Dutch Schultz: A Malone Acquittal

Dutch Schultz Armored Car
Dutch Schultz Armored Car (Photo credit: www78)

When he was acquitted on August 1, 1935, the crowd outside the courtroom cheered. Judge Bryant “who was visibly astonished, disappointed and thoroughly exasperated. In fact, he practically ‘lost his cool.’ ‘Your verdict,’ he declared, ‘Is such that it shakes the confidence of law-abiding citizens in integrity and truth. It will be apparent to all who followed the evidence in this case that you have reached a verdict not on the evidence but on some other reason. You will go home with the satisfaction, if it is indeed a satisfaction, that you have rendered a blow against law enforcement and given aid and encouragement to people who would flout the law. In all probability they will commend you. I cannot!’” (Franklin County Review, vol 12, pg. 27).

Schultz tried to shake hands with the jurors. The first he tried said, “Mr. Schultz, I wouldn’t shake hands with you under any circumstances—especially here!” (Franklin County Review, Vol 12, pg. 27).
But the jury felt the government hadn’t proved its case despite having called sixty-nine witnesses to the defense’s seventeen.
Perhaps the biggest blow to the prosecution was that “Judge Bryant, at the request of the defense staff, ruled that the famous black ledger containing all the incriminating details of the Schultz organization’s operations had been illegally seized and directed that it be returned. The ledger being the core of their case the Government lawyers were stymied and practically futile without it” ( Franklin Historical review, vol. 12, 1975, p.26 ). This ledger had been meticulously kept, down to the penny, and in impeccable penmanship.
Then during the trial, defense attorney George Moore proclaimed, “the beer business was a hazardous business—our local bootlegger never made much money.”  (Kill the Dutchman by Paul Sann pg. 253).
The above obviously played into the acquittal. Foreman Chapin said, “I am sure that no man on the jury approves of racketeering or anyone connected with it. In fact the jury considers Schultz to be a public enemy. But the fact that he was a racketeer and in the beer business could have no bearing on the case. We felt that the Government did not prove its case. The whole discussion centered around whether or  not he was guilty of willfully evading tax payments We were instructed to follow the evidence that that’s what he did. Pre-trial influence had no bearing whatsoever on the verdict, which was 9 to 3 for acquittal.”
And according to Schultz, “An easy acquittal” (ibid).

Dutch Schultz showed the same generosity to Malone after his exoneration as before his trial.

At Moore’s office, two secretaries accepted five pound boxes of chocolates (pg 27 Review).
And according to Fredrick Seaver who wrote the quintessential historical guide to Malone, more than one farmer had new cows after the trial.
Schultz tried to shake hands with the jurors. The first he tried said, “Mr. Schultz, I wouldn’t shake hands with you under any circumstances—especially here!” ( Review, Vol 12, pg. 27).
Beyond these things, Schultz did not stay in Malone long.Knowing that Dewey still had it in for him, he set up his enterprise in Newark, New Jersey.
Shortly before his death, fearing that he would be incarcerated as a result of Dewey’s efforts, Schultz commissioned the construction of a special airtight and waterproof safe, into which he placed $7 million in cash and bonds. Schultz and Rosencrantz then drove the safe to an undisclosed location somewhere in upstate New York and buried it. At the time of his death, the safe was still interred; as no evidence existed to indicate that either Schultz or Rosencrantz had ever revealed the location of the safe to anyone, the exact place where the safe was buried died with them.
Gangland lore held that Schultz’s enemies, including Lucky Luciano, spent the remainder of their lives searching for the safe. The safe has never been recovered.


Treasure hunters meet annually in the Catskills to search for the safe. One such congregation was documented in the documentary film Digging for Dutch: The Search for the Lost Treasure of Dutch Schultz” (Wikipedia).
Schultz was gunned down October 23, 1935 at the Palace Chop House in Newark, New Jersey.
He survived the initial shotgun blasts and was whisked into surgery. “Before Schultz went to surgery, he received the last rites from a Catholic priest at his request. During his second trial, Schultz decided to convert to Catholicism and had been studying its teachings ever since, convinced that Jesus had spared him prison time. Doctors performed surgery but were unaware of the extent of damage done to his abdominal organs by the ricocheting bullet. They were also unaware that Workman had intentionally used rust-coated bullets in an attempt to give Schultz a fatal bloodstream infection (septicemia) should he survive the gunshot. Schultz lingered for 22 hours, speaking in various states of lucidity with his wife, mother, a priest, police, and hospital staff, before dying of peritonitis” (Wikipedia)
So instead of living safely in jail and running his empire, the events in Malone, New York actually contributed to his death.
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  1. I'm unfamiliar with Schultz in East Haddam.

  2. I agree. They need to make the Flanagan a museum about bootlegging and Malone's history in the Shultz drama

  3. I find the Gelston House to be the most interesting and plausible for finding Dutch Schultz's lost treasure. You have the CT River few feet away for bringing in boot legg and whiskey from up North in Canada. I hope to see a news article done soon on East Haddam and Dutch Schultz.

  4. Anonymous says:

    hi you need to find out about a man called Larry Fay and who killed Larry Fay. You also need to find out where Larry Fay (Dutch Schultz Associate) is buried. You might be quite surprised where Larry Fay is buried and and>>> a few who stared down the barrel of Schultz's 45!! Very interesting i can assure you. To the poster Hotel Flannagan yes it needs to be restored Malone needs to fix her up and turn it into a prohibition museum wedding reception function building!!

  5. Anonymous says:


  6. Tax evasion held lighter penalty than all his other interests.

  7. Ross says:

    The accounts by old-timers statewide (and also in CT), as passed on by locals, could prove useful — IF care is taken to corroborate with the local accounts best gleaned from the amazing "fultonhistory.com" For example, if you search "Dutch Schultz" and "hideout", you'll find some stories. "Mountain hideout", "hiding place" etc. My (then) young daughter and I tracked the chest to Norwalk, CT, where he had it until discovered by the press hiding there (with permission of the US Attorney). (The wonderful owner there, Vivian, had found where the rectangular hole had been covered by a metal sheet in the garden; she knew the stories because she was friends with the realtor's granddaughter).

    Dutch turned in his keys to Mrs. Lyman Bracken on April 11. He didn't arrive to the Hotel Syracuse until April 15. So he re-hid the chest somewhere in-between.

    He had a secret residence at Tuckahoe (a suburb of Yonkers) — where his children Ann and John would later go to high school. It is now a co-ed dorm, Koepchen Hall at Corncordia College. There was a tunnel to Ward House across the street that was filled in.

    Wherever you find he was living, look for there to be a filled-in tunnel. :0) For example, there was a tunnel filed in at the Petrilli residence in Newburgh, leading to the North Plank Tavern. There is a bookcase at the residence large enough to hide a person, if not a chest. But the chest is no longer there.

    Much of what is in the chest is commercial paper that has not yet been redeemed — the reward for turning it in to the FBI and IRS, alone, would be worth millions.

    I am from Syracuse. Perhaps the clerk in Malone would know where to find the Malone trial records. In a court case, he lists the specific addresses in Troy, which I otherwise don't know.

  8. Ross says:

    errata –
    "Like Dutch in late November 1935, they may have feared being killed by determined G-Men." I meant late November 1934. That was when Dutch suddenly showed up in Albany and turned himself in. His tax attorney, Noonan, says he did not say where he had last been staying. He says Dutch showed up, introduced himself, and then they went promptly over to surrender.

  9. Your knowledge of Schultz is amazing. I mostly know his Malone connection because that's my "hometown" and his trial had been moved there.
    Malone is where I have most of my esoteric info.

  10. Ross says:

    I don't know my Long Island geography — and haven't yet googled — but am intrigued by the poster's reference to Canders Hall.

    Dutch did stay at William K. Vanderbilt's Oakdale in the summer of 1934. One of the buildings was rented in the name of his chauffeur and trusted lieutenant, Lawrence Carney.

    Then by early November 1934, he was up in Newburgh, NY. He was seen horseback riding. He would have been staying at Petrilli's place not far from the North Plank Tavern (to which there was a tunnel). It was fortified in 1932.

    Then, I believe, 3-4 miles Northwest of Corinth, NY.

    In late January 1935, I believe he was staying at Hendrick Hendrickson Hotel (which I recall to have been in Troy). In February 1935, he was at 4th and Congress St. in Troy, also in Lansingburgh (in northern Troy) and also on Troy's East side, I believe. At one point in February he was living in Troy with his common law wife Frances.

    He stayed at Harmony Hotel in Cohoes long enough to famously kill Jules Martin. Then the police made him leave Troy. He was unsuccessful in having Tammany Hall getting the police to lay off in Troy after Martin's murder.

    The Albany political boss McConnell similarly did not want to Dutch in Albany. At one point, the NYC Police Commissioner said that after Newburgh, Dutch went to a "row of cottages" in Lake George.

    His cronies, also indicted with him, were Frank Ahearn and Henry Stevens, and they were later seen in early 1935 in Queensbury and Fort Edward. They turned themselves in at Glens Falls in February 1935. I believe they turned themselves in when federal men were gathering in the mountains to find them. Like Dutch in late November 1935, they may have feared being killed by determined G-Men. (For example, two days before Dutch turned himself in, the federal men had killed Baby Face Nelson). And two federal men had just been killed in Chicago, and there was a shoot to kill order had issued. So Dutch was wise in turning himself in at Albany in late November.

    Dutch then was in Norwalk CT in early April on Marion Ave. He was living with his 5-month pregnant wife Frances. She was pregnant with John; and had given birth to Ann at Oakdale on Long Island the previous summer.

    Then at the Hotel Syracuse, NY for his tax evasion trial. Then of course Malone, back to Syracuse and onward to Bridgeport.

    He moved on to the Bridgeport Hotel in Bridgeport by August 7, 1935.

    The widespread discussion that he was in Phoenicia in 1935 appears to have been mistaken — and stemmed from a mistaken reporting in 1968 in a treasure writer that then was picked up by later well-meaning folks interested in folklore. Now with new technology, we can trace his whereabouts using the incredible resource of fultonhistory.com and boolean searching. Dutch was active in the Catskills a couple years prior to that — not in 1935 when he and Lulu Rosenkrantz, according to court testimony, collected and his his money in the chest. In fact, the State Troopers headquarterd in barracks "G" named the specific 11 or 13 New York Counties that he was persona non grata.

  11. My family lives near Huntington. Would love to check out Canders Hall.

  12. Anonymous says:

    From Robert Barthomlews UK book another one Dutch schultz's speak easys was the Glenmere Manor now mansion in Chester New York apparently as the story goes Schultz would hide some of his booze at The Lanmark Inn Warwick, New York to be served later at speakeasy Glenmere Mansion Chester. I'll be checking out this Dutch Schultz speakeasy in October which i believe is the month Schultz was gunned down in New jersey. His death at the Chop House was a bloody mess blood everywhere. The treasure of the Dutchman is still at large. I feel it is buried at this place called Canders Hall in Huntindon, Long Island.

  13. Anonymous says:

    Dedicated to my favorite prohibition gangster Dutch Schultz you tube Steve Miller Band go on take the money run video """RIP""" Dutch Schultz Bronx Beer Baron

  14. Anonymous says:

    i think the focal point here is the gelston house East Haddam Connecticut, dutch schultzs south bound liquor storage brothel wharehouse. Running booze from Canada to Manhattan via schooner or steam ship. Then Coindre Hall to bring in north bound cuban cigars Cuban Rum and whiskey and Moon shine from the carolinas Virginia. I guess the dutch shcultz flaggenhammers filthy dirty buried loot is located somewhere in the Gelston House East Haddam CT or Coindre Hall. Schultz once said "i have more bitches than con edisons got switches." Legs Diamond Machine gun kelly pretty boy floy ma barker an her boys they all hung out at that speakeasey the Gelston House east haddam CT. They serve saspirilla@gelston house with machine guns on the glasses for 25 cents like they did during prohibition. hope to see dirty gurdy and her dance hall girls from klondyke kates up north.

  15. I'd love to dig in my back yard and find it. I don't live too far from the Hotel Flannagan or the court house/jail. Just down the road is where they dumped whiskey during prohibition. To me,sounds like that treasure could be in my yard!

  16. TNeal says:

    The hidden treasure in this story would fascinate my son who loved a computer game where you searched for sunken ships (actual historical wrecks) and worked to discover any treasure.

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