Dolly Oesterreich – The Craziness Begins

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Dolly Oesterreich
Dolly Oesterreich

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Herman Shapiro
Herman Shapiro

Dolly’s Craziness begins. So, remember Herman Shapiro, the attorney that had Fred’s watch?  Herman had his own problems.  He was divorcing his wife Nellie and she filed suit that she receive all the couple’s assets and funds.  She maintained that she had supported Herman throughout their marriage, set up his law office, and that he never contributed to the household expenses.  She won, so Herman had no home, no office, and no money.  Pretty much just the clothes on his back. 

Shapiro moved in with Dolly in her new house, closed his practice and was promised 50% of everything that Dolly inherited from Fred.  He devoted all his time to Dolly until September 1928.  They started a business together, Automobile Loan Corporation.  This business made loans on car purchases and invested in real estate, including a five-story office building for $150,000 and a $100,000 Spanish style house sitting on five lots for Herman.  That house in today’s money would be about $1.5 million. 

Herman's office building
Herman’s office building

Is Dolly Crazy?

When Dolly was in jail in 1925, she begged Shapiro to take some food to the house and leave it where it could be easily reached.  Dolly told him to scratch on the walls and the man would come get it.  The man was her “half-brother” and lived in the attic.  The food was gone the next day.  Shapiro was amazed, he had no idea anyone else was living in the house with them.

After all this happened, Shapiro went to Dolly’s defense attorney, Frank Dominguez and asked him what to do. 

“What should I do,” asked Shapiro.

“Go and tell him to get out!” answered Dominguez.

Shapiro went back to Dolly’s house and to her closet.  He whistled loudly and saw first a hand and then a head and then an entire man come out onto the top shelf of Dolly’s closet. 

The man known as Walter Klein stepped out.  Klein told Shapiro that he had lived in a secret compartment in the attic in the house where Fred was killed and continued to live there for a year after the shooting.  For ten years he had lived in Dolly’s attics.  Klein told Shapiro that he had heard a fight between Fred and Dolly and was afraid that Dolly would be hurt so he came out and struggled with Fred and finally shot him and locked Dolly in the closet.

Otto Sanhuber
Otto Sanhuber

Who is Walter Klein?

Walter Klein was really Otto Sanhuber.  He was the adopted son of Mr. and Mrs. George Sanhuber and lived next door to the Oesterreichs in Milwaukee.  He left school at the age of 16 and got a job as a repairman for a sewing machine company.  Over the years he visited the Oesterreich manufacturing company many times to maintain their sewing machines.  He was a small retiring teenager and Dolly fell in love with him!

Dolly’s son had just died, and she was lonely.  She called Fred and told him that her sewing machine at home was broken, so he sent Otto over to the house.  Dolly met him at the door in a silk robe, perfume, stockings, and slippers.  The sewing machine had been conveniently moved to the bedroom, and so it began.

They met at Otto’s boarding house, at cheap hotels and at Dolly’s house.  Soon the neighbors began to gossip about him visiting Dolly all the time.  The gossip soon reached Fred who hired private detectives to follow the two lovers.  Dolly was desperate, she didn’t want to give up Otto, but she didn’t want to divorce Fred either and give up all that lovely money!

She told Fred that she wouldn’t see Otto anymore, and all was forgiven, and the marriage continued on smoothly.  Otto just vanished, or so it appeared.

Dolly asked Otto to quit his job and to move into her attic.  Otto had built himself a secret compartment in the attic of the Milwaukee house.  He didn’t mind because he had Dolly every day, free room and board and he could write pulp fiction, his second passion.  Otto did the domestic chores during the day when Fred and Dolly were at work at the plant.  Dolly suddenly called in sick a lot more than usual.  Fred soon wanted to move to Los Angeles and build another manufacturing company.  What was Dolly to do?  She sent Otto on ahead to Los Angeles where he built another secret compartment in the Los Angeles house before they moved in

Dolly, Herman and Otto
Dolly, Herman and Otto

After Shapiro kicked Otto out of the house.  He got a few jobs as hotel porter and janitor, but he had problems adjusting to being out in the sunshine all the time.  He finally moved to Canada where he changed his name to Walter Klein, met a woman, Matilda, and married her.  She stayed with him through all the things that followed.

Ray Hedrick – a new lover

Dolly’s craziness continues when she became interested in Ray Hedrick.  She and Shapiro had a falling out and she threatened him and had Ray strong arm him into a waiting automobile.  Shapiro called the police for protection.

The craziness continues with Dolly’s love of lawsuits, you file first, she counter sues, you counter sue and so on and so forth. In 1928, Dolly was sued by Genevieve Hedrick for $300,000 for the alienation of affections of her husband Ray B. Hedrick.  She also filed suit against her husband asking to split their assets, alimony, and a restraining order on Ray buying or selling anything until the suit was settled.

Genevieve was given police protection as she started receiving death threats both written and over the phone from the time she filed the lawsuit.

In her complaint, Genevieve states that she and Ray were happy for 12 years until Dolly came onto the scene.  She claims Dolly plied Ray with liquor and gave him presents and money. 

Ray is a real estate man.  He helped Dolly sell the house where Fred was shot and killed and buy a new house in Beverly Hills.  He also was helping her with some real estate investments that she was either acquiring or disposing of.

Dolly vehemently denied the charges in the lawsuit and especially the death threats that were given to Genevieve.  She then filed suit against Genevieve’s mother, Josephine Stanton, for $500,000 for slander.  Josephine was the one that told the police that Dolly was threatening Genevieve.

Ray then filed a cross-suit against Genevieve because she “pinched, struck, slapped, beat, shoved and kicked him, inflicting serious and painful injuries.”  She also called him names, like “Dutch Blockhead”.

The case was settled privately so I have no information on who got what.

Dolly’s craziness continues by taking revenge on Herman Shapiro. Dolly asked the court for a resolution to dissolve Automobile Loan Corporation, she claims that Herman never gave her an accounting of either the profits or the investments.  Herman countered with a suit for $90,000 for his half of the remaining assets. 

But Herman retaliated and soon filed the affidavit.  He filed an affidavit with the District Attorney’s office about a “vagabond half-brother” who lived in the attic of the Oesterreich’s homes both in Milwaukee and Los Angeles.   This “attic-lover” was responsible for shooting Fred. According to Herman, Otto had been living in Dolly’s attics for 10 years.

Otto’s Arrest and Trial

The police investigated the homes in Los Angeles and had the Milwaukee police investigate the house there.  They found the secret compartments in the attics. 

Otto was arrested at a boarding house where he worked as a janitor on April 7, 1930 – eight years after the shooting, and Dolly with her attorney turned herself in.  Dolly was released on $50,000 bail, but Otto was denied bail and went to jail.

Otto released
Otto released

They asked for and received separate trials and both entered double pleas.  Otto, not guilty and not guilty by reason of insanity and Dolly, not guilty and not guilty by reason of once having been in jeopardy on the same charge.

Otto’s trial was first.  Oddly enough, Judge Carlos Hardy had to issue a bench warrant for Herman Shapiro to testify.  He failed to show up when he was assigned to testify.  Our good friend Ray Klumb did show up and testified.  Otto’s attorney tried to make a case that Klumb had killed Fred, but nobody was buying it.  Klumb left the courtroom and immediately filed a slander lawsuit against Otto’s attorney, Earl Wakeman for $100,000.

Otto took the stand and said that Herman could not testify as he had paid him $10 and everything he told him was covered by attorney client privilege.  Otto then testified that District Attorney Fitts promised him immunity from First Degree Murder if he would confess to the grand jury.  Fitts had to testify with the jury excused. 

He testified that Herman Shapiro had coached him in the self-defense story to protect Dolly. Otto then testified that he was locked in the attic at the time Fred was killed.  He heard Dolly run upstairs into her closet then he heard a loud noise and gunshots.  He blamed Shapiro for the murder.

However, Otto made two mistakes in his new version of the murder during cross examination.  The first was that he admitted that he owned the two guns, and the second was that he had thrown and inkwell at a prowler in the Oesterreich home once.  Both statements he previously denied vehemently.

Shapiro was brought back and denied having coached Otto on his story.  Two alienists (psychiatrists) testified that when Otto was under observation at a psych hospital he confessed just as he did to the grand jury, with much the same story.

Otto and Matilda

The case was finally given to the jury.  After seven votes, they found Otto guilty of manslaughter.  As soon as the verdict was read, His attorney, Wakeman file a motion that the statute of limitations had run out on the manslaughter verdict, and Otto should be let go.  And so, he was on July 11, 1930.  Otto disappeared with his wife.  Probably back to Canada but there is nothing that says what happened to him.  Hopefully, he and his wife lived happily ever after.

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