“He was quiet, soft spoken, suave, debonair, and wore expensive clothes that he chose with taste and care,” noted Katz. “He looked like he had just completed a deal to buy the Bank of England. During the twenties, especially, he was a sight to see along Broadway, a little man dressed to the hilt with a gold mounted walking stick and pearl gray spats.”
As natty as he was, Kastel was also a bonafide crook and his escapade with Dillon & Co, sounded similar to a stock scam that Fitzgerald included a veiled reference to in The Great Gatsby. For his involvement, Kastel went to trial three times on federal mail-fraud charges and prosecuted by no less than Manhattan U.S. Attorney Buckner. After two hung juries, in April 1926 Kastel was convicted on one of six fraud counts and sentenced to three years in the Atlanta penitentiary.
Released from Atlanta and back in business with Costello with the slot machines in Manhattan, Kastel decided to enter the business in New Orleans and talked about it further with Costello and businessman C. R. Brainerd. In the fall of 1935, Kastel formed a partnership with Brainerd and two of Costello’s brothers-in-law, Dudley and Harold Geigerman, who had worked in the slot-machine business in Manhattan. The deal was all done on a handshake. The partnership, known as Bayou Novelty Company originally called for Kastel and Brainerd to get 30 percent shares, with the Geigermans each getting 20 percent interest. After Brainerd died in 1937, Kastel’s share increased to 40 percent of the business. Costello may not have wanted to go into Bayou Novelty officially, but he still managed to get a piece of the action, and Kastel agreed to split whatever money he got with him. In fact, Costello loaned Kastel, when he was short of cash, some $15,000 to originally invest in the business. However—and this would be crucial in later legal troubles—Costello stayed away from the daily operation of the company, receiving what one court found was only his cut of the profits directly from Kastel.
Bayou worked out of 2601 Chartres Street, near the French Quarter, and was in operation until the spring of 1938. It had a repair shop for the machines which had been purchased from Mills Novelty in Chicago and a storage area on the premises. Teams of sixteen collectors or agents went around town three times a week to gather the proceeds from the machines of which Bayou retained 50 percent. The stores where the machines had been placed got 40 percent of the take and the collectors the remaining 10 percent. Business was good and in 1936 showed net earnings of over $514,000. The business had at least 1,000 machines and didn’t get robbed or have any obvious problems with the police or any other officials.
Bayou’s affairs represented the one instance in which Costello, even though he was formally not part of the company, was said to have resorted to violence. George Wolf made no mention of it in his book, but Leonard Katz did in his. Quoting an unnamed “friend” of Costello, Katz related how one of the key people in the New Orleans operation was stealing money from the company. Frank was informed and upon arriving in New Orleans called a meeting of the company. While speaking from a podium, Costello asked the thieving man to approach and then suddenly Costello pulled out a monkey wrench and struck the man, according to what Katz said his informant told him. The assault was meant to be a lesson for anyone who was thinking of doing the same thing in the future, said Katz.
But thievery wasn’t the big problem that confronted Costello and Kastel. On September 8, 1935, shortly after a bill Long proposed to remove Judge Benjamin Pavy passed the legislature, the jurist’s son approached Long in the state capital and fired at him four times with a handgun. Long’s bodyguards killed his assailant. But two days later Long died of his wounds. If Long had been the guardian angel of Costello’s slot machine empire in Louisiana—and there are those who think he really wasn’t—things were now in a bit of disarray since the boys from New York had lost their political protection at what seemed like the wrong time.
It was about a year after Long’s assassination that the new mayor of New Orleans, Robert S. Maestri made a move, announcing that slot machines would not be permitted to operate in the city. He ordered the cops to confiscate machines and word spread among bars and other establishments that the “syndicate” which owned the Chief machines, which was Bayou, had ordered everyone to sit tight. According to Wolf, Maestri took a vacation to Hot Springs, Arkansas, a place where Costello’s old friend Owney Madden controlled gambling, and when he returned to New Orleans, Costello’s slot machines didn’t have a problem. This was so despite significant public opposition to the presence of the machines.
While their Bayou Novelty slot machine business was prospering, Costello and Kastel couldn’t rightly do business in New Orleans without cutting in Carlos Marcello, the mob boss of Louisiana and its key city of sin, New Orleans. Born of Sicilian parents and brought to the U.S. in 1911 from Tunisia, where he was born, Marcello rose from the life of a petty criminal to the main Mafia boss in the state. Costello knew of his clout and paid him the appropriate tribute. This was done in 1945 when Kastel and Costello took over the Beverly Club in Jefferson Parish. Once an old plantation converted into a roadhouse, the Beverly billed itself as an exclusive dinner and supper club, which in the days before Las Vegas pulled in entertainers like Carmen Miranda, Rudy Vallee, and Joe E. Lewis. Kastel had a significant 47 percent interest, Costello 20 percent and Marcello 12 percent. The Beverly had slot machines and despite the dicey legal nature of gambling in Louisiana, they made the club a money-making attraction.
Costello also retained some interest and significant ties to New Orleans proper. One of the them was the friendship he had with James “Diamond Jim” Moran Brocato. To say Brocato was flamboyant doesn’t do him justice. A former boxer—he used the name “Moran” so his mother wouldn’t learn of his pugilistic career as a young man—Brocato became a legendary character in the French Quarter from the 1930s until his death in 1958. He was a restauranteur of note, who, his family recalled, clawed his way up from poverty by working as a bootblack and then a barber, in whose chair one day came Huey Long. A man can get to like his barber and in the case of Long their relationship grew as the politician stopped by for a shave and haircut. Brocato, so the story goes, saved Long from embarrassment by having the then-U.S. Senator sleep off a drunken bender at the Roosevelt Hotel while Prohibition agents raided his Ming Toy speakeasy. Brocato got arrested in the raid, didn’t give up Long, and did six months for violating the Volstead Act.
Brocato became such a wealthy man that he bought up diamonds as easily as if they were crayfish. He was known around town for his diamond-studded ties, diamond-studded cane, diamond-studded watch, diamond-studded cufflinks, diamond-filled dental bridge, diamond-studded—-well, you get the picture. Movie stars like Marilyn Monroe, Barbara Stanwyck, and Robert Taylor flocked to his popular La Louisiane restaurant in the Quarter. Sports stars like Joe DiMaggio and Rocky Marciano were also regulars. The food was so good because it was all homemade.
“The fabulous food was cooked at the Moran home by Diamond Jim’s devoted wife, Mary, and delivered every lunchtime and dinner time to the restaurant; the place was packed every night. Jimmy held court, and every now and again, some lucky lady would cut into a meatball and find a one-carat diamond inside,” George Gurtner wrote years later in New Orleans magazine.
Brocato was the kind of outsized, connected personality Costello gravitated toward during the years of his New Orleans slot machine business. Costello also liked him because he was a loyal, standup guy as the incident at the Ming Toy showed. When Costello learned of an early plan to assassinate Long at the Roosevelt Hotel, he tipped off Brocato, who told Long of the danger he faced. Long’s bodyguards raided the location where the plotters were supposed to be, found some guns, and apparently broke up the plot. Long was reportedly so grateful to Brocato that he said, “Tell your friend in New York thanks, and tell him I owe him one.” Was that the reason for Long’s slot machine offer to Costello? That is something we will never know.
Several times a year Brocato would entertain Costello, Luciano, Lansky, and others on Lake Pontchartrain where
he had a family camp. Brocato got his own cut from the slot machine action in his places and it helped make him a rich man. Costello always seemed to feel comfortable around him, cared for, protected.
CHAPTER ELEVEN
“YOU’RE A HELL OF AN ITALIAN”
THINGS MAY HAVE BEEN GOING WELL in New Orleans for Costello. The slot machine money was flowing, and police and public officials there, while spouting off about the evils of gambling, seemed to have turned a blind eye and were happy to take whatever cut they were getting. The food at La Louisiane was like the best home-cooked Italian meals he could get back in New York. Costello and Loretta felt comfortable and secure among the likes of Diamond Jim Brocato, who he sometimes took Holy Communion with at St. Mary Italian Church on Chartres Street in the French Quarter.
But things were not so good back in the Big Apple. La Guardia and his police commissioner were going after the rackets with zeal. As far as La Guardia was concerned, he wanted to drive the racketeers out of town and marshaled as many city agencies as he could to do his bidding. The ice and artichoke cartels, employment agency scams, all became fair game. Lucky Luciano was Costello’s boss and was the public face of the crime family so it was natural that the authorities had him in their sights. After 1933, Luciano was earning illicit profits from other kinds of gambling and, some say, heroin. The sex trade was also a big earner for the Mafia and turned out to be big trouble for Luciano and would impact Costello in ways he wasn’t expecting. The Mafia was in for some big changes.
There were some similarities between Luciano and Costello. Both had immigrant parents and had grown up in immigrant ghettos: the East Side for Luciano or East Harlem for Costello. But their career paths in the Mafia had been different. Costello was the businessman who—mostly—eschewed violence. He wanted to be legitimate and kept a low profile when he could. Luciano had the brashness of a mob boss. He wasn’t afraid of a fight, and his criminal record showed arrests for felonious assault, disorderly conduct, narcotics violations, and weapons possession, most of which were discharged. Costello liked having an office, a home in a quiet area of Queens, and a record of being a businessman. A probation official at one point said Luciano’s idea of life, was to spend his money on beautiful women and silk underwear.
Both Luciano and Costello were key parts of the old Masseria organization, at least as long as the old boss was alive. With Masseria dead, Luciano proved to be the more adventuresome, reckless and hungering for action. It was no surprise that Luciano had the nerve to kill not one but two bosses—Masseria and Maranzano. Costello was the man who was happy to play second fiddle. That didn’t mean that Costello didn’t influence his boss. Costello’s sense of style rubbed off on Luciano who developed a penchant for the cutaway overcoat, so much so that one newspaper columnist likened him to the mythical Dracula.
Luciano, with Costello as an influence, aimed his sights higher in terms of his lifestyle. Having lived in a suite at the Barbizon-Plaza, Luciano moved into the Waldorf-Astoria under the name “Charles Ross.” The hotel was a favorite of Costello, a place where he loved being seen and hobnobbing with people he wanted to impress. If Luciano wanted to spend the money he made from the rackets then living in the Waldorf was one sure way of burning through cash. He entertained out-of-town gangsters with lush parties with showgirls and sometimes prostitutes whom he secured from the madam Polly Adler. Luciano didn’t seem to need call girls for himself. He usually had a girlfriend but never wanted to settle down and get married, unlike Costello and some of the others. In his biography of Luciano titled Luciano: The Man Who Modernized the American Mafia, author Tony Sciacca related the reason why Luciano was shy of going to the altar.
“I will never get married . . . because then I would want to have kids. And I’d never have a son of mine goin’ through life with the burden of the name Luciano, the gangster,” Luciano told friends, according to Sciacca.
Luciano, Costello, and the other racketeers had cultivated their political connection through the power of Tammany Hall, the bastion of crooked city politicians. Various investigative commissions such as the Seabury Commission had pinpointed political corruption as being behind so much of the power of the racketeers. But getting something done had been a challenge in New York. With the arrival of La Guardia, and Governor Herbert Lehman taking the reins in Albany, things were starting to change. But the path to reform would be slow and circuitous.
The Manhattan District Attorney in this period was William C. Dodge, an ally of Tammany Hall. Dodge made cases but only seemed to do so to get quick headlines and, his critics said, give the illusion of being tough on crime. He went after Polly Adler, Luciano’s favorite madam and arrested her for prostitution and charges she possessed a lewd film, which back then was an offense. Adler was ultimately convicted and sentenced to jail. But critics of Dodge said he wasn’t prepared to push forward where the Adler investigation left off. He tried to keep his job but finally Lehman, a fellow Democrat of the reform stripe took Dodge off as supervisor of the vice investigation and appointed an eager, fresh-faced former federal prosecutor named Thomas Dewey, a Republican, as a special prosecutor.
With a mandate from Albany and with the acquiescence and cheerleading of City Hall, Dewey put together a staff working out of lower Manhattan. His target: the rackets, notably, gambling and prostitution. It was the latter that seemed the most intriguing line of inquiry. Over the years the sex trade had been organized along lines in which men known as “bookers” provided madams with fresh girls for their brothels. Prostitution had always been a big business in New York and the supply of women who needed the work seemed a constant. The bookers provided fresh talent from an endless reservoir.
In the early 1930s a group of men who were low-level gangsters forced the bookers into a union or a combination in which they had to fork over some of their earnings to the hoods. The madams were coerced into using bookers affiliated with the gangsters and in return had the protection of the gang in case of the need for bail bonds, lawyers, and other favors. It was classic cartel-style organization, the kind which the Italian and Jewish gangsters had practiced for years in other businesses: ice, grape supply, laundry, coal, and the like.
A round of arrests broke up the booker cartel about a year before Dewey assumed office, but there were others to fill their shoes. After launching his investigations, Dewey learned that new men were coercing the bookers and madams. To try to build a case, he had his staff of investigators arrest prostitutes and madams in an effort to convince them to talk. To keep the women in custody and away from the pressures of the combination, Dewey asked for and got high bail for the suspects in amounts they couldn’t post, even with the help of corrupt bail bondsmen. That kept them insulated from the mobsters. It was a case of Dewey trying tactics of persuasion, using a soft approach, which assured the women that they wouldn’t be facing long prison sentences if they agreed to cooperate. Many did talk and as a result, on February 1, 1936, Dewey’s staff fanned out around the city and arrested more women, as well as four men suspected of controlling the prostitution racket.
Dewey and his staff tried to squeeze the new suspects to find out if there were people higher up, bigger racketeers or even politicians who might be involved. But things didn’t go easily. The witnesses were either too smart or too afraid to talk. The break came with a Brooklyn man named David Miller. After losing his job as a police officer in Pennsylvania on charges he ran a house of prostitution, Miller came to New York in 1929 and started selling dresses door-to-door. Some of Miller’s clients turned out to be prostitutes and eventually he went into their business with another man. The operation earned Miller a lot of cash but then some toughs came by to say a combination of sorts was being formed and that he had better join up. To convince Miller, the goons roughed him up. He decided to run away to California only to return again in March 1935 and reenter the prostitution business as a booker. It was then that Miller decided to pay the combination $50 on a weekly basis and have his prostitutes pay
$10 a week as well. Miller played along with the arrangement until he was caught in Dewey’s dragnet.
At first, Miller couldn’t or wouldn’t tell Dewey who the bigshots were at the top of the food chain in the prostitution business. But over time, Miller let out intriguing morsels of information, hearsay at best, but which suggested Luciano was linked to the prostitution racket. This was the first major indication that Luciano might be involved, and it made Dewey pursue every available lead to bolster what admittedly were thin connections to the Mafia boss.
In early 1936, a special Manhattan grand jury was working feverishly under Dewey to indict Luciano and others on charges they ran a $12 million a year vice ring, which at today’s dollar value adjusted for inflation would have been $211 million. But with his political and police connections, Luciano got wind that he was about to be arrested and ran away, ensconcing himself in the friendly environs of Hot Springs, Arkansas. The town had turned into a gambling Mecca of sorts with scores of clubs and casinos and plenty of pretty and available women. Local law enforcement was very accommodating and pliant. Costello, Owney Madden, and others discovered the locale as a vacation spot and a place where cooperative politicians assured that they would not be harassed by the cops. Costello and his wife Loretta made numerous trip to Hot Springs, no doubt hooking up with Madden, who by that time had left New York in the face of looming legal troubles including suspicion of murder, to “retire” in a way. Madden did that by running his own casino and becoming a respected public figure of sorts.
In Hot Springs, Luciano thought he was safe from Dewey’s clutches. But Dewey petitioned officials in Arkansas to extradite Luciano, a move that the mob boss fought with a small army of lawyers and it was said a $50,000 attempt to bribe the state’s attorney general. But the legal maneuvers could only work so long, and Luciano had played out his string. A New York detective of Italian ethnicity who was working for Dewey was the one who had the honor of serving Luciano with a warrant on April 3 for his arrest. Luciano was said to have been speechless when served with the papers and then got angry with the detective.
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