Zeppo Marx was said to be the funniest of the Marx Brothers off screen, yet he was overshadowed by his siblings Groucho, Chico and Harpo in comic masterpieces such as Duck Soup and Monkey Business.

His own life was no laughing matter, however. A new biography reveals the extent of Zeppo’s involvement with organised crime and mobsters who were involved in high-stakes gambling, drugs, prostitution, burglary and murder.

Zeppo: The Reluctant Marx Brother will be published in the UK in December. The author, Robert S Bader, told the Observer: “This guy was really shady. It’s hard to believe, but he was on this driven mission to make more money than his brothers, and he didn’t care how he did it. But he never killed anybody, as far as I know.”

Born Herbert Marx in 1901, Zeppo was the youngest of the five brothers and appeared in the first five Marx Brothers films. He went on to became a successful talent agent, representing famous actors, and was friends with Frank Sinatra, who later had an affair with Zeppo’s second wife, Barbara.

But Bader found that Zeppo’s associates also included mobsters Gus Greenbaum and Moe Sedway – whose names were combined for the gangster character Moe Greene in the The Godfather. Greenbaum, who took over the Flamingo Hotel in Las Vegas after the murder of co-founder Bugsy Siegel in 1947, was himself murdered by mobsters who suspected him of stealing their money.

Another associate was Pat DiCicco, who worked for Charlie “Lucky” Luciano, the underworld’s notorious drug dealer.

Bader said: “One night at a boxing match in Los Angeles, DiCicco got into an argument with Zeppo, who punched him in the face and knocked him out. If anybody else had done that to Pat DiCicco, they probably would have been killed. But Zeppo was so well connected that it was overlooked. They didn’t do anything to him. He was not frightened at all. He was one of them.”

Bader has spent years researching his book, speaking to people who knew Zeppo and studying court records. Zeppo was called before a grand jury in 1958 to testify over missing funds in a gambling syndicate, but never named his good friend Greenbaum, the biographer said. “Zeppo said that he just went to Las Vegas and paid some man who told him how much he owed. It was pretty obvious it was Greenbaum. Shortly after Zeppo’s testimony, the mob paid Greenbaum a visit with a butcher’s knife. Greenbaum was killed because he was skimming casino profits.”

Bader said Zeppo’s brothers were so worried about the company he kept and his high-stakes gambling that they considered disowning him. “He would lose $100,000 playing cards and the next night he’d win $200,000. The Marx brothers were frightened of this … They didn’t want to have any connection to his debt.”

But the brothers were torn because they adored Zeppo. Bader said: “They were always personally close. They called each other almost every day … That’s the way they were.”

Zeppo was such a funny, gifted raconteur that he would have Groucho crying with laughter. But, away from the family, he mixed as easily with mobsters as movie stars.

The late Susan Marx, widow of Harpo, told Bader that a 1940s Hollywood fundraising gala was “filled with mobsters”: “Zeppo was walking around the room saying hello to all of them. She said to Harpo, ‘How come Zeppo knows all these guys?’”

Bader’s detective work has also linked Zeppo to a series of 1930s jewellery heists from Hollywood stars, in which the thieves sold back the jewels to the insurance company. “I’ve made a pretty clear case that Zeppo was deeply involved in this. He might have even organised it because it’s when he was raising money to buy into a talent agency, and he’s the only two-time victim of this whole scheme. He didn’t have the money, but then he suddenly had the money.”

After his acting career, Zeppo represented some of the biggest earners in Hollywood. In the 1940s at the height of their success, he represented Barbara Stanwyck and Fred MacMurray. He put together a package that made the classic movie Double Indemnity, which starred his two biggest clients.

In a statement, Tim Marx, son of Zeppo, said that Bader has “accurately portrayed my father as a charming, funny but narcissistic individual”.

Bader added: “If the story of the Marx Brothers is a triumphant showbusiness tale, Zeppo’s is a dimly lit film noir based on a gritty crime novel. He kept most of his life secret from even his closest friends, and I’m thrilled to have pieced it together.”