ISGRO HELD WITHOUT BAIL

Record promoter Joseph Isgro, the target of a failed federal prosecution in a 1980s payola scandal, was ordered held without bail on extortion and loan-sharking charges Friday (3/31) after prosecutors accused him of belonging to the Gambino crime family.

Assistant U.S. Attorney Terri Law said Isgro, the executive producer of the 1992 film "Hoffa" and the owner of Private I Records, was a "serious, serious" threat to the community and had terrified witnesses in the case against him. "Our victims are scared to death," Law told U.S. Magistrate Judge Charles Eick. "One is on the brink of suicide, the other is in hiding. There is a real danger that if he is released on bond, we will lose both of these witnesses."

Indicted Thursday with Isgro, 52, was 35-year-old Valentino Bartolone, whom authorities have described as Isgro’s "enforcer." Anthony Saitta, 63, was indicted on similar charges two weeks ago and is also being held without bail.

During Friday’s revealing court hearing, FBI Special Agent R.T. Ballard testified that two confidential witnesses have identified Isgro to authorities as a member of the Gambino crime organization in New York. Ballard said one of the witnesses had told authorities that Isgro had been reprimanded by his alleged mob bosses for keeping too high a profile.

In ordering Isgro held without bail, Eick cited what he said was evidence that Isgro started the loan-sharking operation while on court-supervised release for racketeering and payola charges.

Isgro was arrested and taken into custody Saturday (3/25) in front of Le Grand Passage shopping center in Beverly Hills, a location he and his associates frequently used for confrontations with debtors in arrears, authorities said.

According to an FBI affidavit, Isgro and a crew of collectors and enforcers extorted hundreds of thousands of dollars from scores of victims, charging interest rates of up to 5% a week. The loan-sharking operation had been going on since 1994, the FBI said. Some witnesses who fell behind in their payments told of being punched, slapped and threatened with more serious physical harm, the affidavit said.

One alleged victim, Bernard Beyda, a 66-year-old businessman from Rancho Palos Verdes, went to Beverly Hills police with his story early in January, triggering a joint FBI-Beverly Hills Police Department investigation. Beyda told detectives he had already paid $70,000 in interest on a $30,000 loan from one of Isgro’s associates and didn’t have the money for the next payment. On the day the payment was due, Beverly Hills police set up a video surveillance of the sidewalk in front of the shopping center on Canon Drive. They taped back-to-back meetings by Isgro and his associates with Beyda and with two other debtors, each of whom appeared to fork over an undetermined amount of cash. After counting out the cash, they said, Isgro folded it into a wad and stuffed the roll into his front trousers pocket.

During a February confrontation at the same location, debtor Frank Arico was whacked on the side of the head by an Isgro lieutenant who "took a windup, like a baseball pitcher," before striking him, the affidavit said. Arico, fearing for his life, has since left town.

Federal prosecutors said the video footage and audiotapes make it clear that Isgro was in charge of the loan-sharking operation. They also cited "pay and owe sheets" bearing Isgro’s initials that were seized from the home of co-defendant Saitta. FBI agents and Beverly Hills detectives seized records of transactions dating back to Jan. 10, 1994, according to the affidavit.

In the 1980s, Isgro was a highly successful member of the Network, a loose affiliation of independent music promoters who reportedly charged the record industry $60 million a year to ensure radio airplay for songs. Isgro was accused of offering payola to radio programmers, a claim he denied.

Isgro was charged in 1989 with racketeering, obstruction of justice and numerous other crimes. U.S. District Judge James M. Ideman threw out the case a year later, finding that the main federal prosecutor on the case had failed to disclose evidence that could be used to exonerate Isgro. The charges were later reinstated and ultimately dismissed again.

Isgro is being represented by noted criminal defense attorney Donald Re, who handled his case in the payola prosecution.