When the new Arlington Hotel opened its doors on New Year’s Day 1925, Capone often rented the entire 4th floor of the hotel for himself and his entourage. Al, along with his brother Ralph, were often known to frequent Hot Springs, where they enjoyed the horse races at Oaklawn Park, golfed regularly, enjoyed the bathhouses, and partook of the many gambling facilities. Though Capone often had as many as 40 men accompany him, all of whom were known to be violent thugs in Chicago, while they were in the spa city, they were peaceful, polite, friendly, and appreciated as generous tippers. By 1929, Capone was arrested several times and finally sent to prison for tax evasion in 1931. By the time of his release in 1939, he was physically and mentally ill. He died in Florida in 1947. Today, suite 443 in the Arlington Hotel still bears his name.
One of the most notorious of the many mobsters that spent time in Hot Springs was Owney “The Killer” Madden. After serving a year in Sing-Sing Prison for parole violations, Madden was released in 1933 and began to visit Hot Springs, seeking a slower lifestyle than the one he had lived in New York City. By that time, Madden was in his forties and in chronic ill-health because of old bullet wounds. There, he met a gift-shop clerk, Agnes Demby, the daughter of the local postmaster. He married her in November 1935 and settled down in Hot Springs for the rest of his life. Having made a fortune in New York City in illegal liquor revenue during Prohibition and as the owner of Stork Club and the Cotton Club, Madden could have retired, but instead, applied his organizational skills to the large, and soon to be, larger illegal gambling operations of Hot Springs.
Well respected, well liked, and generous to the community, Madden settled into Hot Springs very easily. Before long, many of his old acquaintances from New York began to visit him, including Meyer Lansky, Lucky Luciano, Bugsy Siegel, Dutch Schultz, and even his Sing Sing warden, Lewis Lawes. Word soon spread that Hot Springs was the perfect hideout for criminals running from police investigations. Madden was reputed to have owned an interest in the Southern Club, as well as becoming the overlord of the city’s illicit gambling activities. Madden spent the rest of his life in Hot Springs until he died of emphysema in April 1965 and was buried in Greenwood Cemetery.
On April 1, 1936, when Charles “Lucky” Luciano was visiting, he was not so lucky as he was detained by the Hot Springs Police Department on orders from Thomas Dewey, the New York State Attorney General. As he was walking along federal property along Bathhouse Row, with none other than Hot Springs chief of detectives Herbert “Dutch” Akers, he was arrested. However, a local judge released Luciano after a $5,000 bond was paid. An enraged Dewey contacted the Arkansas governor and state attorney, demanding action, but Hot Springs officials were reluctant to begin extradition hearings. A new fugitive warrant was issued on April 3 and 20 state troopers were sent to collect Luciano and move him to Little Rock, Arkansas. Though a $50,000 bribe was made to make sure the extradition was denied, the authorities couldn’t be bought and within days, Luciano was returned from Arkansas to New York to stand trial for running a prostitution racket. He spent the next ten years in Dannemora Prison in New York before being released in 1946. He was then deported back to Italy where he spent the rest of his life.
Alvin “Creepy” Karpis, who was America’s last official Public Enemy No. 1 often made Hot Springs his hideout. Although most well known for committing crimes throughout the Midwest, the Barker-Karpis Gang’s first murder occurred in Pocahontas, Arkansas in 1931 and the gang members later holed up in Hot Springs. By 1935, most of the gang members had been killed or imprisoned, but Alvin Karpis was still on the run for two kidnappings. In June 1935, Karpis headed to Hot Springs again, taking refuge at the Hatterie Hotel managed by Grace Goldstein. She and Karpis soon developed a romantic relationship and are often referenced as having a common-law marriage. Goldstein also managed a brothel above the Hatterie, and the joint was generally overlooked by the corrupt the Hot Springs Police. Later, Karpis, along one of his accomplices, Fred Hunter, stayed at Lake Catherine and Lake Hamilton nearby, before renting a house between Malvern and Hot Springs. On March 30, 1936, the FBI raided the house only to find that the two had already fled to New Orleans, Louisiana. Both were later apprehended by FBI agents and in July, Karpis pleaded guilty to kidnapping and was sent to Alcatraz. After serving nearly 33 years, he was released in 1968. He died in 1979 from an overdose of sleeping pills while living in Spain.
Although some of these criminals would get their “just due” and never again visit Hot Springs, the city continued to be a haven for criminals looking to hide. Bugsy Siegel, Jimmy Blue Eyes, and Frank Costello would continue to visit Hot Springs into the 1960s. Some historians even contend that Bugsy Siegel’s vision for the Flamingo Hotel in Las Vegas, Nevada came from his many visits to the casinos of Hot Springs. Albert Anastasia, seeking business advice from Owen Madden, was in Hot Springs just days before he was gunned down at the Park Sheraton Hotel in New York. Meyer Lansky would regularly bring his son, Buddy, for treatment of cerebral palsy at Hot Springs’ Levi Hospital.
But, gangster activity, as well as the other illegal activities in Hot Springs came to an end in the 1960s, due to a federal crackdown on what the government called “the site of the largest illegal gambling operation in the U.S.”
In 1967, two Republican officeholders, Governor Winthrop Rockefeller, and Circuit Judge Henry M. Britt began to enforce the existing state laws and eliminate the gambling laws that had been made legal in Hot Springs. The governor sent in a company of state troopers to shutter the casinos and burn their gaming equipment. Afterward, the only legal form of gambling was at Oaklawn Park, a thoroughbred horse racing track south of downtown Hot Springs.
By Kathy Weiser-Alexander, March 2019.