During a court hearing over a dispute about the lease at the Bridge Whist Club, which was located at 14 East Forty-fourth Street, Bielaski testified that the renting of the location was approved at the highest levels of the Treasury Department and that he hired an old colleague to run the place as a speakeasy. In the days before sophisticated electronic surveillance, Bielaski used Dictaphones planted in the club to record conversations, without the speakers knowing. In one case, noted Bielaski, the device picked up a man trying to bribe a government agent. The club, he insisted, was vital to the government’s effort to go after the bootleggers. The drinks sold there had some of the best liquor and the Bridge Whist gained a reputation of having great drinks for fifty cents, undercutting some of the other speakeasies.
“When I began my work here,” Bielaski said, “Prohibition had been a law for five years. During that entire period no real effort had been made by any Attorney General to bring to the bar the large operators. The rum-runners and bootleggers had grown so bold and confident that they had been giving out interviews which were published in the newspapers, and were also writing articles for magazines concerning their operations.”
The club, Bielaski insisted, helped uncover evidence about most of the big liquor syndicates. But he admitted that he would never again use such a business in an investigation. La Guardia was unforgiving in his criticism and pointed to the nearly $45,000 spent by the government in the speakeasy operation, including vests for the waiters and alpaca coats for the bartenders purchased from Brooks Brothers, as well as $95 spent for engraving club membership cards. It was all a misuse of government funds, La Guardia complained, insisting that the $4,000 paid to Bielaski was improper.
Given how La Guardia would years later as mayor of New York City go after Frank Costello’s various mob operations, his flailing of Bielaski and the government for the Prohibition prosecutions is laced with irony. Costello was able to avoid conviction, in part because of the public loathing of the government tactics in his case. But Bielaksi and prosecutor Buckner were the ones who had their wings clipped. In March 1927, orders came down from Washington that Buckner’s Prohibition enforcement unit was being disbanded. Assistant U.S. attorneys, clerks, office boys, stenographers, and Prohibition agents were all sacked or reassigned. When the low-level women stenographers and typists heard the news they were in tears. The order was a galling humiliation for Buckner and Bielaski. Although he couldn’t have planned things that way, Costello had bested his foes.
With the Prohibition unit closing, Bielaski headed for the door. By March 26, 1927, the word was out that he was quitting to go back to his private law practice. He told The Sun newspaper, “I am getting tired of it.” But Bielaski’s tactics were based on the fact that many of the big bootleggers, Costello included, got to be very tightfisted with money. As Bielaski would later tell reporters, once the bootleggers got arrested and had to hire lawyers they became stingy and didn’t pay their employees. This caused a great deal of resentment among the lowly workers who he said were broke and with empty stomachs. At least some of the men became vulnerable to recruitment by Bielaski. As would be shown decades later in some major Mafia trials, gangsters who cheated their underlings risked having them turn on them and become cooperating witnesses. It seems Bielaski was just ahead of his time.
After beating back the government in court, Costello could relax a bit when he found the time. Sure, he hit the speakeasies and nightclubs in Manhattan. But being a southern Italian and coming from an extended family that had many members in New York City, Costello had another outlet for socializing. His first cousin Domenico Castiglia, the one of Polly the parrot fame, purchased land in Westport, Connecticut, and built an imposing stone house with thick walls on a large slice of land not far from Long Island Sound. The house on Lyons Plains Road had a quarter-mile-long circular driveway and concrete deck. Domenico’s business in New York City had been a partnership with a friend, Jack Delarmy, in which they produced ostrich plumes, a fashionable item of the day. Delarmy actually had first acquired a house in Westport and it was through that connection that Domenico decided to build.
Being a member of the Castiglia clan, Frank and Loretta Costello would visit the stone house property often, making the trip in a caravan of vehicles. Frank Aloise, a cousin, would drive the Costellos. After Domenico left the ostrich-plume partnership, he tried his hand at farming on the property and when that didn’t prove very profitable started bussing in boarders from the city to make extra money when the egg production fell short. Noel Castiglia, Domenico’s grandson, remembered Costello, his wife, and his business associates coming to the farm often, although never by bus.
“There was a fresh water river and a swimming hole on the property and Compo Beach, located on Long Island Sound, was only a few miles away,” recalled Noel. “The food at the replica of an Italian country cottage was always fresh and local.”
Among those visiting was Charles Luciano, Costello’s immediate boss in the Italian mob. With many visitors already at the stone house, Luciano would stay at the nearby home of the Cognato family. A surviving group photograph from the period showed Luciano, dressed in a suit and tie, smiling and sitting on the front steps of the house, surrounded by young Cognato children. The photo had to have been taken prior to Luciano being sent to prison in 1936.
Yet, Luciano’s presence made at least some in the Cognato family uncomfortable at times. In one anecdote recounted to the author by Tom Cognato, whose parents owned the house, Luciano noticed one of the Cognato girls sitting with a doll on the lawn. The girl was Lillian, who would eventually grow up to become Cognato’s mother. Luciano approached her and asked if that was the only doll Lillian had and she told him it was. Luciano, so the story goes, whipped out a $20 bill and told Lillian to have her mother buy her a new doll. However, Lillian’s mother was well aware of how Luciano made his money and told her to give it back. No doubt miffed at the slight, but unwilling to do anything more, Luciano took the money back, lit a match and burned the bill.
“If Lillian can’t have, nobody gets it,” Luciano said as he burned the cash, according to Cognato.
The money episode aside, Costello, Luciano, and the other visitors found the farm a welcome respite from the troubles and constant dangers of life in Manhattan. At least in Costello’s case he visited from the 1920s to the mid-1930s, said Noel Castiglia, who also remembered the wine there to be home made and copious. The gatherings would be punctuated by rounds of the games bocce, badminton, and horseshoes. There was also music. Another pastime for the adults, including Costello and Luciano, was the drinking game fittingly known as “Boss and Under Boss” or in Italian as “Passatella.” Basically, the game called for drinkers, who would designate a “boss” and “underboss” who controlled when other participants, known as equals, could drink shots of liquor or gulp wine. Basically, the game led to group inebriation and sometimes fights, although it is doubtful anybody took a swing at Luciano or Costello.
The results of Costello’s trial were a strong indication of just how much public sentiment was against Prohibition and how flagrant was the disregard of the law. Proponents of a dry country may have insisted that the nation’s productivity and state of law and order had improved with the ban on liquor. But the situation in New York City and elsewhere showed how crime and corruption had increased in certain areas with bootlegging. The proliferation of speakeasies, said by some estimates to number over 20,000 to 30,000 in the city, showed that the law was being disobeyed quite openly. At the Waldorf-Astoria, where Costello lunched and held court, diners at a banquet heard a vice president of the New York Central Railroad—in the presence of the former mayor and police commissioner—blast Prohibition as “the most indefensible law ever written on our state books. It has resulted in a carnival of murder, a carnival of crime.” With that Costello and his cronies had to gleefully agree.
CHAPTER NINE
THE GREAT BLOODLETTING
WITH COSTELLO DODGING THE BULLET and his government to
rmentors humiliated, bootlegging merrily continued in New York City. That didn’t mean that the federal government gave up totally. New York State under a local law tried to enforce the dry concept and cops still went about shutting and padlocking speakeasies. But Prohibition had made Costello and many other gangsters wealthy beyond their dreams. Italian, Jewish, and Irish mobsters still raked in the money. They just needed to be more careful.
Costello made millions with his liquor operation, although one would be hard pressed to find a piece of paper that listed his assets. Costello didn’t keep bank accounts or checking accounts; his wife Loretta did for a while in this period. He dealt in cash and other physical assets. He held nothing in his name, barely. One indication of how much money he had in this period can be seen indirectly through William Dwyer, his partner in crime. Having beaten Dwyer in court, the federal government went after him for back taxes, which revenue agents said he owed from the tens of millions of dollars he made in bootlegging. After years of court battles, the government finally won a judgment for $3.7 million in back taxes and penalties against Dwyer, who despite his sports teams and racetrack holdings would eventually die a poor man. The government said the money was owed for illicit income he received going back to 1922, just before he is believed to have teamed up with Costello.
Dwyer should have taken a lesson from Costello about banks. Dwyer’s problem in the tax case was that he kept a lot of his cash in banks but brazenly reported to the IRS a pittance in income. There was a total of $6.5 million found by the IRS in Dwyer’s bank accounts, an amount that today would be worth $90.5 million accounting for inflation. In 1923 alone, the year Dwyer is believed to have begun doing business with Costello, he reported a gross income of $6,824 but at the same time banked about $2 million or $28.5 million in today’s money. In 1924, Dwyer showed income of $11,000 while banking $1.5 million or over $21 million in 2017 money. One can only guess how much Costello was pulling in during those years, but it had to be as much or greater.
With so much money being made in bootlegging, the mob was awash in cash—and that made for trouble. The Italian gangsters were in a state of continual strife. By 1927, one of the bosses vying for control was Joseph Masseria in New York. Masseria had risen to a position of power among the Italians, and with the rise of Prohibition started to partake of the money that could be made. His loyal lieutenants included Lucky Luciano, with whom Costello worked closely. The old Morello gang was still active but considerably weakened and subservient to Masseria. Another boss, Salvatore D’Aquila, split off from the Morellos and had started his own sphere of influence.
Death was a constant among the Italian mobsters. Masseria dodged some assassination plots believed to have been instigated by a rival bootlegger Umberto Valenti. When the time came, Luciano is said to have shot Valenti dead outside an Italian Restaurant on the Lower East Side. Then in October 1928, D’Aquila, who police described as a Bronx businessman with a record as a swindler, was gunned down in Manhattan as he was visiting his cardiologist. His wife and four daughters watched as he was shot dead. With D’Aquila’s death, Masseria was the top Italian boss in Manhattan. Among his chief lieutenants was Luciano, assisted by Costello, and William Moretti, who happened to be Costello’s cousin. Rounding out the cadre was another Italian immigrant named Joseph Adonis, whose real name was Joseph Doto, and Vito Genovese, another Sicilian transplant.
Over in Brooklyn, bootlegging was also the racket of choice, and nobody did it better than Frankie Yale and Salvatore Maranzano, a relative new comer from Sicily. With his good looks and fearsome temper, Yale was a young force to be reckoned with. Known also by his Italian surname of “Ioele,” Yale had his hand in a number of mob enterprises. He organized the ice merchants—this was in the days before refrigeration—into a cartel and kept unions out of the laundry business. He also developed a brand of cigars known as “Frankie Yales” and suggested in his persuasive way that stores sell them. Yale also owned a funeral parlor; given the death rate among bootleggers that wasn’t a bad investment either.
Yale started a saloon and restaurant in Coney Island, close to the surf and sand, where he employed a jolly young waiter and gangster known as Alphonse Capone, on a referral from a courtly old gangster named Johnny Torrio. The Harvard Inn had nothing to do with the university but everything to do with gangster nightlife at the time. There were plenty of fights and shootings in the vicinity of the club.
Eventually, Capone went to Chicago where he squeezed out his mentor Torrio—who narrowly escaped an assassination attempt—and became the top bootlegger in the region. Yale and Capone had worked together well in the liquor racket. Yale imported the whiskey and shipped it to Capone’s numerous speakeasies in Chicago, where he had additional smuggling operations bringing booze down from Canada. When it became necessary, Yale and Capone finished off an Irish gang led by Richard “Peg Leg” Lonergan with an ambush in a Brooklyn social club Christmas Night in 1925. But among gangsters, things never stayed peaceful, particularly with Capone who began to have suspicions about his old friend Yale.
* * *
It was July 1, 1928, a Sunday morning, when Frankie Yale was driving a new Lincoln car with running boards in the Fort Hamilton section of Brooklyn when he sensed something was wrong. There was another vehicle to his rear with four men inside. Having already survived other hit attempts against him, Yale made a quick turn and drove down Forty-fourth Street. Yale was speeding and so was the pursuing vehicle. A shotgun blast from the other car tore into Yale, killing him. His vehicle, still in motion, traveled a short distance and then came to rest in the front yard of Number 932 where a bar mitzvah party was going on. The large vehicle took out some shrubs in the yard and crumbled some masonry by the front steps.
The next morning, New York newspapers showed the crime-scene photographs of Yale’s body outside the vehicle, a cop standing guard. There had been other mob killings over the years but none as sensational of late than that of the murder of Yale. His funeral was grand, and he was buried in a $15,000 silver-colored casket and the funeral procession was watched by an estimated 100,000 spectators. Two women showed up at the grave in Holy Cross Cemetery claiming to be Yale’s wife. One was his official spouse Mary with whom he had two children, and the other was an attractive brunette identified in the newspapers as Luceida Gullioti. Both women would fight over Yale’s property. But police were more concerned about finding out who had killed him.
The immediate suspicion fell on Capone. The Chicago crime boss had suspected Yale was stealing loads of whiskey, and Capone was the likely suspect. In fact, since Capone had taken over the rackets in the Windy City from Torrio he was suspected of orchestrating a number of murders of his rivals. There was the killing of Irish gangster Dean O’Banion and the brutal beating to death of three Sicilians at the Hawthorne Inn located in the town of Cicero. Then there was the infamous slayings of a group of mob associates in a garage on St. Valentine’s Day. Killings followed in Capone’s wake wherever he went, which prompted J. Edgar Hoover, the head of the FBI, to label him public enemy No. 1. Back in New York, the Italian gangsters believed the bloodshed in Chicago had the potential to destabilize things and turn the public against all the bootleggers. That could really ruin business. The New York mob tried to talk sense into Capone. Costello always believed that there was enough bootlegging to go around for everybody.
“We sent some of our boys out to talk to Al in a nice way,” Costello told Wolf. “He chased them. So we waited.”
By mid-1929, Luciano, who was chief lieutenant for Masseria, put together a group of gangster-bootleggers who historian Nelson Johnson in his book Boardwalk Empire called the “Seven Group.” There were a few Jews—Lansky, Siegel, Longie Zwillman, and Harry “Nig” Rosen. And Italians—Willie Moretti, Joe Adonis, and of course Luciano. Added to the mix was Nucky Johnson, the boss of Atlantic City, New Jersey. Strictly speaking, there were more than seven names, but that didn’t really matter. As author Johnson would, note the alliance controlle
d a great deal of the bootlegging, “buying, selling, distilling, shipping and protecting twenty-two different mobs from Maine to Florida and west to the Mississippi River.”
Luciano, who saw the benefits of organization and cooperation among the various bootleggers, decided to pull together a convention of all the different mobs to talk about business, which at that point was still a money-maker no matter what the government did. But the violence and killing had to be stopped. The Seven Group, plus others, agreed to come to Atlantic City, Nucky Johnson’s fiefdom, and try to hash things out.
The meeting of May 13-16, 1929, goes down in Mafia lore as one of the first big national conclaves of gangsters. Johnson was the host and originally wanted everyone to stay at the exclusive Breakers Hotel. But the Breakers catered to upper-crust white Anglo-Saxons, not the likes of Capone and Jews like Rosen, said historian Johnson. The Breakers wouldn’t take the guests and Luciano recalled later that his friend Nucky had to do some fast stepping to avoid a disaster.
“Nucky and Al had it out right there in the open,” Luciano recalled in his autobiography. “I think you could’ve heard them in Philadelphia, and there wasn’t a decent word passed between ’em. Johnson had a rep for four-letter words that wasn’t even invented, and Capone is screamin’ at him that he had made bad arrangements.”
Finally, all the mobsters took off for the President Hotel which was more accommodating. With everyone settled, Nucky Johnson hosted a party which lasted a day. Then, when they had the time the delegates walked out to the beach where, as was reported, “they took off their shoes and socks, rolled their pant legs to their knees, and strolled along the water’s edge discussing their business in complete privacy.”
The big meeting took place in a large room. The New York group was led by Luciano, Costello and Torrio, At the other end of the large conference table was the Chicago delegation lorded over by Capone, his trusted enforcer Frank Nitti and a bodyguard named Frank Rio. Torrio ran the meeting and said all of the strife had to stop. Costello was introduced and according to Wolf’s account took over the meeting.
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