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Label Gets Bad Rap, Founder Says Is Investigation, Turmoil At Death Row Records Racketeering Or Racism?

Why did Steve Cantrock, a partner in a prestigious Los Angeles accounting firm, sign a document admitting that he stole $4.5 million from Death Row Records owner Marion “Suge” Knight?

Knight has a simple, if implausible, explanation for the unusual, handwritten I.O.U., which is now in the hands of federal investigators. “It was Steve’s idea,” he said.

“After I caught him stealing millions of dollars and confronted him, he started crying,” Knight said in an interview from jail where he has been since October for violating probation on a 1992 assault. “He said, ‘Please, just give me time to get you all your money back.’ I said, ‘OK Steve, don’t get so bent out of shape.”’

Sources close to Cantrock deny he stole any money from Knight or Death Row and offer an equally simple explanation. They say he was threatened by Knight at an after-hours meeting attended by a handful of the rap mogul’s closest associates at a San Fernando Valley residence.

They have told federal investigators that Cantrock was forced to his knees and feared for his life before agreeing to sign the two-page confession drafted on the spot by Knight’s attorney David Kenner - an accusation that both Knight and Kenner deny.

The differing accounts of the confession signed by Cantrock could be a template for the rising troubles dogging Death Row, the most successful rap label in the country since Knight founded it in 1992.

It is increasingly apparent that the company faces even more serious problems than the recent jailing of Knight. Before the probe is over, some sources said, federal investigators might try to seize the company.

The rap label has been under investigation for months by the federal government, which is trying to determine whether Death Row is being run as a criminal enterprise.

Knight believes the probe must be racially motivated.

“This is the most outrageous story I have ever heard,” Knight said. “A black brother from Compton creates a company that helps people in the ghetto, so what does the government do? They try to bring him down. Sometimes people get sacrificed when they stand up. Martin Luther King, Malcolm X. Sometimes they take away your life. Sometimes they take away your freedom. It’s sad.”

Sources said that the government is attempting to build a racketeering case against the company, and is investigating alleged links to street gangs, drug trafficking, money laundering, violent acts, extortion and gun running. The conclusion of the probe, which sources say is expected to result in criminal indictments, is months away.

Justice Department officials routinely have declined either to confirm or deny the existence of the probe. Law enforcement sources said, however, that phones have been tapped and agents from the FBI, IRS, ATF and DEA, as well as police in Los Angeles and Las Vegas, continue to investigate a variety of leads.

In an interview at the Los Angeles County Jail earlier this month, Knight denied that his company has any connection to criminal activities.

“Anybody who wants to follow us around is welcome to come check it out,” Knight said. “If you don’t like rap or R&B; music though, you better bring some earplugs to the studio. Because that’s where you’re going to find us 24/7 (24 hours a day, seven days a week) making the hit records that generate all the money. And when the investigation is over, that’s all the government is going to find out.”

Investigators believe that at least a handful of employees on Death Row’s payroll are Bloods gang members and have participated in assaults and other criminal acts while working for Knight, a law enforcement report said. Authorities are trying to determine whether Knight authorized any of the alleged crimes, sources said.

Knight said: “There is no truth to the allegation that I had any knowledge of any crime committed by any of my employees. I don’t even know what crimes they are talking about.”

Knight’s continued affiliation with individuals who have had run-ins with the law has led authorities to focus on whether the “seed money” used to launch Death Row may have come from drug trafficking or other illicit means.

Federal agents have been examining Knight’s relationships with convicted drug kingpins Michael Harris and Ricardo Crockett, both of whom are now in prison. One of Knight’s eight convictions put him on federal probation for a 1994 weapons charge stemming from a probe into a cocaine trafficking case in Las Vegas that resulted in the incarceration of more than a dozen people, including Crockett.

While Knight acknowledges that he knew both individuals during the period when he was trying to get Death Row off the ground, he denied that any money from illegal activity financed the start-up of the label.

Indeed, Knight and his former partner, Andre “Dr. Dre” Young, received millions of dollars in financing from such entertainment giants as Sony, Time Warner, MCA and Interscope Records.

Over the past five years, Death Row has generated more than $300 million in retail sales - $60 million of which the company received.