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Fun on Friday: Is There Mobster Gold in Them Thar Hills?

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How about a treasure hunt?

I’ve got one for you.

Word has it, there is mobster gold buried somewhere in the Catskills.

How did the gold get there?

Legend has it, a now-deceased mobster buried it there as an insurance policy.

Dutch Schultz had a reputation as a top bootlegger during Prohibition, a savvy racketeer, and he may have been the first mobster to extort New York’s labor unions – this according to Sullivan County historian John Conway who wrote a 2,000-page book titled  “Dutch Schultz and his Lost Catskills’ Treasure.”

So, about that treasure.

In 1931, various criminal syndicates formed “the Commission” to coalesce various Mafia gangs under one governing body. According to Conway, “It was a time of no more independent operators doing things the way they wanted.”

Apparently, Dutch was more of a “do what I want” kind of guy and quickly made enemies of fellow gangsters. He also had a big mouth. That combination also elevated him to the position of Public Enemy No. 1 by J. Edgar Hoover in 1933 after the fall of Chicago’s Al Capone.

That put him on the radar of prosecutor Thomas E. Dewey. He tried to nail Dutch twice on tax charges, but he failed both times. As you might imagine, Dutch wasn’t pleased with this Fed coming after him and decided the only logical solution was to send Dewey off the swim with the fishies. But according to Conway, The Commission balked when Schultz proposed murdering such a prominent figure.

Ultimately, the syndicate decided Dutch was too much of a loose cannon and ordered his murder. According to the Times Union, Schultz was gunned down in Newark’s Palace Chop House tavern on Oct. 23, 1935, along with three other associates.

And that’s where the treasure hunt begins.

Dutch lived for about 24 hours suffering fatal wounds. During that time, he launched into a stream of consciousness, rambling somewhat incoherently. And the cops were there taking down every word.

For instance, Schultz informed us, “A boy has never wept … nor dashed a thousand kin.”

Indeed. I mean, where’s the lie.

During his oratory, Schultz mentioned the buried treasure, supposedly located in Phoenicia.

As the tale is told, the treasure was buried in a steel lockbox or suitcase and consisted of gold coins, jewelry and paper money. In 1935, the stash was estimated to be worth between $5 million and $9 million. That would be about $50 to $100 million today, depending on the mix of cash to gold. Hopefully, it’s more gold and less rapidly devaluing fiat currency.

Why Phoenicia? Well, in his delirium, Shultz said, “Don’t let Satan draw you too fast.” This could be a coded reference to the town. According to the Times Union, Phoenicia features several landmarks that reference the devil, including the large boulder called Devil’s Tombstone and an outcropping known as Devil’s Face.

It’s not completely far-fetched. Schultz knew the area well because he ran bootlegging operations in the Catskills.

People have been hunting for the treasure for decades, but it hasn’t turned up. Heck, it may not even be out there. It could be that people are just chasing the ramblings of a dying man. Conway doesn’t think there is any buried treasure. “These were city men, not (digging a hole) up there in hiking gear.”

Who knows?

But I do know this – people want gold. And if there’s a chance of finding it out there, people will continue to give it the old college try!

Fun on Friday is a weekly SchiffGold feature. I dig up some of the off-the-wall and off-beat stories relating to precious metals (however loosely) and share them with you – with tongue firmly planted in cheek. The opinions expressed are my own. They are 100% correct – but not necessarily shared by anybody else here – including Peter Schiff. Click here to read other posts in this series.

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About The Author

Michael Maharrey is the managing editor of the SchiffGold blog, and the host of the Friday Gold Wrap Podcast and It's Your Dime interview series.
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