Top Rank and boxer Jose Luis Castillo were socked with a multi-million dollar lawsuit in a New York state court Monday, the result of Castillo's failure to make the 135-pound lightweight limit for his scheduled June 3 championship bout against Diego Corrales at the Thomas & Mack Center.
When Castillo twice weighed 139 1/2 pounds at the June 2 weigh-in, the bout was canceled.
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Corrales seeks payment of his $1.2 million purse and $10 million in punitive damages. Gary Shaw, who was the card's co-promoter along with Top Rank, is seeking $750,000 in damages and $10 million in punitive damages.
In addition, Judd Burstein, the attorney for Shaw and Corrales, sent a letter to the Nevada Athletic Commission asking it to investigate whether Top Rank committed income tax fraud by funneling some of Castillo's purse money through Fernando Beltran in Mexico.
Top Rank CEO Bob Arum has described Beltran as Castillo's co-promoter, though Burstein's letter indicates he believes Beltran is Castillo's manager.
Corrales received a larger purse than Castillo both times they fought and was scheduled to make more had the June 3 fight not been cancelled.
In their May 7, 2005, bout, one that would come to be recognized as among the best in boxing history, Corrales earned a gross purse of $525,000 and Castillo $300,000, according to commission records.
In the second fight, on Oct. 8, 2005, which was held as a nontitle bout when Castillo failed to make weight, Corrales made a gross purse of $2 million and Castillo $1.2 million.
Corrales was to have been paid $1.2 million for the June 3 fight while Castillo was to have made $900,000, though Castillo won the Oct. 8 fight by a fourth-round knockout.
"This commission should wonder: Why would Mr. Castillo agree to be paid ... less than Mr. Corrales when Mr. Castillo's promoter (Top Rank) was making more money on the fight than was Mr. Corrales' promoter (Shaw)?" Burstein wrote.
Burstein included the allegations as part of the lawsuit.
The suit alleged the disparity in pay was either because "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 because "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."
The suit claims "this scheme would then permit Castillo to receive a higher net purse by avoiding United States taxation on a substantial portion of the money he was paid."
Burstein's letter also asked the commission to suspend Castillo for two years and to prevent Top Rank from promoting Castillo during any period Castillo may be suspended.
Arum was flying to Las Vegas on Monday from New York, where he promoted a match Saturday, and could not be reached for comment.
Top Rank president Todd duBoef declined comment other than to call the allegations in the letter "ludicrous" and to say "just to clarify, (Beltran) is not a manager. He's never taken a percentage from anyone."
He said he had not seen the lawsuit and referred comment to attorney Ike Lawrence Epstein.
Epstein had also not seen the suit, and would not comment on its substance, but said he had seen the letter.
Epstein said he expected Top Rank would seek to have jurisdiction of the lawsuit changed to Nevada. He was also critical of Burstein's letter, calling its allegations baseless.
"It's sad there are people practicing law who make wild and baseless allegations like Mr. Burstein has done," Epstein said. "I'm not sure why Mr. Burstein has chosen to conduct himself this way. There is no merit at all to it, though I'm not going to discuss the specifics."
