Hunt is on for felon’s money
Mobster Dutch Schultz reportedly hid treasure upstate, in the Catskills
He had a reputation for a white-hot temper and brutality, but in the end it was his loose lips and delirious deathbed ramblings that cemented mobster Dutch Schultz’s legend — and that today still drive modern-day treasure seekers to the Catskills with shovels and a mission.
Let’s rewind. Schultz was born Arthur Flegenheimer in 1901 in the Bronx to German-jewish immigrant parents, and soon ran with the Bronx’s Frog Hollow Gang, which was known for bestowing the nickname “Dutch Schultz” upon its toughest members. The moniker stuck.
Over the years, Schultz built a reputation as a top bootlegger, racketeer and the first mobster to extort New York's labor unions, said Sullivan County historian John Conway, who wrote the 2000 book “Dutch Schultz and his Lost Catskills’ Treasure.”
Who still cares about a Prohibition-era tough guy gunned down in a Newark tavern? Schultz was a well-known figure in the Catskills and Hudson Valley from his bootlegging days, even inspiring the naming of the new Dutch’s Spirits distillery in Columbia County. But it’s the hunt for his ill-gotten gains that’s fueled at least one screenplay, many books and documentaries, a PBS special and countless Catskills visits. The location of the hidden treasure was teased by Schultz himself.
“There’s endless contradic
tions and confusions in the story surrounding the treasure hunt – which I think Schultz would have delighted in because he was the expert of misdirection, deception and falsehoods,” Conway said.
As one might imagine, the pathway to becoming a master criminal is quickly littered with enemies. Law enforcement, naturally, was one — but the real trouble began for Schultz with other mobsters who fought over territory and rackets in the 1930s.
New York’s criminal underworld in 1931 formed "the Commission" to coalesce various Mafia gangs under one governing body. “It was a time of no more independent operators doing things the way they wanted,” Conway said. Now everything had to go through them.
Conway said Schultz was often described as a hothead and a loudmouth, qualities the Commission disliked as J. Edgar Hoover built up the FBI into a national law enforcement entity. In one particularly ruthless incident in Cohoes, as outlined in the book “Five Families” by Selwyn Raab, Schultz’s lawyer Dixie Davis recalled the mobster shooting gangster Jules Modgilewsky in the mouth at the Harmony Hotel “just as casually as if he were picking his teeth.”
Schultz was identified as Public Enemy No. 1 by Hoover in 1933 after the fall of Chicago's Al Capone, drawing the attention of prosecutor Thomas E. Dewey, who would later become governor of New York. Schultz sat trial twice for tax evasion — the crime that tripped up Capone — but was never convicted.
“Dewey didn’t give up; he kept going after Schultz,” Conway said. “So Schultz decided he had to kill Dewey. It’s the only way he could get him off his back.”
The commission balked at Schultz’s proposed killing of such a prominent figure. In a twist of fate, the syndicate later ordered Schultz’s killing: He was gunned down in Newark’s Palace Chop House tavern Oct. 23, 1935, along with three other associates.
Schultz lingered in the hospital for 24 hours with his fatal wounds, babbling a stream of consciousness that observers at the time — including the police — noted in great detail. He uttered strange phrases like, “A boy has never wept … nor dashed a thousand kin,” plus others that were decidedly more interesting.
“The police wrote down everything he said,” said Conway. “They wrote down that there is a treasure and where it’s located in Phoenicia.”
Legend has it that Schultz stashed money to
The mobster is said to have hidden in a steel box, waterproof safe or suitcase a mix of gold coins, jewelry and paper money and bonds somewhere in the Catskills or another part of upstate.
fund his escape in case Dewey ever tried to have him arrested. The mobster is said to have hidden in a steel box, waterproof safe or suitcase a mix of gold coins, jewelry and paper money and bonds somewhere in the Catskills or another part of upstate. (Conway posits that any treasure is unlikely to have been buried: “These were city men, not (digging a hole) up there in hiking gear.”)
In 1935 money, Schultz’s loot was estimated to be worth between $5 million and $9 million. Today, that fortune translates to a cool $50 to $100 million, depending on the mix of cash to gold.
While on his deathbed being questioned by police, Schultz is known to have said, “Don’t let Satan draw you too fast.” Many presumed this to be a coded reference — which Conway first suggested himself in the 1990s — to the Catskills town of Phoenicia, which has several landmarks that reference the devil, including the large boulder called Devil’s Tombstone and Devil’s Face, a rock outcropping.
The area was significant for Schultz, who established illegal bootlegging operations in the Catskills and ran beer and liquor up and down the Hudson from Canada to New York City.
Schultz’s trusted friend and bodyguard Bernard “Lulu” Rosenkrantz — who many think hid the treasure at Schultz’s request — was shot alongside Schultz and is believed to have drawn a map of its location, according to Bruce Alterman, author of “Fear in Phoenicia.”
Alterman said Rosenkrantz gave the map to a Schultz lieutenant, Marty Krompier, who was then almost killed by mobster Jacob “Gurrah” Shapiro in
a barbershop. Krompier didn’t die, but it’s believed that Shapiro left the scene with the map. To this day, no one knows where a map might be.
Many modern-day hunters, meanwhile, have sketched out their own ideas of where the money is hidden, and the internet is chockful of crowdsourced hypothetical pinpoints.
From 1935 to the current day, the legend compels tourists and locals to dig around Phoenicia. In fact, perceived proximity to the treasure is a tourism selling point for some. A recent guest at a Phoenicia Airbnb left a review in May 2021 saying they went to see where Schultz supposedly buried his treasure “10 miles away,” and the Phoenicia Library said visitors still arrive asking for maps of the area to inform their search.
One man spent the last few years of his life walking up and down the nearby tracks of the Ulster & Delaware Railroad with a shovel, Conway said. Eventually, his excessive digging unleveled the tracks, and railroad officials had to ask him to stop.
“A retired detective would email me regularly with new leads,” Conway said of Gary Bennett of Holyoke, Mass. “He had a good way of piecing together things. He … said he knew where the treasure is. But when he got there, he found a hole and a tree next to the hole with the year ‘1934’ carved into it.”
Another person who owned an Ulster County campground near where the supposed treasure is thought to be buried said people knocked on her door all the time, with metal detectors and shovels, asking to look for it on her property, Conway recalled. She eventually drew up an agreement for people to sign, stipulating that she would get a portion of the treasure if they found it. She stopped allowing visitors after someone dug up her entire yard and didn’t put it back, he said.
Is the loot in Phoenicia? Conway says other rumored burial spots include Lake George and Yonkers. He added that it’s also entirely possible that the treasure never existed or was already found. “No one knows for sure,” he said.
“There are so many versions of the legend and story. It’s one of the reasons why people become fascinated by it – they’re challenged to find the right version, and then challenged to find the treasure.”