Unit # 6: The Development of Organized Crime andthe Worlds of Meyer Lansky Lansky's Inner Circle

The remarkable career of Meyer Lansky has been frequently retold, mostcomprehensively by Hank Messick (1973), but a brief recapitulation might beuseful. Lansky was born in Grodno, Russia, as Maier Suchowljansky in 1902; and with his family, he migrated to New York in 1911. By 1918 he had formedacquaintanceships with Bugsy Siegel and Lucky Luciano. As with many others,Prohibition gave him his greatest opportunity, and the "Bugs and Meyer" gangrose to celebrity as a bootleggers' mercenary force. By the late 1920s, with Lepkeand Lucky, he pieced together the outlines of a bootlegging syndicate which would be the dominant influence in organized crime for the next two decades. After Prohibition, he and Siegel cast their eyes further afield -- to the West, theSunbelt, the Caribbean. In Miami, Lansky initiated the "Gold Coast" with itshotels and casinos; in Cuba he created Batista's leisure empire; in Nevada andCalifornia, Siegel used syndicate money to create a network of enterprises. Siegeldied in 1947, having tried to make himself an independent force, but Las Vegaslived on to flourish and prosper. Lansky's business enterprises were now sufficiently far- flung to withstand one setback like that which would be dealt him by Fidel Castro. If Havana fell, he could turn back to Las Vegas or open new enterprises in Haiti, the Bahamas, or even in London. Attempting to describe Lansky's activities is an almost impossible task, even if wecould be sure which of the numerous ventures he is credited with he was in factinvolved in (some authors credit him virtually every financial scam since 1945).So with this caveat, we can begin to describe Lansky's activities on behalf of organized crime. First, let's take a look at the cast of characters which sofrequently are participants in Lansky-inspired activities.Lansky associates can broadly be divided into two categories: 1) the old-time veterans of the gangs of the 1920s and 1930s; and 2) newer associates, usually relatively clean lawyers and businessmen. Lansky appears to have preserved hisfriendships and business partnerships over many decades. For example, after thehit on Bugsy Siegel, control of his Flamingo Hotel passed to three old Lansky cronies: Moe Sedway from the Lower East Side of New York, Morris Rosen, and"Gus" Greenbaum from Phoenix (Fried, 1980: 253-254). Some other examples of these long-standing relationships are instructive.The Minneapolis mob headed by Isadore Blumenfeld in the 1920s providedLansky with some of his most durable business partners. Blumenfeld's bother"Yiddy Bloom" held substantial investments in Miami area real estate andcontrolled a large portion of the New York gambling market (in the supposedheartland of the "Five Families). Probably his best known financial coup was the

early 1970s stock fraud surrounding the artificial boosting of Magic Markershares. Bloom was joined in this by his son Jerold and some fifteen fellow conspirators. In the background, no doubt were Lansky and other mutual friends(Pennsylvania Crime Commission, 1980: 195-198). Also from the Blumenfeld Mob was John Pullman, long used by Lansky in his banking ventures for organized crime. Pullman had lived in Canada andSwitzerland and was an expert in the use of numbered accounts and dummy corporations. He was the head of the "Bank of World Commerce" in Nassau(Bahamas) in the 1960s, a highly effective "laundry" for Mob money (Pennsylvania Crime Commission, 1980: 198; Fried, 1980: 276-277)."Dandy" Phil Kastel was part of the 1930s move to the Sunbelt from the New York mobs. In New Orleans, Kastel bridges the years from the early bootlegging andgambling syndicates to Carlos Marcello, and through it all, he was never far fromLansky's interests (Messick, 1969: 105, 205, 247)."Doc" Stacher (born 1902), emerged from New Jersey organized crime to becomea leader in organized crime's western empire (Fried, 1980: 281-282; Cook andCarmichael: 62).Sydney Korshak (born 1907) was patronized early in his career by the Caponemob. He enjoyed a very successful career representing labor unions and directedthe flow of Teamster money into the Nevada casinos. Korshak apparently hasaccumulated enormous wealth from legitimate sources (Fried, 1980: 285-286).Harry Teitelbaum was a prominent figure in the New York gangs of the 1920s, who was also associated with the "Bugs and Meyer" and "L and G" gangs. By the1950s, Teitelbaum was associated with Nig Rosen in a Lansky-inspired herointrafficking operation (Fried, 1980; Cook and Carmichael).Sam Cohen was a Los Angeles bookmaker who was closely associated with theFlamingo Hotel in Las Vegas in the 1960s and accused with Lansky of operating amajor skim operation at the Fremont and Riviera casinos. With his sons Alan andJoel, he was involved in some interesting deals in both Florida and the PoconoMountains of Pennsylvania. These real estate deals were conducted in association with Alvin Malnik, Lansky's supposed "heir." Sam Cohen fits the pattern we haveseen so often, of continuity from the Prohibition gangs to the financial world of the 1970s and 1980s. He moved from New York to Florida in the 1920s and joined the exodus to Nevada in the 1950s (Messick, 1969: 326-331, 363;Mollenhoff, 1973: 186).Benjamin Siegelbaum was a financial manipulator very close to Lansky, who wasinvolved in a Swiss money-laundering operation in the 1960s called the ExchangeBank of Geneva. Siegelbaum had been a partner of Nig Rosen, John Pullman, Yiddy Bloom, and others in his career.

Morris Lansburgh was a Lansky associate who was extremely powerful in Miami, where he controlled substantial hotel interests in Miami Beach. He was alleged tohave been a partner with Lansky and Sam Cohen in the Flamingo skim(Mollenhoff, 1973: 186).Other prominent figures in the Lansky orbit were newer and more respectablefigures. For example: Delbert Coleman came to prominence in the late 1960s inthe "Parvin-Dohrman" affair. In 1968 Coleman was associated with Korshak in anattempt to purchase the Parvin-Dohrman casinos in Las Vegas -- and to float thatcompany's shares artificially. Coleman and Korshak were also involved in BernieCornfeld's IOS scam (Fried, 1980: 282-286; Raw et al.: 229; Demaris, 1981: 247). Another, Alvin Malnik (born 1932), was picked by some observers of organizedcrime to be Lansky's probably successor. He first came to prominence in the early 1960s with the attempt to establish a gambling resort at Paradise Island in theBahamas. He had already established himself in the banking and real estate businesses in Miami but soon become Lansky's public "front-man." The ParadiseIsland venture led to the establishment of Resorts International, theentertainment and gambling conglomerate which was the subject of intense law enforcement scrutiny for years as charges of control by Meyer Lansky surfaced(Mahan, 1980).In the early 1970s, Malnik was also involved with Sam Cohen's sons in land dealsin Florida and the Poconos. Their companies -- COMAL and "Cove Associates" --dealt with Caesar's World and the Teamsters Pension Fund, both institutions which have attracted a substantial amount of law enforcement attention (Fried,1980: 282-286; Pennsylvania Crime Commission, 1980: 252- 254). Finally, AllenR. Glick (born 1942) of Pittsburgh attracted a great deal of attention when hisfirm ARGENT (A.R. Glick Enterprises) seemingly came from nowhere to secure a vast Teamsters loan (about $146 million). This enabled him to take over theStardust casino in Las Vegas and much of the plundered Parvin-Dohrmancompany. In 1979 he was implicated in a skimming operation, which led to his being forced to sell out for a comfortable profit (Fried, 1980: 284-285; Demaris,1981: 318, 320, 365-366, 391, 445, 525-526). The operations which these andother organized crime money- men were involved in recycled the profits of organized crime and in turn generated immense new profits -- which are,however, almost wholly clean.

Las Vegas

"Bugs and Meyer" pioneered Las Vegas on behalf of east coast organized crimeinterests, investing money from New York, New Jersey, Philadelphia, Cleveland,and other areas. However, in each case it was Lansky who managed andcoordinated the enterprise. It would be incorrect to suggest that other mobs, suchas the "Cleveland Four," were acting as Lansky servants or as members of somekind of "Jewish Mafia", but only that their move to Las Vegas was conditioned by Lansky's enterprises.