Feature Articles

October 2001

Bugsy

By John William Tuohy

When the Gangster Chronicles came on television in the late 1970's, a relative of Bugsy Siegel remarked to Meyer Lansky, Siegel's lifelong business partner, that he was considering suing the production company for depicting Bugsy as an uncontrollable killer.

"What are you going to sue them for?" asked Lansky. "In real life he was worse."

Unlike most hoods who dominated gangdom in the 1930's, Siegel was smart and he knew it. He hated the poverty and ignorance of the world he was raised in and detested the illiterate and uncouth men he had to deal with. He wanted more, he wanted to be on the other side. In fact, Siegel wanted to be on the other side, the legitimate side, so badly, that he invested a million dollars in the stock market in 1933, but lost half of it when the market crashed in October. "If I had kept that million," he said, "I'd have been out of the rackets right now."

Siegel knew that if he stayed in New York, nothing would ever change, so he, and not the New York branch of the syndicate as is commonly reported, decided to try his luck out west in Los Angeles. He had been a regular visitor out there since 1933, introducing himself as an independent sportsman, a title that didn't fool anybody.

Of course, Bugsy had other motives. Gangsters always do. He had stabbed another hood in a dispute over a card game, cutting the man in the stomach 20 times to make sure gases would not allow his body to float to the surface, and now the cops wanted to talk to him about that. He had also been named in a scam to fix boxing matches and had ordered the killing of a bookie who had cheated him. When the bookie found out about the death order, he went to the cops and told them everything he knew, so for the time being it was best he went to the West Coast.

Siegel took over the Screen Extras Guild and the Los Angeles Teamsters, which he ran until his death. With control of the Screen Extras Guild, Siegel was able to shake down Warner Brothers Studios for $10,000, with a refusal to provide extras for any of their films. He also shook down his movie star friends for huge loans that he never paid back, and when he came back for another loan, he always got it, because they were, justifiably, terrified of him.

He once bragged to Lansky that he had fleeced the Hollywood crowd out of more then $400,000 within six months of his arrival. He was a one man terrorist campaign.

When Siegel arrived in LA, the number one racing service out west was James Ragen's Continental Press, which serviced thousands of bookies between Chicago to Los Angeles, each of whom paid Ragen between $100 to $1200. The owner, Jimmy Ragen, was a tough, two fisted, Chicago born Irishman, who had punched, stabbed, and shot his way to the top of the heap, without the Mob's help.

The Chicago outfit, then under Nitti, watched the money flood into Regan's office with envy. Nitti, and later Paul Ricca, tried to set up a rival service called Trans-American, with each mob boss across the country running the local outlet, doing whatever they had to do to take Ragen out of business.

In California, Siegel and Mafiosi Jack Dragna were charged with putting Trans-America in business and taking Ragen's Continental Press out of business. Eventually, the Chicago mob settled the entire issue by shooting Ragen as he drove his car down a Chicago street. Ragen survived the shooting, but not the dose of mercury a nurse working for the outfit shot up into his vein a few days later. With Ragen dead, Continental Racing Services was divided up among the various bosses who had helped to build it, and Jack Dragna was named to run the California office. Siegel was shocked. He had risked his life to build the service out west, he had worked on it day and night, at the least he expected to be cut in on perhaps half the franchise.

Instead, all he was got was a visit from Chicago's chief fixer, Murray Humpreys, who told Siegel to fold up Trans-America wire service. They didn't need it anymore. The syndicate owned Continental Press. But Siegel sent Humpreys packing with a message for Paul Ricca... if the Chicago people wanted Siegel to fold up Trans-America in Nevada, Arizona and Southern California, it would cost them $2,000,000 in cash.

Even though the Chicago outfit didn't want Siegel working for them, at the same time, they didn't want him working for New York either. Crazy or not, Siegel was smart, ambitious and ruthless. They had to watch him, so Paul Ricca told Charlie Fischetti, one of his most dependable torpedoes, to send out a spy, and the woman they chose was the same woman Bugsy Siegel came to call his Flamingo, Virginia Hill.

Virginia Hill was a foul-mouthed, tough-talking product of the poverty of Bessemer, Alabama who came to Chicago when she was 17, to find work in the Century of Progress Exhibition of 1933. She worked at a variety of jobs across the city, including a stint as a shimmy dancer for $20 a week, but, finally ended up as a street hooker, turning tricks for as little as fifty cents or as much as five dollars, it depended on how desperate the John was.

Virginia eventually fell under the command of Charlie and Joe Fischetti, who were heading up the mob's prostitution rackets at the time. Virginia was, more or less, adopted by Jake Guzak and his wife, who offered to put her in charge of several brothels they still owned, but Virginia turned them down. She said she had higher aspirations. But what she did take from Guzak was an introduction to Joe Epstein, or Joey Epp, as he liked to be called, a mild-mannered, middle class, mob accountant who wore thick black glasses and barely spoke to those around him. Nevertheless, he was dependable and honest, by mob standards, and had been Guzak's understudy since 1930 and would one day be his second-in-command.

Epp ran the outfit's racetracks with such authority the newspapers called him Illinois' unofficial racetrack commissioner. And while Epstein was well read, some said an intellectual, he loved to party and he was fascinated by the lowlife around him. He fell head over heels in love with Virginia Hill, and put her on the payroll as his mistress.

But it was a working relationship as well. Epstein put Virginia to work as a courier, bringing suitcases full of the mob's dirty money from Chicago, Kansas City, Cleveland and Los Angeles to syndicate owned and run banks in Cuba, Mexico, the Dominican Republic, France and Switzerland. There, the money was laundered, usually at a price of ten cents on a dollar and then invested in legitimate business from which the hoods could draw a salary.

The second part of the plan called for Virginia to get in touch with Bugsy Siegel, which she did, having met, and romanced him, several times in the past. Like Joey Epp before him, Bugsy Siegel fell head over heels in love with Virginia. He called her his "Flamingo" and drenched her in jewelry, furs and gowns.

Virginia reported every conversation she had with Siegel back to the Fischetti brothers in Chicago. Still, the boys back in Chicago never trusted Hill, or anyone else for that matter, and when Paul Ricca came to power, he told Johnny Roselli to start an affair with Hill so he could keep tabs on her.

Then, Siegel watched a colorful Los Angeles hood named Tony Cornero move his entire gambling organization out of California and into Nevada where he and his brothers opened a rundown but very profitable casino on the Vegas Strip. Within a year, Siegel had the cash, most of it from the New York end of the syndicate, to build the fabulous Flamingo Hotel.

In May of 1947, one month before he was executed, Bugsy Siegel called Jimmy Fratiano, a Los Angeles hood who, technically anyway, worked for Chicago, and asked him to come out to Las Vegas for a meeting. He didn't tell them what it concerned, but, as they found out, it was a recruitment drive. He had already made the same pitch to Jack Dragna, Bugsy Siegel was planning the unheard of, he was going to start his own organization out in the Nevada desert.

Virginia Hill had already reported Siegel's plans to Paul Ricca in Chicago, and, even though the Chicago mob was chiseling Siegel in the Flamingo by sending in professional gamblers to break the bank, they were indignant. As far as they were concerned, although the syndicate had agreed to allow Vegas and Reno to operate as open cities, it was clearly understood in the syndicate that Chicago controlled everything west of the Mississippi.

Siegel was a regional problem at a time when the mob thought it had gotten over its regional misunderstandings. He was a relic from the past. He had to be removed.

On June 8, 1947, Virginia Hill got a call from Epstein back in Chicago, he told her to get out of town, to go to France, she could tell Siegel she was going there to buy wine for the casino as she had in the past. He wouldn't question that. Virginia knew, immediately, why she had to leave town. They were going to kill Bugsy and the boys back in Chicago didn't want their best cash courier and narcotics peddler splattered with blood and headlines. Virginia flew into Chicago and met Epstein at Midway airport, where he gave her $5,000 and then she continued to Paris.

Back on the West Coast, Bugsy Siegel, caught in the middle of an uprising, was too busy to care where Virginia was. Several days before, Siegel told Micky Cohen to tell all of the bookies in Los Angeles, Reno and Vegas that the price for using the wire service was going to double. But, to Siegel's amazement, the bookies refused to pay, they knew that Chicago was taking over and that they were planning to kill Siegel.

And, on June 20, 1947, that's what they did.

Jack Dragna gave the order to a hood named Frankie Carranzo. When the call came, Carranzo drove up to Beverly Hills and parked his car a few feet from Siegel's home, wound the silencer onto the barrel of his .30 caliber, army issue carbine, and walked around to the back of the house. He hid in the shadow of a rose-covered lattice work with his army carbine and released an entire clip into the living room through a 14-inch pane of glass.

Nine slugs in all. Two of them tore apart Bugsy's face as he sat on a chintz-covered couch. One bullet smashed the bridge of his nose and drove into his left eye. The eye was later found on the dining room floor, fifteen feet away from his dead body. The bullet was found in an English painting on the wall. The other entered his right cheek, passed through the back of his neck, and shattered a vertebra, ripped across the room.

At exactly 11:00 A.M., Jack Dragna got a call from Carranzo: "The insect was killed," and he then hung up.

A few minutes before that call, at 10:55, Little Moe Sedway and Gus Greenbaum, two hoods with gambling backgrounds, strode into the Flamingo and announced over the intercom system, "OK, we're taking over."

Everyone present knew who "we" were.

The only persons to attend Siegel's funeral services at Beth Olam Cemetery were his brother and a Rabbi.

Virginia Hill continued working for the Chicago outfit as a courier for several more years before they replaced her in 1950. She married a guy who wasn't involved with the outfit and had a child, but that ended in divorce.

Joey Epp never fell out of love with her, and he kept her on the books for as long as they bosses would let him, but eventually even that stopped.

When it did, it was widely rumored in gangland that Virginia, desperate for cash, started to extort money out of Joe Adonis and other mob guys for whom she had carried narcotics over the years. On March 24, 1966, near a brook in Koppl Austria, a small town near Salzburg, two hikers found Virginia Hill's dead body. Austrian officials, not understanding who Hill had been, ruled her unusual death a suicide by poison.

The Flamingo's next manager was Gus Greenbaum. He did his job. The hotel was completed and enlarged from 97 to two hundred rooms. By the end of the year the casino posted a $4 million profit, $15 million before the skim, clearing the way for the skimming to begin.

With that kind of cash flooding into the mob's offshore accounts, all of the mob families moved to grab a piece of Las Vegas.

Mr. Tuohy can be reached at MobStudy@aol.com.

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