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Feature Articles


June 2007

People v. good people:
The Luciano Trial Revisited

By Ellen Poulsen


Ellen Poulsen is a senior court reporting student and author of The Case Against Lucky Luciano: New York’s Most Sensational Vice Trial and Don’t Call Us Molls: Women of the John Dillinger Gang. Check out her website at www.lucianotrial1936.com

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     The 1936 trial of Lucky Luciano was either a landmark case or a kangaroo court. Historians have argued about which interpretation to apply, and in the process have remained deadlocked. Throughout seven decades since the verdict went up in smoke from the rooftops of Centre Street, sent into history amid morbid screams and vile profanities, Luciano’s fate has been a matter of debate. Since that time, no one has been able to reverse the conviction and declare Luciano’s innocence. The exception, of course, is the Last Testament, allegedly dictated by Luciano himself, where he reiterated his plea of not guilty.

     The hallmark of this case is Thomas E. Dewey, who has served as a voodoo doll of judicial misdeed. The Special Prosecutor was a rising star whose destiny was the New York State Governor’s mansion, and who would later attempt two unsuccessful presidential bids. Yet Dewey was not a despot, nor was he "a David in khaki shorts out to slay Goliath," as described by defense counsel Lorenzo Carlino in his summation at the trial. Rather than standing alone, Dewey was part of a collusion of state officials from the police commissioner to the governor. All played a role in the strategy that would work hand-in-hand with culpability in the courtroom – a trinity of injustice involving gullible jurors, witnesses lacking creditability, and a biased judge.

     The trial had progressed from its embryonic start as a grand jury investigation which built upon wiretapping and voice attribution. In this phase, Dewey played no role whatsoever. Detectives under the command of Acting Inspector John A. Lyons, and Inspector Daniel J. McAuliffe examined wiretaps that had been made as early as 1931. With these wiretaps predating the appointment of Lewis J. Valentine, the police commissioner under whose command the last stages of pretrial discovery took place, it was a two-tiered investigation. The first layer of discovery dated as far back as Seabury’s New York City Investigation of 1931-32. While not a speck in his mother’s eye during Seabury, Dewey was nonetheless starting out, stepping into place as assistant to Federal Prosecutor George Medalie for the Southern District of New York. In that capacity, he piggybacked cases from Judge Seabury’s case load.

     The police conducted their investigation with wiretaps and voice attribution offered by Jennie the Factory, a madam who hated cops yet helped them when it worked to her advantage.

     The object of the police investigation was a racket called the "prostitution bonding combination." It had evolved in the Women’s Court, where bondsmen had always taken payoffs from madams through agents known as "bookers." In the case of a prostitution arrest, the charges would "lay down," or be dismissed before the corrupt magistrates. But in 1933 this system, which had worked well for the madams because they only paid a small percentage, was the subject of a takeover. After that, madams and bookers were forced to accept a middle-man who demanded inflated prices for the same protection they’d received under the old system. Madams and bookers who refused to "bond" were beaten, shot at with sniper bullets, or run out of town.

     With the evidence before the grand jury, all roads led to Little Italy’s Mott Street Mob, who dealt drugs and cash loans to prostitutes. Two members, in particular, interested Dewey’s team. They were Thomas "Tommy the Bull" Pennochio and David "Little David" Betillo. The leaders of the Mott Street mob, they were considered to be associates of Charles "Lucky" Luciano. (Note that Luciano’s real name, Salvatore Luciana, was not used in the trial caption as his alleged crimes were not committed under his given name.) The DAs office had information connecting these men to Luciano through investigations into the activities of Albert Marinelli, the Tammany Hall alderman who brought them to his table.

     Thus, the grand jury testimony implicated the Mott Street Mob. Its main shortfall – and a major one – was its total inability to link the prostitution bonding combination to Luciano. The lack of pre-trial discovery was filled in with paltry exhibits such as mug shots of Luciano, prior arrest records and biographical information which included telephone records from his room at the Waldorf Astoria hotel. In a move to make a case, the DAs drew upon the wrath of the combination madams and their girls, who had a list of grievances longer than a snake. The DAs played a game of connect-the-dots by asking each madam to testify against the combination member who had hurt her the most. In that way, madam Joan Martin testified that enforcer Jimmy Fredericks had blackjacked her and shaken her down. Prostitute Thelma Jordan declared under oath that Ralph "the Pimp" Liquori had threatened her with strangulation. Mildred Balitzer, wife of booker Pete Harris, nursed an old grudge against Luciano for having put out a contract on her lover in the 1920s. To the grand jury, and in the subsequent trial, she implicated "Charlie Lucky" as being the head of the bonding combination.

     During these grand jury hearings of 1935, some of the prostitutes were deemed too risky to appear as witnesses on the witness stand. Peggy Wild was an example – she was an old-time blackmailer. Even the jurors who swore they would believe a prostitute, were thought to doubt the credibility of a blackmailing madam.

The jury was a blue ribbon panel because all were experienced jurors. Their job in the Luciano trial was dangerous. One juror was approached by Luciano’s people and offered a deal – which he bravely turned down. But the fear of mob vengeance raged like an undertow, pulling the jury of 12 men and two alternates, in tormented directions.

     They were directed to the verdict by Judge Philip McCook, who revealed his bias and prejudice for the State of New York like a flasher opening a raincoat. New York State jurisprudence requires a presiding judge to state his objectivity to the jury. Judge McCook’s jury charge did the opposite by asking the men to consider the large amount of money this trial had cost the State of New York. His inference directly linked acquittal to the disaster of a fiscal loss to paying taxpayers. During the Depression, this argument was worth its weight in gold. So prejudicial was this statement that defense counsel Caesar Barra, in his summation, advised the jury that it was "not up to you to justify the spending of a huge sum of money on this investigation."

     Judge McCook allowed the admission of hearsay evidence. In doing so, he ignored the judicial mandate forbidding second-hand statements as proof of the information contained in the statement. Among the many motions made by the defense counsel, a Motion to Disqualify a Judge would have been futile, albeit justified on the basis that Justice McCook was not fair and impartial.

      In considering the evidence, the jurors applied the charge that "the law makes no distinction between the weight to be given to either direct evidence or circumstantial evidence." The testimony provided by the prostitutes and madams, bookers, convicted felons and a few private citizens amounted to a series of facts in dispute. The law has always demanded that there must be positive proof of some of the facts. The Luciano conviction occurred because the jury believed testimony lacking in proof. In spite of the absence of exhibits such as photographs and documents, the jury believed that there was a reasonable inference of their existence.

     The evidence against the co-defendants was strong enough to convict each on charges of loan sharking of prostitutes, and the extortion of the madams.

Historians have written the witnesses off as perjurers, going on the premise that there was no direct evidence to link Luciano to the prostitution bonding combination. But evidence did exist to link members of the combination to Luciano through Al Marinelli’s direct involvement with Betillo, Pennochio, and Ralph Liquori. The mob-backed political support of the 1933 prostitution takeover convinced the jury beyond a reasonable doubt, that Luciano was the money lender behind the operation.

      Al Marinelli, the downtown District Leader and intimate of Frank Costello, Joey Adonis and Luciano, was a link that Dewey connected to the mobsters of the bonding combination. Bookers Pete Harris and David Marcus, who testified for the state, were instrumental in connecting the Mott Street Mob with Tammany Hall. They insisted that Little Davie Betillo and Tommy the Bull Pennochio, along with loan shark Benny Spiller, booker Jack Eller, and bondsman Jesse Jacobs, were guests of Al Marinelli at his hangout at 98 Kenmare Street. They said that Marinelli gave Pennochio, who dated back to the curbside liquor exchange of the early 1920s, political protection in the drug rackets; and with Luciano, backed loan sharks "Cut Rate Gus" Koenig and Benjamin "Benny" Spiller. The shylocks loaned money to the prostitutes at the standard vigs of a dollar on every five. In this way, the prostitutes were indebted to the bonding combination with no hope of ever getting out.

     Arrest records also connected Ralph "the Pimp" Liquori to Marinelli. Based on information provided by Peggy Wild and Thelma Jordan, and corroborated with police records, the DA discovered that Wild, with the help of Inspector McDermott, had set Liquori up. During the arrest, 68th Street Precinct detectives wrestled Liquori to the ground. During the scuffle, Ligori’s partner, Johnny Roberts, was shot. In the stationhouse, Wild related the arrival of Al Marinelli, who told Liquori he would "break the coppers involved." Thelma Jordan, who was seeing Johnny Roberts at the time and concurred, added that Little Davie, Tommy the Bull, and booker Jerry Bruno hung out with Marinelli in the Godolfo Napoli Restaurant at 380 Broome Street.

     When the trial commenced, the co-defendants appeared to be hardened criminals. With the exception of Betillo and Pennochio, they were small fry. As charismatic as Luciano appeared to be, his presence among his nine co-defendants rendered him a low-life by association. Luciano’s place as a mere co-defendant was the result of the manipulative Joinder Law, rushed through the New York Legislature with the approval of Governor Lehman one month prior to the trial’s commencement. The Joinder law, which some have called a precursor to RICO, was approved in April 1936 and coincided with Luciano’s arrest in Hot Springs. The Joinder Law allowed the consolidation of defendants to be tried under one indictment. So Luciano, rather than stand alone, would be linked with enforcement thugs Jimmy Fredericks, and Abie Wahrman, as well as Pennochio, Betillo, and Liquori.

     Defendants Benny Spiller, and bondsmen Jesse Jacobs and Meyer Berkman, both Women’s Court bondsmen, were offered a deal at sentencing in exchange for help with the industrial rackets investigations. Booker Jack Eller would change his plea to guilty during the trial. None of the other bookers went in as defendants; all had agreed to testify for the state before commencement of the trial.

     The co-defendants went in as equals and were sentenced as equals; all were found guilty. In this case, the verdict for Luciano and all of his co-defendants was the result of a jury that believed the witness testimony lacking in reasonable inference of proof.

It is ironic that the guilty verdict would render Luciano as Dewey’s victim, a misnomer that would forever bequeath the mob boss with a lingering, disquieting, presumption of innocence.

© 2007


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