Inside the Mystery of a Country Moonshine Bunker

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About 30 miles north of Poughkeepsie, in the small town of Pine Plains, is Ryan Road. Quiet and flanked by farmland, it has a discreet turnoff onto a long, gravelly driveway.

At the end of that is a large, new-looking barn, with revelers sitting outside at picnic tables, sipping cocktails and eating pizza and s’mores. Inside the barn is a state-of-the-art distillery, bar, and tasting room.

But take away the picnic tables, food trucks and day drinkers, and the distillery looks like any other farm in Dutchess County, just the way it did during Prohibition, when it was one of the largest producers of moonshine in New York State.

All that came to an end in October 1932, when federal agents raided it. According to a local paper of the time, the distillery at Ryan Farm “was one of the most extensive and elaborate layouts ever found in this part of the country.”

This fall, the curious site, revamped for modern day trippers, reopened as Dutch’s Spirits. It is part of a growing trend of distilleries that have cropped up across the state since Gov. Andrew M. Cuomo introduced the Craft New York Act in 2014, easing regulations on farm distillers. These days, with well over 100 craft distillers across the state, New York trails only California, according to a 2018 report by the Craft Spirits Association.

Many farm distilleries have met the moment with pandemic-friendly and rustic-chic outdoor seating. One has an art gallery and an adjoining farm-to-table restaurant; another was built in and around an old firehouse from 1929. But Dutch’s claim to fame is the very thing that caused its demise 88 years ago: It used to be illegal. To that end, its house spirit is moonshine, and its owner hopes to cash in on the farm’s gangster lore.

Bunkers and a tunnel system — for storage and escape routes — are still on the property, said Brendan McAlpine, the current owner of Dutch’s Spirits. He plans to open them up for tours. According to newspaper accounts from the 1930s, only two Polish immigrants were arrested in the raid; it is believed the rest of the workers escaped through the tunnel system.

Dutch’s Spirits is named after the New York gangster and bootlegger Dutch Schultz, who is believed to have been the mastermind behind the expansive underground moonshine distillery, although some local historians stop short of giving him credit. (The property that was used as a front — a turkey farm— was owned by a retired policeman, Patrick Ryan, who was not arrested during the raid and was rumored to be in cahoots with Mr. Schultz.)

Stacey Demar, who moved to Dutchess County from New York City two years ago, discovered the distillery on Instagram, and recently visited with her girlfriend and puppy. But when she heard about the place’s possible connection to a famous gangster, she thought her mother might be interested.

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“My mom is an old Jew from the Lower East Side, so I thought, maybe she knows Dutch Schultz,” Ms. Demar said. “So I brought my parents here and they loved it. My mom’s 85 and she said, ‘Of course, we knew of him.’”

Mr. Schultz, whose real name was Arthur Flegenheimer, had gotten into the crime circuit before Prohibition, but when alcohol became illegal in 1920, he quickly realized he could make a lot of money in booze. He became known as the Bronx beer baron, becoming the boss of a significant organized crime circuit.

In the 1920s and ’30s, several gangsters set up shop in the Catskills and Hudson Valley, including Mr. Schultz, and his rival, Jack (Legs) Diamond, who ran the Irish mob and operated out of Kingston and Albany.

Mr. Schultz’s connection to the Catskills area is well known, especially because of a rumor that he buried a metal box with diamonds, gold, and $1,000 bills somewhere around Phoenicia, about 50 miles west of Pine Plains, right before he died. But his connection to the distillery off Ryan Road is a little more tenuous. Although the Pine Plains raid was well-documented in local newspapers in 1932, Mr. Schultz’s name was never mentioned in connection to it at the time.

Sullivan County Historian John Conway, in his book “Dutch Schultz and His Lost Catskills’ Treasure,” wrote, “Like many other bootleggers of the day, he appreciated the privacy the remote, desolate area offered, and he recognized the value of controlling a piece of land on a direct route from Canada to New York City.” But Mr. Conway was referring to Mr. Schultz’s fondness for Phoenicia.

Bruce Alterman, a private investigator and the author of the novel “Fear in Phoenicia: the Deadly Hunt for Dutch Schultz’s Treasure,” said that he has spoken with locals who remember seeing Mr. Schultz around the town. “There were many eyewitness accounts of him buying everyone dinner at the Phoenicia Hotel and staying at this lodge around the corner,” Mr. Alterman said.

Both men agree that there are no eyewitness accounts of Mr. Schultz in Pine Plains. And Dan Adams, the current owner of the farm where Dutch’s Spirits is based, said he had only heard stories about people seeing Legs Diamond, Mr. Schultz’s rival, in Pine Plains. “The story I heard is that Legs had a little shack in Stanfordville, 10 miles south of us,” said Mr. Adams, 72, who has lived on the farm since the 1970s.

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“My understanding always was that Schultz was primarily in Ulster County and that Legs Diamond controlled most of the booze distribution in Dutchess,” Mr. Conway said. But he allows that after Mr. Diamond was killed in 1931 — a murder some believe was ordered by Mr. Schultz — things could have shifted. “It’s possible that after he had Diamond killed, Schultz moved in and took over his territory.”

After all, the distillery wasn’t raided until 1932 and probably didn’t begin operations until that year as well, according to local newspaper coverage at the time. So it seems impossible that Legs Diamond was behind the distillery, since he was already dead.

Schultz was killed four years after Diamond, in 1935 at the Palace Chop House in Newark, New Jersey. His murder was believed to have been orchestrated by the infamous mobster Charles (Lucky) Luciano.

Mr. Adams, the farm’s current owner, inherited the property from his mother. But his knowledge of the farm’s history, including the construction of its underground network, comes from his father, who as a teenager had worked on Mr. Ryan’s turkey farm during Prohibition.

“My dad, he told me this story of how they would dig a hole and then pour some cement and fill it back in,” Mr. Adams said. “Then three or four weeks later, they would go back, dig it back up again, add to the cement — well, they were building the tunnel.”

The tunnels, he said, ran under the original farmhouse, for about 400 feet. One point of entry was a hole in a rock wall on the property, which was covered up by a lean-to.

The 100-foot-long house had a few unique features, including two kitchens, one of which was a front for the distillery, Mr. Adams said. “Outdoors, there was a pipe going into the kitchen from underground with a tree next to it, a pine tree to block it. And they were cooking the booze in a barn behind the house but it looked like it was coming from the house, like they were just cooking in the house.” The bunker chimneys are still visible today, rising out of the ground on the side of the new barn.

Throughout the years, Mr. Adams had tried growing mushrooms in one of the bunkers, but didn’t have much success. Six years ago, however, when New York State encouraged farms to start distilleries, he discussed the idea of reviving the old moonshine effort — this time legally — with his nephew, Alex Adams.

Alex brought on his friend Ariel Schlein, who spent years building a new barn and distillery, both of which Mr. Schlein still owns. They introduced Dutch’s Spirits Sugar Wash Moonshine, which was produced at a different distillery while they continued construction on theirs.

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Around 2017, Mr. McAlpine, who is known for restoring and running several properties in nearby Beacon, including a hotel and movie theater, entered the picture.

“When I came here and I learned about the history of the property, that sold it for me,” Mr. McAlpine said. “The property is beautiful, the building’s beautiful, but there’s a lot of beautiful farms in Dutchess County, why is this one special? Oh, it has probably what was the largest illegal bootlegging distillery on the East Coast. And it’s — wait, it’s still here?”

Dutch’s Spirits opened to the public in September. The Sugar Wash Moonshine, soon to be made fully on the premises (they are currently blending and bottling there), is back on the menu.

In the Prohibition era, moonshine could be any illegal hooch that was clandestinely produced. It was very strong and could make people sick, according to Patricia Smith, a sommelier and mixologist based in Charleston, S.C. But today, she said, it’s known as a white, or unaged whiskey.

Mr. McAlpine worked with a distiller to refine the Sugar Wash recipe Mr. Schlein had developed while honoring the ingredients uncovered in the 1932 raid (which included 10,000 pounds of sugar, 25 gallons of sulfuric acid and over 3,000 gallons of mash, according to a local newspaper). One item not in the recipe is corn, a common ingredient in modern moonshines.

“In the days of Prohibition, corn would have been harder to come by, less practical, and more expensive, so sugar was often used instead and became a typical base for many moonshines,” said Nima Ansari, a buyer at Astor Wines & Spirits in NoHo.

Next in development at Dutch’s Spirits is a rye whiskey. Mr. McAlpine also wants to use the land around the farm to grow herbs for cocktails and produce for the restaurant. There are also plans for a museum, a farm store, and another bar built around Patrick Ryan’s original turkey coops.

“If Dutch was around, I think if he has a sense of humor, he’s probably laughing a little bit,” said Mr. McAlpine, who received his federal distilling permit on the anniversary of the F.B.I. raid.

“Eighty-eight years later, we’re walking people down into these bunkers and using it as a selling point,” Mr. McAlpine continued. “I’m literally licensed by the federal government to produce alcohol, not 20 feet from where they were doing it illegally.”

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