Levy Denies Charge of Racketeering, Claims Harassment

Times Staff Writer

These aren't the best of times for Morris Levy.

Last week, the 59-year-old president of New York City-based Roulette Records was indicted--along with a handful of reputed East Coast Mafia figures--by a federal grand jury in Newark, N.J., on three counts of racketeering and extortion. If convicted on the charges--which he dismisses as "ridiculous"--Levy faces a possible 60 years in prison.

His early morning arrest by FBI agents at a posh Boston hotel was covered on national television, and in an allusion to his long history of personal and business ties to reputed mobsters, one network news broadcast dubbed him "the godfather of American music."

Subject of 2 Other Probes

As one of the subjects of two other grand jury investigations--based in Los Angeles and New York--looking into suspected Mafia involvement in the record business, Levy says he's been notified by the government that his phones have been tapped for the past year. And he claims that federal agents in the New York investigation recently warned him that he's been marked for death by organized crime. Earlier this month, when someone threw a tear gas bomb minutes into a performance by Moscow's Moiseyev dance company at New York's Metropolitan Opera House, the canister landed under Levy's seat.

But if Levy is worried, it wasn't apparent during a 2 1/2-hour interview with The Times at Roulette's New York office.

"The only thing I know about organized crime is my five ex-wives," he said, with a deep growling laugh. "Right now, I don't think I'm in danger from anyone, except maybe the FBI."

Surrounded by gold-record mementos of his 40-year music business career, family photos and framed testimonials to his many charitable, religious and political contributions, Levy was sporting a three-day growth of beard and wearing sneakers, baby-blue jeans and a T-shirt emblazoned with white letters--"CBS." He was attended by his New York attorney, Leon Borstein, and Roulette's longtime accountant, Howard Fisher, who was also indicted on extortion and racketeering charges.

Borstein said the interview was part of a planned campaign to "go public" with their side of the story. Their side includes allegations of government misconduct in the case.

For example, Borstein claims that when he learned of Levy's indictment and impending arrest from a reporter for a Hollywood trade paper, he called the U.S. attorney's office in Newark and offered to have his client surrender. But the prosecutor's office didn't respond, he said, because "they preferred to embarrass Morris by having him arrested on national TV." Borstein pointed out that an NBC camera crew was on hand to record Levy's 7:30 a.m. arrest at Boston's Ritz Carlton Hotel. "Someone had to tell them when to be there," he said.

Bruce Repetto, the assistant U.S. attorney in charge of the Newark case, said he is unaware of any call to his office from Borstein. "I didn't speak to him and received no message that he called."

The three men also claim that an FBI agent and a New York police detective "kidnaped" Fisher off the street in July and held him for four hours in a Manhattan hotel room in an effort to frighten him into joining the witness protection program and gathering incriminating evidence against Levy, for whom he's worked for 27 years.

'Weak Link' in Operation

"Any allegation as to his being kidnaped and held against his will by the FBI is completely ridiculous," said Ray McElhaney, an FBI spokesman in Washington. "As to whether or not we ever interviewed (Fisher), I have to decline comment due to the pending nature of charges."

Recalling his encounter with the investigators, Fisher said: "They told me that Morris was going away (to jail) for 20 years, that they had him cold. They said I was the weak link in the operation and that Morris and his Mafia friends were going to kill me. They said that if I didn't cooperate, I would be indicted and arrested at my home in front of my family and neighbors, which they eventually did."

Levy claims the same agent and detective later told him that unless he joined the witness protection program, he would be killed. "I said: 'By who? You?' "

"I think they want me to say a lot of things about a lot of people I know," Levy said. "Honestly, speaking about my background, I've been on the streets since I was 14 years old, and I know and like a lot of people that some might say are organized crime figures--I worked for them as a kid in night clubs."

Said FBI spokesman McElhaney: "We simply cannot comment regarding any particulars of the investigation, again because of the pending charges."

According to Borstein, the government specifically wants his client to talk about Vincent (the Chin) Gigante, reputed underboss of the Genovese crime family and a childhood friend of Levy.

Levy denies any business relationship with Gigante, who has served time in prison for narcotics trafficking. "I have nothing to say on that crap, but the government thinks I know something," he said.

"I honestly believe that if I'd joined the witness protection program, I would not have been indicted," Levy said. "Their whole prosecution is based on the witness protection program." He was referring to the government's use of John LaMonte, a Philadelphia-area budget record distributor whose alleged beating in May, 1985, forms the basis of the extortion charges against Levy and Fisher.

Entered Witness Program

After the alleged beating, LaMonte agreed to cooperate with authorities, and he entered the witness protection program a year ago. He's presently in protective custody, following his testimony before the Newark grand jury on Sept. 19. According to the government, the attack on LaMonte grew out of his 1984 purchase of nearly 5 million discontinued, or "cutout," recordings from Los Angeles-based MCA Records. The government claims in its indictment that Levy and several reputed Mafia figures "guaranteed" LaMonte's payment of $1.25 million to MCA for the cutouts.

However, after receiving 60 truckloads of cutouts from MCA in the summer of 1984, LaMonte determined that most of the more valuable recordings had been diverted from the shipment, and he consequently refused to pay. According to the indictment, Levy and his alleged conspirators then employed "physical violence and threats to take over LaMonte's company to enforce their guarantees of payment" to MCA.

Levy acknowledged that he was "furious" over LaMonte's refusal to pay for the records and even had a shouting argument with him in January, 1985, at LaMonte's warehouse in the Philadelphia suburb of Darby. Levy claims that he was actually a "victim" in the cutout deal. "I'm out-of-pocket 120 Gs ($120,000)." But he denies any participation in--or knowledge of--threats or physical violence directed against LaMonte.

"Morris Levy is not a criminal; he's just a very tough businessman," Borstein said.

Levy said that the government "is now going to harass the hell out of me, harass the people I do business with, go to banks where I get credit--they've already started." Levy and Borstein shrugged off what they estimate to be nearly 2,000 hours of wiretaps on Roulette's office telephones. "I've been bugged before," said Levy.

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