MCA Finance Executive Details Pisello Dealings
Testifying under a grant of immunity from prosecution in the tax evasion trial of reputed mobster Salvatore Pisello, the chief financial officer of MCA Records on Tuesday detailed a series of unusual financial transactions between Pisello and MCA in 1984 and 1985.
Dan McGill, the senior vice president of finance for the MCA Music Entertainment Group, testified in U.S. District Court in Los Angeles that he accepted on MCA’s behalf three undated $60,000 checks from Pisello in early 1985. The checks represented a guarantee against $180,000 that the company had advanced to Pisello on a number of business deals in 1984, McGill said.
Under questioning from prosecutor Marvin L. Rudnick, defense attorney David Hinden and U.S. District Judge William J. Rea, McGill said he kept the undated checks in his desk drawer and never attempted to cash them. “Whenever I would discuss (repayment) with Mr. Pisello, he indicated that there were not sufficient funds” to cover the checks, McGill said.
McGill also testified that MCA advanced Pisello $50,000 for unspecified purposes in January, 1985, at a time when the company was owed more than $800,000 from the April, 1984, sale of several million so-called cutout, or discontinued, records that Pisello negotiated.
Despite the outstanding balance on the April, 1984, cutout sale, MCA returned a $200,000 down payment that Pisello made on a second cutout sale--in October, 1984--that the company was unable to complete, McGill said.
McGill--a certified public accountant who has worked for MCA for 13 years--testified that all of the advances were approved by MCA Records President Myron Roth.
McGill’s testimony marks the first time that any executive of MCA Records has publicly answered detailed questions about the company’s dealings with Pisello between 1983 and 1985. Pisello is charged with evading taxes on about $450,000 in unreported income for the years 1983 to 1985. According to the prosecution, Pisello earned about $600,000 during those years through a series of record industry transactions that resulted from Pisello’s relationships with MCA executives.
In his opening argument last week, defense attorney Hinden claimed that most of the money Pisello received from the record deals was in the form of loans that were to be repaid and were therefore was not taxable as income. On Tuesday, however, McGill denied that the advances from MCA were loans.
Asked by Judge Rea if MCA had ever been repaid by Pisello for the advances, McGill responded that they had been written off as uncollectible debts at the end of 1985.
Tuesday’s testimony revealed a number of apparently unorthodox accounting procedures that MCA executives apparently agreed to at Pisello’s request. Under cross-examination by Hinden, McGill said the three undated checks were given to him by Pisello as replacements for earlier dated checks, which he had also kept in his desk without attempting to cash.
The dated checks were returned to Pisello because they had “become stale,” McGill said, meaning too old to cash. McGill said he did not retain photocopies or any type of record of the returned, dated checks. “It didn’t occur to me that it was necessary,” he said.
Asked by Hinden if he’d told anyone else at MCA at the time about the undated checks that he kept in his desk drawer, McGill replied: “I don’t recall telling anyone.”