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Posted on 05/03/2003 8:25:55 PM PDT by TigerLikesRooster
IRS Says Drug Money Laundered Through Record Label
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Sat May 3,12:40 PM ET
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By Sue Zeidler
LOS ANGELES (Reuters) - Murder Inc., a rap label partly owned by the world's biggest music company, Universal Music, allegedly was used to launder money for a drug dealer, according to court papers unsealed this week.
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The document, filed in January in Brooklyn federal court by an Internal Revenue Service (news - web sites) special agent, alleges that convicted drug dealer Kenneth McGriff, who was released from prison in 1995, has returned to the drug business, laundering his drug profits through Murder Inc., a record label that is home to acts like Ja Rule and Ashanti.
The affidavit said the label paid McGriff back under aliases. Lawyers for Murder Inc. said the company believes the allegations are unfounded. McGriff's lawyer also called the allegations untrue,
Murder Inc's partner, Island Def Jam, a division of Vivendi Universal's Universal Music Group, declined comment.
McGriff, convicted of drug trafficking in 1989 and released about six years later, faces sentencing on June 2 on a parole violation for shooting a gun at a firing range.
McGriff's lawyer, Robert Simels, said the affidavit contains a lot of allegations, but not enough proof to enable federal authorities to charge McGriff or anybody else.
Investigators allege that once freed in 1995, McGriff got involved in several high-profile shootings, including the shooting of rapper 50 Cent, who had been feuding with Murder Inc. executives and artists, including Ja Rule.
The affidavit also states that text messages transmitted on a two-way pager used by McGriff and paid for by Murder Inc, confirms extensive narcotics trafficking and cites evidence linking him to a narcotics-related double homicide.
'ILLOGICAL LEAP'
"If the government had any proof, I guess he (McGriff) and the people they claim he was associated with would be charged with criminal conduct," Simels said, adding, "But I don't think there's any evidence."
"The concept here is that McGriff, after serving time in jail, was somehow in a position to come back in 1995 and partake in criminal activities and provide the seed money to Murder Inc. It's such an illogical leap," said Simels.
"The reality is Murder Inc's seed money comes from Island Def Jam to the tune of $6 million in start-up funds," he said.
The affidavit was used in January to justify seizure of bank accounts used by McGriff and associates. The FBI (news - web sites) also raided Murder Inc.'s Manhattan offices in January, seizing records and computer drives.
The probe has also focused on the relationship between McGriff and long-time friend, record producer Irv Gotti, the founder of Murder Inc. Gotti's real name is Irving Lorenzo.
The affidavit said subpoenaed hotel records show that Murder Inc. paid for McGriff's hotel stays in Texas in late November and December, including $1,200 limousine rides to the Beaumont prison facility where he visited Gerald Miller, an alleged prominent member of McGriff's drug operation.
The affidavit says Miller is being investigated because guards repeatedly cite a sharp rise in heroin in the prison, coinciding with McGriff's visits.
The affadavit also says that Murder Inc. used McGriff's reputation for violence and witness intimidation to scare people in the music industry and extort a "prominent music executive from another company."
Simels maintains that Gotti has earned millions legally by running Murder Inc. and producing records.
I'm shocked I tell ya, shocked!!
These guys really live up to their title.:)
"Wiretap helped bring down drug ring
Authorities say violent Gorilla Records group may have put 260 pounds of crack cocaine on city's streets
05/03/03
By JOE DANBORN
Staff Reporter
The Gorilla Records drug ring -- named after a small rap music label investigators say was a front -- killed and perjured while trying to control the cocaine trade in Mobile and Prichard, federal agents allege in documents un sealed Friday.
Authorities contend the organization may have put more than 120 kilograms -- roughly 260 pounds -- of crack cocaine on the cities' streets, a staggering amount considering a fraction of an ounce can cause a full-blown high. The group was so well-organized that for a time, one of its founders used a cellular phone to help run the outfit from his prison cell, agents allege.
Officials consider the group "the major supplier of cocaine and crack cocaine in the Mobile area," an affidavit states.
The Drug Enforcement Administration affidavits, sealed for nearly two months, helped convince a federal judge to authorize the first telephone wiretap in Mobile in at least a decade.
A federal grand jury in Mobile indicted nine people last week, including Gorilla Records' star, Afori Malik Pugh, 28 -- stage name C-Nile the Golden Child. Documents unsealed Friday implicate more than four dozen others.
The wiretap enabled agents to confiscate 15 kilograms of powder cocaine in three recent stings. Larger quantities have been confiscated in the Southern District of Alabama, but those are usually shipments headed to or from Texas or Florida, not destined for distribution in south Alabama. Because the Gorilla Records gang is thought to have converted almost all of its cocaine into crack and sold it on the street, authorities said the local impact of the sting could be dramatic.
Eight of the nine indicted suspects were in custody by Friday, but investigators were still seeking Clinton David Prayer, a 45-year-old felon they say ran the Gorilla Records drug outfit in Mobile for the last two years.
In asking U.S. District Judge Charles Butler Jr. to sign off on the phone tap, DEA agent Todd Hixson wrote that the ring started in 1998 and soon dominated the cocaine trade in Mobile and Prichard.
"The Gorilla Records Organization ... has become the major supplier of cocaine and crack cocaine in the Mobile area," Hixson wrote in February.
"Several murders in the Mobile area have been linked to the Gorilla Records organization," Hixson wrote without elaborating. Authorities declined to provide details.
"We've been working closely in conjunction with the murder investigators of the Mobile Police Department," said Assistant U.S. Attorney Greg Bordenkircher, who is handling the case.
Hixson's affidavits and others in the case depict a carefully constructed network arranged in classic organized-crime fashion, with the biggest players almost never handling the product. Agents indicate the organization looked something like this:
Sometime in 1998, Patrick Wayne Benson of Houston and Leroy Vidal Jackson of Mobile -- both charged in last week's indictment -- and several other men started running cocaine from Houston to Mobile. Benson and another man are described as the sources, while Jackson and others were in charge of getting the cocaine to Mobile, cooking it into crack and distributing it.
The first big break in the case came a little more than two years ago, when FBI agents in Louisiana found crack and two guns on a Houston man, Billy Jerod Mitchell, who agreed to cooperate.
Mitchell, 30, said that sometime around 1999, he, Jackson and several other men started moving cocaine from Houston to Mobile, often carrying it onto Continental Express flights, sometimes toting up to 10 kilograms per person. They later hired couriers to take the drugs east along Interstate 10 to Mobile, either in cars or via Greyhound bus, Mitchell claimed.
Mitchell and others, including Jackson, started Gorilla Records to hide the drug cash, according to Mitchell.
By March 2001, the group had moved between 60 and 100 kilograms of cocaine, most of it powder that was later made into crack, Mitchell told agents. That amount does not include the more than 20 kilograms charged in last week's indictment.
Jackson, prosecutors contend, ran Gorilla Records -- the company and the drug network -- in Mobile and Prichard until he was arrested in 2001 on federal gun charges and sentenced to nearly 10 years in prison. He then turned it over to Prayer, his uncle.
Prayer was released from a federal prison about three years ago after serving about eight years for conspiring to distribute crack. When he got out, he was best man in Jackson's wedding; Pugh, the rapper, stood as a groomsman.
Prayer leased a convenience store on St. Stephens Road when he got out of prison and promptly started selling crack out of it on Jackson's behalf, agents allege.
Investigators' picture of how Gorilla Records worked grew clearer last fall after another man, Darrin Southall, agreed to testify in exchange for a lighter sentence on a crack conviction.
According to Southall, Prayer paid a felon named Michael Howard $15,000 cash and an unknown quantity of cocaine to get Howard to lie on the witness stand at Jackson's trial on Jackson's behalf.
Jackson went to prison anyway, but as recently as March, he was using a smuggled cellular phone to talk to Prayer from Jackson's prison cell in Texas, investigators allege. Jackson has been transferred to a Florida federal prison, and the phone confiscated, Bordenkircher said.
Throughout, Gorilla Records' leaders were cautious, using phones and cars registered in other people's names and nearly always having underlings handle the drugs, Hixson wrote. They kept strangers at arm's length, a trait DEA officials noted in arguing for the wiretap, saying they couldn't get an undercover agent close enough to do any good.
"They were a very close-knit, violent group, and they would not deal with people that they did not intimately know," Bordenkircher said. "And while we could've sent agents in to buy small amounts, that was not going to address the problem of Gorilla Records."
Last October, FBI agents working with the DEA in Houston convinced a federal judge there to issue a wiretap for Benson's phone, and the secret recordings began. Acting on information gained by eavesdropping, investigators caught Robert Anthony Nicholas on Oct. 21 at the Greyhound station on Government Boulevard carrying seven kilograms of cocaine and 13 pounds of marijuana, one affidavit alleges. Authorities confiscated the drugs, worth more than $140,000 wholesale. Nicholas was released on bond on state charges, but authorities kept an eye on him.
Another Texas judge issued a second wiretap in November for another phone Benson was using, this one with a south Alabama area code. Agents believe another load of roughly five kilograms slipped through their fingers and made it into Mobile sometime around then, the documents state.
In February, Hixson and Bordenkircher asked Butler, the Mobile judge, to OK the first wiretap in this federal district since authorities used one six years ago to break up a massive Marengo County drug ring that included some local law officers. Butler approved the bug on the phone Prayer was using, even allowing agents to track it anywhere in the country.
Bordenkircher, a 12-year veteran of the U.S. attorney's office, said it has been at least a decade since a wiretap was used in Mobile.
On Feb. 28, Houston police, acting on wiretapped information, stopped Jerome Francis Bush, 56, of Mobile, on an overpass with another six kilograms of cocaine, worth $120,000, agents allege. Sam Houston, the DEA's resident agent in charge in Mobile, said Bush apparently tried to hurl himself and an officer or two onto the freeway below, but he was thwarted.
Investigators consider what happened next as perhaps most indicative of how powerful Gorilla Records had grown:
Often, aspiring dealers in Mobile have to go in halves, for instance, on buying a $20,000 kilogram of cocaine to cook into crack and sell for a profit. Yet less than 10 days after losing their second sizeable shipment in four months, Prayer and others in Mobile came up with enough cash to make another run to Houston, Hixson wrote.
On March 10, Prayer and Kershita Paige, his girlfriend, were pulled over on I-10 heading back to Mobile. Investigators found two more kilograms of cocaine in the car, the affidavit states.
In order to keep the veil over the Gorilla Records surveillance just a little longer, authorities released Prayer after the traffic stop; Paige was released later.
Nicholas, 49, and Ernest Maurice Battles Jr., 28, both of Mobile, surrendered Thursday. Andre Cheyenne Reed, 30, Paige, 23, and Battles were ordered released under electronic monitoring pending trial. Battles has pleaded not guilty and is set for trial in July.
Pugh, the rapper, has a detention hearing set for Monday. Nicholas is due for a detention hearing and arraignment Wednesday.
Officials have said that other arrests likely will follow in coming weeks.
oh the irony!
That must be why 
DEFEAT THE CHIRAQ's
DEFEAT THE CHIRAQ's
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