Top Hoodlum

by Anthony M. DeStefano

  CHAPTER SIXTEEN

  GO WEST, YOUNG MAN

  FRANK COSTELLO HAD DONE A PRETTY GOOD JOB of staying out of the public eye, even when faced with his own legal problems. He avoided surfacing during the effort to get Luciano a reduced sentence. But after the Allied forces overwhelmed the German and Italian forces in Sicily, attention on Costello seemed to be constant. A world war was going on, but the newspapers salivated for stories about the big gangster.

  After the Aurelio story broke, with evidence that Costello, the big gangster, had backed his candidacy, his attorney believed that his image needed some refurbishment. Toward that end, Wolf said he came up with the idea of having Costello purchase some Wall Street real estate—what better part of town to be a property owner—as part of some grand gesture to help charitable causes.

  “I told Frank my intention was to legitimize him to the extent this could be possible,” remembered Wolf. “He loved the idea.”

  Wolf planned to have Costello pay his taxes—something history would show the attorney ultimately wouldn’t be successful in achieving—and to make a good investment in real estate. Wolf pitched Costello the idea of purchasing three parcels of Wall Street property making up 79 Wall Street. As it turned out, the owners were having financial problems and needed to unload the parcels, which, according to FBI records, encompassed 79-89 Wall Street, 148-152 Pearl Street and a building at 114 Water Street. The properties were assessed at $512,000, a minuscule amount compared to today’s assessments, which would be in the hundreds of millions of dollars.

  Wolf’s idea was to have Costello take over the properties, rent out the offices, and turn over the rental income, above expenses, to charity. It was a way of burnishing Costello’s reputation and making him seem a beneficent man, not some sleazy gangster. Costello’s reaction, as remembered by Wolf, was one of excitement.

  “You done it, George,” said Costello. “Wait until those creeps in Sands Point hear that their shady neighbor is the president of a Wall Street corporation. I like it, George. Beautiful.”

  The deal went off without a hitch. News reports said that Costello plunked down $500,000 in cash and secured a mortgage of $249,000. FBI records showed that the 79 Wall Street Corporation was incorporated on April 21, 1944, with Wolf, his daughter Blanch Wolf, and businessman Harry Shapiro listed as directors. Costello was president and his wife Loretta the vice president and secretary. The corporation listed Wolf’s office at 30 Broad Street as its address.

  Costello’s reference to his snooty neighbors in Sands Point was a reference to the quiet, exclusive community on the North Shore of Long Island where he and Loretta had purchased a home right in the middle of a world populated by millionaires. According to a report in The Brooklyn Eagle, the couple took title to the property on Barkers Point Road on May 18, 1944, for $30,000, paying $15,000 cash and taking out a mortgage to pay for the rest. The seller had been an oil company executive and his wife who were going off to Mexico. The house, now known as 5 Barkers Point Road, had twelve rooms and sat on about two acres of land. There were horses nearby, and Long Island sound was literally around the corner and a comfortable walk from the house. Costello’s neighbors were the Guggenheims, Vanderbilts, and others of the wealthy class. He had arrived, in a sense, in a world of respectability.

  Sands Point was the fictional setting for The Great Gatsby, and the point was not lost to well-read people like Wolf and anyone else who had an appreciation for F. Scott’s Fitzgerald’s masterpiece set in the 1920s, when booze and money flowed during Prohibition. Costello’s house was in the mythical “East Egg,” the tony section of the North Shore, across Manhasset Bay from “West Egg” where Jay Gatsby had his mansion in the novel. Like Gatsby, Costello had made much of his fortune from bootlegging.

  But unlike Gatsby whose longing for East Egg was because that was where the love of his life Daisy lived, Costello was chasing status. While Gatsby had the green light at the end of Daisy’s dock to symbolize the unattainable, the nearby Alva Vanderbilt Belmont beacon at the end of Lighthouse Road served the same purpose in Costello’s life. Costello was able to buy into Sands Point and he liked the notion of being a country squire in a place where corporate executives lived. When a local girl named Margaret stopped by to sell Girl Scout cookies, Costello was generous and bought as many as ten boxes, although her mother was stunned when she saw his name on the receipt. Costello had beach rights through the local neighborhood association and was rumored to have attended barbecues. But as would be made clear to him throughout his life, the rich and respectable people Costello so much wanted as neighbors were very different. He was a kid from an East Harlem slum who grew up to be a preeminent gangster. He discovered that the world wouldn’t let him forget.

  Costello couldn’t forget his criminal life because he wasn’t able to leave it, no matter what his attorney did to try and sanitize him. La Guardia’s anti-racketeering campaign had driven some of the gamblers out of the city. In Costello’s case, he shifted some of his business to New Jersey where he and Joe Adonis opened up a place called the Big Hall in Cliffside Park, a community by the Hudson River.

  Close to New York City via the George Washington Bridge, the Bergen County section where Cliffside Park was located had become a gambling Mecca of sorts for the New York mob. In fact, just north of the bridge was the Riviera, a nightclub situated high above the Hudson on the Palisades and run by Ben Marden. With its sliding domed roof over the dance floor, dining room with walls that could retract and a private back room that seemed a perfect place for gambling, the Riviera attracted all sorts of New Yorkers—gangsters and plain folks—who drove over the bridge on the weekends for the two-minute ride to the club’s circular driveway. Costello, Adonis, and Moretti were said to have patronized the club. The Riviera was long suspected of being a gambling haven, and Marden was called to testify about that before a federal grand jury and asked if the Murder Inc., gangster Louis Buchalter owned the gambling concession at his club. Marden, who went on to become a benefactor of Albert Einstein College of Medicine, denied that Buchalter was involved. No charges were ever brought against Marden or the Riviera for gambling offenses.

  Adonis was another Italian immigrant who had become a Mafia power in Brooklyn following the death of Frankie Yale in 1928. Born near Naples in 1902, Adonis’s real name was Giuseppe Antonio Doto. There are numerous stories about how he took on the surname “Adonis.” One held that he made the change after reading an article about Greek mythology while another story was that he was given the name by a Ziegfeld Follies girl he was dating. In any case, the name stuck although he sometimes used the alias “Joe DeMio.”

  Like many of the men who earned their stripes in the underworld, Adonis made early money in bootlegging and gambling. Federal officials also believed he was involved in narcotics trafficking. But one of the big notches on his belt came with the assassination of old boss Joseph Masseria in 1931. Adonis, so the stories went in the underworld, was reputed to be one of the shooters in Masseria’s murder. His actions put him in good stead with Luciano and with Costello.

  Costello remained a resident of New York State but Adonis moved around 1945 to Fort Lee, New Jersey, a mere stone’s throw from Cliffside Park and virtually a neighbor of another powerful gangster, Albert Anastasia who also took up residence in the same town. Gambling operations flourished in New Jersey gambling laws were very unevenly enforced. Old-timers recalled stories of how Bergen County residents would rent out their telephones to gamblers so they could place bets. The residential phones were handy because NYPD plainclothes detectives became adept at finding the telephones of the more established gambling parlors and tracing the calls made to places like the old Jamaica race track. Calls being made from private homes didn’t easily prompt suspicion.

  But the problem was that all this North Jersey gambling was taking place in wartime, when there were restrictions on the use of gasoline. New York police and agents from the Federal Office of Price Administration started in the s
ummer of 1943 to question the way fuel was being used by certain limousines. The investigators halted the limousines that had been rented to carry card and dice players across the George Washington Bridge from Manhattan to a place in Fort Lee known as “The Barn,” a gambling den between Hoyt Avenue and Central Road, a few hundred yards from the Riviera’s spot on the Palisades.

  A continuing anti-gambling offensive prompted New Jersey’s attorney general and governor to go after operations in Bergen County. Allegations were raised that Costello and Adonis were in command of the dice games and horse betting in Bergen. Both Adonis and Costello had their own problems with their Cliffside Park gambling operation. The place was targeted for a raid in June. But, when the cops arrived they found it had been cleaned out: neither Adonis nor Costello were anywhere to be found.

  Back in Manhattan on June 14, 1944, Costello took a cab ride to the Sherry-Netherland hotel on Fifth Avenue. Costello quickly discovered that he had left an envelope containing $27,000 in cash on the backseat of the cab. Although the source of the money was never shown, Van Riper, the attorney general of New Jersey would later claim that the cash came from the Cliffside Park gambling operation. Upset that he had misplaced the envelope, Costello tried in vain to trace the cab. Meanwhile, cabbie Edward Waters discovered the envelope in the back of his vehicle and being an honest man took it to the police station on Sixty-seventh Street where the money was vouchered and waiting for someone to file a claim for its return.

  But with the owner being Frank Costello, the saga of the missing money was not going to be resolved quietly, particularly after City Hall got involved. As Costello’s attorney George Wolf recalled, his client at first didn’t want to get the money back, apparently fearful of legal issues if the police knew the cash was his. But Wolf told Costello that if he didn’t claim the money, it would look like he was trying to hide something.

  “Damn that stupid cabbie,” remarked Costello, according to Wolf. “Why didn’t he keep the money.”

  Both Wolf and Costello drove to the police property clerk’s office to explain that the envelope with the cash was Costello’s. Then, as Wolf remembered things, the telephone rang with a call from La Guardia who ordered the beleaguered clerk not to turn over the cash to “that tin horn bum” or risk being fired.

  Costello then sued to get his money back and, as might have been expected, the matter was not going to pass unnoticed. The city, at La Guardia’s insistence, refused to turn over the money, claiming it was “outlaw” money Costello received from gambling or another kind of illegal activity—the Mayor wasn’t sure which. The city wanted the money to go to the police pension fund.

  “What I am interested in,” said La Guardia, “is where did the bum get it and where was he taking it?”

  Wolf had said Costello got the money in his role as president of his Wall Street realty company. Costello told the property clerk that $15,000 of the cash had been given to him by Wolf to close out a real estate deal with the rest having been borrowed from someone he didn’t want to name to solve a cash flow problem brought about by paying an $8,000 installment on his federal income taxes. Costello got more specific, claiming the $15,000 had come from old gambling partner Philip Kastel and over $11,000 from his brother-in-law Dudley Geigerman.

  With La Guardia and the police able to use nothing but innuendo and suspicion that the money represented the proceeds of a crime, Costello was on firm legal footing to get the cash back. But there was another problem: an IRS lien of $27,000 for back taxes. Manhattan State Supreme Court Judge Carroll G. Walter ruled that Costello was indeed the owner of the money but also directed that $27,000 of it be turned over to the IRS. Costello got back $127, his forgetful moment in the cab having cost him a great deal.

  Turning to La Guardia’s attempt to grab the cash for the pension fund, Judge Carroll all but called the Mayor a thief. “I cannot tolerate the idea that the Police Department may keep a citizen’s property for no better reason than its own innuendo that perhaps the citizen acquired the property in a gambling transaction,” said Walter. The judge said if there was evidence that the cash represented the proceeds of a crime, he might consider the city’s position. But in this case, there wasn’t any, said the court.

  Although Costello won a pyrrhic victory, cabbie Edward Waters did better. Costello gave him a $500 reward and some war bonds which had a maturity value of $3,500. The newspapers generally ran sympathetic stories about Costello after the ruling on the lost money. But no sooner had one controversy been put to rest in his life than Costello faced another one raised by his constant nemesis: Mayor Fiorello La Guardia.

  * * *

  The Copacabana on East Sixtieth Street in Manhattan was the nightclub of choice for Frank Costello and everyone else in his crowd. It was because of the attraction the Brazilian-themed club had for Costello and his ilk—as well as suspicion that he had a secret ownership interest—that La Guardia went after the business in an attempt to revoke its cabaret license, which it had since it opened in 1940. City Hall used the fact that the Copacabana crowd, including its manager Jules Podell, were involved in gambling, consorted with unsavory characters, didn’t pay city taxes and, in the case of Podell, concealed criminal records when applying for licenses.

  La Guardia’s action was also aimed at drying up another source of revenue for the mob. He believed that Costello and his gambling crony Frank Erickson had interests in a number of night spots and wanted that to stop. The Copacabana wasn’t the only club City Hall thought Costello had an interest in, although officials weren’t certain about just what dealings he had in the place beyond his frequent attendance. Previous attempts by La Guardia to show that Costello had a secret interest in the Hurricane Restaurant failed to turn up anything concrete.

  To get at Costello’s reputed interest in the Copacabana, the city convened a special hearing in which a NYPD deputy commissioner presided and tried to show that denizens of the club like Joseph Adonis and Costello were involved in gambling elsewhere. It was an indirect approach. Testimony showed for instance that Adonis had been a customer at the Piping Rock Restaurant in Saratoga Springs, an establishment to which that Costello had provided money, and had spent his nights in the gambling casino at the back of the restaurant playing gin rummy. The back room at the Piping Rock had roulette wheels, dice tables, and chemin-de-fer, a version of the French card game baccarat.

  “Joe Adonis was in the casino every night of the week,” said an undercover detective who visited the Piping Rock. Most of the time, Adonis spent time playing gin rummy with entertainer and comic Joe E. Lewis, who performed in the restaurant. A spotter at the door of the casino screened customers, and Jack Entratter, a club impresario, made sure that the Copacabana crowd was cleared to enter the casino, the detective noted.

  Jules Podell was also grilled on the witness stand and admitted having done a short stint in jail for the illegal sale of whiskey in 1929 and that Costello had an interest in the Piping Rock. The most damaging evidence for Podell were records that showed he had five bootlegging arrests and one for grand larceny, matters that he hadn’t noted on his pistol permit application in 1934.

  Podell’s attorney said the whole case was a smear against his client. But a city official responded that the government was trying to show that the Copacabana was trying to keep secret that Podell and others were connected to it. Of course, Costello was the main object of the investigation, and his lawyer said that the whole licensing review was motivated by La Guardia’s intense hatred and desire for revenge.

  When called as a witness in the Copacabana case, Costello fought the subpoena in court. He also flat-out refused to testify “on advice of counsel,” and the city tried to get Costello held in contempt. His attorney used as evidence of La Guardia’s hostility the Mayor’s various statements that Costello was a “bum” and a remark about a year earlier during the Aurelio incident by police commissioner Lewis J. Valentine. It was then that Valentine said that Costello “is not a local bum but an inte
rnational thug. I don’t know where he will go when he dies or if there is a hell deep enough.”

  But after about two weeks of hearings, the Copacabana affair ended with a compromise settlement on September 30, 1944. The club’s current cabaret license was revoked and a temporary six-month license granted. The club agreed that the city had a valid claim for $37,371 in back sales and business taxes. More important, the Copacabana said it agreed that “whatever interest Frank Costello may now have or have had in Copacabana . . . either directly or indirectly is completely terminated and severed.” Costello, the settlement said, wouldn’t have any management activity or derive any income from the club in the future.

  The Copacabana settlement was a carefully worded document. The club didn’t say that Costello, in fact, ever had an interest in the club. To be sure, the club’s recorded owner, Monte Proser, said in the agreement that as far as he knew Costello has not and never had any interest in the Copacabana. La Guardia extended his nightclub push to the point where he put an estimated 1,100 nightclubs around the city on “probation,” granting them temporary licenses as their ownership interests and operations were vetted by the police and other agencies. Surprisingly, given the potential disruption of their businesses at a time when the city was awash with soldiers and sailors on leave, many nightclub owners voiced approval of the Mayor’s action since it assured that clubs were owned by legitimate people and not gangsters.