Feature Articles

October 2001

The Greenbaum Murder

By John William Tuohy

     After the Outfit whacked Bugsy Siegel, the Flamingo's next manager was Gus Greenbaum, who started in the rackets with Al Capone and who handled the wire service out West for the Chicago outfit.

     Greenbaum was a master of the skim, the money stolen from the casino winnings before it could be taxed, and unlike Siegel, Greenbaum was a professional, he was a man who could be trusted and depended upon.

     Greenbaum did his job. The hotel was completed and enlarged from 97 to two hundred rooms. By the end of the year the casino posted a $4 million dollar profit, $15 million before the skim, clearing the way for the skimming to begin.

     With that kind of cash flooding into the mob's offshore accounts, all of the mob families moved in to grab a piece of Las Vegas, but it was the Chicago outfit that built Vegas and they did it with the cash, tens upon tens of millions of dollars, they took from the Teamsters Central Pension Funds.

     The outfit had sent Greenbaum west to Phoenix, Arizona in 1928 to manage the Southwest division of its wire service, Trans-American.

     In the early forties, he was moved to Vegas where he took over the Flamingo after the Bugsy Siegel murder, and put the place in the black within the first six months of his management.

     By 1950, Greenbaum was widely recognized as the driving force behind the success of the $50 million Tropicana as well as being known and respected in the underworld as a reliable source of information on Las Vegas real estate.

     Like Willie Bioff, Greenbaum lived in Arizona, part time, and was close to Barry Goldwater, then a Phoenix Arizona Councilman. In fact, Goldwater's family operated a branch of Goldwater's Department store inside the Desert Inn, which was the excuse Goldwater used for visiting Vegas so often.

     After his phenomenal success at the Flamingo and the Tropicana, Greenbaum was called in to put the Riviera Casino in the black after the place lost five million dollars for its original investors.

     Greenbaum didn't want the job, but Tony Accardo and Jake Guzak, the Chicago mob's money manager and technically, Greenbaum's boss, personally flew out to Phoenix to try to persuade him to take the position at the Riviera.

     Greenbaum heard them out, but turned the job down, because, he told them the strain of correcting the outfit's stupid mistakes was starting to take its effects on him. After seven years on the hot seat, he had enough. He was tired, he was rich and he wanted to retire away from Vegas to Phoenix.

     Accardo and Guzak said they understood and returned to Chicago.

     A week later, Greenbaum's sister-in-law was found murdered in her bedroom. The message was received. Greenbaum moved back to Vegas to run the Riviera for a 27% interest in the place. This time he lasted only three years.

     In 1958 Johnny Roselli, who was close to Greenbaum, was told by Paul Ricca and Accardo to order Greenbaum to step down. He was addicted to heroin, drunk when he wasn't high, running around with women half his age who stole from him, and was deeply in debt from gambling at the tables, losing up to $20,000 a week.

     Worst of all, he was skimming from the joint, "Beyond," said Johnny Roselli, "what Mooney (Giancana) and the guys back in Chicago considered reasonable."

     Roselli went out to Vegas and gave Greenbaum the order, he was to sell his share in the Riviera to one of the outfit's front men and leave town. Do that, he could live. All past transgressions forgiven.

     But Greenbaum refused. "This town is in my blood, Johnny," he told Roselli and went right back to stealing from the skim.

     Then Marshal Caifano, Chicago's enforcer in Vegas, was sent in to handle the problem.

     On December 3, 1958, the police found Greenbaum dead in bed, his throat was cut so completely, that his head was almost falling off.

     Down the hall, in a different bedroom, they found Greenbaum's wife's throat cut as well. She had been knocked out with a heavy bottle which caved in the right side of her eye. Newspapers were piled around her to keep the blood from staining the carpet.

     The Chicago outfit, which, by mob standards anyway, normally showed a loyalty to those who served it, would have let Greenbaum's sins go. After all, he had made them a fortune, but Meyer Lansky had a piece of the Riviera and pushed for Greenbaum's demise.

     "That was Meyer's contract," Johnny Roselli said years later.

Mr. Tuohy can be reached at

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