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Every scandal begins with a lie. But the truth will come out. And then comes the fallout and the outrage.
Scandals have shaped America since its founding. From business and politics to sports and society, we look on aghast as corruption, deceit and ambition bring down heroes and celebrities, politicians and moguls. And when the dust finally settles, we’re left to wonder: how did this happen? Where did they trip up, and who is to blame? From the creators of American History Tellers, Business Wars and Tides of History comes American Scandal, where we take you deep into the heart of America’s dark side to look at what drives someone to break the rules and what happens when they’re caught. Hosted by Lindsay Graham.
Tue, 21 May 2019 07:05
In 1986, federal prosecutor Marvin Rudnick is close to cracking the biggest payola case in decades. It might even involve the Mafia and one of the record industry's most notorious figures, Morris Levy. So why do his bosses abruptly take him off the case?
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Federal prosecutor Marvin Rudnick is a stocky bulldog of a man with thick glasses and unruly hair. His brown suit looks like he slept in it. The man sitting across from him, Joe Isgro, couldn't be more different. He looked back hair, a black silk suit, and a single gold crucifix hearing. To Rudnick, Isgro looks exactly like what he's accused of being, a shady, mob connected music industry hustler who's up to his neck in Paila. Like millions of other Americans, Rudnick watched the Blockbuster NBC News report on Paila that aired about two months ago. Isgro was the star of that show. The TV crew filmed him in a New York hotel lobby, meeting with Mafia Dodd, John Gotti, and his underboss, a convicted heroin trafficker named Joe Armon. Isgro was seen heading up to the hotel penthouse carrying what appeared to be an envelope full of cash. Rudnick, who convened a grand jury to investigate Paila, thinks it was a payment for the mob's help in delivering bribes to DJs on the take. What Isgro maintains he's innocent, and furthermore, he says NBC's report has destroyed his business. Rudnick can't believe it, but Isgro came down here willingly to meet with him, and it seems like he's mostly here to complain. It's April 11, 1986, and at the Federal Courthouse in downtown Los Angeles, Isgro and his lawyer sit opposite Rudnick and an assistant prosecutor at a dark wood conference table and size each other up. Isgro leans across the table, and gestures wildly as he speaks. I had to lay off 20 people last week. Good people. They didn't do anything wrong. I run a legitimate business, so you say, but now I find out you're investigating me, so I told my lawyer, let's go down there and meet with him. Set the record straight. That's great, Mr. Isgro. Maybe you can start by explaining why you were meeting with John Gotti and Joe Armone. I've known Joe for 13 years. He's like family to me. I have a linguine dinner with him and his wife every time I go to New York. You're telling me I can't visit with my friends? And John Gotti? Why were you meeting with him? He wasn't a meeting. He was just there, and I recognized him and said, hello, come on. Wouldn't you want to meet John Gotti, the most famous mobster in New York? No, I wouldn't, actually. OK, well, maybe not you, but plenty of people would. I love the Godfather. I just wanted to shake his hand. If you saw me shaking hands with Tom Cruise, would that make me a movie star? Come on. For the next two hours, Isgro patiently answers all of Rudnick's questions. He's articulate, respectful, even likeable, but Rudnick spent his whole career interviewing white collar criminals, and Isgro's explanations don't add up. Why, for example, are labels willing to pay Isgro such high fees to promote their records? So explain to me how it costs $300,000 to get a Michael Jackson single on the radio. He's already a big star, isn't he? Sure he is. When a lot of big stars release singles, they can't all be hits. Only the ones that cost $300,000? It's not that simple. Look, what the labels are paying for are my relationships. The program directors at these top 40 stations, they know me and trust me. I have access. If I bring them a song and say, this is going to be a hit, they pay attention. And that's worth something. Isgro calls it a business, but to Rudnick, it looks like extortion. When the interview ends and Isgro and his attorney leave, he turns to the assistant prosecutor. If we got this guy's tax returns yet, they were subpoenaed last week, haven't come through though yet. Follow up. And get me a list of who's still working for him. I want their returns too. Rudnick is sure Isgro is up to something illegal. And he's sure that with enough digging, he'll be able to find it. But he also suspects that Isgro is just the tip of the iceberg. Not only are there his fellow promoters, a group called the Network that allegedly controls access to every top 40 station in the country. There's also the record labels themselves. Since NBC News broke its payola story, they've all severed ties with Isgro and the rest of the network. They insist they didn't know about any illegal activity. But Rudnick finds that heart to swallow. American scandal is sponsored by the new ABC drama Alaska Daily. When an indigenous woman goes missing in Alaska, it sparks new questions about other missing and murdered indigenous women. And that's where the thrilling new ABC drama Alaska Daily begins, and where it's headed, will have you on the edge of your seat. Two time Academy Award winner Hillary Swank stars as Eileen, a veteran reporter who joins a team of local journalists working to bring the truth to light. From Academy Award winning screenwriter Tom McCarthy, Alaska Daily premieres Thursday, October 6th on ABC, and streams next day on Hulu. If you're into true crime, the Generation Y podcast is essential listening. We started this podcast over 10 years ago to dissect some of the craziest and most notable murders, crimes, and conspiracy theories together, and we'd love for you to join us. Follow the Generation Y podcast on Amazon Music or wherever you listen to podcasts. Some wondering, I'm Lindsey Graham and this is American scandal. For as long as DJs have played records on the radio, there has been payola. In 1960 Congress outlawed the practice, but in the 80s it made a comeback, this time with assistance from the mob. At first, the record labels themselves tried to end payola. A group of independent record promoters called the network had grown so powerful that they alone controlled access to nearly every top 40 radio station in America. Their exorbitant fees were bleeding the labels dry, but every effort to stop them failed. Now it's the government's turn. Their investigations have already uncovered evidence of mafia involvement in the record industry on both coasts. If they connect the dots between the mob, the network, and payola, they might be able to expose the biggest criminal conspiracy in the history of the music industry and finally bring it down. This is episode 5, Music and the Mob. This April 29, 1986, three weeks after Marvin Rudnick's interview with Joey has grown. Today he's working on a different but related case, and it's led him to a rundown holiday in on the outskirts of Montgomery, Alabama. Rudnick follows an FBI agent down a long, carpeted hallway to a room at the end. They're both dressed casually in jeans and polo shirts. They're about to interview a man in the witness protection program so they need to keep a low profile. Inside the dimly lit hotel room, the agent introduces Rudnick to his witness, a record wholesaler from Darby, Pennsylvania named John Lamont. He's younger than Rudnick was expecting, with a boyish mop of messy brown hair, but his left eye droops and there's a web of scars across his temple and cheekbone. A year ago, a mobster named Korky, the Galut Vistola, put Lamont in the hospital with a single punch. Lamont's skull fractured in so many places that it's now held together with wire. Lamont's in witness protection because the feds need him to talk about that punch. Vistola's attack was the bad end to a deal gone sour. In 1984, Vistola acted as middleman between Lamont and MCA records for the sale of 4 million discounted records called cutouts. Lamont was supposed to pay over a million dollars for the shipment, but there was a problem. When Lamont received it, all the best cutouts were missing. The only titles left were discount bin junk. He would never have been able to earn enough from selling them to repay Vistola. But Lamont's a funny, likeable guy, and for a while he was able to charm the mobsters, even get them on his side. But eventually, Vistola lost his temper. When the deal first came to Rudnick's attention, he was only investigating the MCA record side of it. More specifically, he was investigating Vistola's connection at MCA, a guy named Sal Pencello, also known as Sal the Swindler. He's a veteran but low ranking mobster, and Rudnick doesn't really understand how he ended up working for MCA, or overseeing the disposal of over a million dollars worth of cutouts. Rudnick is hoping Lamont can enlighten him. Unfortunately, most of what Lamont knows is secondhand, but he does mention that the Sal O got the gig at MCA through Morris Levy, another of Vistola's cutout partners, and the same man Lamont thinks stole those missing 400,000 records. That name gets Rudnick's attention. Levy is a music industry veteran, owner of a label called Roulette Records. He also has deep, long standing connections to high ranking members of the mafia. Vistola is Levy's inside guy, Lamont explains. The whole thing was a setup. They were never planning on sending me the full shipment. They thought because Vistola was involved, I'd just eat my losses and pay up, and believe me, I would have if I could have afforded it. Rudnick presses Lamont for more details about the MCA side of the deal. Lamont says that to close the deal, he flew to Los Angeles to meet with Pasello in person. They went to a fancy restaurant in West Hollywood, where Pasello walked in with a group of MCA senior executives. For Rudnick, this is a crucial detail. Just until now, MCA's attorneys have insisted that South Pasello was an independent contractor, barely connected to the label. But now Lamont is putting him in the same room with MCA's top brass. If that's true, it's likely that others at MCA knew what Pasello was up to, which would potentially link one of the biggest entertainment companies in the world directly to the mob. After three hours, Rudnick finally thanks Lamont for his time and shakes his hand. Can I call on you to testify, he asks? Lamont looks at the FBI agents guarding him. If they think it's safe, sure. Rudnick flies back to LA with plenty of unanswered questions. It's still not clear why Morris Levy was involved, or why'd he risk pissing off his mob associates just to swindle some poor record wholesaler from Pennsylvania. And Rudnick's still not sure why MCA would put a career criminal in charge of over a million dollars worth of records, even if Levy did vouch for him. But it's obvious that MCA's lawyers know more than they're letting on. And if they're hiding something about South Pasello, there's a good chance they're hiding something about Rudnick's other case, the one involving Joe Isgro and the network. On a smoggy summer morning in July of 1986, a small group of reporters gathers in the plaza outside the entrance to the federal courthouse in downtown Los Angeles. Here here for the first day of the pay all of Grand jury hearings, hoping to catch witnesses as they pass through the courthouses imposing bronze doors. Most of the reporters are from local newspapers or music trade magazines, lone men and women in rumpled business attire, clutching notepads and portable tape recorders. The Grand jury hearings are closed, so most major news outlets aren't here. They don't think there'll be much to report on. The lone exception is the team from NBC News. Her Brian Ross broke the pay all of the story, and he's definitely not going to miss this. With his tailored blue suit and three person crew, he stands out amidst the other reporters. And that's a problem. Because unfortunately, by now, everyone in the music industry recognizes Ross on site and runs the other way. After all, Ross's first pay all of the story got his main source, a Miami DJ named Don Cox, jumped and beaten by men with baseball bats. The reporters have been understandably reluctant to let an NBC camera anywhere near them. But Ross is nothing if not persistent. So when he sees the day's first witness trying to sneak past the cluster of reporters, he chases him across the plaza, cameras and toe. The man, a top 40 radio program director, winces as Ross thrusts a microphone in his face, peppering him with questions. What are you going to tell the grand jury today? Did you take pay all of it? Do you know Joe Isgro? The program director thinks for a moment, then looks Ross in the eye and says, buddy, you could use a good dandruff shampoo. As the morning drags on and more witnesses hurry past the reporters without commenting, Ross gets frustrated. No one wants to speak to him. His pay all of the story has gone cold. So that day, he packs up and heads home early. But just a few months later, Ross gets a tip from one of his sources at the FBI. There's going to be an arrest, a big one. The source gives him a date and the name of a hotel in Boston. Ross tells them the cameras will be there. At the Ritz Carlton Hotel in Boston, on September 24, 1986, Roulette Records owner Morris Levy wakes up to the sound of pounding on the door of his suite. Blereyeide, he looks at the clock on the nightstand, 6.30 a.m. Mr. Levy, open up please. He throws on a hotel bathrobe and patch to the door. He's 59 and still an imposing heavy set man. Take some effort for him to move his large frame though, especially at this hour. Who is it? FBI. We have a warrant for your arrest. Open up or we'll break it down. Levy opens the door with a sigh and three agents barge in, gun's drawn. Morse Levy, you're under arrest. Fine. You got me. Can I put some clothes on? The agents let Levy get dressed, then handcuff him and march him down to the hall to the elevator. No one speaks. Levy doesn't need to ask them why they're here, he already knows. A few months after quirky the Galut Vastola broke John Le Mans face, the FBI showed up at Roulette Records headquarters in Midtown, Manhattan to serve Levy with a subpoena for his financial records. Somehow they knew Levy was part of the MCA Records Cutout deal. Levy figures it had to be that bastard Le Mans, ratting him out. Leaving new, it was only a matter of time before the FBI came back to arrest him. He'd hope they would give him a chance to turn himself in, but they probably hope this show of force will scare him, maybe convince him he should cooperate, turn against his friends. But he's not that easily intimidated. In the lobby though, he realizes there's another reason for all the drama. A camera crew from NBC News is filming the whole thing. Levy is not the FBI must have tipped them off. Told them they could get a great image for their next report on scandal in the music industry, an old man in handcuffs. Levy lets the FBI agents whisk and pass the cameras into a waiting unmarked car. Someone pushes down on the back of his head as he shoved into the backseat. And later that morning, in a federal court in Boston, Levy is arraigned on three charges of extortion and racketeering in connection with the MCA Cutout sale. As convicted on all counts, he could face up to 60 years in prison. Levy thinks that number is also meant to scare him. Still, the thought that he could do any jail time at all because of a punk like John Lamont infuriates him. Levy posts the half million dollar bail and calls his lawyer to discuss the case. His biggest problem is the Galut. The FBI tried to arrest Vistola too, but they didn't get him. And if Vistola thinks Levy is doing anything to cooperate with the feds, well, jail will be the least of Levy's problems. Might even be better. Levy needs to assure Vistola and other members of his gang that he's keeping his mouth shut, but he's no way of reaching them. Unless, he goes big. After hanging out with his lawyer, Levy calls NBC News and asks to speak to Brian Ross. The most notorious man in the music business, a man implicated in the big paleis scandal of the 50s, long alleged to be the main link between music and the mob is about to go public. It's a huge risk, but Levy's got no choice. If he says nothing, he could wind up dead. What if your family was the victim of a home invasion, or you woke up in the morgue, or you were seriously injured, miles from help? What would you do? This is actually happening. Ask our listeners this very question while we bring you captivating real life stories of trauma and perseverance. This is actually happening brings listeners extraordinary true stories from the people who lived them. You'll hear stories about conflict, turmoil, or threats that dramatically alter the course of someone's life. Each episode is an exploration of the human spirit and how survivors manage to overcome hardship and move on with their lives, even thriving afterward. The new season of this is actually happening is available ad free only with Wondry Plus. And if this new season isn't enough, you can listen to more than 120 exclusive episodes available only to Wondry Plus subscribers. Join Wondry Plus on Apple Podcasts or on the Wondry app. Brian Ross can't believe his luck. Morris Levy has agreed to a live on camera interview less than 24 hours after his arrest and in the most public forum imaginable, The Today Show. For Ross, the time he couldn't be better. He needs a fresh angle on his ongoing investigation of the mafia's involvement in the music industry. There's still not much happening on the pay all the front. Marvin Rudnick's grand jury in Los Angeles has yet to hand out any indictments. But this other scandal involving Levy and MCA records has all the trappings of another sensational story. Ross interviews Levy via satellite feed. Ross is at the Today Show Studios in New York. Levy appears at an NBC affiliate studio in Boston. As soon as the camera starts rolling, Ross cuts straight to the chase. Levy, federal authorities were describing you yesterday as the godfather of the American music business, the connection between the mod and the music business. What did you say to that? There is no connection between the mod and the music business. Levy also denies that MCA records had any direct involvement in the sale of their own cutout records. Let me ask you this. The indictments have essentially that you were involved in trying to collect about a million dollars for MCA records that you and a New Jersey mafia figure by the name of Korky Bastola were doing that together and had someone beat up. That's the story in that true. Was someone beat up, you know? I heard you. I haven't seen it. Are you responsible anyway for that? Nothing. Why were you collecting the money on behalf of MCA? I should work. You could act if that's not true either. The party that supposedly got owed me a million dollars over the company, we sold them the records and he owed us a million dollars and he wasn't paying and I honestly believe that he wasn't paying because the witness protection program told them not to pay so that possibly somebody could say something wrong to them or threaten them on the phone and they could entrap somebody. That is what I honestly believe. Throughout the interview, Levy kept bringing up the witness protection program calling it unfair, unconstitutional, saying that it's used to entrap people. He even claims he's being charged as punishment for refusing to enter witness protection. Ross realizes why he keeps harping on it. Now that he's been arrested, Levy is afraid his mob associates will think he's going to flip and go underground. So he's swearing his allegiance to Amarita, the mafia code of silence. The charges are ludicrous. If I joined the witness protection program, there would have been no charges. Mr. Levy, thank you very much for joining us this morning. I think you're going to enter a plea of not guilty to all that abs. Absolutely sir. Thank you, Mr. Ross. Thank you. Thank you. Ross pulls out his earpiece and lets out a heavy sigh. The interview was tense as he knew it would be, but he got what he wanted. As far as Ross is concerned, Levy's repeated mentions of the witness protection program are as good as a confession. Levy was basically declaring over and over on national television that he's not a snitch. Its classic mobster behavior and Ross has seen it all before. With Levy now awaiting a trial date, Ross can turn his attention back to the payola case against independent promoter Joe Isgro. Because back in Los Angeles, prosecutor Marvin Rudnick's grand jury is still calling witnesses, including many of Isgro's current and former employees. On another smoggy LA morning in April 1987, Bodyguard David Michael Smith sits alone in a brown vinyl booth at a Denny's in Los Angeles's San Fernando Valley, wolfing down his grand slam breakfast. In half an hour, he's got to be at Isgro and arises new offices, and nearby Universal City. Smith no longer works for Isgro full time. He's just called in for the occasional odd delivery job, or to accompany his boss to a record label meeting. But lately, those meetings are happening less and less often. He's just finishing the last of his coffee when a short man in a cheap suit approaches his booth. Excuse me, are you David Michael Smith? Who's asking? The man pulls out a manila envelope. I'm with immigration and naturalization services. You're being subpoenaed. Immigration, what's this about? Falling this appena? Have a nice day, Mr. Smith. The immigration agent can't leave fast enough. Smith stares after him furiously, choking back rage, and he riffs open the envelope and reads, you are hereby commanded to appear. Sure enough, Smith is being called to testify before the grand jury investigating Isgro and arises alleged mafia ties and pale activities. Apparently, the only way they could compel Smith's testimony was to report him to the INS as an undesirable alien. Smith chokes back a laugh at that phrase, but he knows this is serious. By now, he's delivered hundreds of thousands of dollars worth of cash and drugs for Isgro Enterprises. He's seen Isgro meeting with his mob friend Joe Armon, one of the men seen with mafia boss John Gotti on that NPC report. He still doesn't know everything about what Isgro is up to, but he knows enough. He'll either have to lie to the grand jury or tell the truth and incriminate himself in his boss, and if he chooses to tell the truth, well, things don't always end well for people who cross Joe Isgro. There is another way, of course, for Smith. Instead of heading into the office, he rushes back to his apartment and starts packing. He's going back to London on the next flight he can book. Four months later, in August of 1987, the man who ordered Smith's subpoena, federal prosecutor Marvin Rudnick, gets some bad news. His boss's boss wants to meet with him. A guy named Iron Mike DeFaeo, the deputy chief of the Justice Department's Organized Crime Division. When Iron Mike calls a meeting, it's never for anything good. He's the Justice Department's enforcer, an ex military officer with a buzz cut and a bad temper. Rudnick is not looking forward to hearing what's on his mind. Because Rudnick thinks he knows why the meeting is being called. He's still juggling two investigations, one into MCA records role in Morris Levy's cutout scheme, and one into Peola, where his primary target is Joe Isgro. The MCA case is going well. The Peola investigation has been harder. He keeps butting heads with the IRS agents who are supposed to be helping him. Half the time, he can't even get them to file a subpoena as he requests. He only went to immigration services to approach Isgro's bodyguard, David Michael Smith, because the IRS refused. In the conference room, Iron Mike DeFaio is waiting. Justice Rudnick expected the IRS has filed a complaint about him. They say you're unable to get along with their agents, DeFaio says, so we're taking you off the Peola case. MCA only for now on. Rudnick is stunned. He expected to be reprimanded, not taking off his biggest case entirely, but we're making progress, he protests. I'm close to getting an indictment on Isgro. DeFaio's decision is final. Another prosecutor will complete the Peola grand jury hearings and handle any subsequent indictments. Rudnick's Peola work is done. Rudnick heads back to his office, Seven. He knows the thoroughness with which he pursues his cases can sometimes rub people the wrong way, but he's never been pulled off in an important case like this. He suspects it can't just be because of some low level IRS agent complained about him. One higher up the chain of command must not have liked the way he was handling his investigation, but who? Rudnick has a theory, but he can't prove it. Several of the major record labels that have been caught up in his Peola case are run by powerful people with strong connections in Washington. They'd hoped he'd keep his investigation focused on the Indie promoters, and they're not happy with the wider net. MCA's chairman, for example, is a former talent agent whose client list once included an actor named Ronald Reagan, and lawyers for CBS records recently threatened to go over Rudnick's head and complain about his aggressive pursuit of the label's financial records to senior members of the Justice Department. That was after Rudnick found evidence that a CBS records executive may have been taking kickbacks from the label's payments to Joe Isgro. Rudnick dismissed the lawyers threat at the time, but now he wonders if they make good on it. Rudnick's only way to test his theory is to go after MCA records as aggressively as he can on his remaining case, the one involving Morris Levy, the New Jersey Mafia, and the sale of 4 million cutout records. Officially, his primary target is low ranking mobster Sal Picello, and MCA's lawyers have bent over backwards to distance the label from Picello, saying that he acted alone, and that if MCA didn't properly vet his background, that was just because someone cut corners, nothing more nefarious than bureaucratic oversight. But Rudnick never really bought that story, and now that MCA and Picello are his only case, he's more determined than ever to prove that MCA knowingly hired a mobster to orchestrate a shady deal on their behalf. Rudnick fires off a fresh round of subpoenas, requesting financial records and interviews with MCA's top executives, within weeks he gets a response, but not the kind he was expecting. A lawyer for MCA calls him and says, we want you to know that we are not happy with the way you're handling the Picello case, and we have friends in the courthouse, we can make life very difficult for you. Rudnick doesn't report the call, but if the threat was meant to deter him, it has the opposite effect. He's going to go after MCA harder than ever now, because whatever it is they're trying to hide. He's getting close. It's 1.30 in the afternoon on February 25, 1988. In San Mateo, California, a bedroom community just outside San Francisco, Ralph Tashgian steps out of his home office to answer the door. His wife is in the kitchen, and their three year old son is upstairs somewhere, playing with his nanny. Their other son, who's in second grade, is at school. Tashgian is an independent record promoter. Nicknamed Tash the Flash for his colorful clothes and loud personality. He is of Armenian and Italian descent, with a mane and wavy dark hair and a handlebar mustache. He and his family have lived in this leafy suburbs since 1985, when they moved here to be closer to Tash's parents in San Francisco. Before that, they lived in Los Angeles, which is where Tashgian worked for another independent promoter, Joe Isgro. Tash knows all about Isgro's legal troubles. He's already been called once to testify before the Péola Grand Jury down in LA, and was warned that he might be called to testify again. He also knows that Isgro's legal troubles could easily become his own. He did more than his fair share of Isgro's dirty work over the years, delivering Péola in the form of cash and cocaine to dozens of radio stations. Still, he's not prepared for what happens when he opens the front door and finds two men and two women in business suits standing on his front porch. Yes, hello? Can I help you? Ralph Tashgian? IRS. We have a warrant for your arrest. Before Tash can respond, the agents are across the foyer and into his house. Two grab his arms while a third pulls out a set of handcuffs. Come on, guys. Was really necessary? Standard procedure. Tash's wife Valerie comes in from the kitchen and drops a dish towel and shock. Val, go upstairs and tell the Nanny to stay with Michael in his room. He doesn't need to see this. But as Valerie heads for the stairs, one of the female IRS agents blocks her path. Sorry, Mrs. Tashgian. You're under arrest, too. What? What did she do? You'll both be read the charges at your arrangement. Two agents accompany Valerie upstairs where she explains the situation to the startled Nanny. Then they tell her to change out of her dress into something more practical. Tashgian or slacks and no jewelry. You'll be spending some time in jail. Valerie changes choking back tears. Then the agents put her in handcuffs and march her and her husband outside. An NBC news van is parked across the street filming the whole thing. Tash turns to his wife about to offer some words of reassurance, but before he can speak to IRS agents put her in the backseat of a graysidan. As it pulls away, they lead Tash to a separate car. He realizes that they're splitting them up, hoping she'll rat him out or give him information that's inconsistent with what he says. He knows it won't work. Valerie has no information to give. She manages their personal finances, but has nothing to do with Tash's business dealings. She's barely aware of Joe's grow. Tash kept it that way for her own safety. Valerie had a federal courthouse, the Tashgians find out why they've been arrested. Ralph Tashgian is being indicted on multiple counts of tax evasion and conspiracy to distribute cocaine to radio DJs and program directors, as well as giving false testimony under oath to the grand jury. Valerie is charged with preparing false tax returns on her husband's behalf. Joe Isgro is hit hard by word of the arrests. He always liked Tash the flash. His jovial style made him a very effective spokesman for Isgro Enterprises, and he trusted him. For all his flashingness, he also knew how to be discreet. But now that both Tash and his wife are in custody, Isgro doesn't expect that discretion to last. He knows they arrested Tash to get to him, and that Tash will tell the feds whatever they want to hear about Isgro Enterprises to save himself and his wife from serious jail time. By now, Joe Isgro is a shadow of his former self. His jet black hair is now streaked with gray. The cream colored rolls Royce he once drove to meetings is gone, along with the fancy mansion he owned in the hills above the San Fernando Valley. Now he lives in a modest bungalow in Glendale. Joe Isgro Enterprises has downsized two into a smaller, cheaper office far from Hollywood. He still gets some business, but not from the major labels. They've cut him off entirely. A few independent labels and artist managers are the only clients he has left, and they pay one tenth the fees he used to command, sometimes less. As far as Isgro is concerned, he's a victim. The target of a vicious smear campaign in the press, all started by the many enemies he made at the major labels over the years. He knows it's the label heads who tipped off NBC News and the rest of the media to the existence of the network, and identified him as the leader. They blamed him for how fast the cost of independent promotion went up. They made sure he became the scapegoat, as the media and the feds began looking into Paola, as if Joe Isgro is the only man alive who ever bribed a DJ. But whatever Joe Isgro may or may not have done, he's right about one thing. Most of his fellow network promoters have already escaped the Paola scandal, unscathed. A few had to lay low for a year or two, but most are already back in business. They're even back to their old ways, paying off DJs with cash and drugs. As for the major labels, they're still paying out huge sums to independent promoters, but now they're funneling the money through artists and their managers. What used to show up in the marketing budget under radio promotion now shows up in the artist budget hidden under things like album advances or tour support. Isgro knows he probably can't save his business, but he's hopeful that he can cash out through another means, an antitrust lawsuit against the major labels, accusing them of illegally colluding to eliminate independent radio promotion. He filed the suit back in 86, shortly after that NBC News report made him out to be some sort of mobbed up supervillain. Since then, the case has been inching along through the courts. Many labels have quietly settled for small amounts, enough to help Isgro keep his head above water. By mid 1988, only two labels remain, Warner Brothers and MCA, and the case is finally set to go to trial. This is one day in court Isgro is looking forward to. If he wins, the labels will owe him as much as $25 million for lost business and damages. What a pretrial hearing on August 22, 1988, dashes Isgro's hopes. The judge abruptly dismisses the case, stating that she's sides with the record labels, Isgro doesn't have enough proof. For Isgro, it's a devastating blow. Winning this lawsuit might have swayed public opinion back in his favor, maybe even force the feds to reevaluate their pay all the case against him. At the very least, he would have given him enough money to comfortably retire from the music business. Now all he has left to look forward to is his inevitable pay all indignment. He knows it's coming. He just doesn't know when. If you'd like to learn more about Peola, we recommend the book, Stift, A True Story of MCA, The Music Business, and The Mafia, by William Notalsair. This episode contains reenactments and dramatized details. While in most cases we can't know exactly what was said, all our dramatizations are based on historical research. American scandal is hosted, edited and executed produced by me, Lindsay Graham for Airship, sound designed by Derek Barrett. This episode is written by Andy Herman, edited by Casey Meiner, and executed producers by Stephanie Jenns, Jenny Lauer Beckman, and her nonlopus for wondering.