Las Vegas & Organized Crime Part I

LAS VEGAS & ORGANIZED CRIME
—A TALE OF BLOOD & MONEY

PART I

In our two-part serialization of Las Vegas, we explore the rich and wild history of the original Sin City, and its ties to organized crime. Leave the gun, take the cannoli.

LAS VEGAS BEFORE ORGANIZED CRIME

Advertised as the Entertainment Capital of the World, Las Vegas has a long history going back thousands of years. Long before the desert landscape within Clark County was renowned for entertainment, gambling, fine dining and nightlife, it was wet marshland filled with rich vegetation and wildlife. The first inhabitants were the Nomadic Paleo-Indians, but the Pueblo and Paiute peoples soon followed, migrating between seasonal camps in the mountains and valley.

Over the years, as the waters receded, disappearing from the landscape and leaving only desert in its wake, many others would come to call the region home. The Spanish arrived in 1829, then American explorers and Mormons, but none survived for long in the harsh climate. Then everything changed, when William A. Clark, a U.S. Senator and mining magnate from Montana, recognized the region's potential.

By the late 1890s, railroad developers had already started looking at Las Vegas to serve as a stop along the San Pedro, Salt Lake City and Los Angles route, but Clark was the one who would make the idea a reality. Clark purchased large tracts of land in the valley, secured the springs' water rights, and arranged for a railroad depot to be built.

He also used his political and economic clout throughout the whole process by openly bribing legislators to secure favours for the railroad. The fruits of his labours saw the railroad completed in 1905; stores, saloons and boarding houses quickly followed. At this time, the town was mostly occupied by railroad workers and ranchers, but their appetites for gaming, prostitutes and drinking saw many speakeasies and bootleg casinos arise. These 'off the books' establishments were the precursors to the thriving industry in Vegas today.

Gambling was outlawed in most of the United States in 1910, but the industry in Las Vegas didn't slow down, if anything it actually grew more because of the ban. It would take a few more years, but this would set the stage for organized crime to get their tendrils into the foundations of Las Vegas, setting off a bloody reign that saw several different groups control the entire city and all its vices.

THE RISE OF ORGANIZED CRIME IN LAS VEGAS
—THE MAN WHO WOULD BE KING

Many years before Bugsy Siegel and Meyer Lansky took over The Flamingo Hotel Casino, ushering in a new era of prosperity for organized crime in Las Vegas, there was a man by the name of James 'Jim' Ferguson. Unlike Siegel and Lansky, Jim Ferguson had no ties to the American Mafia, but he would be a key figure in laying the foundations for organized crime in the city.

Ferguson was by no means the first to bring crime and corruption to the fledgling town in the desert, but he was the first to establish a criminal empire that controlled it all; the first true crime kingpin in Las Vegas. During his reign, like his many successors, he left a trail of destruction; nothing was off the table. Violence, political corruption, robbery, burglary and bootlegging, the man who would gain the moniker 'King of the Tenderloin', allegedly did it all.

The man who would be king didn't initially set out to control the Las Vegas underworld; instead, he had his eyes set on another target. In early 1924, at the age of 31, Ferguson arrived in Ely, Nevada; his life and profession before becoming a crime kingpin are unknown. At the time, gambling, prostitution, and alcohol sale were illegal in most of the USA, and Nevada was among the list of states that had officially outlawed the vices.

However, many residents ignored the laws, and the state gained a reputation for tolerating vice rackets. Ely was considered a hotspot for these activities, and it attracted all manner of criminals looking to make their fortunes controlling the rackets. Unfortunately for Ferguson, when he arrived seeking to carve out his own empire, he found little opportunity; he was far too late. The city officials and crime lords had already come to an agreement, and there was no room for an up and comer like him.

Ferguson was forced to seek his fortune elsewhere. His only success in Ely was making some local contacts, including Vera Magness, who had aspirations to set up her own brothel. Before long, she became his wife, and the two moved to Las Vegas. The population was still relatively small at the time, just over 2000, but upon their arrival in late 1924, Ferguson found all the vices he sought to control—gambling, bootlegging and prostitution—thriving. The fledgling King of the Underworld saw an opportunity to control it all.

Law enforcement officials and police were more concerned with keeping vagabonds and other undesirables out of town. City officials and other shot-callers were busy trying to stop the rampant drinking, gambling, and prostitution among the population, which they considered the height of evil. They ultimately achieved very little and appeared more concerned with arguing about whose fault it was that the vices had become so widespread in the first place.

As a result, Ferguson built his power base unopposed, with no law enforcement or city officials to stand in his way. He recruited to his gang some of the most violent and cunning criminals and began making a name for himself as a force to be reckoned with. His common-law wife Vera, who went by the name Magness—her maiden name—had opened a lucrative brothel. Still, it would be several months before he was powerful enough to overthrow the old guard of bootleggers and vice lords.

In early 1925, Las Vegas prepared for an election. The Mayor, William German, promised to halt bootlegging and improve the standards of decency in the community. His opponent, Fred Hesse, made the same promises, but added the stipulation that he would not stamp out all vices, merely try and find a healthy balance between decency, and letting people have a good time. Nobody can say for sure whether this was a deciding factor in the election, but Hesse managed to win by a slim margin of 38 votes.

While everyone was focused on the election, Ferguson started to move in on Al James, who had overseen most of the gambling and bootlegging in the town for nearly two decades. James owned and operated the Arizona Club, the largest saloon and gambling hall in Las Vegas, located at the centre of Block 16, the 16th block in the grid laid out by the San Pedro, Los Angeles & Salt Lake Railroad.

When the railroad auctioned off the land for Las Vegas in 1905, the deed strictly stated that retail sale of alcohol would be restricted to block 16 and 17. However, the restrictions weren't worth the paper they were written on, and in less than a year, businesses along the main street were selling alcohol under the guise of being hotels. This forced the saloon owners in block 16 to expand their business to other vices so they could compete and saw men like Al James become the leaders of illegal activities in Las Vegas.

After the elections in 1925, Ferguson made his move, making a very violent and public attempt to oust James from his lofty position by storming the Arizona Club with his gang. The violence at the Arizona Club made the front pages of both Las Vegas newspapers, which brought Ferguson into the public eye for the first time. He was promptly arrested and faced the charge of assault with a deadly weapon with intent to commit bodily injury.

Despite hiring the best lawyer in town, Ferguson was still convicted and sentenced to four months in jail. His jail term didn't matter though, while incarcerated, his wife, Magness, and fellow gangsters continued to dominate Block 16, and before long, Al James and most of the old guard were pushed aside.

When he was released from prison, Ferguson spent the next few years solidifying his new position at the top of the underworld; setting up a major operation to manufacture and distribute illegal liquor in Las Vegas. He also forged relationships with Robert Earnest 'Spud' Lake, the Police Chief, and Mayor Hesse to ensure no interference from the law. He paid them monthly fees and fines, and they allowed his bootleggers, both wholesalers and retailers, to operate freely.

Ferguson immediately started using his newfound connections to intimidate other bootleggers into paying protection fees. If they failed to pay, not only were they threatened with violence, but also raids by the police. Anyone who didn't pay was harassed by law enforcement until they went out of business, or paid the protection fee.

Throughout 1926, and 1927, Ferguson cemented his hold over Las Vegas, and expanded into other areas of Nevada and beyond, including California and Utah. While there was no official coronation, James 'Jim' Ferguson was the king of organized crime in Las Vegas. Unlike all those who came before him, Ferguson controlled everything, exerting a tight grip over all the vices in town, while his wife oversaw the local brothels. His time at the top would be relatively short, but organized crime in Las Vegas was forever changed by Jim Ferguson.

DEATH BY A THOUSAND CUTS
—THE LAW CLOSES IN ON FERGUSON

In 1928, Jim Ferguson was on top of the world; he was the undisputed king of organized crime in Las Vegas, and his illicit businesses were thriving. His ally, Fred Hesse, was re-elected mayor, and Robert Earnest 'Spud' Lake kept his job as Police Chief. Voters selected young businessman Roy Neagle as a new city commissioner, and he was put in charge of overseeing the Las Vegas Police Department. Neagle was brought into the loop about the deal with Ferguson, and voiced no objections, giving the criminal kingpin another powerful ally.

However, Jim Ferguson's successful criminal empire had attracted some unwanted attention. Federal law enforcement officials, unhappy about the sanctuary for illegal activities in Vegas, swooped in, staging massive raids that saw over a dozen illegal alcohol venues in Ferguson's domain shut down. They also arrested a large number of his associates and gang members.

Mayor Hesse quickly jumped to his rescue and successfully had the cases moved from federal jurisdiction to the local Las Vegas court. In exchange, the town would pay for the cost of the raid. Only two days later, the treasury found itself with over $4,000 added to its coffers, courtesy of Ferguson, who had promptly paid a bribe to Hesse in exchange for his help.

Ferguson reopened most of his closed venues, and only a few months after the raid, his criminal empire had fully recovered from the raid, but his good fortune wouldn't last. Federal officials knew who he was now, and they wouldn't allow him to continue running his illicit businesses. They were going to keep chipping away, until he was either bankrupt or in jail.

The next significant event that would speed up the end of Ferguson's criminal empire was the death by shooting of the eight-year-old son of Vegas bootlegger, Charles Bradshaw, who refused to pay the protection fees. During the fateful encounter in the early evening of a Saturday, Bradshaw and his family were driving, and allegedly delivering illegal alcohol.

Police Chief Robert Earnest 'Spud' Lake and Special Police Officer Henry Deadrich, who was deputized 24 hours earlier, were also driving, but in the other direction. When the two police officers passed Bradshaw, they recognized the notorious bootlegger as the driver, and turned their car around to give chase. In the resulting pursuit, Lake alleged that Bradshaw refused to stop, even when they identified themselves as law enforcement by turning on their police siren.

Lake then authorized Deadrich to shoot out the other car's tires. The officer fired his weapon at Bradshaw's vehicle several times, and one of his shots went through the back window, hitting 8-year-old Sheridan Bradshaw, resulting in his death a few hours later. Police arrested Deadrich, while Lake would end up resigning his post as Police Chief after the incident.

Both men were looking at a murder charge, but the District Attorney eventually settled on manslaughter because he found no evidence indicating they had deliberately killed the young boy. At the same time, Mayor Hesse was looking at federal bootlegging conspiracy charges. With all his major allies out of the picture, Ferguson was vulnerable.

Bradshaw blamed the whole criminal syndicate for the death of his son. He couldn't strike at Hesse, Lake or Deadrich, but he could try to bring down Ferguson in revenge for the death of his boy. Bradshaw reported everything he knew about Ferguson to Federal Agents, and they acted swiftly by raiding the kingpin's home, finding over 200 gallons of whiskey.

It was the biggest seizure of illegal alcohol in the short history of Las Vegas, and Ferguson was arrested again. He was hit with multiple counts of violating the federal Act prohibiting the sale of liquor; his bail was set at a hefty $10,000. Unable to pay, he remained in jail until he appeared at the federal courthouse in Carson City, where he pleaded guilty to all charges and paid the $500 fine. After his release, he returned to Vegas in late 1928.

THE KING IS DEAD; LONG LIVE THE KING
—THE END OF FERGUSON’S EMPIRE

Ferguson was in jail when Robert Earnest 'Spud' Lake and Special Police Officer Henry Deadrich went to trial for killing Sheridan Bradshaw, but his name was mentioned more than a few times throughout proceedings. Charles Bradshaw testified that Lake and Deadrich were acting under the orders of Ferguson, claiming he had been harassed by police consistently since he refused to pay the protection fees.

It took only 30 minutes of deliberation for the jury to bring back a verdict of not guilty. In the eyes of the jury, Charles Bradshaw was to blame for his son's death because he had brought him along while conducting illegal business. As a result, Ferguson and his associates had escaped significant punishment for their illicit activities again. It would only be a brief reprieve though.

In early 1929, a U.S. marshal and his deputies arrived in Las Vegas with many arrest warrants; they took Ferguson into custody again. A federal grand jury heard months of testimony about his illegal business ventures, and by the end, they handed down a series of indictments.

Mayor Hesse, Commissioner Neagle, former Police Chief Lake and a few dozen other gang members were arrested and charged with conspiracy to violate federal liquor laws. Some pleaded guilty and paid the fine, while Hesse, Neagle and Lake pleaded not guilty and posted bail. Ferguson couldn't raise funds to post bail, so he stayed behind bars, awaiting trial in Carson City, far away from his allies who might interfere on his behalf.

Mid 1929, Jim Ferguson was on trial again, and believe it or not, he pleaded not guilty and denied any wrongdoing. However, unbeknownst to him, he had previously sold illegal alcohol to undercover federal agents and even bragged about the extent of his operation. It was enough to bury him; in only 40 minutes of deliberation, the jury returned with a guilty verdict on all counts.

U.S. District Judge Frank Norcross held off sentencing until after the case against Mayor Fred Hesse, Roy Neagle and former Police Chief Robert Earnest Lake. The trial would prove to be the final nail in the coffin for the entire syndicate. Among the many witnesses was Charles Bradshaw, whose son had been killed in the chase with lake and Deadrich. Bradshaw told the court everything he knew about the protection fees and Ferguson's relationship with Las Vegas officials.

Former police officers were also called to testify, and claimed they were told in no uncertain terms to leave Ferguson’s establishments alone, provided they weren't causing any trouble that would affect the general public. After hearing all the testimonies, and to everyone's surprise, Judge Norcross acquitted Hesse and Neagle on all charges, arguing that the evidence wasn't incriminating enough. The case against Lake continued for a time but ended in a not-guilty verdict.

With the case against the Las Vegas officials over, Norcross sentenced Ferguson to one year, and one day in jail, but in another shocking turn of events, the judge added the stipulation that he could be released in a few months if he paid a fine. The Justice Department stepped in, arguing that Ferguson was a repeat offender who didn't deserve leniency, and the judge had no authority to give him a reprieve regardless.

Ultimately, Ferguson served nearly his complete sentence and was released only 41 days early, in May of 1930. He immediately returned to Las Vegas, but found that in his time away, his empire had crumbled, and new faces had taken over all the vices he once controlled. His wife was still in charge of a few brothels, and some of his gang was still around, but the power balance had shifted.

Mobsters from other cities, and even some of the power players from Ely—whom Ferguson had avoided by coming to Vegas—were moving into town. Even some of the other local bootleggers who were previously forced to pay protection fees had grown bold enough to defy him openly. The new crop of police and city officials were also much stauncher in the face of corruption, making it impossible for him to operate as he had in the past.

Ferguson stayed out of the public eye for a few months after his release, but it didn't take long for him to return to the headlines. This time for a daring robbery of one of his old booze lounges. Witnesses recognised his blue Cadillac as the getaway vehicle, and police swiftly arrested the former king of the underworld, and two other men, in connection with the crime.

The charges were initially dismissed against Ferguson, but he was arrested again when one of the other men ratted on him as the mastermind behind the robbery. Once again, the charge did not hold up in court, and he was released. It didn't take long for the gangster to find himself in trouble with the law again.

After an altercation at an establishment in Block 16—his old domain—Ferguson was arrested for allegedly threatening to kill two individuals. He was charged with vagrancy, and after paying the fine he left Las Vegas, looking for new territory to conquer.

Ferguson spent the next few years committing a series of crimes in several different states with new associates, and some of his old gang. He was caught more than once, and spent a lot more time in prison, and paying a raft of different fines.

In 1936, after a more than three year stretch in prison for robbery, he went back to Vegas, and his wife Magness, who had maintained her position as the manager of a brothel within the confines of Block 16. The police and city officials were not overly keen to have the old, organized crime kingpin back in town, and they fell down on Magness like a hammer.

She was charged with allowing minors in her establishment, and her long-time brothel, the Double O, was closed. Magness would be back in business not long after, but her time on Block 16 was over. There is no record of what happened to Ferguson after that. The first undisputed king of organized crime in Las Vegas disappeared, and was lost to the annals of history, his ultimate fate unknown. James 'Jim' Ferguson wasn't in the Mafia, but he was instrumental in laying the foundations for future organized crime groups like them to establish their operations in Las Vegas.

LOOK OUT FOR PART II, COMING SOON.

This is an article referencing the history of Las Vegas. It is for information and entertainment only. It is not related to, nor a reflection of, Global Poker, its views, products, content, or its games.