In the movie, the Gangster Squad is assembled to go after Mickey Cohen. However, in real life Chief W.H. Parker set up the squad to prevent other gangsters from taking over Cohen's rackets after Cohen went to prison on income tax evasion. Whenever the squad learned that out-of-town gangsters were coming to Los Angeles to try to set up new operations, the Gangster Squad would kidnap them, beat them up (some rumors say torture) and then send them back to wherever they came from with the warning that if they ever returned, they would be killed.
The original trailer was pulled after the Aurora, Colorado, Century 16 theater massacre due to a shot in which four gangsters fire machine guns through a projection screen into a crowded movie theater. Warner Bros. ordered the film back into production for a reshoot of the scene, necessitating a rescheduling of the film's release and rewrite of the script.
The big nightclub in the film was originally an old furniture store that was converted. Bellflower, CA--where this was shot--was hit hard by the 2007 recession, and the production company was able to take over a main street in the city and turn it into period Los Angeles.
The film is based on a series of L.A. Times articles that were turned into a book written by Paul Lieberman. He turned those stories into a book, which was released August 7, which would have been perfect timing if the film hadn't been delayed.
The first line Sean Penn's character Mickey Cohen speaks in the movie, "The children of the night, what music they make," is a quote from the novel 'Bram Stokers Dracula', and is also spoken by Gary Oldman, starring as Count Dracula, in the 1992 film.
The movie culminates in a giant shootout at the hotel in which dozens of gangsters are mowed down by Tommy guns. The leader of the squad, Jack O'Mara (Josh Brolin) assaults Mickey Cohen (Sean Penn) and arrests him for murder. In real life, Mickey Cohen was arrested for tax evasion. Also, by the time Cohen was imprisoned in 1961, the real Jack O'Mara was retired and watched the trial as a civilian.