Music execs may be indicted

Los Angeles Times Staff Writer

Music magnate Irv "Gotti" Lorenzo and his brother, Chris Lorenzo, probably will be indicted this week -- possibly as early as today -- on racketeering and money laundering charges, people close to the case said.

The U.S. attorney's office in Brooklyn, N.Y., is expected to announce the indictment at a news conference this afternoon. The sources said the brothers would be charged with laundering cash from illegal drug sales through an R&B label they co-own and operate with Universal Music Group, the world's largest record corporation, which is owned by Vivendi Universal.

Irv Lorenzo, who founded the label Murder Inc. after discovering such stars as Jay-Z, DMX, Ja Rule and Ashanti, has generated more than $1 billion for Universal and its Island Def Jam division over the last decade. He is the label's chairman and chief executive. His brother is president.

Universal, whose lawyers have met repeatedly with investigators in recent months, won't be charged with any criminal activity in the case, sources said.

The U.S. attorney's office in Brooklyn has been investigating the brothers' finances and their label's relationship with Kenneth "Preme" McGriff, a convicted drug dealer whose Supreme Team gang allegedly dominated the crack cocaine trade in a violent Queens, N.Y., housing project during the 1980s.

McGriff's indictment on murder charges for his alleged involvement in a series of East Coast slayings tied to the rap world is expected to be announced today, sources said.

Authorities allege that McGriff -- who spent 10 years behind bars on narcotics charges -- resumed his criminal activity after his release in 1995 and began laundering cash from drug proceeds through Murder Inc. around 1998, court documents indicate.

The Lorenzo brothers and McGriff deny the allegations.

Two years ago, federal agents raided Murder Inc.'s offices in Manhattan, seizing computers, documents and at least one handgun. Authorities contend that McGriff financed the label's launch with drug money, extorted its rivals and often hand-delivered bags of cash to Irv Lorenzo's office -- about $30,000 of which was allegedly seized from a safe during the raid, government sources say.

After the raid, the government froze the bank accounts of several companies involved in making a soundtrack for the McGriff-produced "Crime Partners," a movie that government officials allege was created solely as a vehicle for laundering money from drug transactions.

Seeking to improve its image, Murder Inc. changed its name to The Inc. in December 2003.

In November, police arrested Ron "Gutta" Robinson, manager of rap star Ja Rule, and Cynthia Brent, a bookkeeper for The Inc., on charges of money laundering. The two allegedly conspired with others at the label to launder more than $1 million from 1998 to 2002, involving cash proceeds from narcotics trafficking.

Three months ago, police arrested two alleged McGriff associates on suspicion of killing New York rapper E-Money Bags, whose real name was Eric Smith. According to court documents, the 2001 slaying was allegedly commissioned by McGriff.

Federal authorities declined to discuss the expected indictments of the Lorenzos and McGriff.

Representatives for Universal and The Inc. also declined to comment.

McGriff, who is in a federal prison in West Virginia, could not be reached for comment. His attorney, Robert Simels, scoffed at the allegations.

"This case is based on fabrications by liars trying to cut a deal with the government to save their own skin," Simels said.

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