Ann Arbor High Graduate Becomes Mr. Las Vegas

Moe Dalitz in Las Vegas publicity shot.

Morris "Moe" Dalitz was born in Boston but his family moved to Detroit where he grew up in the same Paradise Valley neighborhood with many of the original gang members who became known as the Purple Gang. In his adolescence, Moe's family moved to Ann Arbor where he completed his high school education.

 

During the Purple Gang's dominance controlling Detroit's illegal liquor business, Moe helped his father operate Campus Cleaners, a small chain of cleaners and dyers businesses in the Ann Arbor area. Moe used their fleet of laundry trucks to distribute Purple Gang liquor in Washtenaw County.

 

 

Moe became affiliated with the Little Jewish Navy--a faction of the Purples, that controlled smuggling along the Detroit Riverfront. When three of their top leaders were brutally assassinated by the Purples over an unpaid liquor debt, Moe quietly relocated to Cleveland where he continued his bootlegging operation and opened a chain of mob-protected casinos in Ohio and Kentucky. This became his life's work.

Unlike many of his associates who spent their money as soon as they made it buying fancy clothes and flashy cars, Moe maintained a low public profile by investing in legitimate businesses in Michigan. Dalitz held an executive position in the Michigan Industrial Laundry and the Colonial Laundry of Detroit where one of their illegal services was laundering gang money. Moe was also the president of Dalitz Realty Company in Wyandotte, Michigan, that specialized in selling industrial-zoned tracts of land in the Downriver area.

Dalitz served stateside in the United States Army during World War II. While still wearing the uniform, he loaned Detroit Steel $100K to save a collapsing merger with Cleveland's Reliance Steel which proved profitable. In the late 1940s, Dalitz and his underworld backers used Teamsters Union pension funds and began investing in Las Vegas. They lent front man Wilbur Clark--famous Las Vegas developer--the money to build the Desert Inn and then the Stardust casinos.

Dalitz with Bob Hope and Desi Arnez.

Moe Dalitz became a gaming pioneer and a legend of the Las Vegas Strip. His casinos were one-stop resorts catering to a new demographic changing the face of the Las Vegas Strip--working-class Midwesterners. The Desert Inn and Stardust catered to America's postwar, burgeoning middle class. Dalitz and his investors transformed Vegas from a gambling town to a vacation resort destination. Other organized crime figures took notice and began investing in Vegas opening the door to the Midwest mob's infiltration of Las Vegas, which led to skimming the casinos' gross profits "off the top."

Dalitz and other former mob figures discovered a way to sanitize their images. In the early 1950s, they formed the Paradise Development Company which built the Las Vegas Convention Center, Sunrise Hospital, the Boulevard Shopping Mall, a championship golf course, and several buildings at the University of Nevada-Las Vegas. Dalitz became a philanthropic civic leader earning him the name Mr. Las Vegas.

Dalitz at Kefauver crime hearing.

Dalitz came from the rough world of the Purple Gang in Detroit and the Mayfield Road Mob in Cleveland. Despite his great success as a businessman and philanthropist in Vegas, Dalitz was never able to completely shed his associations with organized crime figures. He was called to testify before the Estes Kefauver Crime Hearings on February 27, 1951.

Senator Kefauver asked Dalitz, "We have sworn testimony that you lent Detroit Steel $100,000 for $10,000 worth of company stock. You made $230,000 from that deal, didn't you?"

"Maybe more," was his unapologetic answer. "When I cast bread upon the waters, it comes back cake."

"Mr. Dalitz, didn't you make your original fortune as a rum runner?"

"I didn't inherit any money, that's for sure," Dalitz responded sidestepping the question.

Moe with only daughter Suzanne.

Fifteen years later on August 10, 1966, Dalitz was subpoenaed to testify before the Nevada Gaming Commission about the skim and payments to underworld figures. The government was closing in on organized crime organizations who controlled the casinos behind the scenes. The underworld was looking for a way out of the casino business.

Howard Hughes

Deliverance came in the guise of Texas billionaire and movie mogul Howard Hughes. Hughes moved from Boston and rented the penthouse of the Desert Inn to live in seclusion as an eccentric hermit. In 1972, Dalitz wanted Hughes out of the suites because the holiday season was approaching and "high rollers"--important to the Desert Inn's bottom line--had annual reservations for those rooms. Hughes didn't gamble. Dalitz had intense negotiations with Hughes over the eviction. 

 

Weary of Dalitz's threats, Hughes asked him how much he wanted for the Desert Inn. Dalitz said $13,250,000. Hughes had his chief of Nevada business operations Robert Maheu write out a check and told Dalitz "Get the Hell out of my casino." The penthouse floor became Hughe's private residence while the floor beneath his penthouse suite was used for his business operations. Hughes lived there for four more years until 1976 when he was rushed to Houston, Texas in a Learjet where he died on April 5, 1976. The autopsy listed the cause of Hughes' death as kidney failure.

The Desert Inn sale marked a seismic shift in the ownership of Las Vegas Strip casinos. Corporate interests and billionaire financiers like Kirk Kerkorian were the only entities with the kind of money to buy out the mob. Groups like Bally's, MGM, and Conde Nast ushered in the postmodern corporate era in Vegas that we are familiar with today.

La Costa Resort and Spa

 

Dalitz and his backers did not get out of the resort business entirely. They moved to San Diego County in 1962 and built the La Costa Resort and Hotel for $4,250,000, which catered to wealthy Americans and aging wise guys looking to escape winter weather back East. On August 31, 1989, Moe Dalitz died in Las Vegas of congestive heart failure and kidney disease at the age of eighty-nine.

Suzanne Dalitz, her Dad, and the Vegas Mob Museum

The Fleisher Brothers--Harry and Sam: Crime Doesn't Pay (Part 2 of 2)

Harry Fleisher 1920 (seventeen years old)

Harry Fleisher started his professional criminal career in 1920 as a driver and strong-arm man for the Oakland Sugar House Gang. The leaders of the gang and twelve young thugs were rounded up and charged with extortion in the Cleaners and Dyers War in 1928. The young enforcers put the fear of God into their victims and witnesses against them. Key witnesses recanted their original statements to police or simply disappeared. The Sugar House Gang beat the rap but suffered from the public exposure.

Soon, the leaders of the Sugar House Gang were arrested on a Federal charge of violating the Volstead Act (the Prohibition law) by providing brewing supplies and equipment for the illegal manufacture of beer and whiskey, and for running several industrial-sized stills around the city. The gang disbanded with Charles Leiter and Harry Shorr under federal indictment. What hurt the organization more than anything else was the destruction of their equipment and massive supplies of distilled alcohol.

 ***

Joe Burnstein

Joe and Ray Burnstein were now free to form a spin-off gang of trusted neighborhood friends and former Sugar House members who soon became known as the Purple Gang. Harry Fleisher was part of the gang's inner circle; his brothers Louis and Sam became foot soldiers. Louis specialized in hijacking and labor racketeering, and Sam was a truck driver and strong-arm man for the organization.

Ray Burnstein

In a tactical move that threatened the Purple Gang's existence, Ray Burnstein, Harry Keywell, Irving Milberg, and Harry Fleisher laid in wait for several members of the Little Jewish Navy--a group affiliated with the Purples. Izzy Sutker owed Burnstein $1,300 dollars for a liquor purchase he was two weeks late paying back. But there were other issues. Sutker and his boys were interloping Chicago hoods nibbling away at Purple Gang territory by opening several speakeasies on their turf.

Believing the Burnsteins were phasing out of the liquor business and going legit, Izzy Sutker, Hymie Paul, and Joe Lebowitz showed up at an improvised meeting they thought would make them rich men. Burnstein childhood friend Solomon Levine--and business partner of Izzy Sutker--was duped into driving Sutker and his wing men to the Collingwood Manor Apartments on September 16, 1931 to discuss the deal. But the Purples were harboring another grudge which could not be forgiven or go unanswered. One of their men was murdered outside a Purple Gang protected gambling joint on their territory. Word on the street pointed the finger at Sutker as the trigger man.

Levine, Sutker, Paul, and Lebowitz were greeted at the front door of apartment 211 by Ray Burnstein and ushered-in to sit on the living room couch. After a brief conversation, Burnstein left the room sayin he had to make a phone call to the gang's business manager from the corner drugstore. Minutes later, Ray was behind the wheel of his Chrysler sedan honking the horn and revving the engine. That was the signal for his boys to stand up and torpedo the Little Jewish Navy where they sat.

The assassins left with Solly Levine in shock. He had no idea he was driving his associates to their deaths. The gunmen scurried down two flights of stairs, burst out the alley door, and jumped into the waiting car. "I let you live, Solly, because you're my friend," Ray told him before he hit the gas pedal and sped off squealing his tires.

Shortly after they fled, Levine was dropped off a few blocks away and given cab fare to return to his sports book (betting parlor). Detroit homicide detectives recognized the victims and knew where they lived. After questioning several residents of the boarding house, they discovered that Solomon Levine had driven off with the Sutker, Paul, and Lebovitz a couple of hours earlier. The police detectives were quick to arrest Levine, who turned state's evidence. Levine knew he was as good as dead if he didn't.

Burnstein and Keywell were captured later that evening, and Millberg was caught early the next morning while packing his bags in his apartment. Conspicuous by his absence was Harry Fleisher. He had the good sense to go home, hug his wife goodbye, grab his bug-out bag, and leave town immediately. For this, Fleisher earned the underworld nickname "Slick." After a highly publicized three-week trial, Ray Burnstein, Harry Keywell, and Irving Milberg were convicted and given life sentences at Marquette Prison dealing a staggering blow to the gang.

Fleisher remained at large for nine months. While "on the lam," the Detroit press corps missed no opportunity to drop Harry's name in the newspapers or on radio news broadcasts. Because of his alleged involvement in Detroit's "snatch racket" (kidnapping), Fleisher's name was implicated as a possible suspect in the Lindberg baby kidnapping. The FBI charge gave Harry national exposure as his face and description appeared on wanted posters hung in every police station and post office in the nation. Fleisher was being hunted coast-to-coast.

On June 9, 1932, Harry Fleisher surprised Detroit Prosecutor Harry S. Toy by showing up with his lawyer at the prosecutor's fifth-floor office in Detroit Police Headquarters. Fleisher was arrested and held without bond. Despite the prosecutor's best efforts to try Fleisher, Toy's star witness who could link Harry to the Collingwood Massacre was unable to be found. The case against Fleisher was dismissed. Twenty years later, missing witness Sol Levine reappeared in Detroit. Levine told a Detroit Free Press staff reporter that he had shipped out of New York on a tramp steamer to make himself scarce. "I made $135 a month--the first honest money I ever made. It felt good."

***

Harry Fleisher's arrest file was one of the thickest in the history of the Detroit Police Department coming in at 204 pages. He was arrested thirty times for charges ranging from receiving stolen property, grand larceny, violating the prohibition law, armed robbery, assault with intent to kill, kidnapping, possession of an unregistered gun, suspicion of murder, and a traffic violation. Convicted four times but serving no jail time, Fleisher paid fines totaling $715--chump change for him. What he paid in lawyer fees was much higher.

Despite Prohibition ending on December 5, 1933, there was still money to be made in trafficking illegal alcohol. Now that the state and federal governments were in the liquor business, the cost of legal booze with a federal tax stamp was costly. Harry and his youngest brother Sam were operators of a 4,000 gallon unregistered distillery that took up three stories of a warehouse building at 5620 Federal Avenue.

Sam Fleicher 1935 (twenty-four years old)

While under FBI surveillance, Sam drove a semi-truck loaded with 10,500 pounds of brown sugar--purchased from a wholesaler in Cleveland, Ohio--to the Guardian Transit Company warehouse at Sixteenth and Pine Streets in Detroit. The brown sugar was loaded into smaller vans and transported to the Fleisher brothers' distillery. On April 11, 1935, a Federal alcohol tax unit raided the operation and arrested former Purple Gang members Sam Fleisher, Jack Selbin, and Joe Stein. Once again, Harry managed to escape before he was arrested.

Harry Fleisher was named in the original warrant but remained at large until he surrendered himself to Federal authorities on October 29, 1935 when he was indicted, placed under a $2,500 bond, and held over for trial with the other men. All four men were convicted on April 11, 1936 of conspiracy to violate the Internal Revenue Service Act, given eight-year prison sentences and fined $20,000 each. Additionally, the Fleisher brothers had a federal tax lien of $14,028 levied against them for unpaid taxes on 2,275 gallons of alcohol.

The convicted men were transitioned into the federal penitentiary system in Leavenworth, Kansas. After a month of quarantine, they were taken by train to San Francisco, and from there were ferried across the bay to Alcatraz Island where they served four and a half years of their eight-year sentence. They were released early for good behavior. Again, the men were transitioned to Leavenworth before being released on June 28, 1940. In 1941, Harry Fleisher opened a florist shop on Twelfth Street. Sam went to work at his father's junkyard in Jackson, Michigan after his release.

***

Michigan State Senator Warren G. Hooper

Harry and Sam were habitual criminals determined to lead a life of crime. On January 11, 1945, State Senator Warren G. Hooper--while en route to his home in Albion, Michigan--was shot three times in the head at close range and found next to his burning car on U.S. Highway 99 near Springport in Jackson County. Passing drivers told state police they saw a maroon car blocking Hooper's sedan on the wrong side of the highway. Hooper was slated to be a key witness against Frank D. McKay--former Republican National Committeeman--in a state government race track bribery case.

Chief of the Michigan State Police Detective Harold Mulbar told the press that Senator Hooper had refused police protection. "The Hooper murder was definitely a paid gangster killing," Mulbar said. An intensive search for the killers kicked up several ex-cons who pointed the finger at four men who tried to hire them to assassinate the state senator. Fearing they would violate their paroles and be sent back to prison, the ex-cons turned state's evidence. The corroborated testimony of Henry Luks, Al Kurner, and Sam Abramowitz led to the convictions of Harry Fleisher, Sam Fleisher, Myron "Mikey" Selik, and Pete Mahoney for conspiracy to commit murder. 

The conspiracy was hatched at O'Larry's Bar located at Boston and Dexter Streets in Detroit. First, Henry Luks was asked if he knew how to wire dynamite to a car's ignition. Luks said he did. Several days later, he reconsidered and said he didn't have access to dynamite and refused the $3,000 job. Alfred Kurner was then asked and offered the same amount, but he also refused citing problems with the parole board. Then, Sam Abramowitz agreed, but after making several trips to Adrian in preparation for the hit, he dropped out of the plot when he saw Hopper at home with his wife and kids. Abramowitz didn't have the stomach for it. He returned to Flint, Michigan where he had worked as a barber since his parole from Jackson Prison in 1943. 

On July 31, 1945--after a grand jury trial lasting two weeks--a jury of five women and seven men reached a guilty verdict after only two hours of deliberation. The grand jury was unable to determine who shot Hooper or who financed the $15,000 fund to murder him. The defendants were sentenced to serve four and one-half years in Jackson Prison. Pending an appeal to the Michigan Supreme Court for a new trial, the men were released on $25,000 bonds on July 10, 1946. When their appeal was denied, Harry Fleisher and Mikey Selik jumped bail.

Fleisher dodged arrest for fifteen months. Acting on a phone tip, he was seized by FBI agents in Pompano Beach, Florida--thirty-five miles north of Miami. He and a woman companion Bernice Jackson were registered at a tourist court as Mr. and Mrs. Marvin Goldwyn of Toledo, Ohio. The couple left the cottage and drove to the beach in Fleisher's pickup truck. A squad of four agents dressed in sports shirts and slacks slowly closed in on the couple sunning themselves on the beach. When the agents were noticed fifteen feet away, they rushed on Fleisher and held his face down in the sand while they handcuffed him. Miss Jackson stood quietly with her hands up in the air. When their cottage was searched, a submachine gun was found with 400 rounds of Colt ammunition. Fleisher had $1,200 cash in his possession. He was arrested on a Federal fugitive warrant, and Miss Jackson was jailed as a material witness.

Fleisher was extradited to Michigan arriving at Willow Run Airport aboard a Capital Airlines plane in the custody of two U.S. Marshalls and a Federal guard. He was whisked away to Milan Federal Prison on January 22, 1950. Two days later, the beleaguered fugitive confessed to Detroit Free Press reporter Ralph Nelson that "I'm glad it's over. It hasn't been fun being hunted. I'm looking forward to seeing my wife Harriet. I expect to have a rough time with her. She knows about the other woman, but Hattie knows that a man travels practically unnoticed when he travels with a woman. She'll understand that. I've always tried to keep Hattie from being involved in any of my troubles."

Fleisher pleaded guilty on the Federal fugitive charge on February 1, 1950. On February 24, 1950, Bernice Jackson--a former Detroit prostitute--was sentenced to five months in the Miami City Jail for harboring an escaped criminal.

After Fleisher served his five-year sentence in Milan Prison as a Federal fugitive, he was shuttled back to Jackson State Prison to serve his five-year sentence for conspiracy to murder Senator Hooper. Because of a conviction for the armed robbery of the Aristocratic Club in Pontiac, Michigan in 1945, Fleisher had an additional 25 to 50 years to serve. Once again, Slick jumped bail while out on appeal.When Harry was released from Jackson Prison in the mid-sixties, he took a legitimate job as a warehouse manager for Ewald Steel Company.

Harry Fleisher died in 1978 at the age of seventy-five. He was preceded by Louis, who died in Jackson Prison on April 3, 1964 at the age of fifty-nine and Sam, who died on January 18, 1960 in Miami, Florida at the age of forty-nine. All three brothers succumbed to heart failure.

The Fleisher Brothers (Part 1) 

Prohibition Loophole--Wine Bricks

Wine Brick

Once Prohibition became law on January 16, 1920, many wine producers in California got out of the wine business and converted their vineyards to orchards or sold their land. A constitutional amendment had never been repealed before, so the drastic move seemed like a reasonable way to cut their losses.

But other vintners began to promote and sell grape juice and other non-alcoholic products. Some enterprising vintners began producing non-alcoholic wine bricks. The compressed and concentrated brick was to be rehydrated with one gallon of water to make reconstituted grape juice.

The Volstead Act made it against the law to produce, distribute, or sell alcohol products. But the law had a loophole big enough to drive a truck through. Under Section 29 of Volstead Act, consumption of alcohol was not expressly prohibited. Up to 200 gallons could be produced privately for consumption at home.

To protect themselves from breaking federal Prohibition laws, vintners printed a disclaimer on their packaging. They warned consumers not to place their grape juice in a cool, dark spot for twenty-one days, or add yeast lest it convert to wine. That the products were labeled Claret, Port, Muscatel, Burgundy, and Riesling underscored the intended use of the product.

Wine was culturally the drink of choice for many Italian and French Americans and wine bricks became a legitimate business opportunity for Chicago and Detroit racketeers acting as distributors. They cornered the market. The underworld began buying the bricks by the ton and distributing them nationwide by rail. The pre-Prohibition price was $9.50 per ton; by 1924, the price was $375.

The wine brick trade became big business and was one of the Detroit's Purple Gang controlled rackets. It was a factor that played into the Collingwood Manor Massacre of 1931. Three leaders of the Little Jewish Navy gang were lured to an apartment with the promise that the Purple Gang would give them the wine brick concession for the customary kickbacks. Instead, Izzy Sutker, Joe Leibowitz, and Hymie Paul got paid off in lead for trying to muscle in on Purple Gang territory. 

In 1933, the Volstead Act was repealed and America went wet. The bottom fell out of the bootlegging business and the thirteen-year-long nightmare of gang warfare on America's streets ended. Those winery owners who weathered the storm and supplied organized crime with their raw material became rich, increased their landholdings, and saved America's wine industry.

Canadian Prohibition Loophole Fuels Roaring Twenties in United States

Model T stake truck breaks through Detroit River ice with overload of Canadian liquor

During the United States Prohibition period, the majority of liquor passing through Windsor, Ontario and the Border Cities into the United States came across the Detroit River. The United States Customs Department estimates that 80% of all illegal spirits brought into the country during Prohibition originated in Canada--our neighbor to the North. This "Detroit Funnel" as it became known in the press supplied liquor to Chicago, Lansing, Toledo, Cleveland, St. Louis, Kansas City and all points in between.

When Ontario passed the Ontario Temperance Act in 1916, the province closed the bars, clubs, and liquor stores until the end of World War I. The government needed the grain for the war effort. But with the end of the war, the Canadian government repealed wartime Prohibition and liquor began to flow again in the Dominion.

Meanwhile, the United States Congress passed the 18th Amendment--otherwise known as the Volstead Act--on October 28, 1919. The act banned the manufacture, transport, sale, import, export, and delivery of alcohol spirits within its borders. The bootlegger, rum runner, and flapper were born. The easy market and close access to Detroit became the focal point for shipping illegal booze into the United States from Canada. Historians labeled the age The Roaring Twenties--when organized crime flourished on both sides of the International Border.

Under pressure from vocal Temperence groups on both sides of the International Border, Ottawa passed Bill 26 decreeing that each province could prevent the importation of liquor by holding a referendum vote. The rest of Canada voted dry leaving Ontario to stand alone. The province did vote to approve the Sandy Bill on July 19, 1921 which disallowed the movement of liquor within Ontario without an order of the Board of License Commissioners.

Jim Cooper--Belle River and Walkerville roadhouse owner and illicit liquor dealer--figured out that if he set up an export business in Detroit, he could circumvent the Ontario law. Canadians would place an order through a Detroit telephone number. The purchased goods were not imported into Ontario. The liquor was already in Windsor and Walkerville warehouses. Because the purchase was made out of the country, it was perfectly legal to be delivered within Ontario.  

During Prohibition, six distilleries and twenty-nine brewers operated within Ontario all licensed by the federal government. It is estimated that forty million dollars of booze illegally crossed the border every year. At first, there was a lot of small-time suitcase smuggling for personal use. All manner of devices were contrived to conceal bottles. Some people strapped bottles under their clothing, pints were slid into high boots, and cars were fitted with hidden compartments.

After organized crime wrestled control of the river from small-time operators, much of the liquor was smuggled in by the boat load. In the winter, old jalopies, trucks, and sleds scurried across the frozen river to engage in the illegal trade. When the U.S. Coast Guard built up their fleet with 200 h.p. patrol boats hoping to dominate the river traffic, the Purple Gang's Little Jewish Navy bought specially outfitted speed boats and mounted small cannons on their bows with Tommy Gun-toting crews to harass the authorities leveling the playing field. The Purple Gang laid claim to the Detroit River as their territory. Any freelance bootleggers unlucky enough to be caught smuggling by the gang lost their booty and often their lives. The Purple Gang alone is credited by police with the murder of over 500 people during their bloody reign of the Detroit underworld.

Earning the big money became possible because of a gaping loophole in the Canadian law. Large quantities of liquor could be bought from Canadian distilleries for export purposes if purchasers or their agents carried a Canadian Customs B-13 export clearance document certifying that the buyer was exporting liquor anywhere but a country where Prohibition was the law. Shipments were marked for Europe, Cuba, and South America. But once a boat left the loading dock, the Canadian government was unconcerned where it actually moored and unloaded. The burden of enforcing this American law fell squarely upon the United States, and the Dominion felt no obligation to enforce the laws of their sovereign neighbor.

The boxes and barrels of liquor were distributed to Ontario Border City export docks strung out along the length of the Detroit River. Rum runners from Detroit would cruise across, load up their boats, and make their river runs--mostly at night. In the winter, the shipments were loaded on the frozen Canadian river bank awaiting their mass exodus across the International Border.

Some of the diverted illegal liquor stayed in Canada by sailing directly into slips behind Ontatio's chain of roadhouses stretching from Windsor to Niagara Falls offering dining, drinking, dancing, gambling, and adult entertainment. Americans flocked to Ontario to patronize the Border Cities thriving vice economies.

For its part, the Canadian Government levied a nine dollar tax per gallon on all liquor sales. This export tax was returned when the customs department received a certificated receipt from the country where the shipment was imported. Since most of the liquor landed in America, those receipts were never redeemed. By 1928, Canada earned up to thirty-million dollars per year this way.

With the New York stock market crash on October 29, 1929 and the onset of the Great Depression, many people lost everything. Jobs were scarce and money was tight. The drunken revel was all but over. Then on December 5, 1933, the United States government passed the 21st Amendment repealing Prohibition. The bill landed on President Franklin Delano Roosevelt's desk and he signed it. The boom times of Prohibition ended on both sides of the international border. It would take another World War to turn the economies around for both countries.

The Rise and Fall of the Purple Gang: 
https://fornology.blogspot.com/2018/03/the-rise-and-fall-of-detroits-purple.html