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Season 1, Episode 3

King of New York

"Lucky" Luciano takes over the New York mob.

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After ordering the assassination of the city's two most powerful mob bosses, Joe Masseria and Salvatore Maranzano, 34-year-old Charles "Lucky" Luciano is poised to seize control of the New York mafia.

Luciano's first move is to send out an army of hitmen to purge the remainder of the criminal underworld's old regime, resulting in the murders of more than 40 men nationwide over the course of two days. Luciano also calls a meeting with Maranzano's former underboss, Joe Bonanno, and offers him a position as head of his own crime family, eliminating Luciano's remaining New York competition. But Luciano has even bigger ambitions.

In September of 1931, Luciano convenes a Chicago meeting of the major crime bosses from around the country. He calls for an end to the endless cycles of bloodshed and revenge, and sets up an organizational structure mirroring that of Sicilian crime families. Each individual family will have a boss and underboss, and the position of capo di tutti capi ("boss of bosses") will be replaced with a board of directors called the Commission. The Commission will consist of the heads of the five New York Families — Giuseppe Profaci, Vincent Mangano, Tommy Gagliano, Joseph Bonanno, and Luciano himself — and have final say in all matters, including life and death.

Next, Luciano sets up an enforcement arm to carry out Commission-ordered hits. To prevent ties to the all-Italian Commission, he assigns Meyer Lansky to recruit an elite group of Jewish hitmen. The resulting hit squad includes notorious killers Benjamin "Bugsy" Siegel, Albert Anastasia, Abe "Kid Twist" Reles, and Louis Lepke. Soon dubbed "Murder, Inc. " by the press, the hit squad goes on to become the deadliest team of hitmen in American history, leaving hundreds of unsolved murders in their wake.

Jewish gangster Dutch Schultz becomes one of Luciano's biggest earners, overseeing numbers rackets, restaurant unions, and election fixing. Schultz soon attracts the attention of Thomas Dewey, an assistant U.S. Attorney who will go on to become governor of New York and a presidential candidate — as well as the mob's number one enemy. Dewey's inability to arrest Schultz begins making national headlines, eventually forcing FBI Director J. Edgar Hoover to name Schultz "public enemy number one. "

Luciano instructs Schultz to turn himself in, in order to take some of the heat off the mob, and Schultz agrees in return for a guarantee from Luciano that he'll do everything possible to help Schultz beat the rap. Luciano hires lawyers who successfully petition for Schultz's trial to be moved 400 miles north to the small town of Malone, New York, where Schultz can use his money and charm to influence the outcome of the trial.

When the trial ends, the jury is unable to reach a verdict, and Schultz goes free. However, just six weeks later, Dewey pins Schultz as the leader of New York's largest illegal gambling ring and issues another warrant for his arrest, sending Schultz into hiding.

Schultz appeals to the Commission to order a hit on Dewey, but the idea is firmly shut down by Luciano. Schultz goes behind the Commission's back and tries to hire Albert Anastasia of Murder, Inc. to murder Dewey for him. Anastasia tips off Luciano, and a hit is indeed ordered by the Commission — on Schultz.

With Schultz gone, Luciano has eliminated the mafia's biggest threat from within, while at the same time putting himself at the top of Thomas Dewey's most wanted list.