An investigation of alleged ties between rap music label Murder Inc. and New York's violent drug trade has resulted in the arrests of two men for credit card fraud, authorities said today (Jan. 7). Th

An investigation of alleged ties between rap music label Murder Inc. and New York's violent drug trade has resulted in the arrests of two men for credit card fraud, authorities said today (Jan. 7). The arrests came during raids last week at Murder Inc.'s offices, at a sham business linked to a 1999 murder, and at other locations in the city, according to court documents and interviews.

Murder Inc. is home to multi-platinum artists Ashanti and Ja Rule, who were both nominated for Grammys earlier today. Investigators are looking into whether the label's founder, Irv Gotti, had financial ties to a convicted drug gang leader.

So far, federal prosecutors in Brooklyn, who are leading the investigation, have declined to discuss it publicly. But law enforcement sources said more arrests on money laundering and other charges were expected. A team of FBI agents and NYPD detectives has been assembled to "see if there's dirty money in the record business," said one of the sources. All spoke on condition of anonymity.

In last week's raids, investigators arrested Jon Ragin and Derek Hayes on federal fraud charges. Court papers accused them of using a phony tuxedo rental business as a front for laundering proceeds from stolen credit cards.

Prosecutors allege several luxury cars registered to the business have been linked to burglaries and other crimes. In December 1999, for instance, "an individual was surveilled and videotaped dropping the body of a homicide victim, Colbert Johnson, aka 'Black Just,' at a hospital in an SUV registered to Tuxedo Rentals," the court papers said.

A lawyer for Ragin declined comment. A call to Hayes' attorney was not immediately returned.

Sources identified Ragin as an associate of convicted drug gang leader Kenneth McGriff. Investigators believe McGriff may have provided financial backing for Gotti, the sources said. An attorney for McGriff, Richard Gimp, described Ragin as McGriff's partner in producing a movie, "Crime Partners," which was marketed by Murder Inc. He denied that his client knew about the alleged credit card fraud or other crimes. "All his business dealings are completely legitimate," Gimp said.

McGriff, 42, was arrested in Miami earlier this month for a parole violation after news reports identified him as a target of the federal investigation. He once headed a gang known as the Supreme Team, which earned about $10 million a year peddling crack in Queens. He was arrested in 1988, convicted on federal drug conspiracy charges, and served 10 years in prison.

In the raid at Murder Inc., investigators reportedly seized computers and documents. There was no response to messages left at the label for Gotti, 31, whose real name is Irving Lorenzo. Murder Inc.'s music is distributed by Island Def Jam Records, a subsidiary of Universal Music Group. William Muller, spokesman for the U.S. Attorney's office in Brooklyn, would not comment.

Authorities had hoped to quietly gather evidence against possible suspects, including drug traffickers and figures in the rap industry, sources said. But a recent escalation of violence -- including the unsolved, execution-style slaying of rap pioneer Jam Master Jay of Run-D.M.C. -- and the resulting publicity prompted investigators to begin executing arrest and search warrants.


AP LogoCopyright 2002 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Questions? Comments? Let us know: @billboard

Print