Dutch Schultz Slept Here!

Recently I discovered that the famous gangster Dutch Shultz had a connection with Malone. Dutch Shultz (real name Arthur Flegenheimer) was a notorious mobster in the 1920’s and 1930’s. He made his living in the usual mob style of bootlegging, running numbers rackets and killing people. And in the usual mob style, the only way the government could foresee putting him in jail was through an indictment for tax evasion.

Dutch had a trial in Syracuse, New York after his lawyer successfully argued for a change of venue from New York City. The first trial began on April 16, 1935. John H. McEvers, a member of the team that successfully convicted Al Capone, handled the prosecution. Many of the early witnesses McEvers put on the stand were bankers who were used to detail the Dutchman’s bootlegging income. The government also had subpoenaed twenty witnesses, many of whom were reluctant to speak. Some of the witnesses that were subpoenaed went into hiding. One witness, scheduled to testify during an afternoon session, went for a morning walk and kept on walking. Bo Weinberg and several other Schultz associates developed amnesia on the stand, or pleaded the Fifth Amendment, even while being threatened with contempt charges by Federal Judge Frederick H. Bryant.

Schultz’s defense lasted an entire three hours. Calling just three witnesses, the Dutchman’s defense was that he had been given “expert” legal advice that he did not need to pay taxes on his illegal income. When this advice turned out to be erroneous, Schultz made a concerted effort to pay his debt only to be rebuffed by the government. Outside the courtroom Schultz explained to reporters:

“I offered $100,000 when the government was broke and people were talking revolution and they turned me down cold. You can see how that at least I was willing to pay. Everybody knows that I am being persecuted in this case. I want to pay. They were taking it from everybody else, but they wouldn’t take it from me. I tried to do my duty as a citizen…”

On April 27, the case went to the jury. For a day and a half Schultz walked the court’s corridors nervously chain-smoking cigarettes. Perhaps it was nervousness, but while Schultz waited he spent much of his time making statements to the press on a variety of topics from his own life to Al Capone and Alcatraz. He had become a media celebrity and was seemingly enjoying the publicity he was receiving.

Despite all of the government’s evidence the jury was hopelessly deadlocked. After the first day the vote stood at six to six. The second day it was seven to five for conviction. The judge discharged them at three o’clock on the afternoon of April 29.

The second tax trial was slated to be held in Malone in June of 1935.  In what Paul Sann called a “social rampage,” Schultz arrived in town a week ahead of the trial to show the towns folk that he was a regular guy. He picked up tabs in bars and restaurants, and attended a local baseball game with the mayor and two of Malone’s prominent businessmen, all in the hope of softening up the town. After one of Malone’s clergymen rebuked his congregation for “fawning” over the gangster, Judge Bryant revoked Schultz’s bail.

The prosecution’s case was basically the same – the bankers, the reluctant subpoenaed witnesses, and Bo Weinberg with his faulty memory. In an effort to make Schultz seem more like one of them, the defense hired a local lawyer as lead attorney. The trial, which began in mid-July, went to the jury on August 1. After a nine to three vote for acquittal on the first ballot, the jury came back on August 2, with a verdict of not guilty.

Judge Bryant was furious and he banged his gavel to quiet the joyous outburst in the courtroom. He then admonished the jurors:

“You have labored long and no doubt have given careful consideration to this case. Before I discharge you I will have to say that your verdict is such that it shakes the confidence of law-abiding people in integrity and truth. It will be apparent to all who have followed the evidence in this case that you have reached a verdict based not on the evidence but on some other reason. You will have to go home with the satisfaction, if it is a satisfaction, that you have rendered a blow against law enforcement and given aid and encouragement to the people who would flout the law. In all probability, they will commend you. I cannot.”

Also disappointed at the trial’s outcome was Mayor LaGuardia who told reporters, “He won’t be a resident of New York City. There is no place for him here.” To which Schultz replied to the press, “Tell LaGuardia I will be home tomorrow.”

During his time in Malone, Schultz stayed at the Flanagan hotel, and dined at several of the local restaurants, one of the few claims to fame the residents here will invoke when asked “Does anything ever happen in Malone?”, despite the fact that all this happened some 70 years ago, and that Dutch Schultz was gunned down in some gangland style war shortly after he was acquitted.

And as we will see – Dutch Schultz isn’t the only criminal who has a tie with Malone. Not since there are 3 prisons here, and 1/3 of the population of 14,972 (as of 2006) is comprised of people who are incarcerated. More on *that* little factoid in tomorrow’s post.