Benjamin Siegelbaum was born in Williamsburg, Brooklyn, to a poor Jewish family from Letychiv, Podolia Governorate of the Russian Empire, in modern Ukraine. As a boy, Siegel joined a gang on Lafayette Street on the Lower East Side of Manhattan and committed mainly thefts, until, with a youth named Moe Sedway, he devised his own protection racket: pushcart merchants were forced to pay him a dollar or he would incinerate their merchandise.
During adolescence, Siegel befriended Meyer Lansky, who was forming a small mob whose activities expanded to gambling and car theft. Siegel reputedly also worked as the mob's hit man, whom Lansky would hire out to other crime families. On January 28, 1929, Siegel married Esta Krakower, his childhood sweetheart and sister of hit man Whitey Krakower.
In 1930, Lansky and Siegel built ties to Charles "Lucky" Luciano and Frank Costello, future bosses of the Genovese crime family. Siegel became a bootlegger and was associated with Albert "Mad Hatter" Anastasia. Siegel was involved in bootlegging in New York, New Jersey and Philadelphia. Siegel and Anastasia, together with Vito Genovese and Joe Adonis, were the four gunmen who shot New York mob boss Joe Masseria to death on Luciano's orders on April 15, 1931, formally ending the Castellammarese War. On September 10 of that year, Luciano hired four trigger men from the Lansky-Siegel gang to murder Masseria's rival, Salvatore Maranzano, cementing Luciano's rise to the top of the U.S. Mafia and marking the birth of modern American organized crime. In 1932, Siegel was arrested for gambling and bootlegging but got off with a fine. Lansky and Siegel assisted in Luciano's brief alliance with Dutch Schultz and killed rival loan sharks Louis "Pretty" Amberg and Joseph Amberg in 1935.
In 1937, the East Coast mob sent Siegel to California to develop syndicate gambling rackets with Los Angeles mobster Jack Dragna. Once in Los Angeles, Siegel recruited gang boss Mickey Cohen as his lieutenant. Siegel used syndicate money to set up a national wire service to help the East Coast mob quicken their returns.
Siegel moved Esta and their two daughters, Millicent and Barbara to Califonia. On tax returns he claimed to earn his living through legal gambling at Santa Anita Park near Los Angeles.
On November 22, 1939, Siegel, Whitey Krakower, and two other gang members killed Harry "Big Greenie" Greenberg. Greenberg had become a police informant, and Louis "Lepke" Buchalter, boss of Murder, Inc., ordered his killing. Siegel was tried for the Greenberg murder. Whitey Krakower was killed before he could face trial. Siegel was acquitted but his reputation was in ruins. During the trial, newspapers revealed Siegel's past and referred to him as "Bugsy". He hated the nickname (said to be based on the slang "bugs," meaning "crazy," and used to describe his erratic behavior), and wouldn't be called "Bugsy" to his face.
Siegel yearned to be legitimate. The legitimacy and respectability he craved were beyond his reach. But by spring 1946, it became stronger - in William R. Wilkerson's Flamingo.
Las Vegas gave Siegel his second opportunity to reinvent himself. Siegel had traveled to Southern Nevada in 1934 with Meyer Lansky's lieutenant Moe Sedway, on Lansky's orders to explore expanding operations. Lansky had turned the desert over to Siegel. But Siegel, wanting nothing to do with it, turned it over to Moe Sedway and fled for Hollywood.
Lansky pressured Siegel to represent them in Wilkerson's desert project. Someone had to watchdog their interests. Siegel, who knew Wilkerson and lived near him in Beverly Hills, was the obvious choice as a liaison, but Siegel was infuriated. He wanted no part in any operation that took him back to Nevada permanently. It meant forsaking Beverly Hills and playboy life and enduring the heat of Nevada. At Lansky's insistence, however, Siegel consented.
Throughout the spring of 1946, Siegel proved useful. He obtained black market building materials. The postwar shortages that had dogged construction were no longer a problem. At first Siegel seemed content to do things Wilkerson's way. His desire to learn about the project took precedence over his sportsman lifestyle. It subdued his aggression. Under Wilkerson, Siegel played the pupil, learning the mechanics of building an enterprise. The role did not come easily. Perhaps outdistanced and afraid of being upstaged by his mentor, Siegel began to feel intimidated and paranoid. He grew resentful of Wilkerson's talent and vision. As time went on, the gangster's admiration disintegrated into insane jealousy. Siegel reverted to his familiar role; the big-shot. He began making decisions without Wilkerson's authority. Informing work crews that Wilkerson had put him in charge, Siegel ordered changes which conflicted with the blueprints.
The problem came to a head when Siegel demanded more involvement in the project. To keep the project moving, Wilkerson agreed that Siegel would supervise the hotel while Wilkerson retained control of everything else.
In May 1946, Siegel decided the agreement had to be altered to give him control of the Flamingo. Siegel offered to buy out Wilkerson's creative participation with corporate stock - an additional 5 percent ownership in the operation. On June 20, 1946, Siegel formed the Nevada Project Corporation of California, naming himself president. He was also the largest principal stockholder in the operation, which defined everyone else merely as shareholders. From this point the Flamingo became syndicate-run.
Las Vegas' beginning
Siegel began a spending spree, staggering even today. He demanded the finest building that money could buy at a time of wartime shortages. Each bathroom of the 93-room hotel had its own sewer system (cost: $1,150,000); more toilets were ordered than needed (cost: $50,000); because of the plumbing alterations, the boiler room, now too small, had to be enlarged (cost: $113,000); and Siegel ordered a larger kitchen (cost: $29,000). Adding to the budgetary over-runs were problems with dishonest contractors and disgruntled unpaid builders. By day, trucks delivered black market goods. By night the same materials were pilfered and resold to Siegel a few days later. As costs soared, Siegel's checks began bouncing. By October 1946, the costs had soared above $4 million. In spring 1947, the Flamingo would clock in at over $6 million.
The first indication of trouble came in early November 1946. The syndicate issued an ultimatum: provide accounting or forfeit funding. But producing a balance sheet was the last thing Siegel wanted to do. After the syndicate's refusal of help, Siegel waged a campaign of private fund raising. He sold nonexistent stock. Siegel was in a hurry to finish. He doubled his work force, believing the project could be completed in half the time. But it was costs, not building, that began rising faster. Siegel paid overtime and double-time. In some cases, bonuses tied to project deadlines were offered in hope of increasing productivity. By the end of November work was nearly finished.
Under pressure to have the hotel make some money, Siegel moved the opening from Wilkerson's original date of March 1, 1947 to the day after Christmas, 1946. Although the hotel was incomplete he was hoping to generate enough from the casino to complete the project and repay investors. Siegel announced the hotel would be ready the day after Christmas. Its opening would be held that same evening, December 26, 1946. Siegel generated confusion regarding the opening date. Acting on a whim, he decided a weekend would be more likely to entice celebrities away from home. Invitations were sent out for Saturday, December 28. Siegel changed his mind again. Invitees were notified by phone that the opening had been changed back to the 26th.
While locals jammed the opening, few celebrities materialized. A handful did motor in from Los Angeles despite appalling weather. Some of the celebrities present were June Haver, Vivian Blaine, George Raft, Sonny Tufts, Brian Donlevy and Charles Coburn. They were welcomed by construction noise and a lobby draped with decorators' drop cloths. The desert's first air conditioning collapsed regularly. While gambling tables were operating, the luxury rooms that would have served as the lure for them to stay and gamble longer were not ready. After two weeks the Flamingo's gaming tables were $275,000 in the red and the entire operation shut down in late January 1947. By begging the mob bosses to give his friend a second chance, Lansky got an extension for Bugsy. After being granted a second chance, Bugsy cracked down and did everything possible to turn the Flamingo into a success. However, by the time profits began making a turn for the better the mob bosses above Bugsy were tired of waiting around.
On the night of June 20, 1947, as Siegel sat with his associate Allen Smiley in Virginia Hill's Beverly Hills home reading the Los Angeles Times, an unknown assailant fired at him through the window with a .30-caliber military M1 carbine, hitting him many times, including twice in the head. No one was charged with the murder, and the crime remains officially unsolved.
Though descriptions held that Siegel was shot in the eye, he was actually struck twice on the right side of his head. Both death scene and postmortem photographs clearly show that one shot penetrated his right cheek and exited through the left side of his neck; the other struck the right bridge of his nose where it met the right eye socket.
Though as noted, Siegel was actually not shot exactly through the eye (the eyeball would have been destroyed if this had been the case), the bullet-through-the-eye style of killing nevertheless became popular in Mafia lore and in movies, and was called the "Moe Greene special" after the character Moe Greene - based on Siegel - who was killed in this manner in The Godfather.
Siegel was hit by many other bullets including shots through his lungs. According to Florabel Muir, "Four of the nine shots fired that night destroyed a white marble statue of Bacchus on a grand piano, and then lodged in the far wall."
Benjamin Siegel's crypt is located in Beth Olam Mausoleum at the Hollywood Forever Cemetery, Hollywood.