Why was George in prison to begin with?

I would guess he was a protection money collector for Morton. As protection fizzled out in the 70's I'm guessing this is why Morton moved into porn and prostitution.
For George to do 7 years he must have swallowed the whole thing to protect his boss. Hence Morton 'owing him'.
At this time, robbers tended to move into pub and club ownership. Gangsters into vice and gambling. Before they all advanced to drugs.

I also think he was a collector.