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Head of N.Y. Record Firm Charged With Extortion; 16 Others Arrested in Sweep

September 24, 1986|WILLIAM K. KNOEDELSEDER JR. | Times Staff Writer

NEW YORK — After a two-year probe of alleged mob infiltration of the record business, FBI agents on Tuesday arrested the president of a New York City record company and 16 other people on charges ranging from cocaine and heroin trafficking to extortion.

Among those seized in a dawn sweep were Morris Levy, president of New York City-based Roulette Records; Howard Fisher, Roulette's controller, and Dominick Canterino, reputedly a leader in New York's Genovese crime family.

The arrests were announced at a packed news conference at the U.S. attorney's office in Newark, N.J., on Tuesday morning, soon after 60 FBI agents fanned out across metropolitan New York and New Jersey to make the arrests. The agents were acting on a 117-count indictment handed up Friday by a federal grand jury in Newark.

Agents originally set out to pick up 21 individuals, but four remain at large, including Gaetano (Corky) Vastola, identified as a chieftain in the DeCavalcante organized crime family of New Jersey, and Rudolph (Rudy) Farone, allegedly a DeCavalcante soldier.

The Newark probe is one of at least five federal grand jury investigations looking into suspected Mafia infiltration of some segments of the $4-billion-a-year record industry. The other investigations are based in Los Angeles, New York, Philadelphia and Cleveland.

Tuesday morning's raids and arrests were the first public action in the Newark case, which was launched in November, 1984. The investigation utilized extensive wiretap surveillance--including one on Roulette's office phones, it was learned.

Law enforcement sources say the Newark case began as a "classic racketeering investigation" of individuals involved in traditional organized crime activities such as gambling, loan sharking and narcotics trafficking in New Jersey. But the scope of the investigation was broadened to include the record industry in the spring of 1985, when investigators began picking up information that members of the DeCavalcante, Gambino and Genovese crime families had become involved in certain record business transactions.

At Tuesday's press conference, Thomas W. Greelish, the federal prosecutor in Newark, said Levy, Fisher and six alleged organized crime figures named in the indictment were "charged with conspiring to use extortionate means to collect a $1.25-million debt" owed to Los Angeles-based MCA Records by John LaMonte, the owner of a Philadelphia-area budget-record distributorship called Out of the Past Inc.

As The Times reported last year, that debt was incurred through LaMonte's 1984 purchase of nearly 5 million so-called cutout, or out-of-date, recordings from MCA.

'Physical Violence and Threats'

According to the indictments, the cutouts were sold to LaMonte on credit, with Vastola and Levy guaranteeing LaMonte's payment to MCA. However, after MCA shipped the records to Out of the Past in the summer of 1984, "LaMonte determined that the order had been creamed, meaning that the more valuable items had been taken out," Greelish told the press conference.

When LaMonte subsequently refused to pay MCA for the records, Vastola, Levy, Canterino and Fisher used "physical violence and threats to take over LaMonte's company to enforce their guarantees of payment" to MCA, according to the indictments.

Greelish alleged that the investigation shows that "after a series of discussions among Levy, Vastola and Canterino," LaMonte was severely beaten by Vastola in May, 1985.

No MCA Employees Indicted

As previously reported by The Times, following his beating LaMonte agreed to cooperate with authorities. He entered the federal witness protection program last September and currently is in protective custody with his family. He is expected to be a key witness at any trials.

No MCA employees were indicted by the Newark grand jury, and the giant entertainment company has previously insisted that it was also a victim of the scheme. Also not named in the indictment was Salvatore Pisello, an alleged Gambino family soldier who acted as the middleman in the cutout sale between MCA and LaMonte. Pisello was also involved in a number of other record deals with MCA that are still under investigation by the Los Angeles grand jury. He is currently serving a two-year prison sentence in California for income tax evasion.

Levy and Fisher face a maximum 60 years in prison if convicted on the extortion and racketeering charges. Levy was arrested early Tuesday morning at the Ritz Carlton Hotel in Boston. He later posted $500,000 bail--10% in cash--and was released. Neither he nor his New York attorney, Leon Borstein, was available for comment on Tuesday. The other defendants or their attorneys also could not be reached for comment.

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