William Richard “Billy” Wilkerson had a policy of working with the best people. According to the biography of his life, sometimes that meant working with gangsters. During Prohibition in the 1920s, Billy ran several speakeasies for New York City Mayor James “Jimmy” Walker and later owned several himself in the city. Billy relied on gangsters to supply his liquor because they were the best.

In 1942, Ben “Bugsy” Siegel had murder charges against him dismissed after witnesses died during his trial. Bugsy was from New York City and well respected in organized crime circles, but he was known for being short-tempered. He moved to Hollywood to go legitimate and become a movie star, but his ego got in the way. Instead, he became a playboy and made money in familiar illegal ways.

Myer Lansky and Bugsy were close, and Lansky ordered Bugsy to explore expanding organized crime gambling activities in Nevada. Bugsy hated the desert and the extreme heat and stayed in Beverly Hills. He turned his responsibilities over to Moe Sedway. But when Lansky pressured Bugsy to oversee the investment group’s Flamingo Hotel investment and Billy Wilkerson, Bugsy reluctantly agreed.

Billy was shocked that Bugsy was his partner, but he made the best of it and mentored Bugsy. He even had his service providers sit with Bugsy to fill his knowledge gaps regarding all aspects of the project. Bugsy was glad to learn and worked to win Billy over. He was in awe of Billy’s visionary and business skills and tried to emulate him.

It wasn’t long before Bugsy became jealous of Billy’s talents. He contradicted Billy’s decisions behind his back and told people the Flamingo idea was his, not Billy’s. He demanded more of a hands-on role. Billy didn’t want that, but he gave in to keep the project moving. Bugsy would manage the hotel portion; Billy would manage everything else.

Bugsy went crazy spending and, within one month, spent the entire budget for the hotel and demanded more money. Billy was alarmed and realized that Bugsy could be stopped only by the investor group, but they refused to rein him in.

Bugsy demanded control of the entire project and talked the investor group into this, but he promised that Billy would have creative control and manage the operation when it opened. In reality, Bugsy wanted to destroy Billy, and Billy started to realize this as he witnessed Bugsy’s irrational behavior and outbursts. To get complete control, Bugsy bought creative participation from Billy by giving him an extra 5% ownership stake in the project. In June 1946, Bugsy formed the Nevada Project Corporation of California and named himself president and the largest principal owner. Everyone else—including Billy—was listed as merely a shareholder.

With Billy entirely out of the picture, Bugsy went on a spending spree. It was clear to everyone except Bugsy that he didn’t know what he was doing. His changes added to the project costs and forced him to raise more money from investors.

Bugsy still wasn’t happy because Billy owned 100% of the land. He offered to buy the land, and they struck two deals in 1946 that resulted in Billy getting an extra 10% ownership in the project in exchange for the land. Billy owned 48% of the project.

Costs kept increasing, and by October 1946, the project cost was over $4 million—four times the original budget. Investors were upset and asked for a full accounting of the project—and said that if they didn’t get it, there would be no future funding. Bugsy got a loan for $600,000 from Valley National Bank in Phoenix and started raising cash by selling nonexistent stock in the project. With pressure mounting, Bugsy planned to open the hotel early during Christmas 1946, even though the hotel rooms wouldn’t be ready. He was hoping gambling profits would help him pay back investors and buy him more time. Billy knew that Hollywood’s elite didn’t travel during the Christmas holidays and that opening without hotel rooms was a death wish.

When Billy shared his views, Bugsy didn’t listen; in fact, he exploded. That would come back to haunt him.

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