Probe Points to Mob Role in Record Deal

What seemed like a routine record-business deal in the spring of 1984 has come under the scrutiny of FBI and IRS agents investigating suspected organized crime infiltration of some segments of the U.S. record business.

The deal--in which Los Angeles-based MCA Records sold about 5 million so-called cutout, or out-of-date, recordings to a small Philadelphia budget record distributor called Out of the Past Inc.--may have resulted in a large-scale East Coast operation that distributed suspected counterfeit recordings by some of MCA’s top-selling artists to record chains around the country under the guise that they were part of the MCA cutout sale.

Since The Times revealed both the cutout sale and the counterfeiting scheme a year ago, federal grand jury investigations in Los Angeles, New York and Newark, N.J., have begun looking into this previously little-known area of the record business that, law enforcement officials say, has apparently been penetrated by members of East Coast organized crime families. Reports last week by NBC-TV that the grand juries also may be investigating Mafia links to certain independent record promoters and the supposedly widespread practice of payola in the record industry prompted MCA and Capitol Records to announce that they were suspending the use of such independent promoters.

However, federal investigators in New York and Newark have told The Times that they are unaware of any current investigation of independent promotion, payola or any specific independent promoters. Sources close to the Los Angeles-based investigation say they have begun preliminary inquiries into the business activities of one local promoter but not independent promotion or payola in general.

Federal investigators on the East Coast insist that their investigations remain more narrowly focused on the cutout business, counterfeiting and the circumstances surrounding the 1984 MCA sale.

Ties to Organized Crime

Two individuals involved in that deal are key subjects of all three grand jury inquiries, according to authorities: Salvatore Pisello, 62, and Morris Levy, 57, the president of New York-based Roulette Records. Federal and local authorities in New York and New Jersey have previously identified both men in court and government records as having ties to East Coast organized crime figures.

A third participant in the MCA cutout sale, John LaMonte, 41, the owner of a budget record distributorship in the Philadelphia suburb of Darby, has entered the federal witness protection program and is cooperating with authorities in New York and New Jersey.

LaMonte, who went into hiding with his family in September, pleaded no contest to charges of record counterfeiting in 1978 and subsequently served a year in prison. However, authorities say he is not suspected of counterfeiting MCA recordings but rather was the apparent victim of an extortion attempt related to his purchase of the MCA cutouts.

East Coast law enforcement officials also said that Los Angeles-based MCA itself is not the target of their investigations. “It’s possible the company was just a victim, like LaMonte,” one investigator said. Last week, federal prosecutors in Los Angeles served subpoenas on MCA Records, Roulette Records and LaMonte’s company, Out of the Past Inc., for documents pertaining to the 1984 cutout sale, The Times has learned. In addition, the prosecutors subpoenaed documents pertaining to a number of other business deals between Pisello and MCA--deals that netted Pisello $250,000 in 1984, according to internal MCA documents obtained by The Times.

As previously reported by The Times, Pisello was sentenced last April in U.S. District Court here to two years in prison for income tax evasion--a case prosecuted by the Los Angeles office of the Justice Department’s organized crime strike force. He is appealing the sentence.

60 Truckloads of Records

In documents filed with a sentencing memorandum in that case, Pisello is described by law enforcement officials as a suspected drug trafficker and “alleged high-ranking soldier in the Carlo Gambino crime family of New York.”

LaMonte has told federal investigators and The Times that, after receiving 60 truckloads of records, he complained to Levy and Pisello--in a meeting at Roulette’s New York offices--that he had not received the records he had ordered but rather had been shipped “junk,” or worthless records by MCA. Consequently, he refused to make continued payments to Levy and Pisello through a company called Consultants for World Records.

Several weeks after the Roulette meeting, LaMonte allegedly was beaten up by another subject of the New York and Newark investigations, Gaetano Vastola, over LaMonte’s continued refusal to pay for the cutouts. The beating was photographed by FBI agents who had followed LaMonte and Vastola to a prearranged meeting at a New Jersey hotel. According to the FBI and New York Police Department, Vastola is a member of the DeCavalcante crime family of New Jersey.

LaMonte also has told investigators that, along with Pisello and Levy, Frederick (Fritz) Giovannielo was present at the Roulette meeting to discuss LaMonte’s payment problems for the MCA cutouts and that Giovannielo later visited his Darby warehouse to inspect the MCA cutout merchandise.

Sidewalk Slaying

Last month, Giovannielo, identified by New York law enforcement officials as a member of the Genovese crime family, was charged with the sidewalk killing of a New York police detective and the wounding of his female partner.

According to a police account of the Jan. 21 incident, Det. Anthony J. Venditti was shot twice in the face at point-blank range and twice more as he lay on the pavement. His partner, Det. Kathleen M. Burke, was wounded in the chest after she reportedly exchanged shots with Giovannielo and two other men that the detectives had been following at the time. According to police, the two detectives were part of an FBI-New York police organized crime task force. Giovannielo was arrested at the scene and is being held without bail.

No arrests or indictments as a result of the investigations have as yet been disclosed. However, the revelation that Roulette President Levy is a key target is almost certain to send shock waves through the executive suites of the record industry.

Although Roulette has never been a major commercial force in the record industry, Levy himself has long been considered an influential behind-the-scenes figure in the business. He also controls aNew York music publishing firm called Big Seven Music, a chain of retail record stores in New England called Strawberries and a large thoroughbred horsebreeding operation, Sunnyview Farms, in upstate New York.

Roulette Records’ biggest commercial successes came in the late1950s and mid-1960s with Jimmie Rogers, who had a string of big sellers including “Honeycomb” and “Kisses Sweeter Than Wine,” and Tommy James and the Shondells, whose dozen Top 40 hits include “Hanky Panky” and “Crimson and Clover.” The company currently is enjoying modest success with the album “The Fat Boys Are Back,” on its Sutra label.

In 1973, a government-protected witness testified before the Senate’s Permanent subcommittee on investigations that two well-known mobsters were at one time partners with Levy in Roulette--Angelo DeCarlo, an alleged Genovese soldier who served time in prison for selling stolen securities, and Thomas Eboli, allegedly the head of the Genovese family when he was shot to death in New York in 1972.

Gerald Zelmanowitz, the first person to enter the government’s witness protection program, also testified before the Senate subcommittee that Roulette Records had received funds from organized crime activities that had been laundered through Swiss bank accounts.