- Historic Sites
One man invented the modern narcotics industry
February/march 1993 | Volume 44, Issue 1
But his loss was well compensated for by the incredible windfall of his meticulous files, especially those of the Rothmere Mortgage Corporation, the front for his narcotics business. One month after Rothstein’s death federal agents in New York, Buffalo, and Chicago seized four suspects and three steamer trunks filled with drugs said to be worth more than three million dollars. “This is the single biggest raid on a narcotic ring in the history of this country,” declared U.S. Attorney Charles H. Tuttle, inaugurating the hyperbolic style of assessing drug raids that has continued to this day.
In March Tuttle’s office said that “a casual study of some of the [Rothstein] account books indicated that receipts of from six to seven thousand dollars were received daily by the syndicate leaders in their headquarters in this city.”
Another rare glimpse of the Rothstein modus operandi came three years after his murder, when the New York trafficker “Ike” Berman—disgusted by an undercover agent’s reluctance to make a ten-kilo purchase of heroin—burst out, “Do you know who I used to do business with? Arnold Rothstein, Jack Diamond and Oscar and Sam Weiner…we used to bring back a million dollars’ worth of junk from Merck’s factory in Berlin.”
Meanwhile, to no one’s surprise, the Rothstein case dragged on unsolved. The police were patently unwilling to touch it, and a small-time gambler and hoodlum finally railroaded for the murder was acquitted. Chroniclers of the underworld ultimately concluded that Edward T. (“Legs”) Diamond, a member of the Rothstein syndicate, was responsible for the slaying, the aftermath of a double-cross over a drug deal.
Other gangsters moved in to take over the trade, and the basic monopolistic system Rothstein had established survived for decades, run by generations of powerful New York mobsters. It is no coincidence that Charles (“Lucky”) Luciano, a Rothstein employee in the twenties, would dominate the postwar heroin trade until his death in 1962. Rothstein’s system remained intact until the Colombian cartels brought cocaine and chaos to the markets in the 1970s.