Within a few years, Dutch Schultz was one of the biggest gangsters in New York, employing as many as 100 gunmen to enforce his rackets—one of whom, Legs Diamond, split from Schultz and started his own operation. When Diamond’s gang began hijacking Schultz’s liquor shipments, a full-scale war broke out. On December 19, 1931, the war ended abruptly: Diamond was shot 17 times by one of Schultz’s hit men. Schultz reportedly quipped, “Just another punk caught with his hands in my pockets.” With Diamond’s competition eliminated, Schultz’s operation was clearing an estimated $20 million a year.
In 1933, prosecutors charged Schultz with tax evasion. After the trial was moved to a small upstate New York town, Schultz hired a public relations firm to change his image. He donated a lot of money to charity and briefly gave up his expensive wardrobe. The act worked: Schultz was acquitted. However, when he returned to New York City, the authorities were more determined than ever to bring him in.
In a meeting with several other major organized crime figures, Schultz demanded that they kill Thomas Dewey, the city’s special prosecutor. But, not wanting to draw any more attention to their own illegal operations, the other leaders decided to eliminate Schultz instead.
On October 23, 1935, Schultz was plotting to kill Dewey with his gang at the Palace Chophouse when Charlie “Bug” Workman walked into the restroom and shot him as he was washing his hands. Workman then proceeded to kill three others in the Schultz gang. But Schultz did not die instantly. He was delirious and rambled to police officers trying to identify the killer. Eventually, he slipped into a coma and died soon thereafter at the age of 33.
