Charming, aristocratic and worldly were all words that were used
to describe Nicky Arnstein. Married to the popular singer and
comedienne Fanny Brice, Arnstein was on top of the world in 1920 –
but things were about to change.
Beginning in 1918 a series of robberies occurred involving Wall
Street security houses. There was a basic pattern to the robberies.
A messenger on his way to a bank or brokerage house, carrying as
much as several thousand dollars in securities, mostly Liberty
Bonds, would be stopped, sometimes beaten, and relieved of the
negotiables. Despite the frequency of the crimes no precautions were
made by the security houses to provide protection to the messengers.
The losers were not the security houses that deployed the
messengers, but rather the bonding companies that provided insurance
to the brokers. While police seemed helpless in rounding up the
thieves, the monetary value of the stolen securities by early 1920
was estimated at $5 million dollars. The police determined that a
“mastermind” was at work.
On February 6, 1920 the police broke the gang when they
apprehended seven men after $2,500 was stolen from another
messenger. One of the men arrested, Joseph Gluck, after spending ten
days in jail, felt he had been double-crossed, having been led to
believe his bail money and lawyer would be provided by his
“employer”. Angered by this turn of events, Gluck spilled out
the details of the robberies to the authorities. The information
revealed that many of the victimized messenger boys were actually
involved in the robberies.
Gluck insisted that he knew his employer only as “Mr.
Arnold.” Detectives flew into a frenzy surmising they had finally
obtained information to put away the nefarious Arnold Rothstein.
Their excitement was short-lived when Gluck could not identify
Rothstein from a photograph. After giving a physical description of
Mr. Arnold, detectives provided Gluck with a number of pictures from
which he picked out Nicky Arnstein, who had often used the name
“Jules Arnold” as an alias.
Detectives who were friendly to Rothstein informed the gambler of
Gluck’s cooperation. Rothstein contacted Arnstein and advised him
to leave town immediately. Arnstein fled to Ohio to hide out. A
nationwide manhunt was begun for Arnstein, which, spurred by his
marriage to Brice, filled the front pages of newspapers across the
country. Meanwhile, as details of Gluck’s confession leaked out
regarding Arnstein’s role as the “mastermind” of the
robberies, Fannie Brice was quoted, “Mastermind! Nicky couldn’t
mastermind an electric bulb into a socket.”
While Arnstein was in hiding Rothstein was preparing for his
defense and fending off allegations that he was behind the
robberies. Rothstein hired the legal team of William J. Fallon and
Eugene McGee to handle the case. In a move that was indicative of
Rothstein’s influence, he was able to establish a bail amount
before he negotiated Arnstein’s surrender. Arnstein returned and
gave up on his own terms, amusing himself by riding with Brice and
Fallon down Fifth Avenue in New York’s annual police parade.
Rothstein’s generosity was not solely out of friendship.
Carolyn later revealed that her husband told her, “They’re not
after Nicky, they’re after me. A lot of people would like to tie
me into this and some of them think they can get Arnstein to say
something that would lead them to me.” Rothstein was correct in
his thinking; however, Arnstein never revealed a thing. Despite
promises of leniency, Arnstein always maintained his innocence.
Fallon successfully argued for the case to be tried in Washington
DC as a federal crime punishable with a two year sentence, as
opposed to a New York State offense in which Arnstein could face up
to twenty-five years. The first trial resulted in a hung jury at
which Arnstein did not testify. Before the second trial, Fallon ran
off with a woman leaving McGee to handle the defense. McGee failed
and Arnstein was convicted and sent to Leavenworth.
Throughout the remainder of Arnstein’s life he maintained he
never knew the reason why Rothstein had helped him. There is much
doubt that Arnstein was truly guilty and that Rothstein was involved
in the actual thefts. However, no one doubted that Rothstein was the
only man in New York who could have fenced the stolen bonds.
|