THE SWAN IN SWAN LAKE

It was formed by damming up the Mongaup River to provide water for a large tannery operating near there in the 1840s, and it is perhaps most famous for yielding the body of a victim of a mob hit in 1937.

It is Swan Lake, and as hard as it may be to believe, its name has nothing at all to do with the balletof the same name or the notoriously beautiful long-necked water birds.

The community, as opposed to the body of water, was originally named Stevensville, in honor of the

Stevens brothers, who established a tannery there. James Eldridge Quinlan tells us in his History of

Sullivan County that on January 24, 1848, "a meeting of those living near the tannery was held, at

which Hiram Sandford the oldest inhabitant, presided, and was requested to propose a name. He

suggested Stevensville, which was unanimously approved."

The tannery burned in 1856, but was soon rebuilt, and by 1870 the community on the west branch of

the Mongaup River had become "a thriving village" comprising a Methodist church, a school, a hotel, two stores, a blacksmith shop, and a wagon shop in addition to the tannery, and had a population of about 125.

The body of water about which the community was constructed, which had appeared on some early

maps as Snake Lake, was expanded to over 600 acres by the damming of the Mongaup, and soon became known as Stevensville Pond. It was owned in its entirety by Daniel Stevens.

After the demise of the tanning industry in this area, Stevensville became a favorite destination of

summer tourists, and continued to thrive, despite not being located on the O&W Railroad line. A

number of well-known hotels and boarding houses were located there, and were heavily patronized

despite being served only by stage coach from the Liberty or Liberty Falls (Ferndale) stations. The

stage, which also served White Lake, would pass over the pond on a crudely built causeway.

In April of 1895, Morris Stevens of New York City, a descendant of the Stevens brothers who had

built the tannery, and the owner of large tracts of land at Stevensville, traded that land to Alden S.

Swan, a prominent Brooklyn businessman, in partial payment for an apartment house he had

purchased of Swan.

Swan, born in Hancock, Massachusetts on December 30, 1838, had come to New York at the age of

15 to attend the City College. Upon graduating, he had entered into business in the leather district,

where he no doubt made the acquaintance of tanners from Sullivan County. He subsequently made

his fortune in the oil business, and was, by 1900, also the president of the Rubber Goods

Manufacturing Company, a $24,000,000 corporation. He was active in civic and political affairs in

Brooklyn, and was a director of the Market and Fulton National Bank, as well as other financial

institutions, and was instrumental in the construction of the Brooklyn Bridge.

Swan was an avid boater, who as a young man had held the single scull amateur championship for

nine consecutive years, and was the founder of the prestigious Great South Bay Yacht Club of

Brooklyn. The prospect of owning a lake obviously appealed to him, and he began adding to his

holdings, eventually owning a significant portion of the property around the lake, including the Swan

Lake Mills, Rock Spring Lodge, Horseshoe Lake Farm, and Swan’s Casino, as well as the lake itself.

By 1900 or so, Stevensville Pond had become popularly known as Swan Lake, and was most noted

for the large quantities of pickerel fishermen took from it.

Alden S. Swan died on February 23, 1917; he was 79. In 1927, the post office at Stevensville, was

officially renamed Swan Lake in his memory. When his wife, Mary Althea Swan, passed away in December of 1921, her estate sold a significant portion of the Sullivan County property to Henry W. Siegel of Ferndale and Jacob Kretchmer of Woodridge.

In To the Mountains† By Rail, Manville B. Wakefield writes that the local press at the time noted that

the property had "great possibilities for development, having a large number of ideal sites for hotels

and bungalows." Siegel and Kretchmer took full advantage of those possibilities, constructing the

Stevensville and Commodore Hotels side by side on the shore of the lake. With their construction, and the subsequent emergence of the Swan Lake Hotel, the community was poised to enter Sullivan

County’s Golden Age.

The lake itself became the center of media attention on July 31, 1937, when, at the peak of the

summer tourist season, a body was discovered floating on the surface of the water. The dead man

was soon identified as Walter Sage, a Brooklyn mobster who was running the slot machine

operations at various Catskill hotels for organized crime. Sage’s murder was the subject of two

spectacular trials in Sullivan County Court, and finally resulted, in 1944, in the conviction of local

ne’er do well, Jack Drucker.

The hamlet is enjoying a renaissance of sorts of late, and shows signs of emerging from a decades’

long slumber.

In addition to its hotel and bungalow scene, the Borscht Belt often found itself as a hangout for Jewish (and Italian) gangsters from Murder, Inc. Murder, Inc. was notorious crew of hitmen-for-hire responsible for hundreds of killings across New York City and beyond. 

Founded in the 1930s to threaten, maim or murder designated victims for a price; Murder, Inc., (as they were dubbed by the sensationalist press of the day) was headed by Louis “Lepke” Buchalter and later by Albert Anastasia. The group accepted contracts or hits on foes, and took them out in exceptionally brutal and violent ways. Murder Inc.’s inception, activities and inner workings shocked 1930s society and made newspaper sales soar with sensational headlines and salacious details of underworld death-dealing and deceit.

Murder, Inc. were largely of Jewish or Italian origin, and they were willing to take on pretty much anyone — just as long as the price was right. Though its members were involved in a variety of illicit activities including loan sharking, prostitution, gambling, bootlegging and labor racketeering, they became infamous for their role as the New York syndicate's so-called "execution squad." Based largely in Brooklyn, New York, their reach also extended to the Borscht Belt, where the Brooklyn gangsters vacationed during the summer to escape from the heat of the city and sometimes do some business.

Towns such as Swan Lake, Loch Sheldrake, Liberty, Fallsburg, Bethel and Kiamesha Lake bore witness to this brutal and dark activity.

Swan Lake in particular attracted Italian and Jewish crime syndicates from Murder Inc. Their operational arm, periodically used the Lake as a cemetery, or dumping ground. One of the most infamous murders was that of Walter Sage, whose body was found in the lake during the summer of 1937 tied up to a slot machine.

 The Mob was eventually broken by Thomas Dewey, later the 47th Governor of New York.   

For more reading on this topic check out Carolyn Crane's book entitled Murder & Mayhem in the Catskills. 

THE CORPSE WITH THE PEACOCK TATTOO

It was Saturday, July 31, 1937 and it was a nearly perfect summer day in Sullivan County, sunny and warm. A light breeze stirred the cooling waters of Swan Lake as dozens of vacationers rowed about and swam in the bright morning sunshine. Two of those vacationers, convinced that it was their lucky day, rowed enthusiastically over to a strange shape they saw bobbing on the surface of the lake. What they discovered instead was grisly and gruesome. It was the body of a man, all trussed up and tied to a rock and a slot machine frame.

Police were notified immediately, and Sergeant Thomas J. Mangan of the Bureau of Criminal Investigation and Troopers George Braisted and Ray Dalrymple fished the body out of the water. The man was handsome and well dressed, in a grey striped suit with a purple display handkerchief still protruding from its pocket, and a striped purple shirt. In his pants’ pocket was a single penny. He wore just one shoe. The man had been bound around his legs, neck and mouth with sash cord and ignition wire from an automobile. The rock and the heavy metal frame dangled from his neck. He had been stabbed numerous times in the chest with an ice pick.

The body was removed to the McGibbon & Currey Funeral Home in Liberty where it was examined by county Coroner Lee R. Tompkins, who initially estimated it had been submerged for two weeks or more. Tompkins found 32 holes in and around the man’s heart. On one arm was a tattoo of a peacock, on the other, a bird of paradise and the initials WJS. Fingerprints were lifted in an attempt to identify the body.

By 11 o’clock that evening, police had learned that the good looking man in the grey suit was 32 year old Walter J. Sage of 1245 Eastern Parkway in Brooklyn. Sage, whose real name was Zagotsky, had been a taxi cab driver in Jersey City, New Jersey until about 1930, when he joined up with the Browsville gang run by Abe "Kid Twist" Reles. Sage worked as an enforcer for the group, which operated a dozen rackets, including slot machines, in the Browsville and East New York sections of Brooklyn.

"He worked with such gang notables as Harry Strauss, known as Pittsburgh Phil, Martin ‘Buggsy’ Goldstein, and Seymour Magoon," the Liberty Register reported in its August 5, 1937 edition. "When the Reles gang wanted anybody ‘rubbed out’ for invading the Reles kingdom, Sage was the appointee. He had been under arrest several times for gangster killings."

Indeed, Sage had been questioned in the 1932 murder of Israel Goldstein on a Brownsville street corner and arrested for the murder of Brooklyn gangster Alex "Red" Alpert in 1933.

When the Reles gang began running slot machines in the Sullivan County hotels, Sage was sent here to oversee the operation. Locally, he was known as a quiet gentleman, always impeccably dressed and ready to help out a neighbor with a ride or by picking up groceries.

At some point, the gang discovered that Sage had begun helping himself to a percentage of the slot machine profits, and it was decided that he had to be taught a lesson. His old pal Pittsburgh Phil was chosen as the instructor.

On the evening of July 27, Sage had been picked up from his room at the Ambassador Hotel in Fallsburg by his roommate, Irving "Big Gangi" Cohen and local henchman Jack Drucker. They drove to the Hotel Evans in Loch Sheldrake, closely followed by another car, driven by Abraham "Pretty" Levine and carrying Pittsburgh Phil. At some point during the drive to the Evans, Cohen had mugged Sage around the neck and Drucker had begun plunging an ice pick into his chest. Sage had put up quite a fight, grabbing the wheel and steering the car into a ditch, where it stalled. One of Drucker’s thrusts missed its mark and pierced Cohen’s arm, causing the big man to scream out in agony. The screams of Cohen and Sage helped Levine and Strauss locate the murder car, and by the time they joined the others, Sage was dead and Drucker was wiping off the ice pick. Strauss took over from there, exercising his own sense of irony by utilizing the slot machine frame. He and Drucker tied up the body, drove to Swan Lake, rowed out to the middle, and dumped it.

Cohen, frightened by his part in the crime, and fearful that he might be the next victim, took off running, and went into hiding. Three years later, police noticed him in a crowd scene in the movie "Golden Boy." Cohen’s idea of lying low was to gain work as a screen extra in Hollywood under the name Jack Gordon. Once identified, he was quickly brought back to New York and indicted in the Sage murder. He went on trial in Sullivan County Court in June, 1940 and was acquitted after just two hours of jury deliberation. Levine was one of the chief witnesses against him.

Drucker was also indicted in the Sage murder, but was able to evade capture until 1943. The following year he was convicted in Sullivan County Court. He died in prison, still trying to get authorities to reopen his case right up until the end.

Pittsburgh Phil, the mob’s premier hitman, was executed for other crimes and never stood trial in the Sage murder. His execution, along with those of Louis "Lepke" Buchalter, Louis Capone and Mendy Weiss, effectively put the gruesome gang that had become known as Murder, Inc. out of business for good.

Walter Sage’s relatives never claimed his body. The county paid his $147 funeral home bill and he was buried in the potter’s field section of the Liberty Cemetery.

The acquittal of Big Gangi

Late in the afternoon of Friday, June 21, 1940, a jury of 11 men and one woman delivered a verdict in one of the most famous trials ever conducted in Sullivan County Court. They found Irving “Big Gangi” Cohen not guilty in the ice pick murder of gangster Walter Sage nearly three years before.

Upon hearing the verdict read aloud by Judge George L. Cooke, the hulking Cohen broke down in tears, and was quickly joined by his sobbing wife and his mother, who just a few moments before had returned to the courtroom from the street, where she had been pacing up and down, all by herself, for the entire two hours the jury deliberated.

Cohen had been the first to stand trial in the death of Sage, the overseer of the mob’s slot machine operations here in the mountains. His alleged accomplices included Harry “Pittsburg Phil” Strauss, who by 1940 had already been executed for another murder—one of hundreds he reportedly committed for the ruthless gang of killers dubbed by the press as Murder, Inc.—and Hurleyville farm boy Jack Drucker, who at that point had yet to be apprehended, and wouldn’t be until December of 1943. Drucker would be found guilty the following year, and would spend the rest of his life in prison, dying of a heart attack at Attica in 1962.

Cohen, meanwhile, walked out of the courtroom that day a free man, and returned to California, where he had been hiding, making a living as a film extra ever since fleeing the mountains after Sage’s murder, convinced that he was next on his gang’s hit list.

The jury, made up of Mrs. Robert T. Many and John Knight of Grahamsville, Robert L. Moore of Sackett Lake, Edward Milligan of Lake Huntington, Charles Maas of Cochecton, Earl Kortright of Neversink, Wilbur Robertson of White Sulphur Springs, Michael Minnehan of Monticello, Ivan Wood of Loomis, Herman Molusky of Callicoon, Albert Emerich of Fremont Center, and Thomas Kell of Mongaup Valley, apparently were not convinced by the case put on by prosecutors William Deckleman and Benjamin Newberg, which relied heavily on the testimony of other gangsters who had made deals for themselves.

The murdered man, Walter Sage, or Zagotsky, as his birth certificate read, was a gangster himself. He had been a taxi cab driver in Jersey City until about 1930, when he joined up with the Brownsville gang run by Abe “Kid Twist” Reles. Sage worked as an enforcer for the group, which operated a dozen rackets, including slot machines, in the Brownsville and East New York sections of Brooklyn. 

When the gang began running slot machines in the Sullivan County hotels, Sage was sent here to oversee the operation. Locally, he was known as a quiet gentleman, always impeccably dressed and ready to help out a neighbor with a ride or by picking up groceries.

At some point, the gang discovered that Sage had begun helping himself to a percentage of the slot machine profits, and it was decided that he had to be taught a lesson. His old pal Pittsburgh Phil was chosen as the instructor.

On the evening of July 27, 1937, Sage had been picked up from his room at the Ambassador Hotel in Fallsburg by his roommate, Cohen, and the local henchman, Drucker. They drove to the Hotel Evans in Loch Sheldrake, closely followed by another car, driven by Abraham “Pretty” Levine and carrying Pittsburgh Phil. At some point during the drive to the Evans, Cohen had mugged Sage around the neck and Drucker had begun plunging an ice pick into his chest. Sage had put up quite a fight, grabbing the wheel and steering the car into a ditch, where it stalled. 

One of Drucker’s thrusts apparently missed its mark and pierced Cohen’s arm, causing the big man to scream out in agony. The screams of Cohen and Sage helped Levine and Strauss locate the murder car, and by the time they joined the others, Sage was dead and Drucker was wiping blood off the ice pick. Strauss took over from there, exercising his own sense of irony by utilizing a slot machine frame to provide weight. He and Drucker tied up the body, fastened it to the slot machine frame and a 30-pound rock, drove to Swan Lake, rowed out to the middle, and dumped it. 

Unexpectedly, however, Sage’s body did not stay submerged for long, bobbing to the surface of the lake on July 31.

Cohen, frightened by his part in the crime, and fearful that he might be the next victim, went into hiding. Three years later, police noticed him in a crowd scene in the movie “Golden Boy.” Cohen’s idea of lying low had been to gain work as a screen extra in Hollywood under the name Jack Gordon. Once identified, he was quickly brought back to New York to stand trial in Sullivan County in the Sage murder.

John Conway is the Sullivan County Historian and a founder and president of The Delaware Company. Email him at jconway52@hotmail.com.