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Castillo-Corrales Go to the Courts
By Steve Kim (June 15, 2006) Photo © Pat Orr

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Diego Corrales and Jose Luis Castillo never got it on for the third time, but it looks like their rubbermatch will be played out in court, as Corrales and his promoter Gary Shaw filed suit in the Supreme Court of New York against Top Rank, Castillo and Fernando Beltran.

Corrales, who is looking to receive his fight purse of $1.2 million, and Shaw, who is looking to recoup losses of $750,000, are both suing for $10 million in punitive damages.

They certainly are looking for their monies worth.

"The Supreme Court has said that the Constitutional limitation on punitive damages in essence, has to be a single digit multiplier," explained Judd Burstein, who is representing Corrales and Shaw. "So I've taken the middle ground and given a multiplier of somewhere between three and five times actual damages."

What's interesting about this suit is that it raises several questions about Top Rank's relationship with Fernando Beltran, whether he is his manager or promoter. In the United States, it is illegal to act as both.

Burstein writes in the suit: "Defendant Fernando Beltran has held himself as the manager and 'advisor' of Castillo. However, on October 3, 2005, during a nationally televised interview, Top Rank Chairman Bob Arum inadvertently admitted that Beltran was also, together with Top Rank, Castillo's co-promoter. Top Rank's and Beltran's agreement that Beltran serve as both Castillo's manager and co-promoter is a violation of federal criminal law. On information and belief, the Top Rank/Beltran relationship is designed to either permit Top Rank and Beltran to take advantage of Castillo, who does not speak English, or to permit Castillo to avoid paying taxes in the United States by funneling money from Top Rank to Beltran, who then pays monies to Castillo in Mexico. By reason of such an arrangement, Top Rank would be able to provide Castillo a higher net payment for his bouts while retaining more profits for itself."

In comparison to Corrales’ $1.2 million purse, Castillo was to have received $900,000 for their most recently scheduled bout, which led Burstein to wonder: "One has to ask, why would Castillo agree to be paid as little as 66.66 % less than Corrales when Castillo's promoter was making more money on the fight than was Corrales' promoter? There are only two logical explanations for this disparity between Corrales' and Castillo's earnings - both of them unconscionable: (a) Top Rank and Beltran have been taking advantage of a fighter who does not speak English and is represented by a manager (Beltran) who has been corrupted by Top Rank, or (b) Top Rank, Beltran and Castillo are engaged in a scheme to defraud the Internal Revenue Service by paying monies to Beltran in Mexico that are really due to Castillo in the United States as fight purses subject to United States taxation. This scheme would then permit Castillo to receive a higher net purse by avoiding United States taxation on a substantial portion of it."

Arum would respond to these allegations by stating: "It's just ludicrous, that's the only way I can describe it. It's not what happened; all these allegations really have no place in this kind of litigation. Everybody knows, it's been no secret, that Beltran is a co-promoter on these events. He's not a manager, has never managed any fighters, doesn't take a nickel from any fighters. He's the leading promoter in Mexico."

Perhaps with rumors swirling of the feds coming back around to Top Rank, perhaps Burstein is putting the heat on them to come to a settlement.

Is this low-blow litigation?

What does Beltran's role with Top Rank have to do with the price of tea in China?

"It has a lot to do with it," Burstein would tell MaxBoxing on Wednesday afternoon. "It has a lot to do with the credibility of the witnesses, it also has a lot to do with the fact - and this is particularly important - in terms of Top Rank's knowledge. The relationship between Top Rank and Beltran is a significant issue because if Beltran is the manager, then he and Castillo are charged with Castillo's knowledge. If Beltran is the promoter then whatever he knows is attributable to Top Rank.

"So it's critical to sort out that distinction. It's also completely relevant to credibility. I mean it goes to the whole issue of whether or not this is a fraudulent endeavor."

Several issues raised in the lawsuit have particularly rankled Arum.

“About the IRS thing and so forth, or that this was a plot on our part that we knew he would never make weight and we somehow concocted this schemed where he would come in heavy and so forth. That's nuts!!! Totally nuts!!!," he would exclaim to Maxboxing on Wednesday from his offices in Las Vegas. Even the location of where the suit was filed bothers him. "Nothing happened in New York," said the perturbed promoter.

Last week, while he was in New York to promote his show at Madison Square Garden, Arum met with Shaw and Burstein in hopes of settling things amicably. And how close did they come to doing that?

"We didn't come close at all," Burstein says. "Once Bob got around to telling me that the reason for the problem was constipation, I realized we weren't going to get anywhere."

So at that point, did they think Castillo wasn't the one really full of crap?

"No comment," said Burstein, with a hearty laugh.

"Yeah, he was (constipated)," said a steadfast Arum. "That's the truth."

OK, did they try and give their fighter a laxative or an enema? (And folks, this is done more than you think.)

"We did give him an enema," claimed Arum, but all Castillo got were his pipes cleaned. "He was constipated because he got to camp after flying there and eating a meal, he was a little under 142 pounds. Mitch Hampp (a Top Rank staffer) saw it. That was within the parameters of where you could take off the weight easily. And he took off a few pounds and couldn't take off anymore."

Arum seems to have softened his stance on his fighter.

"I was mortified when this happened, obviously. But now I realize that it was beyond his control," he says. And moving forward, he'll promote Castillo as he always has after his hearing in front of the Nevada State Athletic Commission. "It's up to the commission.
Let's see what the commission finds, let's see what the commission does. Let's see what facts come out and the commission may not even fine him or they may suspend him.

"That's up to the commission. He's going to have very adequate legal representation and he's going to present his case. Let the process play its way out."

Burstein, who should be dubbed 'the Bulldog' for his doggedness in the courtroom, sees this as a landmark case.

"I think that something like this, with all the other stuff that's gone on in boxing in terms of the business regularities of the sport, this is a terrible thing," he would say. "Because when you think about it, it's people who are involved on a financial end - sponsors, TV networks. They're going to be saying, 'this is an iffy proposition, how am I protected?'"

SAME TIME, SAME PLACE

Top Rank, which just got back from New York, where they had a busy week promoting Miguel Cotto's bout versus Paulie Malignaggi in New York, has already made plans for another Cotto fight at the Garden to coincide with the annual Puerto Rican parade and festivities.

As for who will televise it, "Whoever," answered Arum. "It could be HBO, it could be Showtime, it could be us, again. We'll see what the best arrangement is. I'm not angry at anybody. I talked with Ross Greenburg (president of HBO Sports) the other day to clear the air. As far as I'm concerned, what happened was unfortunate, but it's over now.

"You've got to go on with your life."

The industry over/under on Arum and Greenburg going at each other's throats again is listed at about three months.

FLURRIES

According to Arum, WBO welterweight champion Antonio Margarito will not be on the August 12th pay-per-view show featuring Hasim Rahman-Oleg Maskaev.... I get the feeling that 'the Tijuana Tornado' is getting a bit impatient with Top Rank....Also, Jorge Arce will not be on that card as he just went through a recent procedure on his back.... Look for that card to be rounded out with WBC 108-pound titlist Brian Viloria and junior middleweight prospect Vanes Martirosyan.... I hear the faded Bronco McKart will face Kelly Pavlik on the initial boxing broadcast on OLN on July 27th....I'd much rather see Pavlik in there against a guy like Willie Gibbs.... Anthony Thompson may appear on that telecast.... Still no word from either Top Rank or HBO PPV on their pay-per-view numbers from this past weekend as of Wednesday....I know this may sound nuts, but I was impressed by what little I saw of Tommy Z. I know he fought against very little (if any) opposition, but I actually thought he showed some ability.....