Nelson Johnson - Boardwalk Empire - The Birth, High Times, and Corruption of Atlantic City

Those nightclubs/casinos, which flourished under Nucky’s reign, were the 500 Club, Paradise Café, Club Harlem, Little Belmont, the Bath and Turf Club, the Cliquot Club, and Babette’s, which was one of the most chic gambling casinos of that era, attracting patrons from around the country. “Only the very best people went to Babette’s. They had the best steaks and mixed drinks in town, and great entertainment. I saw Milton Berle there when he was first startin’ out.”

These nightclubs were nationally advertised and well known, featuring name bands and Broadway or Hollywood stars as entertainers. The owners didn’t care if they turned a profit on the nightclubs; the main reason for having them was to attract business to their gambling casinos. The owners of Atlantic City’s gambling rooms were all underworld figures, most of whom had arrest records and lived a fast life. Many of them used aliases or were known by nicknames: there was William Kanowitz, who was known as “Wallpaper Willie”; Lou Khoury went by “Lou Kid Curry”; Michael Curcio aka “Doc Cootch”; and Martin Michael, known as “Jack Southern.” Had Nucky gone by “Enoch” he would have been considered an oddball.

The most prevalent gambling racket in Atlantic City was the “numbers” game. In a city of 66,000 year-round residents and in a game where the average bets ranged from $.05 to $.10, the enormous volume of play is revealed by the fact that the daily winnings for the number syndicate averaged between $5,000–$6,000, or $1.5 to $2 million per year. The numbers game became so popular there were two plays per day, one for daytime and one for evening. As part of their probe, the agents surveyed nearly 1,500 local retail businesses, interviewing the individual owners. Of these, 830 signed affidavits admitting under oath that their place of business was used to sell numbers. Another 200 to 300 admitted to writing numbers but were afraid to sign affidavits. “If you went to the corner store to buy a quart of milk, you could get your change or play a number. Nearly everybody who had a business wrote numbers.” Nucky had succeeded in making the entire community a partner with the rackets.

By the spring of 1939 the investigation had produced more than 40 indictments. The first indictment of the racketeers was against William Kanowitz and David Fischer, who were horse room operators. Following them were the indictments of the principals of the numbers syndicates. In approximately the same period, charges were filed on the county highway contracts and the city garbage contracts. In all, nearly 30 of Nucky’s lieutenants were awaiting trial. They were continually pressured by the agents and repeatedly called before the federal grand jury in Camden. But there were no cracks in the wall. Rather than testify against Nucky, Atlantic City’s racketeers accepted contempt citations and perjury indictments.

The first tax evasion defendant to go to trial was Austin Clark, a numbers banker. With the exception of the judge having to remove three of Nucky’s strong-arm men who were sitting in seats directly in front of the witnesses, the trial was uneventful. Clark was found guilty and sentenced to three years in jail but still refused to cooperate. The government had hoped Clark’s conviction would cause the other members of the numbers syndicate to reconsider their silence. But the agents had underestimated the resistance of Nucky’s lieutenants.

With the conviction of Austin Clark, Nucky and his people began to obstruct the government in the preparation of its cases. Witnesses for upcoming trials were requested to appear at the FBI’s office on the second floor in the new Post Office Building on Pacific Avenue. Most of them never showed. Those who did were, immediately after meeting with the government’s lawyers, whisked to the offices of the attorneys for the defendants where they were questioned on what they had discussed with the FBI. William Frank was beside himself at the resistance Nucky was putting up. It’s best to let Special Agent Frank speak for himself:It now became perfectly clear the opposition was well-organized. It was not a case of individuals committing perjury, but the perjury was the result of a gigantic conspiracy and must have been planned by lawyers. Every day that the grand jury sat a group of lawyers hung around in the corridor of the Post Office Building ready to step in and defend anyone who was either cited for contempt or indicted. There is no question but that these lawyers were engaged by the organization and were not representing individual defendants. One Bondsman was always present, and always posted bond, no matter who was indicted.

As Frank learned, his battle with Nucky was only beginning.

The Austin Clark verdict was followed by several guilty pleas and convictions of minor defendants, all who refused to cooperate with the government. The first major trial hitting at the core of Nucky’s empire was that of the numbers bankers, totaling 14 defendants. They were charged with conspiracy to commit perjury and income tax evasion in connection with the numbers syndicate.

The government began its case on April 29, 1940, with high hopes of convicting all 14 defendants. In addition to the testimony of the agents, the prosecution was forced to use as witnesses employees of the defendants. These witnesses didn’t know enough to incriminate Nucky and weren’t making enough money to risk imprisonment. They gave the government the same statements they made to the grand jury; nevertheless, on cross-examination by the defense they answered “yes” to any leading question put to them. This destroyed the value of their testimony and the government had to rely on telephone records and statements made by the defendants to prove its case. But the jury wasn’t convinced, and after two days of deliberating the court declared a hopeless stalemate. William Frank and his agents weren’t about to quit and requested the U.S. Attorney’s office to move for a re-trial, which was scheduled in July.

Several weeks after the first trial, the judge who heard the case received a letter informing him one of the defense lawyers had bribed several jurors. While the agents were unable to prove a bribe had actually been paid, they later obtained convictions against several of the defendants and one of their lawyers for jury tampering. The lawyer was Isadore Worth, a former Assistant U.S. Attorney. Worth was convicted and disbarred the following year.

A second trial on conspiracy charges against the same 14 numbers bankers began on July 8, 1940. The government’s case went in much stronger than the first time and the prosecutors were certain of a conviction. Despite the prosecutors’ confidence, the defendants didn’t appear the least bit concerned. This time only two of them took the stand in their defense. Their lawyers put up little resistance, almost as if they were conceding the case. The agents, prosecutors, and judge were baffled when the jury returned a verdict of not guilty.

William Frank feared his investigation was at an end and knew Nucky Johnson was behind the acquittal. Judge Biggs, who heard the trial, was troubled by the jury’s verdict and urged Frank to have his agents question the jurors. The result was startling. One of the jurors, Joseph Furhman, was a plant, some think, by friends of Nucky’s in the Federal Clerk’s office. He was personally acquainted with two of the defense lawyers, Carl Kisselman and Scott Cherchesky. Furhman’s brother was an attorney associated with Kisselman. It was common for Kisselman and Cherchesky to meet Furhman socially for lunch and to shoot pool together at the Walt Whitman Hotel in Camden. Neither Kisselman nor Cherchesky advised the court of their relationship with Furhman at the time the jury was selected.

Upon questioning the jurors, William Frank learned the prosecution never had a chance. From the first day of trial, Furhman ridiculed the government’s case to the jurors and mocked the judge and the prosecuting attorneys. When the deliberations began, the ballot was eight to four for conviction; however, Furhman was a strong personality and badgered the other eight jurors until he succeeded in getting them all to change their votes. The defendants were tried again—on the substantive crimes as opposed to conspiracy—in March 1941, but only after the panel of jurors had been carefully screened and lectured to by the court. This time there was a conviction.