Detroit's Numbers Racket

Today's state run lotteries are first cousins to the illegal policy rackets of the early twentieth century--known by players as the numbers game. Curious how things once illegal become legal when the government gets involved. The grass-roots game had much better odds but much lower payouts than today's state-run lotteries. To win, a player needed to match only three numbers rather than the six or seven used today with astronomical odds against winning. Then as now, some of the most avid players were the people who could least afford it.

Beginning in the 1920s, the Purple Gang-controlled numbers game in Detroit was a profitable money machine for the Bernstein Brothers and their associates who were many. Numbers runners, bag men, and accountants kept the money flowing. There was a fortune to be made from the pennies, nickels, dimes, quarters, and dollars of working-class immigrants--particularly Italians, Jews, and the Irish. Members of Detroit's black community developed into major players in the innercity numbers racket where the game was popular.

Many people made tax-free extra bucks running numbers. Seemed like everybody had a favorite number or several numbers they played daily if they had some small change. Playing was convenient, bets could be taken over the phone. People could also place more costly combination bets of any permutation of their three numbers. For example, 127 could win with 127, 172, 217, 271, 712, and 721. Every place where liquor or soda pop was consumed became a numbers drop. Every grocery store, barber shop, beauty shop, candy store, and virtually every business within a runners assigned territory was a potential numbers drop. The more money a numbers runner collected, the more money he or she made. 

The numbers game appealed to people who were not habitues of the “high-class” gambling establishments of Detroit’s high rollers, social climbers, and underworld figures that mingled nightly with unsettling familiarity. The urge to gamble was not limited to the well-heeled public and wealthy industrialists. Everyday people wanted to place bets. If they couldn’t afford to chase Dame Fortune, they were content to wink at Lady Luck.

Spare change and small bills made up the bulk of the daily take. The game was easy to play—pick three numbers ranging from 000 to 999 and wait for the daily winning number. Players placed bets with a numbers runner who collected the money and recorded the bets in a handbook with the bettor’s name and date written in. A receipt with a serial number printed at the bottom was given to the bettor to prove he or she placed the bet in the event they won. A more sophisticated version of the game we known as Keno had greater payouts but greater odds.

The odds for the basic game were one in a thousand. If you were the only person to hit that number that day, your payoff could be 600 to 1, otherwise the jackpot was split among the winners. Bagmen collected the money from the runners and took it to a central location called a numbers bank where a group of accountants processed the bets, counted the money, and passed it on to a central drop at a secret location.

At first, the numbers were drawn from numbered balls in a ball cage or three spins of a wheel of fortune. These methods could be manipulated and soon fell out of favor. Players wanted three numbers that were certified random. Bernstein’s game used the last three numbers of the United States Treasury Department balance which was printed daily in the business section of newspapers. When the Treasury Department began to round off their numbers—so they wouldn’t be a party to illegal gambling schemes—the three last digits of the number of shares traded on the New York Stock Exchange became the daily winning number. That number was found conveniently in the daily papers. Choosing today's lotto number picks have gone back to the numbered-ball drops which are televised to prevent fraud.

Accounting books seized by treasury agents in a 1940 raid of a Paradise Valley numbers drop revealed as many as 6,000 men and women were employed by Detroit numbers operators. The average payout was 16% of the take divided among the winners. The number runners who took the bets filled out the betting slips and got 25% of their daily take. The bagmen who collected the money and betting slips from the bookies took them to a secret central location. They made 10% of what they brought in. Finally, the promoters took 49% for themselves and their overhead. All of those accountants needed to be paid—not to mention the occasional bail bondsman.

Because of the large territories where the game was played, the profits were huge. But this scheme was not without its dark side. Anyone skimming money off the top, holding out on winners, compromising the operation, or attracting unwanted attention from the authorities would be quickly eliminated.

Link to the wine brick racket: https://www.blogger.com/blogger.g?blogID=7073297057923413840#editor/target=post;postID=2979020335839039617;onPublishedMenu=postsstats;onClosedMenu=postsstats;postNum=5;src=postname

The Rise and Fall of Detroit's Purple Gang

Purple Gang roundup by Detroit police: Sam Axler, Eddie Fletcher, Sam Goldfarb, Phil Keywell, Abe Zussman, Willie Lake, Harry Fleisher, Jack Stein, and Abe Axler (seated)

There is an oft-repeated story about how the Purple Gang got their name. When an Eastern Market butcher was assaulted and his shop vandalized, he reported to police that "These boys are not like other children, they're off-color. They're rotten purple like tainted meat. They're the Purple Gang." Whether the anecdote is accurate or not, the street thugs made their presence known to merchants and street peddlers from Paradise Valley to the Eastern Market--anybody they could squeeze a buck from was a target.

Ray Bernstein

The Bernstein brothers--Raymond, Abe, Joe and Isadore "Izzy"--were young teens who ran with the gang of street toughs in their Hastings Street neighborhood on Detroit's lower East Side. The gang started off as petty thieves and skakedown artists. By 1919, they branched out to armed robbery, extortion, protection, hijacking, and murder under the tutelage of more experienced neighborhood gangsters from the Sugar House Gang. As their reputation for ruthless savagery grew, so did their power and grip over Detroit's underworld.

In 1927, Frank Wright, a Chicago-based jewel thief, along with Joseph Bloom and George Cohen, New York based burglars, began to kidnap Detroit gamblers for ransom. Among the gamblers snatched were some Purple Gang members. The Purples plotted against the interlopers. One of Wright's men--Meyer "Fish" Bloomfield--was kidnapped by the Purples to lure Wright into the open. The ploy worked. A ransom was agreed upon and a hostage exchange for money was to take place at the Milaflores Apartment on 106 East Alexandrine Ave.

At 4:30 am on March 28th, 1927, Wright showed up with Bloom and Cohen and knocked on the door of room 308 as prearranged. Three men at the end of the hallway opened the stairwell door and fired at point-blank range with pistols and a Thompson Sub-Machine Gun. The first known use of the Tommy Gun in Detroit. The trigger men escaped down the back stairway.

Fred "Killer" Burke finally convicted

Evidence was found in the apartment connecting it with Purple Gang members Eddie Fletcher and the Axler brothers--Abe and Simon. The next day, Purples Abe Axler and Fred "Killer" Burke were pulled over on Woodward Avenue. Although they were suspects in the Milaflores slaughter, nobody was ever charged. It was commonly believed that Fred Burke wielded the Tommy Gun and Abe Axler and Ed Fletcher--known as the Siamese Twins--used hand guns. 

Charles Givens, a reporter for the Detroit Times wrote, "In nine out of ten unsolved cases, investigators are virtually certain who the murderer is. Proof is another thing. Ask detectives who handle these cases and you get the same answer: 'We knew who the murderer was, but there were no eyewitnesses or evidence'."

The Milaflores Apartment murders did result in a Michigan ban on hardware stores and other retail outlets selling submachine guns and multi-round magazines to private citizens. Only police and the military could legally buy them.

Abe Bernstein

Abe Bernstein was essentially the gang's behind the scenes business manager. In 1925, Bernstein and corrupt American Federation of Labor president Francis X. Martell went into a business partnership to control prices in the cleaner and dyers industry. The Cleaners and Dyers Association was formed and the city's independently owned cleaners were forced to join or pay the consequences. Shops were dynamited or burned down. Laundry plants were destroyed, owners and employees were beat up, and some people were gunned down.

A brave businessman stood up and filed a complaint in 1928 with the Wayne County prosecutor. In all, nine Purple Gang members (Raymond Bernstein, Irving Milberg, Eddie Fletcher, Joe Miller, Irving Shapiro, Abe Kaminski, Abe Axler, and Simon Axler) were indicted for extortion. Several days later, Abe Bernstein surrendered and paid a $500 appearance bond. All the Purples were acquitted. The gang was at the height of its power with a feeling of invincibility. The huge amount of money the Purples skimmed from this labor racket allowed the gang to dominate the city's underworld until 1931.

The Collingwood Manor Massacre on September 16th, 1931 marked the beginning of the end of the Purple Gang's stranglehold over Detroit's underworld. An inter-gang dispute erupted when three Purple Gang members violated the underworld code of poaching outside their operating territory. Herman "Hymie" Paul, Isodore "Izzy" Sutker, and Joseph Leibowitz were members of a Purple Gang faction called The Little Jewish Navy (LJN). They owned and operated boats transporting liquor across the Detroit River. The trio wanted to break away from the gang and establish their own organization and territory.

Collingwood Manor at 1740 Collingwood Avenue

A bookie go-between named Sol Levine brokered a meeting between gang factions and transported the LJN men to the apartment on Collingwood Avenue. The LJN, thinking they were going to cut a deal with the gang's leaders. Ray Bernstein ordered the hit and stayed outside in the car acting as the wheel man. After a brief discussion with Purple Gang members Harry Fleisher, Irving Milberg and Harry Keywell, Fleisher stood up and brutally shot the three unarmed men to death. Fleisher dropped his gun into an open can of green paint as he and his men ran down the stairs and out a back entrance to the alley where Bernstein was waiting in the get-away car.

In the heat of the moment, Sol Levine was left behind in shock and was arrested when the police arrived. In fear of his life because he was the only eyewitness to the murder, he turned state's evidence placing himself under police protection. Milberg, Keywell, and Bernstein were arrested and convicted of first-degree murder and sent to Michigan's maximum security prison in Marquette. The trigger man Harry Fleisher left town and was never convicted of the crime. In those days, criminals had a much larger and less-documented world to move around in. It was still possible to simply vanish.

Eddie Fletcher and Abe Axler--"The Siamese Twins"

The Sicilian Mafia--called the "Moustache Pete's" in Detroit--began to fight the Purples over territory they could no longer control. The bodies of Abe Axler and Eddie Fletcher were found shot to death on November 27, 1933 around 2:00 am in the back seat of a brand new Chrysler at the corner of Telegraph and Quarton roads in Bloomfield Hills. The bullet-ridden bodies of the so-called "Siamese Twins" were placed side-by-side, their hands intertwined as a sign of disrespect.

Harry Millman

Purple Gang gunman and loose cannon Harry Millman was brutally shot to death on Thanksgiving Day, November 24th, 1937. Radio crime reporter Walter Winchell described the hit this way:
  
In a big Midwest metropolis yesterday, another gang member met justice at the end of a gun. Prominent Detroit Purple Gang member Harry Millman was enjoying a drink in the bar of Boesky's Restaurant, on 12th Street (and Hazelwood), when four men entered brandishing guns and shot the hoodlum ten times. His body was still warm on the floor when the Detroit Police arrived. His killers were rumored to be members of Brooklyn's notorious Murder, Incorporated. Millman's death signaled the end of the Purples as a force in organized crime in the Motor City. Because of his repeated escapes from convictions for kidnapping, robbery, and extortion, Millman earned the nickname "Lucky." Yesterday, his luck ran out. This is Walter Winchell reporting.

Millman was whacked for feuding with the Detroit Mafia and extorting money from their brothels and gambling operations. The predecessors of Detroit's modern day Mafia simply stepped in to fill the void once the Purple Gang was neutralized.

Abe Bernstein was spared because he had friends in high places--namely New York gangsters Meyer Lansky and Joe Adonis--with whom he co-owned several Miami gambling casinos. Abe Bernstein was allowed to live out his life bookmaking from his suite at the Book-Cadillac Hotel in Detroit until his death from a stroke in 1968.

Detroit Police Chief of Detectives James E. McCarthy credited the Collingwood Massacre for "(breaking) the back of the once powerful Purple Gang, writing the end to more than five years of arrogance and terrorism."

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Part One: https://fornology.blogspot.com/2018/02/kosher-nostra-detroits-purple-gang.html