Lucky Luciano becomes "King" of New York's Mob,
organizing the Five Families.
Now that Lucky has killed both Joe Masseria and Salvatore Maranzano, Lucky becomes the King of New York's mob. It's September 11, 1931, Luciano and his crew (Meyer Lansky, Frank Costello, Bugsy Seigel, and Vito Genovese) send an army of hit men to kill all the old leaders which ended with the murder of 40 men across the country in just two days. They were ruthless killers. This was the biggest purge the mafia has ever seen. He spares a few who he feels are valuable.
The murders are planned
Lucky calls a meeting with Maranzano's underboss, Joe Bonanno, and offers him the opportunity to head his own crime family. With Bonanno on board, Luciano has eliminated his competition. Luciano decides to prevent future mob wars, they need to be organized and have rules. In Sicily there were 100 crime families and each family has a boss who reports to the boss of bosses, "il capo di tutti capi." They have rules and are organized, it's a system that has worked for 100 years and is known as La Cosa Nostra. Luciano bases the structure of his organization on the Sicilian model. He keeps mafia membership limited to Italians. Lansky will remain Luciano's most trusted adviser.
Luciano calls for a big meeting in Chicago of all the major bosses in New York and around the country. Until this time, there was no real mafia in America, just individual gangs operating the way they see fit. Luciano tells them he wants to end all the bloodshed and cycles of revenge and organize the American mob the same way the Sicilian mob was run. They may be criminals, but they aren't savages. We have to run our business like a business. He says they will have capos, crews, underbosses, and counselors. He says there will be no more boss of bosses, the days of the "capi di tutti capi" are over. Instead they will have a Board of Directors, a commission run by the heads of the five New York families, who will have final say in all matters including life and death. The members of the Commission are Giuseppe Profaci, Vincent Mangano, Tommy Gagliano, Joseph Bonanno, and Lucky Luciano. "To peace and profit." He creates the modern mafia.
The Commission divides territories and orders hits. It will be like an underworld court. They need to solve their own disputes peacefully to keep law enforcement out of it. They need and enforcement army to carry out any hits from unresolved disputes. Luciano turns to Meyer Lansky to recruit people from the Jewish mafia as hit men. These hit men recruits included: Benjamin "Bugsy" Seigel, Albert Anastasia, Abe "Kid Twist" Reles, and Louis Lepke, dubbed Murder, Inc. by the press. They are told to be like ghosts, nothing is left behind. Law enforcement would not expect Jewish guys to be hit men. They all have their own signature styles of murder. They transformed the art of killing into a science. They prepare for weeks planning their hits and were responsible for 100's of unsolved murders. They averaged one murder every three days.
Although Luciano has organized the mafia he is unaware that the mob is about to face it's biggest threat from within. Dutch Schultz, a Jewish gangster becomes one of Luciano's biggest earners and not part of the five families. Schultz's numbers racket alone brings in 20 million a year. At this same time, Thomas Dewey, an assistant U. S. Attorney who becomes governor and later runs for president, becomes the mob's number one enemy. Dewey's inability to arrest Schultz causes Hoover to declare him "public enemy number 1." This all stemmed from the mob tampering with elections and, in doing so, Schultz caught the eye of Thomas Dewey. In New York City people were voting multiple times. Dewey went after Lucky Luciano to make a name for himself. He can't get to Luciano so he goes after Luciano's associates, and Schultz in particular. Schultz is their way into organized crime. Dewey declares war on the mob. Dewey has to find a way to prosecute Schultz.
Years ago, Al Capone was arrested and convicted of tax evasion by Eliot Ness. He was sentenced to life in prison. Tom Dewey found his answer in that criminal case. He goes after Schultz on tax evasion. It takes months because Schultz stays one step ahead of Dewey. It becomes a national embarrassment. It ends up on Hoover's desk. Up until now, Hoover never took on the New York mob. The theory is the mob had pictures of him in dresses and threatened to reveal him as homosexual. But now Hoover decides it's time to go after the mob. Lucky becomes concerned by all the FBI's attention. It's not good for business.
Luciano tells Schultz to turn himself in, in order to take some of the heat off the mob. Luciano says he will get him the best lawyers. Schultz agrees in return for a guarantee from Luciano that he'll do everything possible to help him beat the rap. Luciano hires lawyers who successfully get Schultz's trial moved 400 miles north to the small town of Malone, New York. There Schultz uses his money and charm to influence the outcome of the trial. He spreads money all over town and throws parties for officials. He actually convert to Catholicism to gain favor. The trial ends and the jury is unable to reach a verdict. Schultz gets off. Dewey is not happy that two years of work was wasted. But, just six weeks later, Dewey pins Schultz as the leader of New York's largest illegal gambling ring and he issues another warrant for his arrest. Schultz goes into hiding. Schultz feels the only way out is to kill Thomas Dewey.
Schultz asks the Commission to order a hit on Dewey, but the idea is shut down by Luciano. They realize Schultz is bad for business, it would bring all of law enforcement down on them. Schultz goes behind the Commission's back and tries to hire Albert Anastasia of Murder, Inc. to murder Dewey for him. He tells Schultz everyone is watching him and it will cost him double. However, Anastasia tips off Luciano, and a hit is ordered by the Commission, but not on Dewey, on Schultz.
Now that Schultz is dead, Luciano has eliminated the mafia's biggest internal threat, but he has also made himself number one target on Thomas Dewey's most wanted list.
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