Bab 68: Chapter 68 – Wash White
After taking control of the Spanish gang's territory, Hardy had grander plans than just becoming a prominent gangster in Los Angeles. The gang era of the thirties to the fifties was a golden age, with many powerful figures wielding significant influence. However, as government crackdowns intensified, the gang's momentum waned, and many of these leaders were either imprisoned or killed. Hardy wasn't interested in fleeting glory.
Understanding the social and economic changes to come, Hardy knew there were better opportunities than a life in the underworld. He decided to keep a low profile and avoid the limelight, while letting Bill take charge of the gang operations. This strategy was about preserving his identity and preparing for legitimate business ventures.
Siegel, observing Hardy's intentions, asked, "Are you looking to follow my example and stay behind the scenes?"
"Essentially," Hardy confirmed.
"Do you trust your brother?" Siegel inquired.
"I do," Hardy replied.
Siegel pondered for a moment before agreeing. "Very well, I'll inform Fred about you. You'll be able to cooperate with him in the future."
"Thank you, Mr. Siegel," Hardy said.
Siegel responded, "Don't thank me. Your achievements are the result of your own hard work. Come with me; I want to show you my vision for this place."
As they walked through the Flamingo Casino construction site, Siegel passionately described his plans for the casino, which he treated as a work of art. Hardy admired Siegel's dedication, noting how meticulously he oversaw every detail, from the building's structure to the decor.
By the small river that had been dug to attract mountain water, Siegel expressed his frustrations about insufficient funds. He had invested $1.3 million of his own money, with other shareholders contributing $2.4 million, but he needed at least another $4 million to complete the project.
Hardy mentioned, "After taking over the Spanish gang's territory, our annual profit is about $450,000, not including drug-related activities."
Siegel did some quick calculations and noted that Hardy's share, at 40%, was only $180,000—a modest sum compared to the project's needs. However, Hardy also mentioned a new venture involving slot machines and pinball machines placed in bars and convenience stores, which could bring in around $300,000 annually.
Siegel saw potential in this additional revenue and promised to call in some favors to help with any potential police issues related to the slot machines.
Over the next two days, Siegel and Hardy continued their discussions, moving from a restaurant to a bar. Siegel lamented the absence of his partner, Virginia Hill, who had left for New York. Despite this, he introduced Hardy to local officials and helped establish connections for future endeavors.
Returning to Los Angeles, Hardy convened a meeting with his team at the security company. Bill and the others were thrilled to hear that Hardy was ready to formally establish a gang.
"It's good news, indeed," Hardy said with a smile. "I'm planning to formally form a gang, but Bill will take the lead."
Bill was initially surprised. "Boss, you've built all of this. Why make me the leader?"
Hardy explained, "I intend to separate our business into legitimate enterprises and gang activities. For the formal businesses like security, film, and economic companies, I'll need a legal identity. The gang side will be under Bill's leadership."
Bill understood, equating his role to that of a CEO with Hardy as the chairman. Hardy's strategy allowed him to maintain a clean image while still leveraging the gang's power.
With Hardy's decision, the "Red Dani" gang was rebranded as the "Red Bill" gang, with Bill as the new leader. The team was reorganized, with roles assigned to various members, while Hardy and his key personnel remained focused on legitimate business ventures.
The slot machine and pinball machine business flourished, becoming a significant source of revenue. Hardy planned to discuss a new business opportunity with Fred, aiming to expand their operations further.
As Hardy prepared for his meeting with Fred, the transformation of the Red Bill gang and the growth of their legitimate businesses marked a new chapter in Hardy's empire.
Bab 69: Chapter 69 – There Are Many Ways to Make Money
At the Jewish gang headquarters, Hardy and Bill met with Fred, who greeted them warmly. Fred was visibly emotional, having seen Bill's rise from a minor subordinate to a significant player in his own right. Hardy, who had briefly joined the Jewish gang, was now establishing himself as a formidable force, seizing the Spanish gang's territory and setting up his own operations.
Fred was impressed. "Hadi, Bill, I didn't expect you to progress so quickly. You've quietly taken over the Spanish gang's turf and established your own gang."
"We're all under Mr. Siegel," Hardy replied with a smile. "We're like family."
Fred agreed. "Indeed, we are. We'll support each other and handle any challenges from the Irish and Mexicans together."
Fred then asked, "You called me to discuss something. What is it?"
The three of them took a seat.
Hardy started, "Our territory has three nightclubs and thirty-eight bars. Currently, we buy our drinks from the Kosher warehouse. As we're a major customer, I hope Mr. Fred can offer us a preferential price."
Fred considered this. "I can reduce the price by 10%. It's a very favorable offer."
"Deal," Hardy agreed. The discount was beneficial for both sides, but Hardy had more important business to discuss.
"Boss Fred, you're familiar with the McKinsey No. 5 Club, right?" Hardy asked.
"You mean the casino that Dani used to run?" Fred replied.
"Yes, it's been under renovation since we took over. It's now more luxurious than ever. I'd like to offer it to you. How about taking over this business?" Hardy proposed.
Fred was surprised. "You want to transfer the casino to me? Aren't you planning to operate it yourself?"
Fred was aware of the casino's success in the past, attracting wealthy clientele and earning two to three million dollars annually. He was puzzled why Hardy, who had the resources, wouldn't run it himself and instead let the Jewish gang operate a casino in their territory—a bold move.
Hardy explained, "I don't have the right people to run a casino. It's not just about money but also having experienced staff."
Fred nodded, understanding the complexities involved. "How do you plan to transfer this business?"
Hardy had a proposal ready. "The McKinsey No. 5 Club has a three-year lease, and we've spent over $150,000 on renovations. If you take it over, I'll ask for $200,000."
Fred found the price acceptable but inquired about the operating rights fee, which was a standard practice for businesses operating in another gang's territory. Hardy suggested a trade-off:
"I propose we exchange operating rights. I won't charge an operating fee for the casino if you allow us to place slot machines and pinball machines in your locations. Does that work?"
Fred was initially skeptical about the slot machine and pinball machine business, considering it a minor venture. However, he was reassured by Hardy's reasoning and the fact that both gangs operated under Siegel's umbrella.
"Alright, I agree to the exchange of management rights," Fred confirmed.
That afternoon, Fred and his team inspected the McKinsey No. 5 Club with Bill. Fred was pleased with the renovations, noting that it was far more opulent than the casinos he managed and would attract high-end customers. Bill left with a suitcase containing $200,000 in cash—funds from Hardy, not from Bill's own operations.
In addition to the $200,000 in cash, Hardy had a check for $300,000, which he kept for legal transactions. He planned to allocate $100,000 to the security company for operating funds and the remaining $100,000 as a bonus for Henry and Matthew for their previous efforts. This brought his total cash reserves to $400,000.
With his growing cash reserves, Hardy turned his attention to the assets left behind by Dani. Dani had a film company and three brokerage firms. Hardy needed to figure out how to transfer these assets into his control.
He called Simon, Dani's financial advisor, to discuss the situation. Simon was familiar with the documents and advised Hardy on how to handle them.
"It's challenging to transfer shares due to legal and economic regulations," Simon explained. "However, acquiring assets is feasible. For instance, in the brokerage firms, the most valuable assets are the contracts with actors. We can buy these contracts at a low price and transfer them."
Simon continued, "As for the film company, the major shareholder is Dani, while the small shareholder is a minor director who started his own studio. We can sell the film company's assets to another company and ensure the smaller shareholders get their due, which would make it difficult for them to oppose us."
Hardy was pleased with Simon's plan, recognizing the value in converting these assets.
Simon took the documents and assured Hardy, "I'll handle this and retrieve the assets."
Shortly after Simon left, Lanster, head of the security company, reported some setbacks. Despite numerous attempts, banks were reluctant to cooperate with their newly established security company due to its lack of reputation.
Hardy remained unperturbed. With the ongoing transformation and strategic partnerships, he was confident in their progress.
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