Jacob "Yasha" Katzenberg
a/k/a Jacob "Yasha" Katzenberg played a minor role in the history of organized crime, yet he helped bring down some major mobsters and then disappeared forever.
by Allan May
Jacob "Yasha" Katzenberg played a minor role in the history of organized crime. His short, but sweet appearance confirms that narcotic and drug dealing was going on during the 1920s and 1930s and involved both Italian and Jewish mob leaders.
Born in Russia, Katzenberg grew up on Manhattan's Lower East Side. In Rich Cohen's nostalgic, if not somewhat misguided, "Tough Jews," he provides us with the following description of Katzenberg:
"I do not know what he looked like, but I have tried to imagine him. I see his eyes as mirrors, reflecting not what he is looking at, but what he will see: mountains, rivers, wars. I imagine him tall and slender, wearing a hood, taking his time – something long prophesied, a nomad who has crossed wastes to get here. Or maybe he was completely unremarkable, just another curly-haired Jew boy in back of Hebrew class, saying the words but thinking only of the presents his bar mitzvah will bring. To me, Yasha Katzenberg was the ultimate example of the wandering Jew, going country to country, east to west, always on the other side of the glass, lost in the wilderness."
In the mid-1920s, Arnold Rothstein saw illegal drugs as an untapped field, one that could be developed and profited from. The drug traffic was unorganized and there was little competition on the level Rothstein chose to enter. In fact, the only competition at that time was provided by unethical doctors. Rothstein's plan was to purchase and sell in quantities so large that no one could compete with him. He could regulate supply and demand on an international basis. In 1923, a kilo of heroin, 2.2 pounds, could be purchased for $2,000. It could then be cut and resold for $300,000.
Rothstein's interest in narcotics was strictly for wholesaling. He would need a network to sell the drugs and the rum running and bootlegging market already in existence would serve as his pipeline. Lucky Luciano and Waxey Gordon were in place in New York City and New Jersey. The Torrio – Capone Empire was interested in Chicago. Charles "King" Soloman was ready in Boston, as well as Harry "Nig Rosen" Stromberg in Philadelphia. In addition, mobsters in Detroit, Kansas City and St. Louis showed an interest.
Among the buyers Rothstein decided to do business with was Jacob Katzenberg, who was already serving the New York mob as a liquor buyer in Europe.
When Katzenberg teamed up with Rothstein in 1926, they began purchasing from European sources. Rothstein purchased "Vantines," a well-established importing house in New York City. The importing house had an excellent reputation and was known as a legitimate enterprise. When shipments arrived for them, customs officials gave their merchandise only a cursory search. Vantine's would become a perfect front for the smuggling operation. Rothstein also owned several art galleries and antique shops that would also serve as fronts.
Rothstein put all of his drug profits back into the business. When he was murdered in November 1928, he had untold millions invested. Upon his death Luciano and Louis "Lepke" Buchalter became the new overlords. Their first order of business was to make Katzenberg their principal buyer in Europe.
By 1931, the League of Nations had outlined a plan to reduce the world's drug production. Under the guidelines, countries could produce narcotics only in quantities large enough for domestic medical needs. As nations around the world ratified the agreement, the illegal drug supply line began to dry up. When Prohibition came to an end in 1933, Katzenberg was sent to Asia.
In the early 1930s, Katzenberg operated an opium plant on Seymour Avenue in Brooklyn. Buchalter and Meyer Lansky were rumored to be partners in the operation along with several other men. The plant processed raw opium into heroin. In December 1935, an explosion occurred which destroyed most of the manufacturing equipment in the plant. Enough evidence, however, was left to reveal to authorities what the plant's function was. However, Federal Narcotics Bureau agents were unable to put together enough evidence to indict the owners.
Buchalter, Katzenberg and Lansky met and agreed it would be too risky to establish another plant. Instead, Buchalter had a "fix in" with several United States Customs officials. So Katzenberg was sent packing again, this time to Hong Kong. Lansky supposedly bowed out of the operation at this time to focus his attention on gambling.
Katzenberg was soon making purchases in Hong Kong and Shanghai. After the heroin was purchased, it was brought to the United States by "mules" who were paid $1,000 plus expenses to bring the drugs into the country. Once the carriers were back with the drugs, bribed Customers employees would get the shipments through.
In the mid-1930s, clearance stamps were pasted on trunks and baggage to show that they had cleared inspection. Eight different colors were used, but agents would not know which color was in use until they arrived at work that day. For another $1,000 per shipment, Buchalter would be tipped as to the color of the day. The appropriate stamp would then be slapped on and the trunk containing the drugs would be carried through the gate by a porter to a waiting automobile. Officials estimated that between December 1935 and February 1937, six purchases made by Katzenberg generated a retail value of $10 million dollars. No wonder Sonny Corleone told his father, "lotta money in that white powder."
Harry J. Anslinger, who headed up the United States Narcotics Bureau, told this story about Katzenberg in his book "The Murderers":
"On his first trip to Shanghai he was to bring back two trunk loads of dope. Some of the crowd in Shanghai were afraid he might find out too much about their operations and blackmail them into lower prices. 'Shanghai streets are too dangerous,' they told him, 'you better stay right in the hotel room. We'll bring the trunks here.' This required a few days, and Katzenberg began to fume in his hotel prison. 'Hell, I'm on a kind of vacation. I want some action,' he told his 'protectors.' The boys said they would take care of that. They had access to a Russian princess. She was – they informed their impatient prisoner – 'the highest priced whore in Asia.' It would cost $1,000. But to give him a pleasant memory of the hotel and of their service they would provide the lady at no cost to him. They would pay the fee."
"When they brought her to the room, Katzenberg took one look at her and said, 'Hello there, baby.'"
"The Shanghai dealers looked startled. 'Oh, we didn't know you knew Her Highness,' one said."
"'Sure I know her,' Katzenberg told them. 'She was here last night. All night. For two lousy bucks.'"
In the late 1930s, the drug smuggling ring came to an end. As usual it would be informers within the gang that helped bring it down. Indictments were obtained against thirty gang members including Buchalter, who, at the time, was a fugitive from another indictment involving the garment industry.
When Katzenberg returned from China, he found out he was wanted and fled to Romania. Officials there refused to deport him back to America, but instead sent him to Greece. Friendly officials there held him until he could be brought back to the United States. By this time the League of Nations had declared Katzenberg an "international menace."
Katzenberg was convicted on narcotics charges, fined $10,000, and sent to prison for ten years. When Buchalter came out of hiding and was tried on the narcotics case, Katzenberg testified against him. Katzenberg would also testify at the tax evasion trial of Johnny Torrio.
Yasha's saga ends here. After serving his prison sentence, wherever the wandering Jew, Jacob Katzenberg, wandered to, he kept it to himself.
Copyright A. R. May 1999