“At the law enforcement level, the Rothstein investigation revealed the staggering extent of illegal drug trafficking in the US.

This revelation would lead to the reorganization of the Narcotics Division of the Internal Revenue Service’s incredibly corrupt Prohibition Unit (fondly referred to as “the Old PU”) and result in the creation of the Bureau of Narcotics in June 1930.



These bureaucratic developments began when certain documents were found at a realty company Rothstein used as a front for his illegal enterprises.

The documents confirmed that Rothstein was financing an international drug cartel based in Holland.

They also revealed that the cartel had been supplying “primarily through trans-shipment points in Canada) millions of dollars’ worth of illicit drugs to American gangsters since 1925, when Rothstein’s emissaries first contacted a Chinese gang in Shanghai.
( The more things change.....)



Treasury Department narcotic agents, having confiscated the incriminating papers from reluctant police detectives, were certain that his murder was related to an ongoing struggle for control of the burgeoning underworld drug trade. They also felt that his papers would provide additional leads in several major narcotics investigations.
( Americas biggest gangster killed cause he welched on a bet??!!!! Ridiculous..IMO.....)

The Treasury agents “agents were right. Although the police would never solve the murder case, Rothstein’s financial records did enable Treasury agents – operating independently of the police – to seize several million dollars’ worth of narcotics in early December 1928 and to establish a link between Rothstein and the narcotics, which had been legally manufactured in Europe, then diverted onto the black market and smuggled from France.



While the law enforcement developments of the Rothstein investigation were significant, they were eclipsed by the resulting political fallout.


The biggest impact was felt in New York, where newspapers printed rumors that Rothstein had financial ties with the city’s most prominent public figures, including New York’s celebrated mayor, James John “Jimmy” Walker.


More importantly, the New York Times reported that Rothstein had used a portion of his drug profits to finance communist-sponsored strikes in the city’s garment district.


This was the first time in American history that politicians and policemen were linked with Bolsheviks and drug traffickers.


In conjunction with charges that Democratic Party officials were on Rothstein’s payroll, the specter of sedition enabled Republican US Attorney Charles H. Tuttle to demand the immediate dismissal of all officials associated with Tammany Hall (the Democratic Party’s infamous headquarters in New York), including a number of judges.

( I suspect Costello got his start I. Tammany Hall by inheriting Rothstiens network of corruption, they had the most to gain from his death...)