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Otto Berman

Otto Biederman, known as Otto "Abbadabba" Berman (August 10, 1891 – October 24, 1935) was an American accountant and organized crime figure best known for his role as the chief financial advisor and numbers specialist to New York gangster Dutch Schultz in the 1930s. A mathematical genius, Berman devised systems to manipulate the outcomes of the illegal policy numbers racket, ensuring frequent wins for less-played numbers and thereby maximizing Schultz's annual profits, which may have reached $20 million. Born in Manhattan, New York City, Berman leveraged his expertise in gambling and accounting to become one of Schultz's most trusted lieutenants, handling the complex finances of bootlegging, extortion, and lottery operations during Prohibition and beyond. His innovative rigging techniques transformed Schultz's numbers game into a highly lucrative enterprise, solidifying Berman's position within the criminal underworld despite his lack of violent reputation. On October 23, 1935, Berman was dining with Schultz, bodyguard Abe Landau, and associate Bernard "Lulu" Rosenkrantz at the Palace Chop House in Newark, New Jersey, when they were ambushed by hitmen from the National Crime Syndicate, who sought to eliminate Schultz for his defiance against mob commission orders. Shot multiple times, Berman succumbed to his wounds the following day, on October 24; he died alongside Schultz and Landau, while Rosenkrantz died on October 25, in a pivotal event that marked the end of Schultz's reign and highlighted the brutal infighting of the era.

Early Life and Career Beginnings

Birth and Youth

Otto Berman, originally named Otto Biederman, was born on August 10, 1891, in Manhattan, New York City, to a Jewish immigrant family. Limited information exists regarding his siblings. In 1906, at the age of 15, Berman was arrested on charges of attempted rape in New York City. He underwent a trial but was acquitted due to a lack of sufficient evidence, marking an early brush with the criminal justice system.

Initial Criminal Involvement

Following his acquittal as a teenager, Otto Berman engaged in small-time gambling operations during the 1910s and 1920s, gradually building a presence in the underworld through activities tied to betting and horse racing. Berman honed his skills as a low-level handicapper at racetracks, where his aptitude for rapid mental calculations allowed him to assess odds and bets efficiently. In the mid-1920s, he served as an official handicapper at tracks operated by bootlegger Big Bill Dwyer, including the Coney Island track in Cincinnati, Ohio, contributing to the pari-mutuel betting system by computing payouts on the fly. During this era, Berman cultivated a notable friendship with journalist Damon Runyon, whose reporting on Broadway and sports figures expanded Berman's social connections beyond criminal circles. Runyon drew inspiration from Berman for the character "Regret," a horse player and gambler, in his 1932 short story Little Miss Marker, published in Collier's magazine. Berman's focus on these pursuits supported a nomadic lifestyle, shuttling between New York City and Midwestern cities like Cincinnati for racing seasons, which helped him evade major arrests until the 1930s.

Involvement with Dutch Schultz

Joining the Gang

In the early 1930s, Otto Berman was recruited by Dutch Schultz (born Arthur Flegenheimer) for his exceptional mathematical expertise, which had earned him a strong reputation in gambling and horse-racing handicapping circles. This alignment occurred in 1932, as Schultz sought reliable talent to manage the financial complexities of his growing criminal enterprises. Berman transitioned from independent operations, including work as a handicapper at tracks like Cincinnati's Coney Island, to a full-time role as advisor and accountant in Schultz's Bronx headquarters. This shift coincided with the end of Prohibition in December 1933, which prompted Schultz to pivot and expand into lucrative ventures like the numbers racket and remaining beer distribution networks. Upon joining, Berman's initial responsibilities focused on basic bookkeeping for Schultz's beer rackets and policy games, ensuring accurate tracking of profits and minimizing risks in these high-volume operations. For this work, he received a substantial salary of approximately $10,000 per week, reflecting his value in maintaining the organization's financial integrity. Berman's position as a non-violent specialist positioned him as a trusted inner-circle member amid Schultz's intensifying rivalries with other New York syndicates, such as those led by Lucky Luciano and the emerging Commission structure. His expertise allowed Schultz to navigate these tensions without relying on Berman for enforcement roles, instead leveraging him for strategic fiscal oversight.

Role in Numbers Racket and Gambling

Otto Berman served as the primary accountant and financial strategist for Dutch Schultz's numbers racket, an illegal lottery operation known as policy betting that dominated gambling in Harlem and the Bronx during the early 1930s. Known for his exceptional mathematical abilities, Berman devised methods to rig the game's outcomes by selecting or influencing winning numbers—often derived from horse race results—that were less frequently bet upon, thereby minimizing payouts and maximizing profits for the syndicate. The Harlem policy racket generated around $35,000 in daily revenue in the early 1930s, with Berman's system helping to transform Schultz's operation into a highly lucrative enterprise estimated at $12-20 million annually. Berman's expertise extended beyond the numbers game to horse racing, where he functioned as an official handicapper at tracks affiliated with organized crime figures. In 1935, he worked at Cincinnati's Coney Island racetrack, operated by bootlegger Big Bill Dwyer, calculating parimutuel betting odds and assessments on-site as part of Schultz's broader gambling network. His role involved precise computations to track collections and balances without relying on written records, leveraging his mental arithmetic skills to manage the complex financial flows of these operations. Associates nicknamed Berman "Abbadabba" in recognition of his unparalleled prowess in handling the intricate odds and transactions of the racket, which processed bets from thousands of participants daily across urban neighborhoods. This moniker underscored his status as the indispensable "fixer" who ensured the syndicate's in both betting and wagers, contributing significantly to Schultz's dominance in City's underworld .

Assassination and Death

The Palace Chophouse Shooting

On October 23, 1935, Otto Berman met with Dutch Schultz, Abe Landau, and Bernard "Lulu" Rosenkrantz at the Palace Chophouse tavern in Newark, New Jersey, to review financial records amid growing threats from special prosecutor Thomas E. Dewey, who was targeting Schultz's operations for tax evasion and racketeering. The group had relocated to the Newark establishment as a temporary headquarters to evade New York authorities, but the meeting was interrupted around 10:30 p.m. when two gunmen burst into the premises. The assassination had been sanctioned earlier that month by the National Crime Syndicate's Commission, led by figures including Lucky Luciano, due to Schultz's increasing instability, his refusal to heed warnings against expanding into other territories, and his plot to murder Dewey, which the Commission viewed as a reckless act that could provoke widespread federal crackdowns on organized crime. The hit was carried out by Charles "The Bug" Workman and Emanuel "Mendy" Weiss, enforcers affiliated with Murder, Inc., who entered the chophouse armed with revolvers and a shotgun. The gunmen first entered the back room and fired upon Berman, Landau, and Rosenkrantz as they sat at the table, with the victims reaching for their weapons and returning fire; Schultz, who had been in the restroom, then emerged and was struck in the abdomen. The assailants fled after the brief exchange, leaving the scene in chaos. Berman sustained multiple gunshot wounds, including two to the chest, one to the left arm, the cheek, and the abdomen, and was rushed to Newark City Hospital along with the others. He lingered for several hours but succumbed to his wounds at approximately 2:55 a.m. on October 24, 1935, becoming the first of the group to die; Landau followed later that morning, Schultz that evening, and Rosenkrantz on October 25.

Aftermath and Burial

Berman was rushed to Newark City Hospital after being shot multiple times during the ambush at the Palace Chophouse on October 23, 1935. He died there on October 24, 1935, from gunshot wounds, with hospital records and his death certificate confirming the cause as homicide by shooting. Contemporary media reports frequently mischaracterized Berman as a ruthless enforcer in Dutch Schultz's criminal operations. Damon Runyon, a prominent columnist and Berman's close friend, rebutted these portrayals in his newspaper columns, insisting that Berman was a non-violent figure whose expertise lay in accounting and mathematics, not intimidation or violence. Berman's funeral was conducted privately amid lingering tensions in the underworld, with burial at Mount Carmel Cemetery in Glendale, Queens, alongside his parents. The assassination contributed to the rapid disintegration of Schultz's gang, as surviving members scattered and key operations like the Bronx numbers racket were absorbed by rival organizations, accelerating the syndicate's collapse.

Legacy

In Popular Culture

Otto Berman has been depicted in various works of literature and film, often emphasizing his mathematical prowess and association with organized crime figures. In Damon Runyon's short stories, Berman served as the inspiration for the recurring character "Regret," a gambler and horse player known for his shrewd calculations and eccentric demeanor. This portrayal appears in several of Runyon's Broadway tales, collected in anthologies such as The Best of Damon Runyon, where Regret embodies the witty, numbers-savvy underworld figure. The character was brought to the screen in the 1934 film adaptation Little Miss Marker, directed by Alexander Hall, with Lynne Overman portraying Regret as a reluctant guardian entangled in a betting scheme. Berman features prominently in E.L. Doctorow's 1989 novel Billy Bathgate, where he is depicted as Otto "Abbadabba" Berman, the trusted accountant and mentor to the young protagonist Billy Bathgate within Dutch Schultz's criminal organization. In the narrative, Berman guides Billy through the intricacies of the gang's operations, highlighting his role as a paternal figure who imparts lessons in loyalty and calculation amid rising tensions. The novel was adapted into a 1991 film directed by Robert Benton, with Steven Hill cast as Berman, capturing his intellectual detachment and advisory influence in the story's climax. In the 1984 film The Cotton Club, directed by Francis Ford Coppola, Berman appears as "Abbadabba" Berman, played by Allen Garfield, as a key lieutenant to Dutch Schultz in the Harlem nightclub scene. Garfield's performance underscores Berman's nickname-derived mystique and his behind-the-scenes management of gambling rackets. Beyond these major portrayals, Berman receives minor mentions in mob histories and Runyon compilations, where his nickname "Abbadabba"—a playful reference to his rapid mental arithmetic—and exceptional math skills are frequently highlighted to illustrate the blend of intellect and criminality in Prohibition-era syndicates.

Cultural Impact and Attributions

Otto Berman is popularly attributed with coining the phrase "Nothing personal, it's just business," said to have been uttered during internal discussions within the Dutch Schultz gang in the 1930s, though this attribution remains disputed due to a lack of primary documentation and its widespread use in later mob lore narratives. The phrase has since permeated American cultural idioms, symbolizing the detached pragmatism of organized crime operations, but historians note its origins are more legend than verified fact, often amplified in retellings of Schultz-era conflicts. In organized crime history, Berman exemplifies the archetype of the intellectual accountant, a cerebral figure who managed finances and rigged gambling outcomes through mathematical expertise, starkly contrasting the era's violent enforcers like Schultz's gunmen. As a Jewish mob associate, his role influenced later depictions of Jewish figures in American organized crime as strategic "numbers men" rather than frontline thugs, highlighting the diverse ethnic contributions to Prohibition-era syndicates. Berman's position underscores the economic scale of the 1930s numbers racket, where his weekly salary of $10,000—equivalent to over $200,000 in today's dollars—served as a symbol of the operation's immense profitability, drawing in millions annually for Schultz through manipulated policy betting. This compensation reflected the racket's role as a Depression-era lifeline for urban communities, particularly in Harlem, where it generated steady illicit revenue far exceeding legitimate wages of the time. In modern true crime literature and podcasts, Berman appears as a enigmatic supporting character in accounts of the Schultz gang, such as in examinations of the 1935 Newark hit, yet primary sources reveal significant gaps in details about his personal life, including family background and early influences, limiting deeper biographical insights. Episodes dedicated to him, like those in the Kingpins series, emphasize his mathematical prowess but underscore the scarcity of firsthand records, perpetuating his status as a shadowy archetype in mob historiography.

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