The anecdotes that Herbert Asbury relates in The Gangs of New York [Chapter XI, Section 3] concerning gangster Crazy Butch and his fatal downfall were lifted from one source, Apaches of New York, written by Alfred Henry Lewis and published in 1912. Lewis devoted one chapter to the saga of Crazy Butch–too long to quote in full here, but in the public domain at the Internet Archive.
Lewis is the sole source for the stories about Crazy Butch, though newspaper items about his court travails and the bare facts about his death were published. Alfred Henry Lewis often only identified gangsters by their nicknames, but at some point Crazy Butch was later identified as Simon Erenstoft, who had emigrated from Austria as a boy. In Lewis’s story, Crazy Butch was neglected by his parents; and other sources have said that he was abandoned in New York at age 8. However, the passenger list of the ship Rhaetia arrived in New York City on December 10, 1889, bearing Simon, 7; his brother Mordecai, 6; and older sister Beile, 18. The parents are not mentioned–the children arrived alone.
Simon, as a teen, came under the influence of the Monk Eastman gang, the predominantly Jewish youth gang that ruled the Lower East Side from the late 1890s through to the 1910s. His teen years aren’t documented, but in the 1900 Federal Census, Erenstoft was an inmate at the city reformatory, the New York House of Refuge on Randall’s Island. He was later sent to Blackwell’s Island city penitentiary in 1902; and again in 1904. His 1904 conviction made national headlines, since he was accused of training pre-teen pickpockets. An eleven-year old testified against Erenstoft, and demonstrated his skill by stealing the District Attorney’s wallet undetected.
Erenstoft’s multiple trips to Blackwell’s Island is counter to the narrative that he did several years at Sing Sing, the State prison. There is no evidence that this was true. According to that narrative, Erenstoft turned Fagin after leaving Sing Sing; but it’s pretty obvious he was involved in the pickpocket business before 1904.
Lewis’s tale covers Crazy Butch’s downfall, after stealing the girlfriend (i.e. the Darby Kid–real name unknown) from an Italian Five Pointer gang lieutenant, known only as Harry the Soldier. It’s a plausible story, matching some (but not all) aspects of the news reports of his killing:

Lewis’s version claims that the assassination was made possible by Harry and Five Pointers taking out the lookouts that were protecting the poolroom. However, a mention in a newspaper a year later may offer a new perspective on the murder of Crazy Butch. The May 18, 1908 edition of the New York Sun reported in an item about Kid Twist, i.e. Max Zweifach, another Monk Eastman lieutenant: “He was accused in connection with the death of Dick Fitzgerald in a saloon row several years ago and was thought to have a hand in the killing of Crazy Butch, a member of the gang.”
Was Crazy Butch’s murder the work of the Five Pointers; or a power struggle within the Monk Eastman gang (Eastman was in prison between 1904 and 1909)? Or did Kid Twist assist Harry the Soldier by neutralizing the lookouts?