by Tim Newark
Madges had been around for twenty-six years, said the local informant, and was very well protected by the local police and a few state troopers. In fact, those state troopers were on a “free list” who got taken care of by the girls in the brothel and even recommended out-of-towners to it. Local bartenders and taxi drivers all got a commission for sending customers to Madges. It was a thriving business and seemed immune to prosecution, as anyone of any consequence in Middletown was on its “free list.”
Such open corruption may well have appalled Dewey, but what really interested him was the informant’s description of who was behind Madges. “For the last few years, this house has been ‘controlled’ by a syndicate of Luciano … . [It] is part of the ‘loop,’ from New York to Toledo, Ohio. The sale of girls routes through the chain of a Toledo Mob, which is also a subsiduary [sic] of the Luciano enterprises.”
The letter explained that Madges was managed by Bat Nelson, “who has an interest in Madges place and represents Luciano.”
The extent of Luciano’s tax mess was confirmed by Tax Field Supervisor Nathan H. Mitchell. On August 20, 1936, he gave a sworn testimony stating: “From my investigation I find that the said Charles Luciano was resident and had his principal place of business in the county of New York, state of New York, during the year 1934 and that for the said year 1934 he had a net income of $20,000, upon which said income, with intent to evade the payment of a tax, he willfully, unlawfully, and fraudulently failed to render, verify, and file an income tax return; and further unlawfully, willfully, and fraudulently failed to pay the income tax which was due thereon, with intent to evade the payment of the said tax … .” These accusations hung over Luciano if he dared to challenge the decision of the court, but Luciano had nothing to lose. He was already in jail, effectively for the rest of his life, and he would consider anything to get out.
10
NAZIS IN NEW YORK
“The whole thing was a frame-up,” said Meyer Lansky, twisting the truth to show his support for his closet crime associate. “Dewey had decided to get Lucky Luciano and the only way he could do it was through the girls. They built up a phony case against him and everybody must have known that the girls were lying. They had been told exactly what to say. I never believed a word of it, and nobody who knew Charlie believed it either. But because of his reputation and a hostile judge, the jury was prepared to believe anything.”
Lansky shrank away even further from the spotlight and concentrated on building his gambling empire in Florida and Havana, Cuba, both places that were developing into profitable tourist industries. Lansky ensured that Luciano continued to receive his cut of the profits made by the Mob and invested them alongside his own.
With Luciano confined to Clinton Correctional Facility in Dannemora, an isolated maximum-security prison near the Canadian border, Thomas Dewey scouted around for more gangsters to prosecute. Ice-cold killer Vito Genovese shed few tears over Luciano’s imprisonment and, according to Nick Gentile, was quick off the mark to suggest that an election be called to select the new head of their crime family. As its second-in-command, he obviously considered himself well placed for the job, but Dewey had other plans for him. The prosecutor linked him to the murder of a small-time hoodlum called Ferdinand Boccia in 1934 and, with enough evidence against him for an indictment, Genovese cheated the law by fleeing to Fascist Italy in 1937. He was never part of the Sicilian Mafia attacked by the Fascists, so he managed to make close contacts with Mussolini’s regime and set up a criminal network, including drug-smuggling routes, that would serve him very well during World War II.
Dewey next went after union racketeer Louis Lepke, forcing him into hiding. He was also wanted for narcotics smuggling, and the FBI managed to persuade other mobsters that it was against their own interests to shield him. From jail Luciano concurred, and Frank Costello arranged for Lepke to give himself up to the FBI in August 1939 by convincing him that the Mob had swung a deal with Hoover. It was nonsense and the less-than-bright Lepke was sent down for fourteen years. Dewey added a further thirty years to that sentence and Lepke was eventually executed for the murder of a garment industry trucker—the only top mobster ever to receive the death sentence. Mafiosi have a ruthless history of using law enforcement to rid them of troublesome rivals.
When Longy Zwillman was called in for an interview by the FBI, he didn’t hold back on his views about Dewey. He said that Lepke had remained a fugitive for so long because he distrusted the New York prosecutor. “It is known in the underworld,” said the FBI report, quoting Zwillman, that Dewey “framed ‘Lucky’ Luciano in the White Slave Traffic case; that from his knowledge of Luciano and from the knowledge of all persons known to him, Luciano at no time dealt in white slavery. Zwillman stated that in numerous other cases it is known to the underworld that Dewey framed them for his own political glory.”
Frank Costello was untouched by Dewey’s assaults. “He couldn’t touch me because I was legit,” he later said. What that really meant was that he could not be linked to any racket within Dewey’s jurisdiction in New York. As far as the authorities were concerned, his main source of income came from slot machines in Louisiana—moved there because of La Guardia’s attack on them in New York. With Genovese out of the way in Fascist Italy, this lack of attention allowed Costello to move quietly but firmly into the position of senior Mob boss. His connections in political and legal circles were unparalleled, and his discretion ensured he maintained a good reputation among the five Mafia families. He was close to Lansky, Joe Adonis, and Albert Anastasia, and he kept in touch with Luciano in prison, passing on his orders to the underworld.
Thomas Dewey eventually benefited from his formidable crime-busting reputation by becoming governor of New York in 1942. He proved to be a popular politician and was elected to two more terms as governor. He would later stand as a Republican presidential candidate three times, but his youth counted against him in wartime—the nation preferred an older man to lead them against their enemies. Although an infamous headline, proclaiming falsely that “Dewey Defeats Truman,” did appear in the Chicago Tribune following the close presidential race of 1948.
Life in Dannemora was unpleasant for Luciano. Not only was it bitterly cold and strictly run—dubbed “Siberia”—it was a long way from New York City, making it difficult for his Mob associates to visit him.
Little Davie Petillo, Luciano’s codefendant in 1936, was also in Dannemora and formed a gang of Italian criminals. They fought other inmates, stabbing and beating them. Luciano stayed out of the fighting, but in a tense recreation yard confrontation stepped in to bring an end to the conflict. Petillo swung at him with a baseball bat. Another convict defended Luciano and punched Petillo to the ground. Petillo was sent to solitary and Luciano’s brokered peace between the prison gangs remained as long as Luciano was there.
John Resko was a fellow inmate who later described Luciano’s impact on the prison community. “Life in prison picked up tempo after the arrival of Luciano and his partners,” he recalled. “Cons and guards were constantly planning accidental meetings with Lucky. Involved were curiosity, a desire to enhance prestige, or a plea for aid. Everyone around Luciano was approached at one time or another to intercede, to introduce, to pass on information.”
Generally, he was called Lucky by fellow cons and guards. His friends knew him as Charlie.
“Though other convicts, with less influence and less cash, availed themselves of special privileges,” continued Resko, “wearing outside shirts and tailor-made trousers, having special meals in their cells and hired help, Luciano for one reason or another refused all such favors. The psychology was excellent. He was never pointed out as a big shot because he wore a white shirt or had a guy cleaning out his cell. He was one of the boys. Just another con.”
Despite this apparent modesty, money continued to flow into Luciano’s coffers on the outside, thanks to Lansky’s diligence, and he used it to fund his legal team and their case for a retrial. In early
1937, it looked as though they might be getting somewhere.
Affidavits came to the trial judge from witnesses stating they had testified falsely at the trial. Their recantations came as newly discovered evidence and completely validated the application for a retrial. On January 26, 1937, Cokie Flo Brown stood in a California law office and testified before a notary public for Los Angeles County.
“I was in very bad physical condition,” she said of her original testimony. “I don’t think I was even able to think at the time.” As a heroin addict, she would have testified to almost anything in order to alleviate her suffering.
“On May 5, 1936, I was arrested for soliciting on the streets,” she continued, “and was convicted on May 12, 1936, and at the time I testified, I was waiting sentence on that crime. There were also pending against me three other charges in which I was a fugitive from justice. One charge was possessing of drugs, a second, the possession of a hypodermic needle, and the third, of maintaining a disorderly house.” Flo Brown declared that the idea for the garage meeting testimony about Luciano came from Mildred Curtis, Tommy the Bull’s girlfriend, and she made it up, as well as the Chinese restaurant conversations in which Luciano famously said he wanted to set up brothels like A&P stores. All of it was fabricated, she claimed.
To counter this allegation, Dewey was forced to bring back some of the girls from the trial to testify that they had told the truth about Luciano’s involvement with the vice business, despite being terrified of mobster retribution.
“After we had given Mr. Dewey’s office our testimony,” said Thelma Jordan, “we told the district attorney that after we testified on the stand, we would be in fear of our lives and we had in fact been threatened by Ralph Liguori in Mr. Dewey’s office … . Mary Morris told me that the Luciano Mob had threatened to torture or kill both of us. I told Judge McCook and Mr. Dewey’s office of this conversation. Mr. Dewey’s office then agreed to raise the money to send us out of the country.”
Dewey was compelled to give his own extensive testimony on the motives and process behind his prosecution case. He denied his office was out to get Luciano.
“Prior to the arrest and testimony given by these witnesses,” he explained, “we had no evidence of Luciano’s direct connection with this racket; we had made no effort to locate him and did not even know where he was. Toward the end of March, however, the evidence was such that I felt it was my duty to represent the case to the grand jury and attempt to locate Luciano. This was done. After some undercover investigation, it was reported to me that he was either in Miami, Florida, or Hot Springs, Arkansas, having given up his apartment at the Waldorf-Astoria and fled from New York shortly after the murder of Dutch Schultz in October 1935.”
No special inducements were offered to the witnesses, insisted Dewey, except for protection from underworld figures.
“It is impossible to picture the fear expressed by almost every witness in this case at the prospect of testifying against these defendants,” he said. “Petillo had a reputation as a desperate killer. Wahrman [Abe Heller] and Liguori were widely known for various acts of violence. Tommy Pennochio, alias the Bull, was believed to have murdered a narcotic peddler who had turned state’s evidence in the federal courts a short time before the arrest in this case, and at the time of his arrest there was found in his pocket, written in pencil, a careful account of the date of arrest, date of release, date of assault and hospitalization, date of death and date of burial of that narcotic peddler who had been murdered.”
Dewey rejected the claim that Flo Brown was in an especially weakened condition when she testified, saying that under the most exhaustive cross-examination she performed very well and her recollection never failed her. “I said at that time that it was my opinion that Florence Brown and Mildred Balitzer were the two most intelligent women in the entire group and also that each had intimate knowledge of the criminal underworld.”
Dewey admitted that after the trial he was approached by moviemakers from Warner Bros. looking for inside material on the trial. “I told them that I personally would not in any way participate in such an activity. I would not permit, if I could help it, any dramatization of the Luciano trial as I considered it unfit for dramatization.” But he did recommend they talk to Brown and Balitzer. “I also told them that both of these women had repeatedly said that they were going to go straight ‘if it killed them’ after this trial.”
Several of the prostitute witnesses were invited to Hollywood to appear as themselves in movies rushed out to capitalize on the publicity of the trial, including Missing Witnesses in 1937 and Smashing the Rackets in 1938. Warner Bros. made Marked Woman in 1937, their own version of the story with Bette Davis playing a Flo Brown character, while Humphrey Bogart starred as the crusading DA and the Neapolitan-born Eduardo Ciannelli played Johnny Vanning—the Luciano-like mobster.
Despite the recantations of his chief witnesses, Dewey made his argument well, and the case for a retrial was dismissed. In 1938, the case was revisited again by five judges. In their report, they believed the case had been effectively proven. “The appellant Luciano took the stand in his own behalf and testified that he did not know any of the defendants except Betillo [sic]. In this, he was contradicted not only by the women witnesses, but by employees of the two different hotels.
“This evidence cogently proves Luciano’s connection with this nefarious enterprise,” concluded the judges. “His position as head of this Combination did not bring him in direct contact with the victims of this scheme, and he displayed an anxiety that his name be not too openly associated with the bonding enterprise. Thus the evidence against him is not so easily available as it was against some of those lower in the organization, but the evidence produced against him is amply sufficient to warrant the verdict of guilty against him.”
The sentence was not overly harsh, either. All the defendants received shorter sentences than the law allowed. “In other words, they got less than they might have gotten.” However, only four ofof the five judges affirmed the judgment. The fifth dissented on the ground “there were material and prejudicial errors committed during the trial which cannot be overlooked, and that the defendants were tried for a crime with which they were not charged in the indictment.” This dissension was not strong enough cause for a retrial.
It looked like it was the end of the line for Luciano. His legal team had failed to get him out of jail and there would be no more appeals. It must have been his most depressing moment—realizing he could be imprisoned in Dannemora for the rest of his life. Leo Katcher, the biographer of Arnold Rothstein, visited Luciano in prison shortly after he got the news of his failed final appeal. He told the mobster that he looked surprisingly good for his time in jail.
“Why shouldn’t I?” he said. “Lots of work, lots of exercise. No late hours. Just what the doctor ordered. God, how I hate it.”
He had a job in the laundry and revealed the calluses on his hands. He still claimed the witnesses had lied against him in the trial and pinned his only hope of getting out of jail on this truth coming out.
“What will you do when you get out?” asked Katcher.
“I’ll follow the horses from Saratoga to Belmont to Florida to California. I’ll sleep with my windows open so I can reach out and hold the air in my hands. I’ll never lock a door again. Whenever I hear a noise I’m going to go in and look at people and watch them. I’ll watch women laughing and dancing. I’ll laugh and dance too. When I get out, I’m going to be free.”
As Katcher stood up to leave, he asked Luciano if he could do anything for him.
“Yeah,” he said. “Don’t close the door as you go out.”
At that point in time, Luciano could have little guessed that political events in faraway Germany—the land he visited with Jack Diamond to set up a narcotics smuggling network in 1930—would conspire to create a world situation that would radically change the future outcome of his criminal career. That dream of freedom would come true. The Nazis w
ere coming to Manhattan.
When it came to extremist politics in the 1920s and 1930s, New York City was just an extension of Europe. So many immigrants thronged the streets of the Lower East Side and other pockets of New York and New Jersey that it is not surprising that the high emotions sparked by events in Italy and Germany should also be expressed on their sidewalks. As early as 1925, the Fascist League of North America was fervently supporting the policies of Benito Mussolini and being attacked for it. In a political meeting in Newark, violence broke out.
“There were yells of ‘Here they come!’” reported a local newspaper, “and as the Fascisti reached the center of the hall a half hundred Socialists closed in behind them, some flourishing guns.” They fought with knives, razors and sticks, as well as firearms. “The yells of the combatants, punctuated by occasional pistol shots, could be heard for blocks.” By the time the police arrived, there were piles of abandoned weapons among the wounded, six of whom were in a serious state from stabbings and gunshots.
Anti-Fascist opposition came from American union leaders. William Green was president of the American Federation of Labor and he spoke out against Mussolini to his five million members.
“Not satisfied with the weapons of a dictator in Italy, he has extended his tentacles of Fascismo into other countries,” said Green. “His dictum that ‘once an Italian always an Italian to the seventh generation,’ prohibits Italian immigrants to the United States becoming naturalized. They must remain Italian citizens to Fascismo … . Fascismo and communism have the same fangs and the same poison which it is intended to inject into the political life of our nation.”
In Green’s view, Mussolini was creating a potential Fifth Column of Italian immigrants of dubious loyalty within the United States.