Waxey Gordon’s Half Century of Crime

Oct 14, 2009 - by Allan May - 0 Comments

Waxey Gordon

Waxey Gordon

Waxey Gordon led a life of crime during a very long life. Busted for pickpocketing at age 18, he became a major East Coast bootlegger during Prohibition and the head of a heroin ring following World War II when he was in his 60s. He was the one Jewish gangster who seriously rivaled Meyer Lansky, who became his bitter enemy.
by Allan May

Waxey Gordon led a life of crime during a very long life. Busted for pickpocketing at age 18, he became a major East Coast bootlegger during Prohibition and the head of a heroin ring following World War II when he was in his 60s.

Along the way he crossed paths with Thomas E. Dewey, a promising young assistant U.S. attorney who got his first exposure to the limelight by sending Gordon to prison in 1933 on income-tax evasion charges. Neither prison sentences nor the shame he brought to his wife and son could cure or deter him.

The judge who sentenced him for the last time depicted his life of crime as a "malignant cancer" on society. When he died of a massive heart attack in Alcatraz in 1952, the 66-year-old was facing new federal charges for heading a coast-to-coast drug ring.

Waxey Gordon started out life as Irving Wexler. He was born in 1886 into a large, wretchedly poor Polish-Jewish immigrant family on Manhattan’s Lower East Side. He got his nickname "Waxey" from friends who said he was able to remove a victim’s wallet "as though it were coated with wax." The name Gordon was from one of several aliases he used.

His police record began in 1905 when he was arrested for pickpocketing and sent to the Elmira Reformatory in October of that year. He was returned there for a short while after a parole violation in 1908. Later that year he was arrested in Boston and served four months in the workhouse. He was then arrested in Philadelphia and did a 19-month stretch there. Both arrests were for picking pockets. This last stint must have convinced him there was no future for him in this field because he returned to Manhattan and became a strong-arm goon in the labor gang of "Dopey Benny" Fein.

Gordon was described as a "gruff, powerful, thickset man," with a particular talent for what the Jews called "schlamming," which translates to roughing up or beating a person. In 1914, during a gang street fight, a municipal court clerk was killed by a "stray" bullet. Gordon was one of 13 hoods arrested for the shooting. He and another gang member were the only ones tried for the murder, and after a lengthy trial they were acquitted. The same year, Gordon was sent to Sing Sing for two years for beating a man and robbing him of $465. He was released in 1916. It would be his last prison term until Dewey prosecuted him for income tax evasion in the 1930s.

By the time Gordon was released from prison and returned to Manhattan, "Dopey Benny" had left the labor rackets. Gordon hired himself out to other gangs as a labor goon, strike breaker, dope peddler, and robber – until Prohibition came along. In the fall of 1920, Waxey met Maxey. Max "Big Maxey" Greenberg had recently left St. Louis for Detroit after double-crossing members of the St. Louis Egan’s Rats Gang by taking sides with the Hogan Gang. While in Detroit, Greenberg began smuggling whiskey from Canada. Quickly realizing how profitable this venture was, he wanted to expand and needed $175,000 to do so. He traveled to New York in hopes that through Gordon he could obtain financing from Arnold Rothstein, also known as the "Big Bank Roll." Gordon knew Rothstein from having worked for him in the garment district as a labor enforcer.

Rothstein met the two in Central Park. Sitting on a park bench, he listened to their plan to smuggle Canadian Whiskey. The following day the three men met again, this time in Rothstein’s office where the Big Bank Roll made a counterproposal. Rothstein would finance the venture, but the liquor would be purchased and brought in from Great Britain. Gordon, who was acting as a middleman, asked to be included in the deal and was cut in for a small "piece." From this piece, Gordon would launch a successful rum-running empire and become a wealthy man. After Rothstein ended his partnership with the two in 1921, he continued to help finance them. Gordon took over two large warehouses when they split, one in the city and the other on Long Island. Rothstein would later use Gordon’s speedboats to smuggle in diamonds and dope. As with rum running, it was Gordon who saw the large profit potential in narcotics and later introduced it to Rothstein. Just as with the run running, Gordon lacked the finances to enter the racket on a large scale.

Waxey put together a gang of hoods from the old neighborhood to help him with the rum-running business. The liquor would be retrieved from "Rum Row," the fleet of ships anchored off the coast of New York and New Jersey, just outside the three mile limit (later extended to 12). It would then be brought ashore, taken to the warehouses where it would be cut and stored, and then sold to restaurants, clubs, and bootleggers in the New York metropolitan area. The best clientele always received the uncut merchandise.

From his headquarters in the Knickerbocker Hotel on 42nd Street and Broadway, Gordon operated an efficient operation, which he modeled after his mentor, Rothstein. Gordon lived in a lavishly decorated, 10-room apartment on Manhattan’s Upper West Side and owned a large home on the Jersey Shore. In his book, The Rise and Fall of the Jewish Gangster in America, Albert Fried describes Waxey’s transformation from street thug to "a captain of the bootleg industry:"

"Gone was the schlammer and gunsel of yore. He was reborn Irving Wexler, free-spending New York businessman, owner of real estate and stocks and other properties of a vaguer nature,…a gentleman about town conspicuous by his fancy dress and limousine and companions. He too cultivated a persona. And while he could not yet be a Rothstein – he was still too grubby and coarse and arriviste-looking – he was definitely cutting his own swath of respectability."

In 1925, government agents, who had been watching Gordon’s operation, got lucky when Hans Furhman, one of Gordon’s ship captains, was unhappy with the amount of money he received from one of the shipments. Furhman decided to get even by going to the authorities and telling them about a Canadian steamer that was on its way to Queens with a hidden cargo of liquor consigned to Gordon. On Sept. 23, agents raided Gordon’s headquarters, arresting everyone there, including Maxey Greenberg, and seized maps, charts, and radio codes. Gordon, who was en route to Europe for a vacation with his family, was arrested when he returned. Before Gordon’s trial was to begin, Furhman mysteriously died in a guarded New York hotel room. The police ruled it a suicide and the case against Gordon went down the drain.

However, with his rum-running operation exposed and his boats seized, Gordon abandoned that business and moved to Hudson County, N. J. Along with Maxie Greenberg and Jimmy Hassell, Gordon muscled his way into the bootlegging business and opened several breweries that were licensed to produce near-beer. Gordon rigged the breweries to produce the "real stuff." By 1930, he was the main supplier of bootleg beer to northern New Jersey and eastern Pennsylvania. He paid Jersey City Mayor Frank Hague and his political machine handsomely for political protection. To throw off law enforcement, Gordon operated legal near-beer breweries in Patterson, Newark, Union City, and Elizabeth. From these breweries, trucks left daily with legal near-beer shipments. Meanwhile, the genuine beer was produced in the same vats, but before it went through the de-alcoholizing process, it was pumped by underground pipes to bottling plants, sometimes miles away. The gang of triggermen Gordon hired to make sure both his near and real beer reached their destinations was headed by Abner "Longy" Zwillman.

By the late 1920s some of the younger men whose names would become synonymous with organized crime began to emerge on the East Coast: Charles Luciano, Meyer Lansky, Benjamin Siegel, Frank Costello, and Joe Adonis. Organized crime writers sometimes refer to "a group of seven" or the "Big Seven" in discussing the underworld leadership on the East Coast during this time. Although there have been variations of the "seven," Virgil W. Peterson, in his book The Mob, gives the following account:

"According to information reportedly furnished by Luciano almost three decades after Prohibition ended, the original seven members of the cartel were: (1) the Bug and Meyer mob headed by Benjamin (Bugsy) Siegel and Meyer Lansky, which operated in New York, New Jersey, and surrounding areas; (2) the group headed by Joe Adonis, which held sway in Brooklyn; (3) the organization headed by Abner (Longy) Zwillman and Willie Moretti, which maintained a strong foothold in northern New Jersey, including Newark, Jersey City, and Fort Lee, as well as in western Long Island; (4) the group controlled by Irving Wexler (alias Waxey Gordon), Harry Stromberg (alias Nig Rosen), and Irving Bitz in Philadelphia; (5) Charles (King) Solomon, who ruled much of New England; (6) Enoch L. (Nucky) Johnson, boss of Atlantic City, who controlled the south New Jersey coast; and (7) Lucky Luciano along with Torrio himself. From other sources it appears quite certain that Frank Costello was also one of the ruling members of the Big Seven."

There are two points of interest here. First, the time frame being discussed is between the death of Arnold Rothstein, in November 1928, and the beginning of the Castelammarese War, which began on a full scale in 1930. The two mob bosses with the largest armies at this time, Joe "the Boss" Masseria and Salvatore Maranzano, are not mentioned as being a part of the "seven." Nor does either man attend the famous Atlantic City conference, in which Gordon participated, held in May 1929. The second point is that after the 1925 raid on Gordon’s office, crime writers have always attached him with Philadelphia mobsters Max "Boo Boo" Hoff and Harry Stromberg. How much influence and how many operations Gordon had going on in Philadelphia was never quite clear.

In the Last Testament of Lucky Luciano, Luciano talks about a trip he made with Joe Adonis to Atlantic City sometime around 1927-28. Luciano was badly in need of imported liquor to supply his customers and went to see "Nucky" Johnson. According to Luciano, he was willing to make Johnson a partner in his gambling enterprise, but "Nucky" had to come up with some much needed Scotch for him. Luciano demanded, "I need Scotch now…So, who’s making the next shipment?" Depending on which book you read, the shipment was coming in for either Masseria or Maranzano, and it was going to Gordon, either for his customers or to be "cut" by him, in Philadelphia. For whomever it was intended, it never got to them. The shipment was hijacked by a gang that Luciano claimed to be a part of, which included Lansky, Siegel, and Adonis:

"A tree was felled across the road and at two in the morning the Maranzano trucks appeared, with several men riding shotgun. At the sight of the tree, the trucks halted and some of the men jumped out to remove it. ‘Siegel started to shoot right away, and then Lansky opened up. One of the Maranzano guys was bumped off and another was wounded, and the rest of ‘em gave up right there. But that didn’t do ‘em no good because we took away their guns and give ‘em a good beatin’ before we took off with the trucks. Maybe the best thing about it was that none of ‘em recognized us because we was all masked.’"

There have been different accounts of the same incident that indicate that as many as three or four of the men were murdered by the hijackers, and that one of the survivors recognized Lansky and told Gordon. From that point on Gordon and Lansky were bitter enemies. In Meyer Lansky: Mogul of the Mob, the authors state:

"Soon afterward the two men began to quarrel openly, much to the embarrassment of their various partners. The dispute reached such bitter proportions that they accused each other of being double-crossers and liars. Once they came to blows, but Charlie Lucania (Luciano) stepped between them and told them to ‘behave.’ The feud was long-lasting and by 1931 had become known in the underworld as the ‘War of the Jews.’ Finally Charlie Lucania decided to take stronger action, because the dispute between his two friends threatened to disrupt their business. This was the only situation he had ever seen in which the passions of the ‘Little Man’ seemed to conquer his normal common sense, and it was obvious that the organization could not contain both Meyer and Waxey.’

By mid-1931 cooperation between Gordon and Lansky had become impossible. In addition to his feud with Lansky, Gordon was facing an investigation of his income tax returns by the Internal Revenue Service. According to Luciano, he and Lansky formulated a plan to feed the IRS incriminating evidence to help them put Gordon away. The plan was allegedly carried out by Lansky’s brother, Jake, who was said to have several friends who were IRS agents. Jake traveled to Philadelphia and supplied the agents with financial information that led to the indictment of Gordon. Thomas E. Dewey prosecuted the Gordon tax trial. If there was any truth to Luciano’s statement, Dewey never acknowledged it. In Dewey’s book Twenty Against the Underworld, neither Jake nor Meyer Lansky is mentioned.

With the spectacular conviction achieved in Chicago against Al Capone, the special agents of the Intelligence Unit of the IRS were reassigned to New York to begin the same process on East Coast bootleggers Waxey Gordon and Dutch Schultz. For two years, six investigators worked full time collecting evidence that would stand up in court on Gordon. During the final six months, a half dozen lawyers and twelve IRS agents formed the task force against Gordon.

While Gordon prepared himself for the onslaught of government agents, he was also fighting another battle. The newspapers claimed that the trio of Gordon, Greenberg, and Hassell had killed those who got in the way of establishing their lucrative bootleg business. Local bootleggers James "Bugs" Donovan and Frank Dunn were part of this slaughter. With Gordon now facing legal problems, his enemies struck back. The New York Times stated that it was a North Jersey gang, made up of the "remnants of the one deposed" by the Gordon gang, that made its move.

Gordon later testified, in April 1933, that while he, Greenberg and Hassell were meeting at the Elizabeth Carteret Hotel in Elizabeth, N. J. that he heard "sort of like a rattle of dishes out in the hall." When he went to investigate, he saw "some of the men that worked for Mr. Hassell and Mr. Greenberg running along the hall." He claims the men told him "they just shot Max and Jimmy." Gordon, however, said he was unable to identify any of the men in the hallway that day. In Mark Stuart’s biography of Abner "Longy" Zwillman, Gangster #2, Stuart claims gunmen sent by Dutch Schultz did the shooting and that Gordon escaped by jumping out a window.

After the shooting, Gordon hid out at a hunting lodge he owned in Sullivan County, N.Y. Gordon kept two bodyguards on hand, a speedboat docked by the lakeside, and a pistol under his pillow. He stayed there until May 1933 when government agents tracked him down and brought him back to be charged with income tax evasion.

In his book, Dewey described some of the tasks the agents had to perform to prepare the indictment against Gordon:

Agents needed to find out, "For example, who sold the beer barrels to the Gordon breweries? Who sold the malt? Who sold the fleet of trucks the Gordon organization used for distribution? Who sold the oil, the gasoline, the tires, the brewing machinery, the cooperage coating, the air compressors, the cleaning compounds, the kettles and pipes, the hops, the yeast, the repair parts for the trucks, and the materials for repairing beer barrels, the heads, shooks, and rivets? Who installed the piping and the electrical equipment?"

"How were all these goods and services paid for, and in whose names had delivery been taken? What did the sellers’ books show about the checks and who had signed them? On what banks had the checks been drawn?"

Dewey claims in several instances the agents were in a foot race to get to the company records and banks before Gordon’s men did. Often they lost. The agents investigated companies and found that accounting entries had been re-written where they involved Gordon. There were times when agents went into New Jersey banks and were told to sit and wait. Soon Gordon’s men would show up and withdraw all of the money from his account and remove any evidence of ownership of the account. One time agents were arrested in a Hoboken bank by the local police. They were held until Gordon’s men arrived and carried off the records.

One of the Gordon employees the agents were looking for was Samuel Guroch, who had opened a number of bank accounts under fictitious names. Guroch had been issued a subpoena to appear for questioning and ignored it. In June 1932, agents tracked him down and he was held in jail for contempt. His hearing was set for the following morning. In the middle of the night, Frank J. Pfaff, a U.S. Commissioner, arrived at the jail and set the bail for Guroch at $500. Guroch promptly posted bail, walked out, and was never seen by the investigators again.

Although Gordon never opened a bank account in his own name, he was careless at times and endorsed checks with his name or the name on the dummy account that had been set up. Dewey would claim that the handwriting expert assigned to the case "did more than any other single factor to tie the whole case together."

As the Dewey investigation ground on, Gordon battled back. Perhaps the most intriguing part of his fight involved New York’s corrupt Democratic machine, Tammany Hall. The district attorney of New York County, "the perennially inactive" Thomas C. T. Crain, announced that he was initiating an investigation of Gordon. After a few weeks he gave up, stating publicly there were no witnesses brave enough to testify against Gordon. Dewey states that this incident created one of the darkest days of the investigation as a number of witnesses the prosecution had lined up suddenly forgot everything they had to say.

Dewey’s men persevered. By the end of the two-year investigation, they had interviewed over 1,000 witnesses, reviewed 200 bank accounts, traced the toll slips of more than 100,000 phone calls, and sat through several thousand hours of grand jury examination. Gordon was indicted for attempting to evade payment of federal income taxes. The indictment at trial time claimed he had an unreported net income of $1,338,000 for 1930, and $1,026,000 for 1931. Agents arrested him at his hideout, a summer cottage at White Lake in the Catskill Mountains.

The trial was set to begin on Nov. 20, 1933. Dewey had one more hurdle to clear though. With the recent election of reform Mayor Fiorello La Guardia, U.S. Attorney George Z. Medalie, set to prosecute the case, resigned on Nov. 1. This pushed the 31-year-old Dewey to the forefront of handling the case for the government.

When the trial opened, Dewey introduced the Gordon empire to the jury. He presented information on the two breweries, washhouses for the barrels, drops for the delivery and concealment of the beer, the barrels, a vehicle repair garage, five offices, two houses, several hotel suites, and 60 Mack trucks. After nine days, 131 witnesses, and over 900 exhibits, Dewey rested his case. It was now up to Gordon to prove how he acquired these assets with a net income of $8,100 that he claimed for 1930.

Gordon’s attorney tried to convince the jury that the business had been owned and operated by the now deceased Greenberg and Hassell. Any wealth Gordon had accumulated had been given to him by the two men. When the defense called upon an insurance man to prove that Gordon was actually a poor man, Dewey demolished his credibility by producing several memos sent to the insurance company that showed Gordon’s heavy investments in several hotels.

The final defense witness was Gordon himself. His testimony proved pathetic: He claimed to be "lured" into the beer business, and "lured" into investing in the hotels by Greenberg and Hassell. When presented with the paperwork for a building loan where he had signed one personal guarantee for $1 million and another for $795,000, his answer was simply that it was "just a favor" for Max Greenberg. Gordon testified that none of the brewery employees worked for him, instead they worked for "Max and Jimmy."

Gordon tried to convince the jury that what he did he did for his family, but he floundered terribly under the young prosecutor’s acute cross-examination. At one point, Dewey’s assistants suggested he close his examination because Gordon, "looking physically sick," would gain sympathy from the jury while under this much pressure.

The case went to the jury on Dec. 1, 1933 at 3:34 p.m. A verdict was reached in just 5l minutes. Back in the courtroom the jury foreman announced, "We find the defendant guilty on the first count, the second count, the third count and the fourth count." The newspapers reported "Gordon’s jaw sagged and his dark eyes (were) fixed in hatred on the men in the jury box as their verdict was pronounced." Seated behind Gordon was his wife Leah, who cried openly as the verdict was read.

The judge fined Gordon a total of $80,000 and sentenced him to 10 years in the federal penitentiary in Atlanta. Judge Frank J. Coleman was so impressed with Dewey’s handling of the case that he told reporters:

"It is my firm conviction that never in this court or any other has such fine work been done for the government. If ever again I hear the criticism that there are no longer enthusiastic and able young men in the government service, I shall refer the speaker to this case."

In addition to his conviction and jail sentence, Gordon suffered a personal tragedy as well. Over the years Gordon had tried to shield his family from his criminal activities. The veil of middle-class respectability that his wife and children lived under was shattered by Gordon’s high-profile trial and conviction. His wife, Leah, the daughter of a rabbi, endured much shame. Gordon’s oldest son, Theodore, was in his first year of pre-med. at the University of North Carolina. Gordon was proud of his son and often boasted about him. His son remained in New York with his mother throughout the trial, but returned to school after the verdict was announced. Gordon’s brother, Nathan Wexler, called Theodore and urged him to return to New York a few days later to plead to the judge and Dewey for a reduction in sentence for his father, and for Gordon to be freed on bail while an appeal was pending. On his way back to New York, Theodore was killed in a car accident on snow and sleet covered roads.

In 1940, Gordon was released from Leavenworth Penitentiary after serving seven years. Upon leaving he declared, "Waxey Gordon is dead. From now on it’s Irving Wexler salesman." He traveled to San Francisco during the summer of 1941. At the time it was reported that he still owed the government $2.5 million in back taxes. When San Francisco police officers found him registered at an expensive hotel, he told them that he had come West to begin anew and was selling a "revolutionary type of cleaning fluid." Although he had over $400 in cash on him, the police arrested him for vagrancy. He posted $10 bail and left town.

If Gordon became a salesman, he wasn’t an honest one. When America began sugar rationing during World War II, Gordon was caught selling 10,000 pounds of it to an illegal distillery. He was convicted and served a year in jail.

Gordon got heavily involved in the drug trade and by 1950 the Narcotics Bureau had a large file on him. In December 1950, the bureau used ex-convict Morris Lipsius to befriend Gordon and set him up for what would be his final arrest. After two successful drug transactions, Gordon was nailed on Aug. 2, 1951 by federal agents for selling heroin. Gordon was not just facing a sentence for heading a narcotics ring that was believed to have international connections, but as a four-time offender to the "Baumes Law." New York of General Sessions Judge Francis L. Valente found Gordon guilty and sentenced on Dec. 13 from 25 years to life. During the sentencing, Valente told the court:

"Since his (Gordon’s) first act of lawlessness forty-six years ago, his contempt for authority manifested by progressively more serious criminality, has been like a malignant cancer, weakening the dignity and good order of the community."

Turning to Gordon the judge lambasted him with:

"You have demonstrated repeatedly that there is no crime or racket to which you would not resort in order to make a dollar. Your latest and most dastardly offense is typical of your hostility, and it should ring down the curtain on your parasitical and lawless life."

Gordon was sent to Sing Sing, but on March 8, 1952, he was transferred to Attica. On April 10, he was charged in another federal indictment for participating in a coast-to-coast heroin racket. A warrant for his arrest was issued in San Francisco and he was transferred to California on May 21 to be arraigned. Gordon pled not guilty to two counts of narcotics trafficking. He was one of 23 people indicted in the nationwide narcotics case. Ten had pleaded guilty, and two were still fugitives. The trial, with the remaining 10 people, was set to begin on Aug. 18. Gordon was being held in the San Francisco County Jail, but was soon transferred to the federal facility on Alcatraz. Gordon, who had been ill for some time, was confined to the prison hospital. On the afternoon of June 24, 1952, Gordon was sitting in a chair speaking to a physician when he suffered a massive heart attack and died.

Assistant U.S. Attorney Joseph Karesh, who announced Gordon’s death, surprised many by stating that Gordon was expected to be a government witness against the other defendants. If Gordon had worked out a deal to reduce his own sentence by this action, the government wasn’t saying.

Allan May's e-mail address is: AllanMay@worldnet.att.net

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