In 1977 Wealthy Queens Businessman In Lottery Ticket Business Was Target Of "Well-Planned Execution"


One cold, snowy night in February 1977, Arthur Milgram, the owner of New York State's biggest lottery ticket vending company, drove to a luxury apartment building in Little Neck, Queens, where he'd been staying the past month.

Arthur Milgram was gunned down in 1977.

He wasn't living in the swanky Monte Excelsior apartments. Rather, Milgram, who was separated from his wife, had subleased one of its apartments.

He was hiding out there in fear for his life.

Built in 1964, the 240-unit Monte Excelsior still stands. Among its amenities is an onsite parking lot -- and it was across that snow-covered unlighted parking lot that, on that February night, Milgram drove his rented 1977 Buick Electra 225 and parked in one of the spots.

At around 11:45 pm Milgram exited the car and headed towards the building's rear door. As he stepped onto the stretch of concrete between the parking lot and the building, a gunman opened fire.

Because there were no witnesses and his body wasn't found until early the next morning, detectives pieced together how the shooting went down.

It was a "well-planned execution."

After an initial fusillade, Milgram managed to make a frenzied dash back to his car -- and reached it just in time to unlock the driver's side door. He was about to leap inside and -- he wasn't fast enough -- the gunman was already behind him and opened fire again at point blank range, hitting him at least five times in the head, chest and back. (The murder weapon was later revealed to be a .22 caliber pistol; the scenario also seems to suggest a silencer had been used.)

Milgram collapsed onto the snow and died there, beside his car.

Seven pistol shell casings were later found around the body. Milgram -- wearing a black sportscoat, black pants, blue shirt and matching tie -- still had on him his wallet with $245 inside. His executioner never touched it.

It was theorized on the night of the murder that the killer may have been working with at least one accomplice, who may have been driving the vehicle in which the shooter had escaped. As per reports, police believed the killer(s) had either followed Milgram home that night or had been waiting for him in the parking lot.

Milgram's attempt to lay low apparently hadn't worked. According to Monte Excelsior employees and residents, "strangers" had visited the building before the murder to inquire about where Milgram lived, when he usually left the building, when he returned.

Officers of the 17th homicide squad seemed to have a lead almost immediately. Their investigation focused on the possibility that members of the Mafia had been hunting the man and had been trying to muscle in on Milgram's lucrative vending machine business.

Monopolizing Lottery Ticket Sales
New York voters approved a state lottery in November 1966, and on June 17, 1967, the New York Lottery held the first drawing. In its first year, lottery sales were $53.6 million.

Milgram, 55, was an inventor and affluent businessman who jumped into the lottery business with both feet. In 1973, Milgram hit the proverbial jackpot in the lottery game business when he won a vending machine contract with the state. His company was the only one to win such a contract.

Milgram erected a virtual stranglehold on sales of New York State lottery tickets. Automated Tickets Systems Inc., his Flushing, Queens-based vending machine company, generated about $175,000 in ticket sales weekly -- and received a 9% commission on each ticket sold.

At the time of his death, he owned a fleet of 350 vending machines located in retail storefronts and transportation terminals all over the city.

Milgram was well on his way to amassing a fortune -- until October 1975, when New York Governor Hugh Carey ordered the immediate suspension of the state's lotteries after it was learned that a programming error had caused hundreds of duplicate tickets to be printed for a $1.4‐million jackpot drawing. There was no indication how long the suspension would last.

Carey's effort, after temporarily turning off Automated's revenue, also inadvertently seemed to help Milgram, in at least one way, inconsequential though it ultimately was.

New York Governor Hugh Carey
New York Governor Hugh Carey closed the state lottery.

Jerry Bruno, a director of the New York State Lottery, would later tell a Federal grand jury in Manhattan that he had tried to break up Milgram's lottery vending‐machine operation. Bruno, who appeared before the grand jury voluntarily, said he had predicted in 1975 that Automated's machine‐vending monopoly would lead to underworld warfare over territorial rights.

The former director served from January 1975 until a scandal over duplicate tickets closed the lottery down eight months later. He pointedly remarked that his efforts to terminate the “Milgram stranglehold on machine‐vended tickets” came to an end when his management of the lottery was attacked in the press during the summer of 1975.

Due to the imposed ban, Automated had no tickets to sell. Milgram was caught in a credit squeeze and allegedly turned to a group of 13 investors, who set up a tax shelter scheme for the company -- and also took over 45 percent of Milgram's company.

If Milgram had known what the investors had done next, then we probably know why he'd been hiding out. The investors had taken out a $1.3 million life insurance policy on him.

One of the 13 investors was J. Jay Frankel, who allegedly had connections to two Mafia-linked loansharks, Nicholas Forlano, a reputed member of the Colombo crime family, and Charles Stein, who federal investigators described as “a usurer's usurer” or a loanshark's loanshark.

Frankel had a somewhat colorful past as an importer of motion pictures from the Soviet Union.

During testimony before a State Commission of Investigation, he'd acknowledged knowing Genovese-affiliated loanshark Charles Stein.

Charles "Ruby" Stein was brutally murdered, and dismembered, that same year.....

POSTSCRIPT: Looking Monstrous
About 10 years after Milgram's murder, in October 1987, a former member of the Westies, a street gang located on the West Side of Manhattan, testified about how he had helped murder the loanshark Stein in a Manhattan bar.

William (Billy) Beattie, who said he joined the gang in 1972, told a federal court jury in Manhattan that the main defendant, reputed Westies boss James ″Jimmy″ Coonan, had once remarked  that killing enhanced a reputation in the street.

″The more bodies you got, the more monstrous you look.″

The Westies had seized control of Hell’s Kitchen, the former name of the west side of midtown Manhattan, in the 1960s and maintained a vise-like group for some two decades, holding power courtesy of their gruesome reputation for dismembering murder victims.

In 1975, James Coonan started building up his loansharking operation and had established a relationship with the dapper, old-time gangster Ruby Stein, one of the most successful loansharks in New York. His book included a long list of clients that included big-time businessmen, politicians, and bank presidents.

Stein had been affiliated with Fat Tony Salerno of the Genovese crime family.

Beattie later learned that Ruby was one of the biggest loansharks on the East Coast. He didn't think killing the well-connected loanshark was a good idea. Ruby Stein was big-time, as big as they get.

Carrying out the plot, while in the car on the way uptown, Jimmy explained his reasoning. “I got a feelin’ this fuckin’ Ruby Stein had somethin’ to do with (two members of the Westies) bein’ taken out—know what I’m sayin’?”

But Jimmy also admitted that he was in debt to Stein to the tune of $70,000. Supposedly, other West Siders owed Stein similar amounts. So it was an opportunity to clear everyone’s slate and maybe even take over Ruby’s operation after he was gone.

Still, Beattie knew another reason Ruby was a goner. Stein’s death was going to attract a lot of attention from Cosa Nostra. And that’s just how Jimmy wanted it. This was Jimmy’s first big power play. And it was either going to get them all killed or make Coonan’s crew an ally with the Italians.

Coonan walked Stein directly into the ambush.

As TJ English wrote in The Westies:

"Finally, Coonan walked in the door with Ruby Stein right behind him. Beattie immediately pulled the shades and pretended he was using the pay phone. Then he locked the door. Hess and Ryan greeted Ruby, who walked into the middle of the bar. Jimmy told him to take a seat at the counter, he’d be right back. ... Suddenly Danny Grillo burst out of the kitchen with a .32-caliber automatic aimed straight ahead. “Oh my God!” gasped a startled Ruby Stein as Grillo fired six shots, hitting him in the chest, arms, and leg. .... It was over just that fast."

(Grillo was never indicted because he was dead, having been murdered in 1978.)

Ruby Stein, left, was dismembered in Hell’s Kitchen in what's now Mr. Bigg's Bar and Grill. Formerly it was the 596 Club, owned by Jimmy Coonan.

Coonan embraced Grillo after his bullets had cut Stein down. Then the wily Coonan sought to tie his accomplices to him via blood. He ordered Beattie and others involved to also pump bullets into Stein’s corpse. As Beattie noted: ″Richie Ryan shot him, gave me the gun and I shot him.″

Jimmy then pulled off Ruby's shoes and socks -- and $1,000 in cash plopped into the floor of the dive bar. The killers piled the money on the bar and divied it up, as Beattie said. Stein’s body was then placed on plastic sheets and dragged to the rear of the bar, where it was cut up...

A follow-up story will be published soon...