Supermob

by Gus Russo

  After Nevada governor Fred Balzar signed the law legalizing gambling on March 19, 1931, Frank Detra openly operated the Pair-O-Dice until 1941, when he sold the business to Guy McAfee, who incorporated the club's structure into his Last Frontier Club. Detra, who died in 1984, went on to operate clubs in Reno and Ely.

  In the early years, Las Vegas city commissioners issued only seven gambling licenses for downtown clubs, most of which had maintained illegal gambling operations for years. Among the licensed clubs was the Boulder Club, where Frank Detra had worked briefly as a dealer, and the Las Vegas Club.* Other club owners with Chicago affiliations were among the first to cash in on the Las Vegas gambling rush. On May 2, 1931, Johnny Rosselli's bootlegging partner from Los Angeles Tony "the Hat" Cornero opened Las Vegas' first legal hotel-casino, The Meadows, just east of the city. Unlike the small, sawdust-coated downtown casinos on Fremont Street, Cornero's place was a Lansky-like "carpet joint," but combined with well-appointed hotel accommodations. The May 3, 1931, Las Vegas Age newspaper described the Meadows: "Potent in its charm, mysterious in its fascination, the Meadows, America's most luxurious casino, will open its doors tonight and formally embark upon a career which all liberal-minded persons in the West will watch closely."

  Although visionary, the Meadows was a huge gamble during the Depression. In southern Nevada especially, there were not yet enough well-to-do patrons to sustain the business. In just a couple years, the Meadows closed, only to reopen as a high-class bordello. Cornero would resurface in the 1950s to open another Vegas hotel-casino, the Stardust, which was quickly appropriated by the Outfit.

  Cornero, Humphreys, Rosselli, and the rest were ultimately the victims of bad timing. The nation's depressed economy kept the number of available affluent high rollers to a minimum. The economic conditions around Las Vegas were even worse, since after the Hoover Dam was completed in 1935, the area saw the exodus of the five-thousand-man workforce and their families. The situation thus remained in stasis as Vegas once again became synonymous with low-rent dude ranches, cowboy casinos (with gamblers' horses harnessed out front), and sawdust-floored gambling roadhouses. Out-of-towners were dispossessed of a bit more cash by state legislators, who passed no-fault quickie divorce codes. But roadhouse gambling and quickie divorces were not panaceas for a flat state economy. However, redemption would come soon after World War II in the form of an ambitious New York hoodlum who had been peddling the Outfit's Trans-America wire service to the downtown gambling joints. The movie-star-handsome thug came up with the best scam idea of his life: he decided that the time was right for Las Vegas (and the Chicago mob) to revisit the hotel-casino notion pioneered by Tony Cornero in 1931. With the Chicago-New York Commission's financial backing, Ben Siegel gave new life to Nevada while ironically sacrificing his own. In doing so, the fortunes of Nevada, and particularly Las Vegas, would improve forever.

  Benjamin Siegel, Meyer Lansky's childhood pal and New York crime partner, had been exiled to the West Coast when his violent temper threatened to start a gang war. In Los Angeles, Siegel began fronting for the Chicago Outfit's Trans-America betting wire service, scattering agents throughout the Southwest. Siegel guaranteed his new empire's success by bribing countless state politicians and law enforcement officials, all the way up to the state Attorney General's Office. Among the men handling his legal affairs were Greg Bautzer and Sid Korshak.

  Bugsy Siegel's selection as the Outfit's wire representative in the Southwest was understandable: he had known the gang's patriarch Big Al Capone since both their formative days in the Williamsburg section of Brooklyn, where they had worked in consort as strike-breaking thugs for garment-industry scions.

  In 1941, just after the race wire was legalized in Nevada, Siegel sent his aide and lifelong Brooklyn friend Moey Sedway to Las Vegas with a charge to install the Outfit's Trans-America wire service in the downtown Vegas haunts of the serious gamblers—casinos such as the Golden Nugget, Horseshoe, Golden Gate, and Monte Carlo. The task was virtually effortless, since the "Glitter Gulch" casino owners saw bookie wagering as a draw and hoped that in between races the bettors would sample the other games of chance on-site.

  The money was huge. In no time, Siegel was receiving a $25,000-per-month cut from the Las Vegas wire alone, which he called the Golden Nugget News Service. Sedway became a civic-minded philanthropist, who, for a time, considered running for public office—that is, until Bugsy set him straight. In a typical fit of rage, Siegel screamed at Moey, "We don't run for office. We own the politicians."

  The second incarnation of Las Vegas casino gambling was about to occur. At the time, Willie Wilkerson, the publisher of the Hollywood Reporter and the owner of successful L.A. nightclubs on the Sunset Strip, hoped to create a new "strip" on the Las Vegas outskirts. Years later, the FBI would learn that there was also a hidden partner in the Flamingo project. As Chicago FBI agent Bill Roemer recounted, "We learned how Hump [Curly Humphreys] went there in 1946 to assist 'Bugsy' Siegel in establishing the first hotel-casino on what is now known as the Strip."4

  By 1948, Virgil Peterson of the Chicago Crime Commission had determined the exact amount that Sid Korshak's Chicago bosses had invested in Siegel's operation. In a letter to the Nevada Gaming Commission, Peterson noted that, via the Fischetti brothers, Chicago had transmitted over $300,000 to Bugsy. If the figure is accurate, it would make the Chicago Outfit the most substantial shareholder in the Flamingo, since the largest investor of record (Siegel) had endowed only $195,000. As previously noted, Supermob associate and longtime Korshak friend Al Hart invested $75,000 in the Flamingo,5 even more than Meyer Lansky, who chipped in an initial $25,000, adding $75,000 more later. Del Webb, the Phoenix-based builder who constructed many of the Japanese internment camps, was again enlisted to lend his talent in the furtherance of the Supermob's expansion.

  Now, investors anxiously awaited the casino's grand opening, and when the big day arrived on December 26, 1946, everything seemed to conspire against Siegel, who at the time was involved in a tempestuous affair with a favorite Chicago moll and skim courier Virginia Hill. Bugsy had spared no expense for entertainers such as George Jessel, Rose Marie, George Raft, Jimmy Durante, and Xavier Cugat's Orchestra, but despite his best efforts, he was thwarted by Mother Nature and local politics, the combination of which guaranteed the Flamingo's opening would be a disaster. In Los Angeles, a winter storm grounded the two planes Siegel had chartered to ferry celebs to the gala; those who did arrive, such as Clark Gable, Lana Turner, and Joan Crawford, either drove the 350 miles from L.A. or took a train. While in Nevada, most local gamblers, accustomed to the sawdust joints, had no desire to don dinner jackets and buy overpriced drinks merely to play a round of blackjack.6

  In the face of massive cost overruns, it came as little surprise that Siegel was the victim of a mob rubout on June 20, 1947, or, as Flamingo comic Alan King put it, "Bugsy took a cab." Twenty minutes after the shooting, before police even arrived, the Outfit's Phoenix bookie chief, Gus Green-baum, along with Moey Sedway and Morris Rosen, walked into the casino at the Flamingo and announced that they had taken over. The next day, the Outfit's Joe Epstein arrived to do the books. Over the next year, Greenbaum used $1 million in borrowed Outfit money and Mormon bank loans to enlarge the hotel's capacity from ninety-seven to over two hundred rooms. It turned out to be a good investment, since in its first year the Flamingo showed a $4 million profit, skim not included. Although Greenbaum did a brilliant job as the Flamingo's manager, his own alcohol and gambling addictions would ultimately produce tragic results. In the meantime, Green­baum was proclaimed the first mayor of Paradise Valley—or the Strip.

  The widely held perception that Siegel was killed over finances was later dispelled by many, among them Sidney Korshak, who occasionally represented Siegel's legal affairs in Los Angeles. "Ben [Siegel] introduced me to Sidney Korshak, who said he was his consigliere," said screenwriter Edward An­halt. 7 Anhalt (The Pride and the Passion, Becket, Jeremiah Johnson, Not asa Stranger,
etc.) recently recalled a conversation with Korshak when Anhalt had sought out Korshak years later with the intent of getting background for a possible film on Siegel.

  "You know all that bullshit about Ben being killed because he spent too much money?" Korshak asked. "Absolute fiction." The man who ordered the contract, according to Korshak, was Virginia Hill's first lover, "the guy from Detroit . . . the guy from the Purple Gang." The only man from the Purple Gang with the power to order such a hit was none other than future Las Vegas sachem Morris Barney "Moe" Dalitz.* "He was very offended by it [Siegel's battering of Hill]," said Korshak. "He warned Siegel," Korshak said, "and Siegel paid no attention to the warning, and they whacked him."8

  Korshak's allegation of Siegel's abuse of Hill was corroborated by other hangers-on as well as by the FBI, which noted in their Siegel file, "Early in June, 1947, Siegel had a violent quarrel with Virginia Hill at which time he allegedly beat her so badly that she still had visible bruises several weeks later. Immediately after the beating she took an overdose of narcotics in a suicide threat and was taken unconscious to the hospital. Upon recovery she immediately arranged to leave for an extended trip to Europe."

  After Bugsy's demise, the Flamingo began delivering big-time. In addition to the millions in legit profit, the partners were sharing a count-room skim estimated in the hundreds of thousands of dollars per month. With dollar signs now occupying their complete field of vision, the ravenous hoods quickly looked for their next cash cow, but this time they would improve the scheme by choosing a better front man than Bugsy, and one with no criminal convictions to attract the government's radar. Thus when the New York and Chicago mobs made their post-Bugsy foray into the Nevada desert in 1949, they concocted a bold game plan: they would hide behind intentionally arcane casino investment partnerships so as to obfuscate the true nature of the endeavor. Casino owners of record rarely indicated the true powers behind the thrones.

  "The owner names on file at the Nevada Gaming Commission in the early days were a joke, and everybody knew it," said one retired local attorney familiar with the lax licensing procedures. In one wiretapped conversation, East Coast mob investor Doc Stacher summed up the strategy nicely for the eavesdropping feds. "We worked out a deal that gave each group an interlocking interest in each other's hotels," Stacher explained, "and our lawyers set it up so that nobody could really tell who owned what out there."9 Even Nevada's then governor, Grant Sawyer, was aware of the "hidden interests" and the casino theft that was transpiring right under his nose. Sawyer said that "there is probably considerable unaccounted-for vagrant cash going somewhere," and that both state and federal governments are "being deprived of unknown amounts of taxes."10

  With Sid Korshak in place to broker these complex hidden casino ownerships and to mediate disputes among the partners, the hoods needed owners of record whose IRS statements reflected legitimate wealth. The obvious first choice for the ownership role was the non-Chicago Supermob associate Moe Dalitz, a lifelong friend of MCA heir Lew Wasserman's, Jimmy Hoffa's, and Meyer Lansky's. The addition of Dalitz to the fold would herald a three-decade Supermob affair with Sin City.

  "A Man of Gargantuan Contrasts"11

  Born on December 12, 1899, in Boston, the son of Russian immigrants Jacob and Anna Cohn Dolitz (later Dalitz), "Moe" Dalitz and family relocated to Michigan, where Moe's father opened a successful laundry business. Moe developed into a wiry young tough, with few scruples about with whom he associated in his quest to rise above his current situation. One associate of Dalitz's, a Midwestern attorney, recently described him: "Dalitz had gray eyes that never blinked. He walked like a cat—on the balls of his feet."12

  When prohibition hit in 1919, laundry trucks became a useful commodity in the world of the bootleggers, and the enterprising Moe used his father's trucks to deliver the hooch. Relocating to Cleveland, Dalitz bought the best barges money could buy, floated his trucks across Lake Erie to Canada on what he called his Little Jewish Navy, and brought them back loaded to the gills with prime Canadian liquor. Because his trucks disembarked at Cleveland's Mayfield Road dead end on the shores of Lake Erie, Dalitz's gang was christened the Mayfield Road Gang. The key members of Dalitz's gang included Morris Kleinman, Lou "Uncle Louie" Rothkopf (Rhody), Ruby Kolod, Sam "Sambo" Tucker, and Tom McGinty. When Senator Estes Kefauver's committee questioned his bootlegging, Dalitz said, "If you people wouldn't have drunk it, I wouldn't have bootlegged it."

  Dalitz testifying before the Kefauver Committee in Los Angeles, February 28, 1951 (Cleveland State University, Special Collections)

  Often working under the moniker Moe Davis, Dalitz and the gang branched out to run gambling "gyp joints" such as the Pettibone Club, the Thomas Club, and the Arrow Club. High-roller clients were chauffeured by drivers such as Jimmy "the Weasel" Fratianno, who would go on to become one of the biggest Mafia turncoats in history. As local illegal gambling czars (with racing books in Ohio, New York, and Florida) and former bootleggers, the gang worked closely with Detroit's Purple Gang bosses Al Polizzi and the Milano brothers, New York's Meyer Lansky, Bugsy Siegel, Lucky Luciano, and Lepke Buchalter of Murder, Inc., and New Jersey's Longy Zwillman. In addition, Dalitz and Kleinman leased L.A.'s Moulin Rouge Nightclub (6230 Sunset Boulevard) from Lansky's partner Joseph "Doc" Stacher.

  When questioned by the FBI in 1960, Dalitz said he met most of these hoods when he was stationed at New York's Governors Island during World War II. No one actually believed that Dalitz's criminal associations were just a matter of casual happenstance, since it was said that anyone who questioned Dalitz's power "would have to deal with Lucky, Meyer and Bug."13

  Not surprisingly, most of the Mayfield Road Gang had criminal con­victions: Kleinman served three years at Lewisburg federal penitentiary for tax evasion; Lithuanian-born "Sambo" Tucker boasted a Kentucky gambling conviction; McGinty served eighteen months in the Atlanta federal penitentiary for violating the National Prohibition Act (NPA); Kolod served three years in New York for unlawful entry, after previous bootlegging and assault-and-battery arrests; and Rothkopf/"Rhody" was the prime suspect in the murder of Cleveland councilman William "Rarin' Bill" Potter.

  Another Dalitz associate was Henry Beckerman, whose name appeared on the liquor license for the Mayfair Theater, which was run by the May-fields, and which provided early work for MCA's Lew Wasserman. In 1936, Beckerman was charged as an arsonist, but the corrupted officials refused to extradite his fellow arsonists from out of state, allowing the charges to be dropped. One week after the dismissal, Beckerman's daughter Edie, who referred to Dalitz as "Uncle Moe," married Lew Wasserman.14

  Thanks to corrupted officials, Dalitz managed to have all their "yellow sheet" police records destroyed,15 and Dalitz himself seemed to be coated with prosecutorial Teflon. That, and the fact that he had local officials well compensated, gave him a clean record with no convictions. Nonetheless, Dalitz was the prime suspect in the shooting murder of bootlegging rival Morris Komisarow in May 1930. When Komisarow's bloated body surfaced on Lake Erie a month later, it was tied to an anchor that belonged to Dalitz's boat, The Natchez. The anchor was stamped NAVY, also hinting of Dalitz's Little Jewish Navy.16

  Many years later, Dalitz had the audacity to threaten drunken heavyweight boxing champion Sonny Liston. After the two exchanged words in Hollywood's Beverly Rodeo Hotel in 1964, Liston made a fist and reared back, then a mild-voiced Dalitz cut him off, "If you hit me, nigger, you'd better kill me. Because if you don't, I'll make one telephone call and you'll be dead in twenty-four hours."17

  The Mayfield Gang made its headquarters in Suite 281 in the Hollenden Hotel, whose owner, Julius Epstein, would become a partner with Ziffren, Pritzker, Bazelon, and Greene in Franklin Investment Company (see chapter 5). From that vantage point, the gang expanded its operation and interstate mob alliances. In 1929, when Chicago's Al Capone decreed that there should be an organized crime convention, Dalitz offered to host it in Cleveland, but was overruled. Dalitz and the Mayfields attended th
e convocation, which was ultimately held in Atlantic City and attended by over thirty underworld bosses.18 During the 1932 Democratic National Convention in Chicago, Dalitz appeared in Lucky Luciano's suite in the Supermob-invested Drake Hotel, where the New York boss was lining up delegates for FDR.19 Fourteen years later, Dalitz attended the farewell bash for Luciano, who was being deported to Italy.20

  As Dalitz's friendship with Lansky grew, the two entered into major investment partnerships, the most visible being the building of molasses-alcohol distilleries throughout the Northeast, a venture that began in 1933, immediately after Prohibition was repealed.21 The move exemplified the Su­permob credo that emphasized a major presence in the legit world. Dalitz converted his profits into lucrative legitimate businesses, including linen supply companies, steel companies, and even a railroad.* His Detroit investments inevitably brought him into contact with Teamsters leader Jimmy Hoffa, whom he met in the mid-1930s through Hoffa's mistress, Sylvia Pagano. In 1949, when the Teamsters threatened to strike the Detroit Dry Cleaners Association, another Dalitz dry-cleaning racket, Dalitz slipped Hoffa $17,500 to get the union off his back.