Head of N.Y. Record Firm Charged With Extortion; 16 Others Arrested in Sweep

After a two-year probe of alleged mob infiltration of the record business, FBI agents on Tuesday arrested the president of a New York City record company and 16 other people on charges ranging from cocaine and heroin trafficking to extortion.

Among those seized in a dawn sweep were Morris Levy, president of New York City-based Roulette Records; Howard Fisher, Roulette’s controller, and Dominick Canterino, reputedly a leader in New York’s Genovese crime family.

The arrests were announced at a packed news conference at the U.S. attorney’s office in Newark, N.J., on Tuesday morning, soon after 60 FBI agents fanned out across metropolitan New York and New Jersey to make the arrests. The agents were acting on a 117-count indictment handed up Friday by a federal grand jury in Newark.

Agents originally set out to pick up 21 individuals, but four remain at large, including Gaetano (Corky) Vastola, identified as a chieftain in the DeCavalcante organized crime family of New Jersey, and Rudolph (Rudy) Farone, allegedly a DeCavalcante soldier.

The Newark probe is one of at least five federal grand jury investigations looking into suspected Mafia infiltration of some segments of the $4-billion-a-year record industry. The other investigations are based in Los Angeles, New York, Philadelphia and Cleveland.

Tuesday morning’s raids and arrests were the first public action in the Newark case, which was launched in November, 1984. The investigation utilized extensive wiretap surveillance--including one on Roulette’s office phones, it was learned.

Law enforcement sources say the Newark case began as a “classic racketeering investigation” of individuals involved in traditional organized crime activities such as gambling, loan sharking and narcotics trafficking in New Jersey. But the scope of the investigation was broadened to include the record industry in the spring of 1985, when investigators began picking up information that members of the DeCavalcante, Gambino and Genovese crime families had become involved in certain record business transactions.

At Tuesday’s press conference, Thomas W. Greelish, the federal prosecutor in Newark, said Levy, Fisher and six alleged organized crime figures named in the indictment were “charged with conspiring to use extortionate means to collect a $1.25-million debt” owed to Los Angeles-based MCA Records by John LaMonte, the owner of a Philadelphia-area budget-record distributorship called Out of the Past Inc.

As The Times reported last year, that debt was incurred through LaMonte’s 1984 purchase of nearly 5 million so-called cutout, or out-of-date, recordings from MCA.

‘Physical Violence and Threats’

According to the indictments, the cutouts were sold to LaMonte on credit, with Vastola and Levy guaranteeing LaMonte’s payment to MCA. However, after MCA shipped the records to Out of the Past in the summer of 1984, “LaMonte determined that the order had been creamed, meaning that the more valuable items had been taken out,” Greelish told the press conference.

When LaMonte subsequently refused to pay MCA for the records, Vastola, Levy, Canterino and Fisher used “physical violence and threats to take over LaMonte’s company to enforce their guarantees of payment” to MCA, according to the indictments.

Greelish alleged that the investigation shows that “after a series of discussions among Levy, Vastola and Canterino,” LaMonte was severely beaten by Vastola in May, 1985.

No MCA Employees Indicted

As previously reported by The Times, following his beating LaMonte agreed to cooperate with authorities. He entered the federal witness protection program last September and currently is in protective custody with his family. He is expected to be a key witness at any trials.

No MCA employees were indicted by the Newark grand jury, and the giant entertainment company has previously insisted that it was also a victim of the scheme. Also not named in the indictment was Salvatore Pisello, an alleged Gambino family soldier who acted as the middleman in the cutout sale between MCA and LaMonte. Pisello was also involved in a number of other record deals with MCA that are still under investigation by the Los Angeles grand jury. He is currently serving a two-year prison sentence in California for income tax evasion.

Levy and Fisher face a maximum 60 years in prison if convicted on the extortion and racketeering charges. Levy was arrested early Tuesday morning at the Ritz Carlton Hotel in Boston. He later posted $500,000 bail--10% in cash--and was released. Neither he nor his New York attorney, Leon Borstein, was available for comment on Tuesday. The other defendants or their attorneys also could not be reached for comment.

As reported by The Times in a profile of the record executive earlier this year, Levy has a long history of business and personal ties to organized crime figures, including Vastola; Vincent (the Chin) Gigante, reputedly the underboss of the Genovese family, and Thomas Eboli, reputed head of the Genovese family until he was gunned down gangland-style on a Brooklyn street in 1972.

In a telephone interview earlier this year, Levy acknowledged those associations, saying that he’d known Gigante and Vastola “since we were kids.”

Roulette has produced almost no hit records for two decades, yet Levy has been considered an influential figure in the record business and is known socially by many major executives in the industry.

Until Tuesday’s arrest, the government has never brought a racketeering charge against Levy. In June, 1975, he was indicted for assaulting an off-duty police officer outside a New York nightclub--a beating that resulted in the officer losing an eye. He was indicted along with Nathan McCalla, decribed as a vice president of Roulette Records. The assault case was later dismissed, and the case records have been sealed by court order. McCalla was later murdered in Fort Lauderdale, Fla.

Tuesday’s indictments describe Vastola, also known as “The Big Guy” and “The Galoot,” as the kingpin of an extensive criminal enterprise that operated out a company called Video Warehouse Inc. in West Long Branch, N.J.

According to the indictment, the “Vastola Organization” carried out a “pattern of racketeering” in New York, New Jersey, Pennsylvania, Maryland and Florida. Its illegal activities allegedly include loan sharking, gambling, bankruptcy fraud, wire fraud and insurance fraud. The indictment states that “under the direction and protection of Vastola” and members of his organization, “heroin and cocaine were transported to New Jersey and New York for distribution in New Jersey, New York and Pennsylvania.”

Vastola’s ties to Levy and the music business go back at least 20 years. According to published transcripts of FBI wiretaps on the phones of Sam (the Plumber) DeCavalcante, Vastola earned half a million dollars from a record counterfeiting deal in 1965.

During hearings before the House Select Committee on Crime in 1972, Vastola was identified by a New Jersey State Police criminal intelligence officer has having an interest in a New York talent agency called Queens Booking Agency, “which has booked many principal entertainment figures throughout the country.” According to law enforcement and entertainment industry sources, Queens has booked concert appearances at Atlantic City, N.J., casinos by such performers as Red Foxx, Ray Charles, Aretha Franklin and Sammy Davis Jr.

Vastola has been convicted of extortion twice before, in 1970 and 1972. Along with his cousin, Palmer (Sonny) Brocco--who was also arrested Tuesday--he was indicted in New Jersey in October, 1985, for allegedly extorting executives of a local New Jersey airline that flies gamblers on junkets to Atlantic City.

One investigator described Vastola as “a tough character, very intelligent, with a background of violence.”

Times researcher Tony Robinson contributed to this story.