Dutch Schultz was born Arthur Flegenheimer on August 6, 1902 in New York City. His family were Jewish Germans and his father disappeared when Dutch was only fourteen years old. The absence of his father deeply traumatized him and when asked about his father, he constantly said that he had died from a disease.
After his father left, Dutch was forced to drop out of school in order to earn a living for himself and his mother. He eventually found a job working for gangsters at a local night club. Soon he was committing all sorts of crime to make money, including robbing illegal gambling dens.
In 1919, Dutch was caught breaking into a Bronx apartment and thrown in the Blackwell's Island prison. There, he behaved so badly that the guards had him transferred to a work farm. Dutch managed to escape the farm, but he was recaptured by authorities and another two months was tacked onto his sentence.
After his release, his gangster friends started calling him Dutch Schultz after a deceased gangster known for underhanded tactics. In the early 1920s, Dutch drove trucks for Arnold Rothstein and made more underworld contacts. By 1928, he was running his own bootlegging business and supplying local "speakeasies" with alcohol.
Dutch began strong-arming speakeasies run by competitors into buying his alcohol and violently punishing those who didn't. One tavern owner, Joe Rock, blatantly refused to buy Dutch's liquor and lived to regret it after Dutch kidnapped him. Dutch dragged the man back to an abandoned warehouse, where he was hung from meathooks by his thumbs. While he was hanging there, Dutch taped a piece of gauze saturated with discharge from a gonorrhea infection over Rock's eyes. The bacteria infected Rock's eyes, causing him to go blind, and news of this cruelty struck fear into the hearts of speakeasy owners all over town.
At this point, Dutch's ambition compelled him to expand operations into Manhattan. Since Manhattan was the territory of Jack Diamond, Dutch hired some new gangsters, including Mad Dog Coll, Abe Weinberg, and George Weinberg. Diamond retaliated against the move by killing Joey Noey, a close friend of Dutch.
The death of Noey devastated Dutch and he decided to seek revenge. After the body of Arnold Rothstein, Jack Diamond's best friend, turned up dead, newspapers speculated that Dutch was responsible. Later, Diamond was gunned down by Abe Weinberg, ending the feud.
Despite having less competition, Dutch's gang began having internal problems. Mad Dog Coll was arrested for carrying a concealed weapon and Dutch posted $10,000 bail. However, Coll skipped bail, causing Dutch to lose the money (an exorbitant sum at the time). Coll then returned to the gang and demanded that he be made a full partner in the criminal operations.
After Dutch refused to meet these demands, Coll left the gang with his brother Peter to start their own bootlegging operation in Manhattan. Dutch retaliated by having Peter shot, but Coll then stole four shipments of booze from Dutch. Later, Coll attempted a drive-by shooting on a member of Dutch's gang, but ended up accidentally killing a five-year-old boy. The incident forced him to go into hiding, but Dutch's crew surrounded Coll when he left his apartment and gunned him down.
After prohibition was repealed, Dutch allied himself with Otto Berman, the leader of the numbers racket in Harlem. The team was able to change the odds at the racetrack and win nearly every bet. In 1933 alone, Dutch's operation pulled in 13 million dollars in profit.
In 1933, Dutch was indicted for tax evasion by the state of New York. He stayed in hiding for over a year, but turned himself into authorities in November of 1934. The first trial was held in Syracuse, New York and Dutch's lawyers employed an unusual strategy. He was placed on the stand and described his bootlegging operations and numbers racket. His lawyer then argued that since all of Dutch's income was illegal, it could not be legally taxed and therefore he was innocent of tax evasion.
His next trial took place in Malone, New York and Dutch moved into town a month early. He went to the local bar every night and paid for everyone's drinks. He also became a close friend of the local mayor and sheriff. The jury found him not guilty and released him, leaving the judge shocked.
After his last trial, Dutch returned to New York City, but the district attorney, Thomas Dewey, prepared new charges against him. Dutch decided to go to Murder Inc. and order a hit on Dewey. Albert Anastasia, the head of Murder Inc., scoped out Dewey's apartment, but decided against performing the hit after talking with Lucky Luciano.
After the hit was canceled, Dutch was furious. He declared that he would kill Dewey himself and made preparations. On October 23, 1935, Dutch was hanging out at the Palace Chop House in Newark, New Jersey when a car rolled up and sat idling outside. Charlie "The Bug" Workman strolled inside the men's room, where Dutch was urinating. Workman fired two shots into Dutch's side, then escaped after a brief firefight with Dutch's henchmen. Dutch was taken to a hospital, but he died the next day on October 24, 1935.