- Nicky Arnstein enters Leavenworth (May 16)- Nott suspends sentencing for Fuller & McGee (July).- Fallon acquitted of perjury (Aug. 8).- Fallon defends Giants coach Cozy Dolan (Oct.-Nov.).- Rothstein high agent in sales for Norwalk Insurance Co.

1925 - Bankrolls Jake Factor again.- Sends Sid Stajer to Asia for drug buys in China, Formosa, and Hong Kong. - Wins $80,000 on suspicious Mickey Walker-Dave Shade fight at Madison Square Garden.- Mayor John F. “Red Mike” Hylan accuses A.R. of being a “big gambler” backing James J. Walker for mayor (Aug. 24).- Tammany chief George Olvany denies knowing Arnold Rothstein (Aug.).

1926 - Rothstein, Inc. employee Irving Sobel arrested on charge of selling heroin.- Mediates garment industry strike—allegedly influences police on behalf of the Communist faction.- Sends George Uffner to Asia for further drug purchases—these will continue until after Rothstein's death.- Gives power of attorney to both L. P. Mattingly and Rolland Nutt to represent him when an additional tax assessment for the years 1919, 1920, and 1921 was lodged against him- Gambler George Formel charges A.R. had paid Saratoga Co. D.A. Charles B. Andrus $60,000 in "protection" money.- Presence ringside at first Jack Dempsey-Gene Tunney heavyweight title fight causes controversy; wins $500,000 (Sept. 23).

1927 - Carolyn Rothstein tells Rothstein she desires a divorce.- Death of Bobbie Winthrop.- Arnold Rothstein meets showgirl Inez Norton.- Arnold Rothstein urges Little Augie Orgen to lay off strongarm tactics in unions and opt for infiltration of their management—Orgen refuses.- American Federation of Labor (AFL) accuses Arnold Rothstein of “fixing the police in behalf of the Communists” in recent furriers strike (June 11). - Arnold Rothstein in virtual control of U.S. drug trade.

1928 - Bankrolls Fats Waller's Broadway review Keep Shufflin' (opens Feb. 27)- Belgian multi-millionaire Captain Alfred Loewenstein arrives in New York City (Apr. 28).- Loses $130,000 at Belmont Park (May 31).- “Loans” $19,940 to City Magistrate Albert Vitale (June 17 or 18).- Death of Capt. Alfred Loewenstein (July 4).- Loses $300,000 at poker game at Jimmy Meehan’s apartment, 161 W. 54th Street (Sept. 8-10).- Shot in Room 349 at Park Central Hotel, 200 W. 56th Street (Nov. 4).- Rothstein signs will prepared by attorney Maurice F. Cantor (Nov. 5).- Arnold Rothstein dies at 10:15 AM at Polyclinic Hospital, 335-361 W. 50th Street (Nov. 5).- Funeral at Riverside Memorial Chapel; Burial at Union Field Cemetery, Queens (Nov. 7)- Sidney Stajer and Jimmy Meehan testify before Rothstein murder case grand jury (Nov. 28).- In the Tombs Bridget Fahey and two others identify gambler George McManus as being occupant of Room 349 (Nov. 28).- District Attorney Joab Banton denies Arnold Rothstein-Alfred Loewenstein link (Dec. 3).- George McManus, Hyman “Gillie” Biller, John Doe, and Richard Roe indicted for A.R.'s murder (Dec. 4).

1929 - Mayoral candidate Fiorello LaGuardia reveals 1928 A.R. loan to Vitale (Sept.).- Judge Charles C. Nott refuses to try McManus until after election (Oct. 10).- James J. Walker defeats Fiorello LaGuardia 865,000 to 368,000; Thomas C. T. Crain elected District Attorney (Nov.). - George McManus' trial postponed because of illness of witness (Nov. 12). - McManus trial begins (Nov. 18).- Judge Nott directs acquittal of George McManus (Dec. 5).- Judge Albert Vitale robbed at Tepecano Democratic Club (Dec. 7-8).

1930-Judge Nott quashes charges against Biller (Jan. 16).- Inez Norton returns from Florida, announces she will play on Broadway in a play based on Rothstein (Feb. 1).- Grand jury issues report on NYC federal narcotics office (Feb. 19).- Judge Albert Vitale removed from office over Rothstein loan (Mar. 14).- Inez Norton opens in Room 349 at the National Theater (Apr. 21)- Judge Albert Vitale honored by the Federation of Italian-American Democratic Clubs; gunmen burst in and rob guests (June 8).- Judge Samuel Seabury appointed to investigate Magistrates Courts; begins end of Walker administration (Aug. 25).

1932 – Rothstein murder grand jury dismissed (Feb. 2).- Seabury interrogates Walker (May 25-26).- Seabury sends recommendations to Governor Franklin D. Roosevelt (June 8).- Governor Franklin D. Roosevelt interrogates Walker (Aug.11-26).- Jimmy Walker resigns as mayor (Sept. 1).

1938 - Jack Rothstone files an accounting of brother Arnold's estate, no assets listed (Mar. 1)


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