By the mid 1930s, Luciano's national Syndicate had almost complete control over the rackets in New York City. Prostitution had been organized, as had hijacking and extortion, and the unions of New York's garment workers, longshoremen and restaurants were under the control of the gangs.
At the same time, Murder, Inc. was running at full steam. Luciano had sent Bugsy Siegel out west to organize the Los Angeles mob and integrate Jack Dragna's gang into the Syndicate. Lucky appointed Lepke Buchalter as head of Murder, Inc. and named Albert Anastasia as the boss of the Brooklyn boys.
Buchalter had been a member of the Amboy Dukes -- so named because they came from Amboy Street in Brownsville -- and was the dominant player in the mob that ran the city's garment industry. Born LouisBuchalter in 1897, Lepke (Yiddish for "Little Louis") had never known an occupation other than crime.
Lepke's police record stemmed back to 1913, when he was arrested with his partner Gurrah Shapiro for shaking down pushcart operators in Brooklyn. He had served an apprenticeship with Li'l Augie Orgen in the 1920s and helped Li'l Augie gain control of the garment workers unions. In 1926, the bantamweight Lepke decided with the help of Gurrah to push out Orgen and his lieutenant Jack "Legs" Diamond. They succeed in killing Orgen and wounding Legs Diamond, who would eventually be killed by some of Dutch Schultz's gang in 1931.
Lepke was not just an industrial mobster, he had his fingers in other traditional mafia areas, as well. During Prohibition, Lepke was a rumrunner (or rather his gangsters were), and had developed an intricate narcotics smuggling operation, receiving a cool 33 percent of the profits from any drugs brought into the country. Once the drugs were in the U.S., they belonged to Lucky Luciano
As the supreme head of New York's industrial rackets, Lepke needed a stable of gunmen to preserve order. That's where gunsels like Kid Twist, Mendy Weiss, Happy Maione and Buggsy Goldstein came in. Lepke culled his gunmen -- mostly Jewish -- from other mobs. By the time his good friend Lucky Luciano became capo di tutti capo, Lepke had an army of more than 200 of the most vicious killers in the city.
And kill they did.
Lepke's overseas buyer Curly Holtz, who once arranged six quick shipments of morphine and heroin and earned his boss $3 million profit in just 10 days, got greedy. He pocketed part of the buy money on a trip to Europe and tried to cover up the theft by tipping authorities to the shipment. He was caught by his friends and paid for his greed with his life.
Lepke had been one of the early proponents of a national Syndicate to bring "peace" to the rackets, but he was greedy, too. A cartel, he had argued at the summit meeting with Johnny Torrio, would make intergang warfare a thing of the past. But that didn't mean that he didn't covet things belonging to other gangsters.
Thanks in part to the efforts of a an ambitious prosecutor and a precocious New York County grand jury, Judge Lepke (who earned that moniker as a result of his seat on the national Syndicate's tribunal), got his chance to move in on Dutch Schultz's operations.