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Pisello Sues MCA Records for $50 Million : Reputed Mob Figure Claims Firm Reneged on Series of Business Deals

September 10, 1988|WILLIAM K. KNOEDELSEDER Jr. | Times Staff Writer

Salvatore J. Pisello, who was recently convicted of evading taxes on money earned in a series of business deals with MCA Records, on Thursday filed a $50-million lawsuit against MCA, accusing the company of fraud and breach of contract in those same deals.

In announcing the suit late Thursday afternoon, Pisello--whom authorities have identified as a member of the Gambino crime family, although he denies it--said he had been "made the scapegoat and fall guy" in the MCA transactions, which became the focus of at least two grand jury investigations.

Pisello's attorney, Robert J. Tobias, said in a written statement that "this lawsuit is simply a legal recitation of some very disturbing facts which describe what we deem to be wrongful acts committed by MCA. . . . Some of the acts will shock the conscience of those upon whom MCA's image has been impressed."

Ron Olson, MCA's outside counsel, said in a telephone interview that MCA "has seen a draft of what purports to be a lawsuit but which has not been served on the company."

"We believe the allegations are without merit, and if the suit is filed, we are confident that a court will reject the allegations that are being made," Olson said.

Filed in Los Angeles Superior Court in Burbank, the Pisello suit claims that MCA reneged on certain written and oral agreements to pay Pisello a commission in exchange for his help in arranging a 1983 distribution agreement between MCA Records and Sugar Hill Records and MCA's 1985 purchase of Sugar Hill's primary asset, the Checker/Chess/Cadet catalogue of master recordings by such early rock 'n' roll stars as Bo Diddley and Chuck Berry.

The suit claims that in the spring of 1985--after Pisello's alleged ties to organized crime became public--MCA purchased the Checker/Chess catalogue for $3 million but "intentionally interfered with" a written agreement that called for Sugar Hill to pay Pisello 15% of the purchase price. The suit also claims that, at the same time, MCA ceased paying Pisello a 3% commission on the proceeds from the Sugar Hill distribution deal, which MCA had already agreed to in writing.

Sugar Hill, a small New Jersey record label that specialized in so-called rap music, filed for protection from its creditors under Chapter 11 of the U.S. Bankruptcy Code in 1986 and later filed a $240-million fraud suit against MCA Records. That case is still pending.

In his first on-the-record meeting with reporters in three years, Pisello took issue with a number of MCA's public statements about his dealing with the record company:

He claimed that--contrary to MCA executives' assertions that they were "swindled" and "conned" in their transactions with him--MCA actually made "millions of dollars" on the deals.

He said three of the deals--including a 1984 sale of more than 4 million discontinued, or "cutout," records--were proposed to him by MCA executives, not the other way around, as the executives claimed in a 1985 report to the company's board of directors.

In April, Pisello was convicted of evading taxes on more than $300,000 in income earned from the MCA transactions. He was sentenced to four years in prison and presently is free on bail while appealing his conviction.

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