Reputed Crime Figure Indicted Over Record Deal Income Taxes

After a two-year investigation, a federal grand jury in Los Angeles on Thursday indicted reputed organized crime figure Salvatore J. Pisello for allegedly evading $187,000 in taxes on income he received as a result of transactions with Los Angeles-based MCA Records.

Pisello failed to report most of nearly $600,000 in income from the MCA deals between 1983 and 1985, and paid only $27,000 in taxes on all income over that three-year period, according to a statement issued by U.S. Atty. Robert C. Bonner and Richard A. Small, acting attorney in charge of the Los Angeles office of the Justice Department’s Organized Crime Strike Force, which is directing the investigation.

Pisello is currently living in a halfway house while completing a two-year prison sentence on a 1985 income tax evasion conviction. If convicted on the current charges, he faces a maximum of 15 years in prison and a $600,000 fine.

Pisello, 64, could not be reached for comment.

A spokesman for MCA Records said in a statement that neither the company nor its employees “have ever had any knowledge of Mr. Pisello’s personal finances.” He added that no allegations had been made against MCA or its employees and that the company “has previously cooperated fully . . . and will continue” to cooperate with federal investigators.

According to a number of former and current MCA executives previously interviewed by The Times, between late 1983 and mid-1985, Pisello operated out of MCA Records’ Universal City offices on an almost daily basis.

The statement issued Thursday by Bonner and Small alleged that Pisello earned $200,000 for his role in helping arrange a record distribution deal between MCA and tiny New Jersey-based Sugar Hill Records, a rhythm and blues label, in 1985. That money was purportedly paid by Sugar Hill. Additionally, he was allegedly paid $50,000 by MCA for helping to arrange the purchase of a Sugar Hill record catalogue.

He also received $180,000 in connection with his role as “middleman” on the sale of 8 million discontinued MCA records and tapes, according to the indictment.

The same so-called cutouts are also the subject of an extortion case in New Jersey against alleged DeCavalcante crime family chieftain Gaetano “Corky” Vastola and Morris Levy, a well-known record industry official and president of Roulette Records.

In defense motions in that case two weeks ago, attorneys for Levy presented a number of sworn affidavits by FBI agents claiming that Levy and Roulette were controlled by New York’s Genovese crime family.

According to the FBI, Pisello is a member of the Gambino crime family. Most of the money he earned from the MCA transactions allegedly passed through a New York company called Consultants for World Records. As previously reported, Pisello was a partner in that firm with two other reputed organized crime figures, alleged Genovese capo Frederick Giovanelli and his “lieutenant,” Rocco Musacchia. Giovanelli is currently on trial in New York for the 1986 murder of a New York police detective. He has pleaded innocent.

The Los Angeles grand jury investigation is one of five looking into organized crime involvement in the record business. The others are in Newark, N.J.; New York; Philadelphia, and Cleveland.