The near-half million dollar drug deal former Detroit mob associate Leonard (Little Lenny) Schultz was busted for coordinating more than three decades ago was doomed from the start, plagued with police informants and undercover cops from practically Day 1. The narcotics conspiracy landed the well-connected and personable Midwest Jewish racketeer in federal prison for three years. Schultz and his mentorship of disaster-recovery expert and New Millennium business mogul Sheldon Yellen was written about in this month’s issue of Forbes Magazine in a feature story on Yellen, the CEO of BELFOR, the leading reconstruction specialist around the globe valued at 1.5 billion dollars (read here).

Yellen worked for Schultz at Schultz’s Southfield Athletic Club in the 1970s as an aspiring teenage entrepreneur pushing fruit juice at a club concession stand. The Southfield Athletic Club acted as Ground Zero for the Detroit mafia back at that time, the headquarters of Schultz’s direct superior in the mob, menacing Tocco-Zerilli crime family street boss Anthony (Tony Jack) Giacalone. The club was also a hot spot for civilian businessmen, lawyers, doctors and other local, upwardly-mobile professionals to gather, workout, eat and socialize in its’ heyday which lasted through the 1980s.

In the years following Yellen going off on his own (he was clear with Forbes’ writer Dan Alexander that he never engaged in any illegal activity in his capacity at the club), Little Lenny Schultz, linked to the final remnants of the notorious Purple Gang – Detroit’s murderous all-Jewish mob of the first-half of the 20th Century -, got himself arrested for conspiring to sell 10 kilos of cocaine to an undercover state policeman. He was convicted at trial in 1987 and released from behind bars in July of 1990.

As a young man in the 1930s, Schultz was a gopher for fearsome Purple Gang lieutenant Abe (Abie the Agent) Zussman, soon graduating to Zussman’s driver prior to seguing into being a key middleman for Giacalone and a nationally-respected powerbroker in the labor unions. His mentor in the labor-union world was Purple Ganger Joseph (Monkey Joe) Holtzman. Schultz, 95, died of natural causes in the fall of 2013 living full-time in Florida.

It was in sunny South Florida where the drug conspiracy that wound up sending him to prison was hatched. Towards the end of 1984, Schultz, who wintered in Miami while still maintaining his then-residence in a posh, leafy homestead in Southeastern Michigan, approached a neighbor of his from his North Miami Beach condominium complex, Alan (Piney) Nadell, about going into the cocaine business together, according to federal court records. Nadell was a Christmas tree salesman and had access to wholesale narcotics distributors in South Florida. Per the records, Schultz recruited a Metro Detroiter named Sam Einhorn, who he knew through Einhorn’s parents and could arrange for buyers in Michigan, to join the conspiracy as well.

In January 1985, according to future court testimony, Einhorn arranged for the group’s first customer to be Jeff Sand, unbeknownst to them a Michigan State Police informant. Sand, Einhorn and Schultz held a meeting at the Hunter’s Square shopping mall in West Bloomfield, Michigan, then known as Tally Hall, to negotiate the particulars of the deal according to FBI documents. Schultz and Einhorn agreed to sell Sand 10 kilos of cocaine at $40,000 apiece in one lump-sum deal worth a cool $400,000 in cash, per the documents.

Days later, Sand introduced Schultz and Einhorn to undercover state police officer Jim Tuttle as his “partner and financier” at another meeting at Tally Hall, surveilled by the state police and the FBI. Tuttle told Schultz he wanted to sample the goods before the purchase was made. Over the next few weeks, Sand tape recorded several phone conversations with Schultz discussing the specifics of the pending transaction. The pair used the word “acres” as the code for kilos and arranged a meeting in Florida with Tuttle to provide him a sample package of the proposed cocaine for sale.

Lenny Schultz after his arrest in 1985

Just before Tuttle left for Miami to meet with Schultz and Piney Nadell, Schultz called Sand on February 12 and informed him he was raising the purchase price to $42,000 per kilo, according to court documents. Sand was instructed by his handlers in the government to feign discontent but then agree to the hike in price. With federal authorities watching, Tuttle and Sand met with Schultz and Nadell at a Miami Beach hotel on February 15 and Schultz told Tuttle that he now wanted to break the deal down to one-kilo at a time piecemeal arrangement in order “to build trust.” Initially, a wired-for-sound Tuttle balked, however, Schultz told him not to worry “they would work something out,” and that he would get him a sample pack of the cocaine back in Detroit to try out.

After the meeting at the hotel, Nadell expressed concern to Schultz that Tuttle might be a “fed,” per court testimony, and Schultz responded by contacting people he knew in Michigan law enforcement to check him and his phone number and address out. According to the testimony, two days later Schultz told Nadell that Tuttle “came back clean,” and that when Nadell travels to Detroit to do business on his behalf he would be “protected.”

Nadell flew from Miami to Detroit on the afternoon of March 22, 1985 with a half-kilo sample pack of cocaine in his luggage that he intended to exchange with Tuttle at a nearby airport hotel for $25,000. Upon arriving at the hotel suite to make the deal, Nadell was arrested by FBI agents and immediately agreed to cooperate.

A team of FBI agents tracked Lenny Schultz down at a suburban Detroit pizza parlor called Buddy’s, in Farmington Hills, Michigan, just a mile up the road from where Tally Hall was located, and filled him in on what was happening. He was being arrested and charged with three counts of federal narcotics trafficking.

“When we told him, he was quiet, I think he was a bit shocked at what was going on,” recalled one of the agents on the scene, now retired. “His head was spinning, you could see him sitting there internally contemplating his options. We pressed him…..we all knew he had a lot to give us. A lot more I should say.”

You see, Little Lenny knew the feds he was talking to that early-spring evening 32 years ago. They had a working relationship.

Schultz, as he himself would later admit in open court, was an FBI confidential informant and he had been since 1951. The bulk of his arrest record dated between 1940 and 1960 (almost 20 collars).

“We wanted him to flip,” recollected the retired G Man. “We wanted him to give us everything he knew about Jimmy Hoffa’s murder and everything he knew about Harvey Leach’s murder.”

That never happened. Although a “dry” informant for 34 years, Schultz chose a prison cell over taking the witness stand against his bosses in the mob, like his longtime gangland benefactors Tony Giacalone and his brother, fellow Rustbelt mafia chief Vito (Billy Jack) Giacalone, considered prime suspects in the Harvey Leach and Jimmy Hoffa slayings, unsolved homicides from 1974 and 1975, respectively. Schultz was scheduled to be with both Leach and Hoffa on the days they were kidnapped and killed. Tony Jack died of kidney failure in 2001, Billy Jack succumbed to dementia in 2012.

Leach, a 34-year old Detroit businessman, disappeared on his way to a meeting with Schultz and Tony Giacalone at Schultz’s Franklin Village, Michigan home related to the forced sale of Leach’s furniture store chain on March 16, 1974. He’d be found dead 24 hours later in the trunk of his car with his throat slashed on his wedding day. Hoffa, the one-time Teamsters union president and iconic labor leader, vanished en route to a lunch date with Schultz and Tony Giacalone at the Red Fox restaurant in Bloomfield Township, Michigan never to be seen or heard from again after angering the mafia with his desire to return to the union presidency following a prison term.

Lenny Schultz leaves a federal grand jury in the mid-1970s

The ensuing seemingly never-ending search for Hoffa’s remains has turned into a pop culture punchline, fascinating the masses worldwide for going on 42 years and generating tens of thousands of tips that never panned. Schultz and Tony Jack were at the Southfield Athletic Club on the afternoon Hoffa was clipped on July 30, 1975.

At his trial, FBI agents testified to Schultz’s role in the Detroit mob hierarchy, describing his close ties to the Giacalone brothers and as a veteran labor consultant how he acted as “the Giacalones’ guy in the Teamsters union.” Schultz unsuccessfully put forth as his defense the theory that he was setting up the 10-kilo coke deal in his capacity as a confidential informant for the FBI in an effort to “clean up the drugs in his condo complex” in North Miami Beach.

Nadell, Einhorn and Sand all testified against him. The FBI closed Schultz as an informant following his conviction. The Giacalones were suspected for years for involvement in the drug trade, but neither ever took a pinch for narcotics. Their former errand boy, Francis (Big Frank Nitti) Usher, who served an apprenticeship as a youth in the 1960s under the Giacalones’ collective tutelage went on to become Detroit’s biggest African-American drug kingpin of the late 1970s. One-time Purple Ganger Sam (The Mustache) Norber, one of the most prolific heroin dealers in Michigan and mafia narco czar Raffaele (Jimmy Q) Quasarano both frequented Schultz’s Southfield Athletic Club in the 1970s and early 1980s, according to FBI surveillance reports.

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