The history of Prohibition, one of the least popular ideas in American history, gave rise to a new type of criminal. This new breed was well funded and organized, building up a support infrastructure that today we would call a gang. Names like Lucky Luciano and Meyer Lansky became widely known, and these high-profile thugs built their fortunes supplying America’s desire for bootleg alcohol. One of the more brutal and notorious of the 1930s era gangsters was born Arthur Simon Flegenheimer. But since Flegenheimer is hardly a name that inspires dread, and it takes a long time write, the world knew him by the name Dutch Schultz.
In the 1920s and 1930s organized crime flourished, operating speakeasies and clandestine breweries. Early mobsters built a fortune supplying Prohibition America with alcohol, gambling and prostitutes. Dutch Schultz got his start with a minor gangster named Noe and the pair eventually built up a sizeable operation. Schultz’s reputation for brutality, combined with a notorious lack of self control, gave them a seat at the table with the big boys and the money flowed in for all of them.
By the middle of the 1930s, when America was still digging itself out from under the Great Depression, law enforcement was getting better at dealing with organized crime. One of the surprising law enforcement tools that proved to be effective getting mobsters off the street were tax laws. That’s how Dutch Schultz found himself being hounded by Federal Prosecutor Thomas E. Dewey. It’s at this unlikely juncture that our tale of lost treasure begins.
Pursued by federal authorities, and denied his wish to assassinate the federal prosecutor by the mob bosses of the day, Schultz took the unusual step of trying to hide a sizeable amount of his fortune. He had seen his compatriots spend decades in prison while competing gangs seized their assets. Many gangsters emerged penniless from incarceration. Determined this was not going to happen to him, he and his henchmen gathered millions in loot. Some say it was all cash, others say it was a mix of cash, gold and jewels. The value of the collection has been estimated to be anywhere from five to nine million dollars. That is still a hefty amount of money, even by modern standards, and a king’s ransom back in those days.
According to the legend, Schultz and his men secured the valuables in bags that were then placed in a specially designed air- and water-tight safe and buried somewhere in the hills off Route 28 near Phoenicia, New York. North of New York City and southwest of Albany, it’s a great place to get away from it all to this day. The rugged hills and forests of Big Indian Wilderness are a place where civilization has made few inroads.
Bizarrely, Dutch Schultz was found not guilty of the tax evasion charges but Dewey wouldn’t give up trying to put Schultz behind bars. Defying his mob bosses, Schultz threatened to go after Dewey on his own. Fearing blowback from the death of a federal prosecutor, and wanting Schultz’s profitable enterprises for their own, the bosses sent a team to kill Schultz and his gang.
The heat in New York forced Schultz and his gang to take refuge in Newark, New Jersey, and set up a temporary headquarters at a restaurant called the Palace Chop House. On October 23, 1935, a team of killers led by Charles “Bug” Workman raided the restaurant and shot Schultz and his accomplices. Only Dutch Schultz didn’t die right away. Mortally wounded, with bullet holes through his liver, spleen, stomach and colon, Schultz lived for nearly twenty four hours, drifting in and out of consciousness in the hospital. In his delirium a police stenographer took notes on his fevered ramblings, which included references to millions in hidden money along with cryptic references to its possible location.
In the end, the secret of the Dutch Schultz treasure died with the gangsters killed in the Palace Chop House that day, but—as you might guess—that hasn’t stopped treasure hunters from seeking his fortune over the years. Gangster lore says Shultz’s enemies searched for the loot for decades but never found it. To this day treasure hunters flock to upstate New York, still searching for the ill-gotten gains of history’s most notorious killers. Maybe it will turn up someday, or perhaps it was only the tortured ramblings of a dying man at the end of a brutal career. Only time will tell.