 SPOILER: Although it is not specifically mentioned in the film, the  reason Dutch Schultz was killed was because he planned on  assassinating prosecutor Thomas E. Dewey. Dutch was under indictment  for racketeering and tax evasion charges and was such a volatile  gangster that he was willing to risk unbearable heat from law  enforcement to kill Dewey. When the organized crime syndicate, lead  by Lucky Luciano, Meyer Lansky, and other bosses learned what Dutch  was planning, they ordered his death. Also, Dutch did not die in the  restaurant as seen in the film. He actually lived for nearly a full  day in delirium before dying of peritonitis (inflamation of the  abdominal wall) exacerbated by a staph infection in his gunshot  wound.