Did the mob invent Las Vegas?

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HOW MOB MONEY, MURDER, AND HOLLYWOOD CAME TOGETHER TO CREATE AN OASIS IN THE DESERT

Benjamin “Bugsy” Siegel (Photo: UCLA Special Collections)

MYSTERY WIRE One of the most infamous murders in the history of the American mafia remains an open case.

Before he was gunned down inside a Beverly Hills mansion, Benjamin “Bugsy” Siegel, spent millions of mafia dollars on a plush resort in the Nevada desert that would be called the Flamingo.

BUILDING AN OASIS IN THE DESERT

Contrary to popular belief and Hollywood, the Flamingo was not Seigel’s idea. But Seigel was integral to the early development of Las Vegas as we know it today. And new documents have surfaced showing in writing who was behind the luxurious resort that opened in 1946 and why not many people have ever heard of him.

Bugsy Siegel had movie star looks and wanted respect for something other than his reputation as a founding member of Murder Inc., an organized crime group that operated from 1929 to 1941 that acted as the enforcement arm of the Italian-American Mafia, Jewish Mob, and other closely connected organized crime groups in New York City and elsewhere.

The chance came when Siegel was put in charge of the mob’s investment in what would become the Flamingo hotel, a project actually started by Billy Wilkerson. Wilkerson was best known for creating The Hollywood Reporter in 1930.

Billy Wilkerson

As the man behind The Hollywood Reporter, Wilkerson became well known in Hollywood as a gossip writer and gambler. But Wilkerson also had a grand idea. He wanted to build a resort in the desert to rival the grand hotel casinos of Europe.

Wilkerson took his money from Hollywood and began building what would become the Flamingo in Las Vegas. But it didn’t take long before his gamble in the desert went bust and he went looking for investors. He found one with the mafia and Bugsy Siegel.

At the time Siegel was an investor in The Northern Club and the El Cortez hotel and casino in downtown Las Vegas. While Siegel’s mob money was being used to grow Las Vegas casino-hotels, he was best known as the man who was controlling the race wires, something he had also done for the mob while in southern California.



But one year after he and several others invested in the El Cortez they sold it. “They made about $160,000 on it,” according to Geoff Schumacher, Vice President of Exhibits and Programs at The Mob Museum in Las Vegas. “They took that money and plowed it into the Flamingo along with taking some of the trained staff from the El Cortez and bringing them over to the Flamingo. So the El Cortez was sort of the precursor to the Flamingo in terms of the mob’s involvement with Las Vegas.”

WILKERSON PUSHED OUT

After Siegel’s investment into the Flamingo project, he decided he would not stay a silent partner.

“Siegel really took a liking to this project, so much so that he wanted to sort of go legit,” Schumacher said. “He wanted to finally put his stamp on something other than you know, killing people, or whatever he had done in the past. He and Wilkerson had their visions for the Flamingo diverging. And Wilkerson had a vision for a resort that would be about $1.2 million, a lot of money at the time but still relatively modest compared with what Siegel wanted to, which was to spend a lot more money make it a much more opulent place. He always wanted to add things and do things differently and the conflicts reached the point where Siegel basically threatened Wilkerson and said you’re out, we don’t want you here anymore. And if you don’t leave, you know, something bad might happen to you. So Wilkerson takes off for for Paris, and literally is there for a good chunk of the time that the Flamingo is being completed. Meanwhile, Siegel has taken over completely. He ends up spending $6 million on this project.”

Schumacher and The Mob Museum now have documentation to back-up this version of what has become a messy history.

The documents include an agreement called “Release of All Demands” signed by Bugsy Siegel that legally separated his and Wilkerson’s interests in the Flamingo.

The other new document is a check written by Wilkerson for $9,500 that was a down payment for the property where the Flamingo would be built. The property would cost Wilkerson $84,000 for 33 acres.

Before being acquired by the Museum, both artifacts had been in the possession of Wilkerson’s son, Willie Wilkerson. Author of two books about his father, Willie’s most recent publication is titled “Hollywood Godfather: The Life and Crimes of Billy Wilkerson.”

Ralph De Luca, a prominent collector and member of The Mob Museum’s Advisory Council, aided the Museum with his expertise and financial support. The Museum acquired the down payment check directly from Willie Wilkerson.

SIEGEL IS MURDERED

After Seigel pushed Wilkerson out of the project he poured mob money into it, trying to make the Flamingo the finest hotel and casino in the world. Siegel’s girlfriend, Hollywood actress Virginia Hill also helped with the design and also spent Siegel’s money on luxurious items.

But Siegel and Hill’s spending spree did not gain any favors with the bosses back East. The opening on the Flamingo did not go as planned due to only the casino being complete for the December 26, 1946 grand opening.

In fact, the casino closed in January 1947 until construction of the whole resort was complete a few months later.

The Flamingo re-opened in March. But it’s early success was not enough to save Siegel from the mob’s revenge.

On June 20, 1947 relaxing in the Beverly Hills house he shared with Hill, who was away at the time, Siegel was shot to death.

Leading to theories about the mob being involved or carrying out Siegel’s murderer was a questionable coincidence. Schumacher said that less than 20 minutes after he was killed, a group of executives walked into the Flamingo and said they were now in charge. This happened before word got out about Siegel’s murder.

Siegel’s murder remains unsolved and technically still an open investigation with the Beverly Hills Police Department.

After being pushed out of the project Billy Wilkerson disappears from public. According to Schumacher it has taken a great effort by Billy Wilkerson’s son, Willie, to bring his father’s name back into Flamingo and Las Vegas history. Willie Wilkerson has also written two books detailing his father’s life.

Now, the contribution of the down payment check from Wilkerson and separation agreement signed by Siegel help put this slice of history back in place.

The documents will be on public display at The Mob Museum in Las Vegas later this spring.

Celebrities cloned at Madame Tussaud Wax Museum inside the Venetian Hotel include the mobster Benjamin Bugsy Siegel, who built the Flamingo Hotel. Las Vegas, Nevada (Photo by Carol M. Highsmith/Buyenlarge/Getty Images)

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