#Searching for gangster Dutch Schultz’s gold

Upstate New York: Home to Buffalo wings, Niagara Falls and a gangster’s buried treasure?

Yes, legend has it that the Catskills town of Phoenicia conceals a trove of money, bonds and jewels that once belonged to a New York City bootlegger named Dutch Schultz. The criminal’s riches have been hunted for nearly 90 years, but after a recent breakthrough, two intrepid men believe they’re about to hit the jackpot.

Colorfully known as the Beer Baron of the Bronx, Schultz made a fortune in the 1920s selling suds during Prohibition, when alcoholic beverages were illegal across the US. Born Arthur Simon Flegenheimer in 1902, and raised in a slummy Bronx neighborhood, Schultz, along with his thugs, made a lucrative trade from hawking banned booze, even though their brew was known for being the most horrendous tasting stuff in town.

Chalk up the gangster’s success to a convincing sales spiel. “He and his partner Joey Noe were extremely brutal,” Nate Hendley, author of “Dutch Schultz: The Brazen Beer Baron of New York,” told The Post. “They would go to speakeasies and threaten to beat the crap out of [proprietors] who didn’t buy their beer. One saloon owner, Joe Rock, foolish enough to refuse, got hung by his thumbs. A rag dipped in a gonorrhea sore was placed over his eyes. It eventually blinded him.”

 

After Prohibition ended in 1933, Schultz padded his overflowing coffers even more by strong-arming racketeers in Harlem, and forcing them to cut him in as a partner. But NY prosecutor Thomas E. Dewey (later to be governor and a failed presidential candidate) vowed to stop his wrongdoings. In the wake of fellow gangster Al Capone being found guilty of income tax evasion, Dewey said that Dutch would be imprisoned by similar means.

According to a new documentary, “Secrets of the Dead: Gangster’s Gold,” it is believed that Schultz — a miser who, said Hendley, “looked like an unemployed clerk” — prepared for his takedown by burying a princely sum of cash, bonds and diamonds in the Catskills. To this day, it’s never been found.

The show, which airs Nov. 18 on PBS, follows a pair of Canadian treasure hunters, Steve Zazulyk and Ryan Fazekas, who believe they are closing in on the gangster’s cache. They maintain the loot was worth $7 million at the time it was hidden and about $150 million today. While Dutch’s buried treasure is hardly a secret — the show depicts two other teams, composed of amateurs, seeking the same booty — Zazulyk insisted that he and his partner are better equipped than those weekend warriors. An arsenal of metal detectors and special radar augments their skills and experience

“We have connections,” Zazulyk told The Post. “The key person is Bruce Alterman,” referring to a private investigator who lives in the area and claims to have had a family member who told him stories about Schultz. On the show, Alterman provided recollections of his grandfather that excited the treasure hunters whose quest had already taken them through a deeply wooded area near Yonkers and a home in Bronxville, which may contain a hidden tunnel used by Schultz.

“Bruce is privy to a lot of private information that you would not mention to very many people,” he said. “Bruce threaded the story together with timelines, details on how far [Dutch and his gang] traveled and the roads they took.”

Alterman found a revealing article in a 1939 issue of Collier’s magazine. In it, a former lawyer of Dutch Schultz recalled a 2-by-3-foot steel box filled with diamonds, gold coins and $1,000 bills.

“It is just a matter for someone to find it,” Alterman said in the doc.

Even the show’s director, Elizabeth Trojian, is in on the hunt, invested emotionally — and financially.

“My grandfather was muscle for Dutch Schultz,” she told The Post. “He kept a journal, and there were references to gold coins.” As for Trojian’s material payoff, she sounds less certain: “At first, we were saying I would get 10 percent. Now it’s more like, ‘Let’s see how big it is.’”

Schultz evaded tax-related charges twice and was killed by fellow mobsters after he made noise about offing Dewey. Fearing that the murder of a highly placed public official would bring heat on Big Apple mobsters, a pair of hitmen from Murder, Incorporated, shot Schultz in the restroom of the Newark chop-house he owned.

Schultz died a day later, on Oct. 24, 1935. But about two hours before he passed, the gangster left an important clue as to the whereabouts of his stash.

“Lulu, drive me back to Phoenicia,” he said, referring to his bodyguard/chauffeur. “Don’t be a dope, Lulu, we better get those Liberty Bonds out of the box and cash ’em.”

His ramblings were transcribed by a police-appointed stenographer and formed the spine of William S. Burroughs’ book called “The Last Words of Dutch Schultz.”

Considering that Zazulyk and Fazekas are more about commerce than art, it’s easy to wonder why they are courting TV exposure. “[The show] can work to our benefit,” said Zazulyk. “All of a sudden, someone [who sees it] could come from out of the woodwork with information that we could never have imagined.”

Plus, there was promised discretion: “We would allow only one camera with us and the guy [shooting] was sworn to secrecy.”

We would allow only one camera with us and the guy was sworn to secrecy.

 – Steve Zazulyk

Nevertheless, a major clue is splashed all over the screen. It came via a photo touted by Alterman — and offered by the director’s brother Tim Trojian. He owns property in the Catskills and concurred with Elizabeth that their grandfather provided “muscle for Dutch Schultz.”

Trojian produced what looks like a fairly innocuous shot of a wooded area alongside Stoney Clove Creek, in Phoenicia, with a car parked nearby. Not one to underestimate a potential lead, Fazekas read into the image.

“People [in the 1930s] didn’t take scenery photos and waste their film,” he said. “And this is not scenic; it had to mean something.”

Intimating in the documentary that it is a shot of the burial spot, snapped for future reference, he added, “My contention is that they transported the heavy steel box and buried it alongside Stoney Clove Creek.”

Alterman said that the picture provides “a link like no other. If we can match up the creek in that picture with a present day location, I will say let’s break out the metal detectors.”

So far the Canadians have only found two 1903 gold coins near the creek.

The road to Dutch Schultz’s loot

Still, they are adamant they’re within a football field of the fortune. Author Hendley, however, sounded skeptical.

“I [am] not hugely optimistic,” he said. “Finding a treasure when no one knows where it is, that’s haphazard at best. Gangsters did not keep memos or minutes from their meetings and they are not known for careful deliberation. Dutch might have thrown a bunch of money in a paper bag and told a guy to bury it. It could all be dissolved by now.”

The two gold coins have encouraged Zazulyk and Fazekas. Mark Schimel, of Stack’s Bowers Rare Coins in Manhattan, valued the pieces at around $950 each, and Fazekas viewed them as “bread-crumb[s] leading us down a trail to the big hit.” Though temporarily slowed by COVID-related travel restrictions, he and Zazulyk are ready to break out their scuba gear and start digging around the water’s edge.

“We not only need to search this area, but we need to do it fast, before other people find out,” Zazulyk declared in the doc. “The hunt is on!”