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(12/31/1995) federal bureau Of investigation Precedence: ROUTINE Date: 06/02/1998 To: FBI HEADQUARTERS Attn: GOVERNMENTAL FRAUD UNIT PUBLIC CORRUPTION UNIT New York Squad C-4 Contact: SA (212) 384-3979 b6 Approved By: b7C Drafted By: Case ID #: 46B-NY-266736- (Pending) Title: PERCY E. SUTTON; APOLLO THEATRE FOUNDATION; b6 NEW YORK, NY; b7C FAG-HUD OO: NEW YORK Synopsis: Opening of captioned matter. Details: The Southern District of New York (sDny) has requested the APOLLO THEATER(APOLLO), affiliated companies, and related individual's.* -Arlegations pf misuse of funds have been made.. aqainst the APOLLO THEATER FOUNDATION, and its founder,<pERCY SUTTON fgderal funding to be used in the renovation and operation of the ApoLLO THEATER, located at 253 W. 125th Street, New York, New. b6 York. b7C associated for many years in a variety of business,. political, and community endeavors.. The central allegations include the non-payment of profits to the APOLLo from SUTTON's production company, INNER CITy proDyerIoNs, and the default of several government l6ans and STATE DEVELOPMENT CORPORATION and is leaSed to the APOILO THEATER FOUNDATION. The New York State Attorney General's Office (Ny AGo) conducted a review of ApoLLo records. A report was prepared by the NY AGO and made available to the SDNY. The SDNY, FBI-NYO,. and the Irs will conduct an investigation into the allegations. At least initially, this case will be investigated iointly iby I b6 both the Nyo Government Fraud Squad (C-4 case agent) : b7C and the Public Corruption Squad (C-14 case agent..