Murder Inc. and Meyer Lansky: The Gangsters Who Built Las Vegas

Jewish-American organized crime produced two of the most consequential criminal enterprises in American history, and both were built from inside the national syndicate rather than alongside it. Murder Inc. was the enforcement arm of the national organized crime syndicate, a for-hire killing operation that executed an estimated 500 murders between the early 1930s and its dismantling in 1940.^1^ Meyer Lansky was the financial architect of Las Vegas, the man who figured out how to launder casino revenue on an industrial scale and who managed criminal money from the Flamingo Hotel to Havana to the Bahamas and back. These were not adjacent stories. Lansky helped finance Murder Inc.’s operations and spent the rest of his career managing the money that organized crime generated by other means.

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Murder Inc. Was Organized Crime’s Killing Contractor

Murder Inc. — the name was a tabloid invention, not the organization’s own — was established in the early 1930s as the enforcement arm of the national crime syndicate that Lucky Luciano and Meyer Lansky had assembled. The operating principle was compartmentalization: killings ordered by syndicate leadership would be carried out by men who had no personal connection to the target or the ordering party, making prosecution through witness testimony nearly impossible.^1^

The organizational center was Louis “Lepke” Buchalter, a Brooklyn labor racketeer who controlled extortion operations in the garment, trucking, and bakery industries. Buchalter’s crew, based in the Brownsville and East New York neighborhoods of Brooklyn, provided the operational capacity: a pool of killers available on contract who received cash payments for completed assignments. The primary killers included Harry “Pittsburgh Phil” Strauss — believed to have committed over thirty murders — and Martin “Bugsy” Goldstein, Abe “Kid Twist” Reles, and Mendy Weiss.

Between 1931 and 1940, Murder Inc. executed an estimated 500 killings nationwide, including in New York, New Jersey, and across the country for clients who were members of the national syndicate.^1^ The exact number is uncertain because the operation was specifically designed to leave no traceable connection between the order and the execution.

The operation collapsed when Abe Reles, arrested on a murder charge in November 1940, decided to become a government cooperating witness. His testimony to Brooklyn District Attorney William O’Dwyer was extensive enough to produce the conviction and execution of Louis Buchalter — executed in the electric chair at Sing Sing Prison on March 4, 1944, making him the only major organized crime leader in American history to be executed by the state.^1^ Reles himself died on November 12, 1941, falling from his sixth-floor room at the Half Moon Hotel in Coney Island while in police protective custody. Whether he was pushed or jumped has never been established. He was the only witness who could have convicted Albert Anastasia, who was never prosecuted for his role.

Lansky Built the Financial Architecture That Made Organized Crime Permanent

Meyer Lansky was born Maier Suchowljansky in Grodno, Russia (now Belarus) in 1902 and immigrated to New York’s Lower East Side in 1911. He met Bugsy Siegel in the neighborhood and formed the partnership that would last until Siegel’s murder in 1947 — Siegel handling the operational violence, Lansky handling the money. Lansky’s skill was financial: he understood, earlier than most in organized crime, that money could multiply itself through investment and that the difference between criminal revenue and legitimate money could be erased through sufficiently sophisticated laundering. His early contribution to the national syndicate was building the infrastructure that allowed gambling revenue from multiple sources to be aggregated, cleansed, and reinvested.^1^

His relationship with Lucky Luciano was central. Luciano provided the political and organizational structure of the national syndicate; Lansky provided the financial management. When the Cuban casinos that Lansky had built in partnership with the Batista government were nationalized following Castro’s 1959 revolution, costing the syndicate an estimated $17 million in casino equipment alone, Lansky adapted to the Bahamas as an alternative offshore financial center.

The Flamingo Established the Las Vegas Criminal Finance Model

Bugsy Siegel’s Flamingo Hotel in Las Vegas — opened on December 26, 1946, on a stretch of highway south of the city that would become the Strip — was financed by the national syndicate under Lansky’s management. The construction cost overruns that eventually totaled approximately $6 million, against an original budget of $1.5 million, were at least partly the result of contractor fraud that Siegel either didn’t control or participated in. The syndicate’s patience for the overruns expired before the hotel was profitable.^1^

Siegel was murdered on June 20, 1947, shot through the window of Virginia Hill’s Los Angeles living room with a .30 caliber military carbine. The Flamingo eventually became profitable under new management, and the Las Vegas model Siegel and Lansky had established — the resort casino funded by syndicate capital and generating skim revenue for the national organization — became the dominant organized crime financial structure for the next three decades. Lansky’s management of the skim from multiple Las Vegas properties, combined with his Bahamian casino operations and his investment strategies in Swiss banking, established him as the financial brain of American organized crime. The Kansas City mob’s role as Las Vegas skim coordinator and the Chicago Outfit’s Teamsters pension fund financing were both downstream of the model Lansky built.

Did Israel Refuse to Take Lansky?

By the late 1960s, federal investigations were closing in. Lansky fled to Israel in July 1970, attempting to invoke the Law of Return — which grants Israeli citizenship to any Jewish person — to avoid American prosecution. The Israeli government, after prolonged legal proceedings in which Lansky argued he was a Jewish refugee from American persecution, rejected his application and expelled him in November 1972. He returned to the United States and was indicted on tax evasion charges that resulted in acquittal in 1974.^1^

He died on January 15, 1983, in Miami Beach, at age eighty. The FBI, which had investigated him for over twenty years and estimated his personal fortune at $300 million at various points, concluded upon his death that his estate was worth approximately $2 million. Either the FBI’s estimates were wrong or Lansky had hidden the rest more effectively than anyone could document. Given his profession, both are possible.

The financial infrastructure he built — offshore accounts, casino skimming operations, labor union pension fund corruption — became the template for organized crime money management that influenced criminal finance globally in the decades after his death.

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Sources:

1. Lacey, Robert. Little Man: Meyer Lansky and the Gangster Life. Little, Brown, 1991.
2. Turkus, Burton B., and Sid Feder. Murder, Inc.: The Story of the Syndicate. Farrar, Straus and Young, 1951.
3. Eisenberg, Dennis, Uri Dan, and Eli Landau. Meyer Lansky: Mogul of the Mob. Paddington Press, 1979.
4. Hammer, Richard. Playboy’s Illustrated History of Organized Crime. Playboy Press, 1975.