When one thinks of lost or hidden treasure, places in the United States that likely come to mind are the waters off North Carolina or Florida with sunken ships carrying tons of gold and silver, or perhaps a secret cave in the American west where outlaws and bank robbers stashed their ill-gotten gains, or even secret vaults owned by Chicago prohibition-era mobsters. But one does not have to travel that far as right here in the Catskills there is the enduring legend of gangster Dutch Schultz and his lost treasure.

Dutch Schultz, born as Arthur Flegenheimer, was a fearsome mobster in the early 20th century who made a career bootlegging alcohol during prohibition, extortion and organizing numbers rackets. His criminal activities brought him into to contact with other notorious mobsters of the day including Lucky Luciano, Jack “Legs” Diamond and the “Commission”, a committee of the bosses of the mafia’s New York Five Families.

As Schultz’s wealth and power grew authorities targeted him for income tax evasion. Despite several acquittals Schultz was still under pressure from the authorities and sought permission from the mafia Commission to murder US Attorney and special prosecutor Thomas Dewey. Permission was not granted, and fearing the attention of law enforcement if Schultz were to go ahead with the hit anyway, the Commission immediately ordered a hit on Schultz. Schultz was killed in October 1935 at the Palace Chop House in Newark, New Jersey. He is buried at the Gate of Heaven Cemetery in Hawthorne, New York. 

The legend of Schultz’s lost treasure begins around the time of his tax evasion trials. Worried that he would be convicted and sent to jail and that he would have no money upon his release, Schultz supposedly constructed an airtight, waterproof “treasure” chest. The metal chest was supposedly filled with millions of dollars worth of money, gold, diamonds, and bonds. Schultz transported the chest to upstate New York and, being known to have been a regular visitor to the Phoenicia area, supposedly buried it in that vicinity. 

Schultz was killed soon thereafter. Right after the mafia’s Newark hit, despite his body being riddled with bullets, Schultz survived for nearly 24 hours. During those last hours, his rambling, seemingly incoherent words were recorded by a police stenographer. Some believe that those last words provide key clues in finding the Schultz treasure. 

Whether the treasure ever existed is anyone’s guess. And if it was in fact buried in the Phoenicia area, it’s also anyone’s guess as to whether it is still there. But that doesn’t stop many of the adventure seekers who have tried their luck in searching the area in and around Phoenicia. Perhaps one of Dutch’s henchman found the loot soon after Schultz was killed. Or the chest could still be out there, perhaps in the woods. Or near the Esopus Creek. Or within a grove of pine trees. Or near the Phoenicia hamlet. Or near Devil’s Tombstone. Or just maybe though the treasure could have just been legend all along.

For more information specifically about this legend there is a great book by John Conway, Sullivan County Historian, called Dutch Schultz and His Lost Catskills’ Treasure. The book is a short read but is detailed, yet quite engaging in recounting the entire tale. There are several available books about Schultz that cover his life and mob career. Dutch Schultz has also been portrayed in several movies including The Cotton Club (1984) and Billy Bathgate (1991). There was also a locally produced documentary that featured at a local film festival called Digging for Dutch: The Search for the Lost Treasure of Dutch Schultz. Unfortunately, I have yet to find a copy.