Morris Levy: Big Clout in Record Industry : His Behind-the-Scenes Influence Is Felt Throughout the Industry

Times Staff Writer

On a map of the $4-billion-a-year record business, Roulette Records and its president, Morris Levy, would show up as a speck.

In operation for 30 years, the tiny New York-based company rarely makes the record industry best-seller charts. It hasn't had a consistently successful recording act since Tommy James and the Shondells in the late 1960s. Levy himself is virtually unknown to the record-buying public.

Nonetheless, Levy is regarded as something of an institution in the record industry--a mysterious behind-the-scenes figure whose power--whether actual or perceived--would appear to be out of proportion to Roulette's sales performance.

Over the years, industry sources say, Levy has been the man to whom record company executives often turned for help in solving sticky problems ranging from record counterfeiting to suspected employee theft from pressing plants to turf disputes among rival rock concert promoters.

Exactly how he does it is the subject of considerable speculation. A good example of Levy's clout came last March 6, when an aide to Boston Mayor Raymond L. Flynn sought Levy's help in securing big-name performers for a series of city-sponsored concerts to be held on the Boston Commons this summer.

Levy says he personally arranged for Whitney Houston, Willie Nelson and Kool & the Gang to perform at the Concerts on the Commons. "I am booking the big acts, and I'm doing it for nothing," he said in a recent telephone interview from his New York office. "They (the mayor's office of business and cultural affairs, which is handling the concert series) couldn't get arrested without me," he said in an interview.

Levy's influence apparently extends to the highest levels of the major record companies. He says he has close friendships with Atlantic Records Vice Chairman Sheldon Vogel and CBS Records Group President Walter R. Yetnikoff, among others.

All of which helps to explain why there is uneasiness in the industry these days over recent revelations that Levy is currently one of a number of subjects of three federal grand jury investigations--in Los Angeles, New York and Newark, N.J.--looking into suspected organized crime infiltration of some segments of the record business.

Over the years, Levy has had a series of business and personal relationships with a number of reputed organized crime figures, including Thomas (Tony Ryan) Eboli, reputedly the boss of the Genovese crime family until he was gunned down gangland style on a Brooklyn street in 1972; Dominick (Swats Mulligan) Ciafone, reputely a Genovese soldier; Ciafone's nephew, Gaetano (Corky) Vastola, reputedly a chieftain in the DeCavalcante crime family of New Jersey, and Vincent (the Chin) Gigante, whom authorities believe is currently the acting boss of the Genovese family.

In a telephone interview, Levy said he's known a number of alleged mobsters over the years, but he doesn't apologize for the associations. "I grew up in New York, and I hit Broadway when I was 12," he said. "I started working the checkrooms at the nightclubs, and they owned all the clubs and had the liquor licenses."

He said that he's known Vastola and Gigante "since we were kids" and that he still supports Ciafone's widow. "She called me last week because she needed $1,000 for surgery, so I gave it to her. She's 79 years old." Levy is an active civic leader, philanthropist and political fund-raiser.

For example, in 1973, Levy was honored as Man of the Year by the United Jewish Appeal, for which he's served as chairman emeritus for the last 10 years. The following year, he was chairman of a Washington fund-raiser that netted $3 million for the Black Congressional Caucus. Levy's efforts earned him a citation signed by former U.N. Ambassador (and now Atlanta Mayor) Andrew Young, Rep. Ronald V. Dellums (D-Berkeley) and former Rep. Shirley Chisholm (D-N.Y.).

The citation hangs on a wall in Levy's office, along with a prominent photo of Levy standing on the steps of St. Patrick's Cathedral in New York shaking hands with the late Cardinal Francis Spellman.

"I helped raise money for the Foundling Hospital, the cardinal's favorite charity," he said. "(Roulette) recorded two albums of his St. Patrick's Cathedral Choir."

Last year, Levy was appointed to the board of the Opera Company of Boston, home of noted conductor Sarah Caldwell.

"I'm also on the board of the Columbia County Hospital (in Upstate New York), and I'm very active in the Jewish National Fund, which plants trees in Israel," he said. "I've been involved with civil rights since 1959, when we booked concert tours that played to non-segregated audiences in the South."

Music Publishing Firm

Reputedly a multimillionaire, Levy currently presides over a music and entertainment mini-conglomerate that includes--in addition to Roulette--half a dozen other small, independent record labels, among them Buddah, Sutra, Domino and Sunnyview. The latter label is named after Levy's 1,500-acre racehorse breeding farm in Ghent, N.Y.

He owns a major New York music publishing firm called Big 7 Music Corp. that holds about 30,000 song copyrights, according to Levy, including "Yellow Rose of Texas" and "Lullaby of Birdland," which was composed by pianist George Shearing in honor of the famous Broadway jazz club that Levy once owned. Levy also operates a New England-based chain of 60 retail record stores called Strawberries that recently announced plans to open 35 outlets in the Philadelphia area.

From 1969 to 1983, Levy owned a company called Promo Records Inc., based in Paterson, N.J. Thomas Eboli was one of his partners in Promo. According to a 1972 law enforcement intelligence report obtained by The Times, Eboli had acquired a 50% share in Promo for $100,000 and was on the payroll at a salary of $1,000 a week.

Record industry sources say that until about 1979, Promo was the dominant distributor of "cutout" recordings in the country, with a virtual monopoly on the sale of cutouts by several major companies.

Cutouts are older recordings that the record companies have deleted from their sales catalogues because they supposedly are no longer in demand. The major record companies sell huge amounts of cutouts--some experts estimate more than 100 million a year--to a network of budget record and tape distributors around the country. The cutout distributors, in turn, sell them to record stores, which offer them to consumers at prices considerably lower than the record companies' current, or "front-line," merchandise.

FBI Investigation

The Recording Industry Assn. of America, a trade group of the major record companies that is charged with policing counterfeiting in the industry, has contended for years that such mass selloffs help create an atmosphere conducive to counterfeiting by providing illegal duplicators with a "cover" to produce large quantities of the recordings that have been sold by the manufacturers as cutouts.

In 1978, Levy and Promo were among the subjects of a two-year undercover FBI investigation into record counterfeiting. Code-named Modsound, the investigation centered around an FBI-run "front" company called Modular Sounds in Westbury, N.Y. With undercover agents posing as record counterfeiters, the investigation uncovered a nationwide ring that included manufacturers, printers, distributors, wholesalers and retailers of counterfeit records and tapes.

Most of the counterfeiting uncovered by Modsound was of cutout, or older, recordings, investigators say.

The Modsound investigation led to more than a dozen convictions, including those of a large New York record chain, Sam Goody Inc., and one of its executives.

No charges were brought against Levy, and he scoffed at the investigation.

"(Former Genovese family boss) Eboli was my partner in Promo, and the FBI used to wake him up in the morning. You think if they found anything they wouldn't have charged me? I had a chain of stores; you think they didn't go into my stores and check them out? We're the cleanest chain in the country, and we intend to stay so. They know we were cleaner than Caesar's wife."

Remained Key Player

Promo Records went out of business in 1983. But law enforcement and record industry sources say that Levy remained a key player in the cutout trade by brokering deals between some major record companies and a number of small, budget record distributors.

The three current grand jury investigations are focusing on suspected organized crime involvement in the sale of cutout recordings and its apparent connection to counterfeiting.

Of particular interest to investigators is Levy's involvement in the April, 1984, sale of nearly 5 million cutouts by Los Angeles-based MCA Records to a Philadelphia-area cutout distributor called Out of the Past Inc., which was owned by John LaMonte, whose 1977 conviction for counterfeiting cutout recordings sparked the 1978 Modsound operation.

Investigators believe that East Coast counterfeiters used the MCA cutout sale as a cover to distribute unauthorized copies of recordings by some of MCA's top-selling artists to record chains around the country under the guise that they were part of the cutout sale.

Investigators say LaMonte, who has entered the government's witness protection program and has been cooperating with the grand jury investigations, is not suspected of counterfeiting MCA recordings.

The MCA cutout deal was arranged by Salvatore Pisello, identified by law enforcement officials as a high-ranking soldier in the Gambino crime family.

Roulette and Levy "guaranteed" payment of $1.4 million to MCA for the cutouts. However, most of the money was passed through another New York company called Consultants for World Records.

"I was not the customer in that sale," Levy said. "I just signed the purchase order and guaranteed payment through Consultants for World Records."

According to federal authorities, Consultants was operated by Pisello, Rocco Mussachia and Frederick (Fritz) Giovaniello. The latter two men are identified by law enforcement officials as members of the Genovese crime family. Levy acknowledged that Pisello, Mussachia and Giovaniello were partnered in Consultants. "An interesting combination," he said.

In March, 1985, Pisello was convicted of income tax evasion in U.S. District Court here and is currently serving a two-year prison term. Giovaniello was arrested in January for the brutal sidewalk killing of a New York Police detective who was following him as part of "a larger investigation of the Genovese family," according to New York police officials.

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