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U.S. Links Murder Inc. to Drug Cash

A civil complaint says a felon used the record label to launder funds from sale of narcotics.

May 13, 2003|Chuck Philips | Times Staff Writer

A convicted crack kingpin delivered cash from illegal drugs to the Manhattan headquarters of rap label Murder Inc. as part of an elaborate money-laundering scheme tied to the company's first movie project, "Crime Partners," according to a federal complaint filed Monday.

The document provides the most starkly detailed picture to date of what government investigators describe as a far-reaching plan to pour illicit funds into entertainment enterprises, including the rap label founded by producer Irving Lorenzo, who is also known as Irv Gotti.

The civil complaint, filed in federal court in Brooklyn, N.Y., by the U.S. attorney's office, contends that Kenneth "Supreme" McGriff, the convicted dealer who produced the film, would exchange narcotics proceeds for checks from Murder Inc., a rap label co-owned by Vivendi Universal's Island Def Jam unit. It demands forfeiture of money in a variety of accounts tied to McGriff.

Among other things, the complaint says McGriff and his criminal associates secretly controlled the bank accounts of Picture Perfect, Picture Perfect Entertainment, Crackhouse Studios, Murda Management and other companies affiliated with "Crime Partners" -- which the government says were created solely to launder proceeds from drug trafficking and credit card fraud.

"Crime Partners," a low-budget action drama, was released on DVD in late March by Ventura Distribution in Thousand Oaks.

The complaint says records obtained by investigators indicate that McGriff used a two-way pager registered to Murder Inc. in communicating with his criminal associates. The complaint also alleges that McGriff used a Murder Inc. credit card assigned to Christopher Lorenzo, the brother of label executive Gotti, to pay for a posh hotel suite last fall at the Four Seasons Hotel in Houston.

The government said it had collected evidence showing that McGriff routinely used Murder Inc. money and credit cards for airfare, hotels and at least one limousine trip that cost $1,200. Investigators alleged that McGriff was being paid by Murder Inc. under aliases to conceal payments from the label, which is part of Universal Music Group.

The complaint says federal agents have interviewed Christopher Lorenzo. Investigators say he told agents that "Crime Partners" was "Supreme's movie," referring to McGriff.

Gotti and McGriff couldn't be reached. They previously have denied any wrongdoing. Sources close to Gotti say he has earned millions legally by running Murder Inc. and producing hit records for pop stars such as Jennifer Lopez and Mariah Carey.

Executives at Island Def Jam, which has provided funding to Murder Inc., declined to comment, as did Universal Music.

A federal task force is investigating the finances of Murder Inc. and its relationship with McGriff, whose "Supreme Team" drug gang allegedly dominated the crack cocaine trade in a Queens, N.Y., housing project during the 1980s. Court documents state that the gang maintained control by murdering competitors and terrorizing the neighborhood while driving in bulletproof cars.

As part of the "Crime Partners" project, Murder Inc. negotiated a $1-million deal with McGriff to provide a soundtrack for the film. So far, he has received a $500,000 advance from Murder Inc.'s partner Island Def Jam, according to a company document, but no recording has been delivered.

Sources say Gotti provided acts from his Murder Inc. roster to appear for free in McGriff's film. Money launderers often use cheap projects that fail to generate cash to hide illegal earnings, according to federal sources.

McGriff's attorney, Robert M. Simels, said Monday that there was nothing illicit about the business relationship between Gotti and McGriff, who was convicted on federal narcotics conspiracy charges and served 10 years in prison.

The complaint contends that McGriff resumed his criminal activity after his release from prison in 1995. Investigators allege that McGriff began to transport narcotics from New York to Maryland and other areas.

McGriff is in jail in Baltimore awaiting sentencing on a federal parole violation for shooting a gun at a firing range. He also faces sentencing on a state charge for criminal possession of a weapon with intent to use.

With regard to the state charge, New York police officers stopped McGriff in July while driving a BMW in Harlem, the complaint says. McGriff was carrying a loaded .40 caliber pistol in his waistband, about $10,000 in cash and a New Jersey driver's license bearing his photograph and the name "Lee Tuten," according to the filing.

During the traffic stop, McGriff told the arresting officers that his name was "Rick Coleman" and that he was an executive for a record company named Island Def Jam, the complaint contends.

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