He was born in the Borough of the Bronx, New York City, and was the only son and elder of two children of Herman and Emma (Neu) Flegenheimer. His parents were German-Jewish immigrants. In Arthur's early boyhood, his father deserted the family, and his mother did laundering while the boy sold papers on the streets.
He grew up in a slum section of the Bronx, and went no further than the sixth grade in school, though he had a keen mind and was an omnivorous reader.
Later he was for a time an office-boy, and worked in a desultory way as a printer's apprentice and as a roofer. He always thereafter carried his roofer's union card as "proof" that he was an honest laboringman.
At seventeen he was convicted of the burglary of an apartment in the Bronx and served fifteen months in a reformatory. He had become a member of a youthful neighborhood gang before this incident, and his prison term enhanced his reputation among its members.
He was now given the nickname of a former bully of the neighborhood, Dutch Schultz, by which he was known ever afterward. Working at his roofer's trade, as a moving-van helper, and at odd jobs for a few years--during which time his record showed arrests for grand larceny, felonious assault, homicide, and carrying weapons, but no convictions--he finally became a partner in an illicit saloon in the Bronx in 1928.
This was during the prohibition era, and he now began trading in "bootleg" beer which he brought from New Jersey.
He continued to be arrested at times on one charge and another, but was always discharged, though upon one occasion, in 1931, the police killed his bodyguard.
Oddly enough, he was in terror of the law, and an arrest gave him such a nervous shock that at least once a physician was called to administer a bromide to him.
Jack ("Legs") Diamond, Edward ("Fats") McCarthy, and the Coll brothers, Vincent and Peter, were at times (1929 - 32) in partnership with him in beer-running.
He quarrelled with the Colls, however, and they wrecked one of his garages, together with trucks and supplies of beer, and then, with a new gang of their own, began killing his henchmen. So dangerous did they become that Schultz went into hiding for a time, but not before Peter Coll was slain, and then Vincent and others of Schultz's enemies.
He now seized the "policy" gambling game in the Harlem district of New York and took a hand in labor rackets. Estimates of his wealth ran into the millions.
He maintained a luxurious apartment on Fifth Avenue, where he lived with his common-law wife, Frances Maxwell, by whom he had two children.
He was arrested for income-tax evasion in January 1933, but lay hidden until November 1934, when he gave himself up. He was tried twice, once at Syracuse and again at Malone, New York, but skilful maneuvering by his attorneys and his own artful behavior secured, in the first instance, a jury disagreement and, in the second, an acquittal.
When the prohibition law was repealed he bought shares in three licensed breweries.
His attempt to force his way into rackets in Brooklyn controlled by the Amberg gang led to a feud in September-October 1935, during which at least four men were killed on each side. Louis Amberg employed gunmen from Paterson, New Jersey, to kill Schultz, and they wounded him and three of his gang fatally in a backroom of a saloon in Newark, New Jersey, on October 23.
Schultz died on the following day in the Newark City Hospital, and he was buried in the Gate of Heaven Cemetery, Mt. Pleasant, New York.
He maintained a luxurious apartment on Fifth Avenue, where he lived with his common-law wife, Frances Maxwell, by whom he had two children.
