10/26/99

A porn webmaster tells Luke:

From the archives of l-keford.com for January 19, 2001, an interview with someone who worked for Bob Johnson:

XXX says: Bob Johnson, from Brooklyn, is now a project manager for Vivid's internet operation. He's an interesting story. He's a Satan worshipping former editorial director for High Society aka Crescent. He's a Hallmark Satanist. He would quake in his boots if he ever ran across an honest to God Satanist. But he had all the Satanic accoutremont at his office.

It made people wonder if there wasn't something to worshipping Satan because the guy did absolutely nothing. He never lifted a finger. He did no work. People who worked for him would actually write on the galleys that people would send round, and everybody would sign off on it, that "Bob Johnson is a scum bag and he will never read this." And he would just sign off on it. A very lazy guy.

He moved from the editorial director's position to the head of the internet (1998) when they first broke the internet off and made it a separate entity on a separate floor. He is credited within the company, by most employees, of thinking up the scheme of the free tour. Getting people's credit card numbers to supposedly verify age. Promise the surfers the tour was free and they would not get charged. Then charge them up the yazoo.

Bob Johnson, his real name, possibly implemented a similar scam at Vivid in April - June 1999.

He's an avowed worshipper of Satan, but only in the most superficial way. Almost as if someone said, 'I'm going to be a punkrocker.' And they get their hair cut, and they get the jacket, and the boots and they go to the concert. But next week they could be Britpop fans.

Every Halloween was his High Holiday [Rosh Hashannah, Yom Kippur]. He would decorate his office and give out free donuts.

His big coup was when he interviewed Satanist Anton LaVey. That was the one piece of work that anybody could attribute to him. He got on a plane because he wanted to meet his hero Anton LaVey. A two part interview that appeared in High Society and the numbers on those issues tanked. They put an inset of LaVey's face on the cover and they sold about half the normal amount of newsstand copies. And not only did those two issues tank, but they affected the numbers for the next half dozen issues that came out.

Anton LaVey wrote "The Satanic Bible" which to this day rakes in tons of money. He had an affair with Jayne Mansfield. He had the affair with her and supposedly put a curse on her that resulted in her deadly car accident. He litigated to have Satanism recognized as a religion that deserves the same constitutional protection as other religions. He's based in San Francisco and heads the American Satanic Church. He's the self proclaimed pope of Satanism in North America. He's well traveled along the fringes of Hollywood celebrity.

Bob Johnson was editorial director at Crescent from 1984 to 1998, when he moved to the internet.

I had Vivid sources swear to me, Luke, that Bob Johnson had nothing to do with Crescent's internet operation when in fact he was the evil mastermind behind the ripoff.

XXX says: "Johnson's such a natural fit for devising the free tours scheme. Every time there was a questionable photograph of topless celebrity taken by paparrazi that may or may not have been ripped out of a European magazine, any time there was questionable material, do we have rights to the picture? His standard operating procedure was, 'Just run it.' He was a known photo thief.

"What's he good at? He's good at developing relationships with people like Bruce Chew and Carmine Bellucci, to be well liked..."

There were layoffs at Crescent a year ago. But six months prior, many people in the internet division were shifted around. They were sitting in offices not doing much of anything. Then after the FTC story broke, they got scared. And they started saying, 'We don't know what happened. We had people working for us that we let go... They must've gone too far.'

Bruce Chew's concept meetings would get interrupted and Bernstein, the CFO, would say, 'We're having problems with VISA. They found another one.' And Chew would respond, 'f-ck 'em. We'll go to Guatemala. And if they find us down there, we'll move someplace else.' There's enough anecdotal information like that to put the smoking gun in Bruce Chew's hands. He knew exactly what he was doing. He was willfully avoiding VISA. American Express cut them loose early on.

Luke: So what is Bob Johnson good at? What's his talent? How does he run these things?

XXX says: "That's the joke. It's a real mystery to anyone who's worked with him on a daily basis. Maybe there really is something to worshipping Satan because look how far this guy's gotten with no talent, no skills and no work ethic."

Luke: "And no morals either."

XXX: "Maybe that is what he's good at. Cutting corners and screwing people over. Maybe that was recognized by his superiors there. He only had two - Carmine Bellucci and Bruce Chew (real name). Maybe his underhandedness was something they recognized."

Luke: "I hear that Bellucci and Chew are ruthless people."

XXX: "Extremely. Carmine fired somebody for breaking his chair. This guy was a little overweight and he broke Carmine's chair. That was it. He was fired the next day. Bruce Chew was famous for threatening people with strangulation in concept meetings. There were the terms, 'I really got Brucified,' or 'I really got chewed out this time.'"

Luke: "Bob Johnson's been at Vivid almost two years."

XXX: "When we heard about that, everybody was saying, my god. They probably just want to keep him for six months, find out everything he knows and then cut him loose. Vivid, that's top of the heap. It doesn't get any better than that."

Luke: "They were running that free tour scam in May of 1999."

XXX: "They're not still doing it, are they?"

Luke: "No."

XXX: "Even after the FTC story broke, Crescent was still doing it."

The numbers for Crescents magazines, like High Society, are in the toilet. They made a conscious decision a year ago to go more hardcore and introduce pissing, penetration and transvestites, thinking it would bring the numbers up.

In 1995, Crescent published about 300,000 copies of High Society, of which about 40% sold on the newsstand. They're run has been reduced to 86,000. A lot of the copies would wind up getting destroyed. They did big print runs to impress their advertisers etc.

Their distributor was Cable who had a liberal return policy.

The big hit was when they got taken off the military bases.

If you look at their magazines now, it is poor. There are no serious articles. The design is cheap.

Cheri's always been the little sister to High Society. But now their numbers are better.

1/28/01

FTC's Injunction Against Crescent - What It Means

Click here to read with Acrobate Reader the Federal Trade Commission's Preliminary Injunction against Carl Ruderman's Crescent Publishing.

Here are excerpts from the PI:

Defendants operate pornography web sites that have offered viewers "free tours" of parts of the contents. In order to take a "free tour," however, a visitor was asked to enter his or her credit card number. The visitor was assured that the card "will not be billed" during the free tour and told that the card number was necessary so that the defendants could verify the user's age. Once the visitor entered a valid card number, the visitor was permitted to begin the "free tour." At some point, however, the "free" part of the tour ended, and the defendants began billing the visitor's credit card...

Defendants Bruce Chew and David Bernstein, together with an allegedly passive investor, Carl Ruderman, and their corporate entities, own and operate "adult content" web sites... The practices of these web sites are a moving target.

Defendants have long been identified by credit card and related companies as having strikingly high levels of "charge backs"...

Defendants high level of charge backs caused related problems with Card Service International (CSI) and Heartland Payment Systems (HPS), businesses that help set up merchant accounts. CSI opened several merchant accounts for Crescent and affiliates between late 1996 and mid-1998 , and for a few months in 1999, both times eventually closing the accounts because of consistently high charge back rates. Likewise, HPS processed more than $22 million in bank card transactions for eight of the Bernstein - Chew businesses in 1998, but later that year closed all eight of the accounts because of excessive charge backs.

Crescent and affiliates had an average charge back rate of 10.51 percent in 1999. High in itself, this figure does not reflect the full extent of customer dissatisfaction as it does not include the additional 28 percent of sales that the companies credited back to customers during the same period...

...[D]efendants did not provide the name of Carl Ruderman, Crescent's "investor and economic beneficiary," in either of their voluntary disclosures to the FTC. This late-breaking news that defendants' have a silent partner makes defendants seem less than forthcoming...

Here's an exclusive picture of Ruderman with his arm around a black man.

Martin Finklestein writes: The effect of the opinion should be obvious to the reader, but a brief overview is warranted.

The suit was filed under two different laws by two parties: A suit under the FTC Act (unfair and deceptive practices) by the FTC, and a suit with identical allegations under NY law very similar to the FTCA filed by the NY attorney general's office.

The issue was whether or not to grant a Preliminary Injunction. A PI is an order that a party do or not do something, granted soon after filing a case, after a highly abbreviated showing of evidence. The purpose of a PI is to maintain the status quo or remedy on ongoing wrong before the lengthly trial process. It is not a final disposition on the case.

Many of the details of the PI issued by the court are not contained in the decision. Crescent offered its own version of the PI, which was identical to the one offered by the FTC/AG in nearly all respects. The judge's opinion therefore dealt only with the areas where the two parties differed: Largely, the questions of whether or not to protect Crescent's assets/profits to pay off a future judgement or settlement, and if so how to do so.

The judge granted the FTC/AG's request to prevent Crescent's owners from taking money out of the company. He granted the FTC/AG's request for a very large bond to be posted against damages. He denied the FTC/AG's request to place Crescent into receivership, saying that he was reluctant to order such a severe remedy on the basis of the incomplete evidence presented in a PI hearing. He also ordered Crescent to move all its money back to the US, except what had to be foreign for business reasons (presumably, offshore merchant accounts.)

Interesting question at this point: What, exactly, did Crescent mean when it said that their money just happened to pass through a bank account in Guatemala on its way to the US? Why would anybody do that? I mean, did their money just need a South American vacation before being put hard to work back in NYC?

The judge's refusal to grant receivership is interesting only because the opinion drips with indications that the judge is suspicious of the defendant's intentions and behavior. The answer is that Kaplan is known as a very cautious judge, many judges are wary of governmental power and reluctant to grant extreme remedies on the basis of incomplete evidence, and the judge apparently felt that the other restrictions he placed on Crescent and its owners' behavior were sufficient.

Two significant questions are evident from the opinion: 1) There's $113M or so that Crescent took in and claims it doesn't have; where is it? and 2) What is the impact of the fact that attorney generals are now bringing FTC-style suits against internet companies?

1) According to the opinion, they had something like $188M in revenue over two years, but weird net assets. The opinion says that they describe their net worth at $16M, but include in that a debt from Ruderman of $10M (from an "advance" paid to him) and "inventories" of $18M. (It's difficult to imagine what possible "inventories" the company could have, without that its net worth would be negative; but, accountants can legitimately do things that to the rest of us seem pretty odd) It also says that in 1999 they did a stockholder distribution of $15M out of net income of $12M. A lot of the money (I think upwards of $50M) is tied up in bonds and letters of credit to satisfy Visa on chargebacks. So, where's the other $113M?

The opinion makes not-so-subtle points about a bizarre corporate structure, attempts to hide that Ruderman was a partner (the judge apparently was told, and did not believe, that Ruderman is a silent partner) and offshore bank accounts. It also says that Chew is the sole shareholder. (The $15M appears to have gone to him.)

So what's the relationship with Ruderman if he doesn't own any shares? Did he loan them money, if so for what compensation? Does he have a contractual relationship with Chew? Does he take some sort of salary from the company?

Let's take a look at the numbers for a moment. In the first 10 months of 1999, they took in $141M, had net income of $12M, and paid dividends to the single shareholder (Chew) of $15M. But how did Ruderman get paid, and if so for what? If his relationship to them is based on debt (he loaned them money) or a salary (he performs some service) then that would be deducted from the $141M before net income was counted, and be counted as a liability, which might be why they claim a net worth of only $16M (really, a negative net worth once you deduct the claimed inventories and the "advance" apparently to Ruderman.)

From the way they appear to be structured, it doesn't look like his "up" was stock options; draining $15M out of $12M in net income isn't a way to increase the value of the shares; they were maintaining this company to have _low_ assets. (There are legimate reasons for doing this in a non-public company; then again, there are also illegitimate reasons for doing it.) Many private companies with a single owner compensate the owner with a salary rather than dividends from the stock; this has legitimate tax purposes, and is an entirely wholesome way of structuring a company. But Ruderman doesn't own any stock, and Chew took out as dividends in 1999 more than the company's claimed profits! So how the heck were these guys being compensated? And for what was Ruderman being compensated?

Another possibility is that Ruderman had no direct relationship with Crescent; he had instead a relationship with Chew, who in turn owned all of Crescent. Chew would then pay Ruderman out of his salary or dividends as payment on a personal debt or contract rather than one of the company. That would have interesting implications for who could be held personally liable for misbehavior by the company. But if that's the case, why is the company giving Ruderman a $10M "advance"? Advance on what? (By the way, the opinion only notes that this was probably Ruderman, the company said it was their "beneficial owner"; if Ruderman isn't that beneficial owner, who is?)

Some of the $113M must have been expenses --- content, employee salaries, webmaster payments, hosting expenses, etc. But some of it must have been owner/controller compensation --- much larger salaries or other compensation paid out instead of shareholder distributions to Chew and Ruderman. But the court also says, when it says that Crescent can't pay out any disbursements, loans, etc. to its major beneficiaries so that the company's profits are retained as a fund against its liabilities, that salaries can be maintained at their present level, so the big-player compensation doesn't appear to have been in salaries.

One of the really interesting things about the opinion is that the relief doesn't talk about Ruderman. The court appears not to know very much about him, or the nature of his relationship to Crescent, and hints that the defendants were deceptive about it.

Where's the missing $100+M? One possibility is that a lot of it is with Ruderman. Another is that margins in web porn, once you pay for the content, the free webmasters, the bonds to Visa, the transaction fees, the legal fees, and the hosting costs, just aren't as large as the industry would have you believe. In other words, a lot of these guys are lying about how much money they're making. A third possibility, and note that Chew pleaded the 5th and refused to answer questions, has to do with foreign bank accounts like the one in Guatemala. The Crescent story appears far from over.

2) Another thing to keep in mind, in the context of the industry's present Ashcroft related fears, is that this wasn't a pure FTC suit. The state AG was also involved. That's not a good sign for the industry if they believe (you know I think its bullsh-t) that these suits are realy a cover for an anti-porn jihad.

First off, by the way, Ashcroft has nothing to do with the FTC, its an independent agency not part of the justice department. On the other hand, the FTC doesn't bring criminal cases, the justice department does; when an FTC case turns criminal, it has to hand it over the the justice department.

Second, the state AGs have started suing. New York, like many states, has state laws nearly identical to the one the FTC sues under. If they can bring actions independently of the FTC against websites under those laws, what happens to the justice department won't matter a wit. All of those Southern and Western states that the industry is so afraid of (like that stuff with the Cambria list) have AGs, many of whom make Ashcroft look like a liberal. Each of them can bring actions just like the FTC actions against these web porn companies. If they catch on (Spitzer is a very aggressive AG, but they've all been getting aggressive recently) what happens with the FTC is pretty irrelevant; you won't have one anti-porn jihad, you'll have 50 of them. And they won't be brought by independent agencies with long tenures like the FTC, they'll be brought by officials who have to run for reelection every four years, and satisfy their Southern and Western constituencies.

2/6/01

Luke says: I was just reading the July 19, 1999 issue of Screw magazine which featured this satirical article by Johnny Scorpio about his days working at High Society magazine, owned by Carl Ruderman's Crescent. Here are some excerpts:

The vice-prez [Carmine Belluci] was a tall fellow named Guinea, and he wore a silk shirt, unbuttoned to show off a bunch of gold chains and his graying chest hair. He wore diamond pinkie rings on each pinkie and he spoke with a lisp...

When we filed out of Guinea's office, a weirdo wearing a bathrobe and pajamas almost ran me down, and didn't even say excuse me. He was unshaven and muttering to himself like a shizo; he reminded me of some nut you'd see feeding pigeons in the park. He walked into the VP's office and slammed the door.

"Who was that?" I asked Morty, our editor-in-chief [Ken Kimmel]. "Oh, that's Mr. Rutterman [Carl Ruderman]," he said. "He's the owner of the company. He's a little eccentric. He comes by every so often to see how things are going."

So now I was admitted into the inner circle of the porn magazine's hierarchy; I had gang-f-cked a chick with the vice president and the editor-in-chief. That's when I was invited to take part in a kind of Satanic virgin sacrifice hosted by the reclusive executive editor, a man with a shaved head who rarely left his office and was allegedly a High Priest in the Church of Satan (I'll call him Chuck). [It's Vivid's Bob Johnson.] It took place at Chuck's Park Avenue mansion. Chuck comes from money and just works in the porn field for kicks.

...Each guy chose a girl and proceeded to tear her clothes off, and once they were naked Chuck began uttering some cryptic incantations and dousing their bodies with goat's blood...

JohnnyScorpio@hotmail.com writes Luke: I worked for Crescent as associate editor of CHERI in '95-'96. I heard that Marc Medoff used to work there, and I know that he knows a lot about the business... He writes and takes photos for lots of men's mags, or at least he used to. (I read on your site that he has his own business now, dealing with photos and editorial material. I wasn't clear what it was. Does he supply men's magazines with material? Is he like an agent who receives photos and stories from others and he markets them?) Once I met Medoff when he was editorial director for Gallery and Fox--he interviewed me for a job but didn't hire me. I've written porn freelance for SCREW and others for about ten yrs. But I only heard gossip when I worked in the Crescent offices. I sat in meetings with Bellucci and Chew, and Ken Kimmel was my Ed-In-Chief, and Bob Johnson was Executive Editor of all the mags. I am still writing stories for Live Young Girls (a Crescent pub) but maybe that's over after this big shakeup at the company.

BTW, I met Seth Warshavksy. in Seattle when he flew me out there (from NY) to interview me for a vacancy for executive editor of Club Love (in '96). Scott Schalin (who used to be with Hustler) had the position and was leaving. Seth promised to hire me and I quit Crescent. But then he ignored my phone calls, leaving me high and dry, without a job, 'cause I quit as associate editor at CHERI. He hired someone else for executive editor.

Crescent had 200 employees when I was there, and editors there went to different mags at different companies. Rick Hall was managing editor of High Society. He went to Hustler's Leg World when they started it, and he was ed-in-chief. He's not there anymore, he left 1 or two yrs. ago. Mike McPadden worked at Crecent and he went to Genesis and was its managing editor. Then Genesis was sold to Swank about 3 or 4 yrs. ago, so everyone there lost their jobs. Originally, McPadden was an editor at Barely Legal, when that magazine was still pretty new. The art director of SCREW worked with McPadden at GENESIS, then he went back to Screw. So it's a lot of the same people working at different publications. McPadden wrote a bunch of porn scripts for Gregory Dark, too. I like the world of porn magazines, it's interseting. I currrently contribute articles and stories to a funky San Francisco sex newspaper called YANK. It' s sold in street boxes in the Bay Area for one dollar and 25 cents. Mostly it has hooker ads in it, but it also has writing in it. Does L.A. have something similar?

Four or five years ago Crescent started with the young girls mags, because they noticed that Barely Legal was selling really well. So they changed LIVE magazine to LIVE YOUNG GIRLS. Then they put out a few other young girl titles--purely 18, candy girls, finally legal. And like you said, lately I noticed that CHERI is doing hardcore and raunchy stuff, penetration and pissing. Do they sell that in Canada, I was wondering? I attributed it (the ever raunchier content) to their trying to compete with the Internet. From what you're saying, that High Society's sales figures are way down from five years ago, it sounds like this may be the last gasp of men's magazines. Do you think that they are going to die out before too long?

You're welcome for the Screw story. The sex part was just bs (mostly). The Japanese amateur girl was true, but I did not share her with the rest of the guys. Colleen I think was an ex-stripper, but she didn't give bj's to the staff. Screwin' the woman on the conference table was made up--but the ed's would get girls (potential models) to strip down in the conference room. Never heard of any actual banging on the table. A couple of parties they threw I went to were pretty good. One was a bachelor party, for the art director. Took place on a Saturday afternoon, in a rented space on East 14th Street (NYC). About a dozen porn chicks and models doin' lap dances, getting nude, doing lezzie stuff. But no out-and-out f-cking and sucking. Maybe some guys got a blow job, but I didn't. X-mas party had a girl named Bella (I think she uses the name Sasha Sweet in X-vid's) dressed as Santa claus, and I was dressed as elf. China Lee was there, and another familiar chick (can't think of ! her name). This party was in the office. The girls strip down, there's a band playing, etc.

Morty in the story is Ken Kimmel, who was ed-in-chief of CHERI for a long time. Mr. Ruderman--no, he didn't walk in with a bathrobe. He would drop in occassionally. Once I happened to ride up in the elevator with him. He seemed a little nutty. He was with this middleaged lady who is like his assistant or something. They were communicating through signals in the elevator.He was dressed all in denim garb--jacket jeans cowboy boots and hat. Maybe bolo tie too.

Guinea is Carmine Bellucci (VP--but while I was there he got his title changed to Sr. VP). David Bernstein is the guy who signs the checks (CFO).

Reclusive exec editor character is Bob Johnson. But it's not true that he came from money and was working in porn for kicks. While I worked there he lived in Staten Island. (That's one of the five boroughs of NYC, the most suburban one.) He was pretty nice to me. When I moved into a new apartment he gave me some furniture-- a nice couch, an ottoman, a lamp, etc. I went by his house on a Saturday when I moved and loaded the stuff into the moving van. He showed me around his house; his wife and daughter were out at the time. He actually wanted me to stay and hang out for awhile but I told him I should be going because I had hired a van and two movers and I was being charged by the hour. In his office at Crescent he had a framed certificate that said he was a priest in the Church of Satan. That Church of Satan thing was no big deal. He was a regular guy, it wasn't like he tried to project an evil character. He told me that Satanism is basically Social Darwinism. I read the Satanic Bible but put it down halfway through. It's a common sense kind of book, it doesn't have to do with casting spells and magic. I read Johnson's Anton LaVey article and thought it was pretty good. Johnson seemed smart about the magazine business. He was aware of the big picture I think. He was very good at coming up with catchy coverlines. He knew the finer points of punctuation--editors would ask him questions and he knew the rules. The comments he made in meetings were insightful. Originally he was editor of HAWK magazine. I think he started Hawk. I noticed one time that the H in Hawk on the cover of the mag had an eagle figure on it--the German eagle that the Nazi's used as an insignia. I pointed this out to Bob and he said, "That's scary--you're the first person who ever noticed that." I had nothing against Bob Johnson, I thught he was basically a good-natured guy. Others seemed to resent his position of authority (executive editor), and were perhaps jealous of his paycheck. When I was there he was getting 86,000. The Satanic party in the story is all made up.

The dildo sucking photo shoot in amsterdam was true--it's called the "CHERI SUCKATHON" and it was an annual feature (this was before they started showing hardcore) in which models sucked on dildos. This was Carmine Bellucci's idea. BTW, many of the photo sets come from Europe.

Here's an exclusive picture of Carl Ruderman with his arm around a black man.

2/22/01

Crescent Publishing Scam

From CNET.com: NEW YORK--U.S. prosecutors are investigating allegations that X-rated Web sites owned by a New York man defrauded customers who spent $196 million viewing pornography online, according to court documents in a related consumer probe by state and federal authorities.

More than 20 sites owned by the man [Bruce Chew] offered visitors "free tours" if they entered their credit card numbers, purportedly as a way to verify ages, court papers state. But after people clicked past the fifth screen, the sites began billing them $1.50 per day.

The sites were enormously popular, generating revenue of more than $141 million in 1999 alone, court papers indicate. Even after refunds of nearly $100 million to customers who complained of improper billing, the sites earned at least $196 million over four years, according to a civil suit filed by the Federal Trade Commission and the New York Attorney General's Office.

The Web sites' owner, Bruce Chew, said in papers filed in response to the suit, that he'd been told by his lawyer that "there is a grand jury investigation being conducted" by prosecutors in Brooklyn, New York.

Attorneys with the FTC suspect the Web sites may have defrauded viewers out of as much as $120 million.

4/23/01

Zack writes: Hey Luke, Crescent Publishing may already be violating the FTC injunction. As you know, they are prevented from doing business on the web without posting a 10 million dollar bond. I'm sure they haven't posted that bond, since they claim not to have the money and since they appeared to have shut down all their sites. But, at least one or perhaps three (or more) of their sites is still up. Celebrityskin.com is still up and is definitely run by Crescent. Liveyounggirls.com is also up and is most likely run by Crescent, since they publish Live Young Girls Magazine. That site bounces you to 18n'Horny.com. They might be able to claim that Celebrityskin.com is not "doing business on the web," since it's not a pay site. It is however an advertisement for Celebrity Skin Magazine. Liveyounggirls.com and 18'nHorny are both pay sites and both ask for your credit card number for a "free five day memborship." Conspicuously, both Liveyounggirls.com and Celebrityskin.com were Crescent sites not named in the original indictment. Anyway, the FTC should be tipped off.

18Nhorny will bounce you to a rabbit warren of other pay sites: sugarwalls.com, puref-ck.com, orgasm.com. Each asks for your credit card number for a free 5 day membership. Puref-ck has the audacity to offer you a year for free and then claim that they need your credit card because the "government requires them to use it for age verification"! Are these all run by Crescent? Are they so stupid to think that they can simply change the names of their sites and get away with the same stuff?

03/20/1998 Media Daily

Playgirl editor Ceslie Armstrong has been fired following a row with the brass at Playgirl Inc. over their intention to run unauthorized nude photos of actor Leonardo DiCaprio in the magazine's July issue.

Armstrong said she "went ballistic" when she discovered that her bosses had undercut her authority and made a decision that "goes against everything I feel about people's privacy." She claimed she was going to issue a threat to quit but never got the chance -- she received a call last Wednesday from president Bruce Chew , who terminated her employment "over speaker phone ... after a very brief conversation," she told First Day.

"I was shocked and I am very sad that I was fired," said Armstrong, who vowed to "evolutionize" the 500,000-circulation title upon joining it in July. "There was no forewarning. I was never counseled or put on probation." She claimed she briefly resigned two months into her tenure following an argument over her bosses' wishes to publish a hodgepodge of other celebrity nudes. She won that battle and returned, convinced her "plan for the magazine was understood."

In a brief statement released on Monday, Playgirl contrasted Armstrong's claim, saying her "termination was in no way related to the publication of any photographs or editorial content in Playgirl." Spokeswoman Kathleen Giulini said, "It would be character assassination if we were to say anything else."

06/27/1989 The Wall Street Journal

NEW YORK -- Few champions of free speech are as tight-lipped as Sable Communications, the plaintiff in last week's landmark Supreme Court ruling that eased a congressional ban on dial-a-porn.

Operators at Sable's Manhattan office answer the phones with a cryptic "Good morning, 5100" (the phone number's last four digits). Asked to give his name, the company's publicist replies, "We don't have one," adding that he prefers to be identified as "public information." Asked a question about Carl Ruderman , the man who runs Sable, the publicist says, "I don't know the name."

Even Laurence Tribe, the Harvard Law School constitutional scholar who argued Sable's case, says he knows virtually nothing about the company and only dealt with it through another law firm.

Within the porn industry, however, Sable is known as part of a secretive and prosperous empire, Drake Publishers Inc. Drake publishes Playgirl, Cheri and High Society, a magazine known for unearthing nude photos of Hollywood movie stars.

Drake also made news last fall when it unveiled "SzexPress," a Hungarian publication that it billed as the Eastern bloc's first sex magazine. Just this month, it made a bid for mainstream readers, agreeing to buy Venture, a troubled monthly about entrepreneurs.

New York Mafia and Israeli Porn Connection
2003-03-18 16:04:56
The companies busted have changed names and are still in business.

(AP) NEW YORK - A mobster, two executives and five companies bilked Internet users out of $230 million by running bogus "free tours" of adult entertainment Web sites, federal authorities charged Tuesday.

Thousands of users who thought they were taking a free peek at the sexually explicit material actually were charged $59.99 a month, according to Brooklyn U.S. Attorney Roslynn R. Mauskopf.

Authorities arrested Richard Martino, who they described as a member of the Gambino organized-crime family; Bruce Chew, the chief executive of porn Web site operator Crescent Publishing Group; and Norman Chanes, a businessman.

The men tricked customers into submitting their credit-card information for free visits and then made it nearly impossible for them to leave the Web site, Mauskopf said.

Some users discovered that the "go back" button on their browser was disabled, while others couldn't find an "exit" button and racked up fees, the U.S. attorney said.

"The defendants created a web of lies and deception to trap unwary consumers on the Internet," Mauskopf said in announcing the indictment. "Millions of dollars went from consumers' bank accounts and into the defendants' pockets."

The government will attempt to seize the men's multimillion-dollar homes in New York and California, she said.

Martino, 43 years old, of Harrison, N.Y.; Chew, 50, Lloyd Harbor, N.Y.; and Chanes, 56, of New York, were charged with a number of offenses including money laundering, which is punishable by up to 20 years in prison.

Martino and Chanes are charged with using three companies they controlled — Mical Properties, Dynamic Telecommunications Inc., and Westford Telecommunications Inc. — to launder illegal profits. The companies were named on the federal indictment along with Lexitrans Inc. and Harvest Advertising, which controlled or designed the adult Web sites, authorities said.

Martino is charged with funneling more than $8 million of the proceeds to a high-ranking member of the Gambino crime family.

The porn sites are based on magazines published by Crescent, which is cooperating in the investigation. Crescent gained notoriety in 1999 when it published photos of actress Jennifer Aniston sunbathing topless. The "Friends" star sued Crescent, claiming a paparazzi photographer scaled a neighbor's wall to take the shots, and settled out-of-court last year.

Chew, the CEO of Crescent, agreed in 2001 to pay $30 million to settle Federal Trade Commission charges that he billed users for "free" access.

From New York Daily News 3/19/03:

Martino, who made millions as a phone sex pioneer before joining the Internet revolution, and his pals allegedly shared more than $230million in illegal revenues, according to an indictment filed in Brooklyn Federal Court.

FBI Assistant Director Kevin Donovan said the take befitted Martino's status "as one of the Gambinos' biggest earners."

The Manhattan-based operation was unusually sophisticated, with an infrastructure of more than 64 companies, overseas bank accounts, automated credit card billing systems and elegant Web site and software designs, officials said.

Authorities believe Martino funneled millions of dollars to the Gambinos, including his crew chief, Salvatore LoCascio, son of the late John Gotti's consigliere Frank LoCascio, who was convicted of murder conspiracy with Gotti in 1992.

Assistant U.S. Attorney Linda Lacewell said Martino, under various corporate names, created the software used to run the operation and allegedly laundered much of the money.

Chanes' company, Harvest Advertising, bought space in porno magazines advertising the sites, which included climaxmag.com and ygirl.com.

From Primedia:

The indictment continues that Martino and Chanes laundered the proceeds from the scheme through several companies, including Mical Properties Inc., Dynamic Telecommunications Inc. and Westford Tellecommunications Inc. In addition, Martino transferred more than $8 million to "a higher ranking member of the Gambino crime family," it charges.

Chanes and Martino jointly ran companies in the 900 number-phone sex business during the 1990’s. In 1996, they expanded onto the Internet, the indictment continues.

One of Chanes’ mail order firms, Encore House, was raided by postal inspectors in 1983 after several thousand consumers complained about binoculars and other product offers made by its subsidiary Marine Surplus Depot.

....................................

DUC asks: I'm not sure of Yishai Habari's role in all this. Richard Martino controlled all companies involved. His brother, Danny ran day to day operations. New York (Mical, Harvest and FSE Consulting) called the strategies. There were more Israelis involved. Isaac Levy was a big guy that you didn't want to screw with. Yael (the dialer queen) was tight with Isaac. Moshe Tamir was another Israeli involved. He was originally a consultant and then later came on board full time as the Oracle expert.

Harvest Advertising became Webmedia Interactive presided over by the notorious Yishai Habari.

Harvest Advertising Inc
1501 Broadway # 25, New York, NY 10036
Phone: (212) 840-2666

From Web Media's Home page:

Web Media Interactive Inc.
1501 Broadway 25th Floor New York, NY 10036
Phone: 212.856.4700 <Email : info@wmediainc.com>

http://www.wmediainc.com/

From Profit Plantation's Page:

For information contact profits@wmediainc.com
or call us by phone: 212.856.4700

http://www.profitplantation.com/about_us.html

Harvest Advertising and Web Media are the same company. Webmedia runs profit plantation. Both are listed at the same address on the same floor.

Yishai Habari often speaks on panels about his dialer program Profit Plantation.

Here's the Madrid panel description: "ProfitPlantation.com is a premium affiliate program allowing webmasters to take advantage of the dialler billing solution. It allows surfers to enjoy instant access on a "pay per use" basis - no credit card forms, check debit difficulties, passwords, email, hassles or delays! So how does it work in the all-important US market and on an international basis?"

Mutt writes on GFY: And the same scam basically is going on today and many people who are familiar to all are part of it. One day the same thing will happen to those involved in today scams but when you're making 10's of millions of dollars a year worrying about jail isn't big on your list of priorities. Nobody gives a sh-t, nope. And as I've always suspected organized crime is involved in this one you can bet. The ability to run through hundreds of merchant accounts from all over the world isn't something Joe Webmaster can do - it takes people from the criminal underworld to get that job done.

Very dirty business.

Serge brokered traffic, he had nothing to do with the people who ran it, probably never met Chew. They bought traffic from all over, probably got it from Alta Vista, Yahoo and lots of other sources.

It was dirty though, amazing how many people i've met who got the 60 dollar charges on their credit cards from that operation. I got a few until i realized what it was. Don't think I ever got a chargeback, back then my bank made you go through a whole process, filling out forms, to contest a charge, wasn't worth it to me.

DUC writes: What happened yesterday is merely the criminal side of the original FTC versus Crescent thing. The companies mentioned have not run under those names for several years. Mical, Lexitrans and Harvest (now Webmedia Interactive) all stopped using those names as soon as the FTC busted Chew and company at Crescent.

Mical controls all the others. Mical got its content from Carl Ruderman's Crescent. They hosted off of Cyberdata, Harvest operating the programs and Mical owns several phone companies for dialer billing and all sorts of 1-900 type phone lines. Mical/Cyberdata are still in operation.

Why hasn't the name of Carl Ruderman, the secretive owner of Crescent, emerged?

Go do a whois on Lexitrans. You should find the name Harry Stalnaker attached to the various registration records, either as tech contact or admin contact. Do a google on Harry's name and you will see a return from cdproc.com. That is cyberdataprocessing's site. Cyberdata used to be Lexitrans. They are still in business in Overland Park, Kansas. This is where all of the Crescent sites were hosted (still are, although nobody can join them, FTC made them keep them up for existing members).

I did a search in google on Westford Telecommunications and the top search result was a SPAM overview page with references to a Kenny Schaefer.

Do a google on Kenny Schaefer, you will get a whole lot of returns on him from back in '98 and '99 listing him as the Midnight Spammer, Online 18, all sorts of names. Kenny worked for Mical although many sites associate him with Westford inc. Most of the aliases associated with Kenny are actual real people who worked for Mical and continue to work for the company under it's current name.

Peaches writes on Oprano.com: I saw almost the exact same situation with a guy a worked for in audiotext. Most of his $$$ are socked away offshore. Yes they took his homes and cars here in the US (kinda funny when you watch the government put a $4mil lien on a $1mil house), and yes he was sentenced to 4 years in Club Fed. But it took 6+ years for him to be sentenced, a year after he was sentenced, he still hadn't gone to prison, and if he ever goes, he'll probably not actually serve more than a year. And when he gets out, he'll have at least a $100mil he can play with for the rest of his life as long as he doesn't spend it in the US.

During a meeting once, we were talking about when they were fined $200K for another scam they ran. "Yeah, but we made $2Mil, so who cares." was the comment from his wife.

Sarettah writes on Oprano.com: You go to certain restaurants.. You're giving your money to the mob (because, as Nick said, there ain't no mafia)

You go to certain theatres/entertainment ventures, your'e giving your money to the mob.

You buy from certain content providers, your'e giving your money to the mob.

You spend any money on Long Island or in Las Vegas, your'e giving your money to the mob.

Tom Pall writes on alt.tv.pol-incorrect: I spent 4 hears with multiple on-line companies, notably a company called Lexitans, in Leawood, KS, USA (It has since changed names to Cyber Data Processing, though the 900 number company retains its name Overland Data Systems). We took no pictures. We provided bandwidth (multiple DS3s), picture and chat. Soem of the sites where http://www.twogirlsex.com www.coedsex.com, www.playgirl.come (which is NOT for women).

The growth of income looked like we're reach 10 US Billion in just a few years. The Federal Trade Commission plus the Credit Card Companies cause most of the $US millions a day to be charged back.

We received numerous unsolicited letters from women and men, hoping to strike it big in porn. They included resumes, references and, yes, pictures.

There a million guys and girls, straight and gay, with terrific builds, all hoping to just be something to be a hamburger flipper or an office girl/buy. And it's no longer a "bad" thing. When I mentioned that I filed on my income tax, occupation "pornographer", most people wanted to know where they
sign up.

I was an Oracle DBA. It was a work a day work. Yes, I had access to all dirty picures. But I've referred CNN.COM.

White collar crime pays. Always has, always will - the repercussions just AREN'T that severe. And I'll bet if you ask ANY of these guys if they had the chance to do it again, even with all the penalties and prison time, they'd say "Yes" w/o giving it a second thought.

.........................

Here are some other companies involved with Mical:

Indus Venture Group is the newly-created venture arm of Mediacom Holdings, a closely-held, New York-based company with businesses in the telecom, Internet, wireless, customer service, and logistics sectors. Mediacom currently generates approximately $600 million in annual revenue, and has 570 employees, with operations in New York, Kansas City, Dallas, India, Israel and the Dominican Republic. Mediacom's companies include:

CyberData Processing, a commerce solutions, web hosting and fully integrated telephone switching and IVR company that maintains billing relationships with all domestic RBOC's and long-distance telephone companies CBXI, a full service billing management company with 40 clients and a 300-seat call center.
Online Advertising, a marketing company that controls more than one billion page views per month.

NetServ, a software development and programming company with 15 full-time programmers.

New GlobeCom Telecommunications Inc., a facilities-based inter-exchange carrier that provides dedicated and switched service as well as data and Internet networking.

LEC L.L.C., provides management services and acts as a holding company for several telephone exchanges in Texas, Missouri, and Kansas. LEC also owns and operates cellular properties in various parts of the U.S. Mediacom's international properties include a 10 person R&D center in Israel, a 100-seat call center in the Dominican Republic and a satellite company in India. Two of Mediacom's portfolio companies, a DSL provider called Red, and CoolEmail (Nomad Technologies), a unified messaging company that has just secured investments from Lucent and Qualcomm, have already seen a valuation upside of more than 10x their initial funding.

The Indus Venture Group is managed by Kevin Fortuna, former VP of Business Development for NBC Internet, and Roy Rodrigues, who spent two years in the Internet Investment Banking Group at Bear Stearns, where he managed several financings and M&A transactions, such as the IPOs of L-3 Communications, Xoom.com, Wit Capital and Intermedia..

cyberdata processing
CyberData's CEO, Harry Stalnaker, has built upon his experience as a former senior executive at Sprint to focus the company on providing premier hosting, monitoring and billing services in the Internet distribution pipeline. Processing over ten million credit card transactions a year, CDP has established itself as a leading Internet billing service. Drawing on this experience, CDP, working together with NetServ, CBXI and Overland, creates custom solutions in web site development and web hosting, web marketing strategies, and Internet-based billings and collections. The company currently has more than 175 clients, including DVD Express and WWF Internet Properties. CyberData currently employs approximately 40 people, and is based in Kansas City. CBD also operates a fully-integrated switching center as well as a voice response unit. The company supports numerous "900" and "1+" dial-up services. CBD has billing relationships with all the major long-distance phone services and Regional Bell Operating Companies (RBOCs). We have the ability to bill through local phone bills (as opposed to credit card billing) and are currently doing this on behalf of several of our portfolio companies. CBD's Product Manager, Wayne Wier, is a former Sprint executive with more than a decade of high-level experience in the telecom industry. The company currently has over 40 clients, including Sprint and Northstar.

convergent billing exchange, inc. (cbxi)
CBXI is a full-service billing and information management services provider to Internet and communications companies. CBXI offers a variety of cutting-edge direct billing and "pay-per-net" billing platforms, as well as a platform that allows billing through local telephone companies. Through arrangements with third-party billing clearinghouses, the Company can arrange for billing through 1,300 local telephone companies. CBXI also operates a 300-seat call center, through which it supports its clients' billing and customer service needs. The company currently employs 60 full-time staff members, serves approximately 40 clients, and is located in Kansas City.

new globecom telecommunications inc.
New Globecom is a facilities-based inter-exchange carrier that provides dedicated and switched service as well as data and Internet networking. Through its strategic alliance with other international long distance providers, New Globecom has the ability to exchange capacity, thereby creating a seamless transport product with competitive rates in all regions of the world. This unique networking capability also allows a single source for provisioning service to multinational companies that generally favor a "total" telecommunications solution. New Globecom is based in New York.

international
Our international properties include Mediaserve Israel, a technology and business development center in Israel. Mediaserve Israel's 10 employees are closely linked with Indus, providing Israeli entrepreneurs a seamless Israeli-New York connection vital to the development and growth of Israeli companies looking to enter the U.S. market and U.S. companies searching for Israeli partners. We maintain a satellite company in India and are establishing an India-based software development and service center as well. We also maintain a 100-seat call center in the Dominican Republic.

Our wholly-owned telecom and technology properties provide entrepreneurs with a fully integrated suite of business infrastructure and revenue enhancing offerings. Building upon the management experience and synergies amongst our companies, Indus will fashion innovative solutions for seed and growth-stage businesses.

online advertising
One of the largest traffic brokers on the Internet, Online Advertising transacts over one billion page views per month. Based in New York, the company purchases traffic in bulk from the larger Internet portals, generates traffic through a community of sites and the use of proprietary technologies, and resells this traffic to smaller sites on a "per click" basis. Through its in-depth knowledge and experience in the market, Online Advertising constructs custom solutions to direct value-added traffic for a wide variety of demographics. We currently drive traffic to several of Indus' portfolio companies.

outreach communications
An integrated systems provider of broadband technology catering to rural LECs (there are approx. 1,300 LECs, with 6 million access lines). OutReach, a Kansas City, Missouri based company, provides wholesale distribution of communications equipment and sale of enhanced communications services, enabling these LECs to become providers of integrated advanced communications services (including voice, video and data) in their respective markets. Recently, Outreach announced the company ’s formation and the signing of a preferred vendor partnership with Next Level Communications, a leader in ATM/IP optical interactive DSL broadband systems.

netserv
Netserv, a 15 person programming team based in New York, is an Internet development company that specializes in the development of advanced web-based programming and software. It acts as the Internet development arm for the Indus family of companies. Netserv works with Indus' portfolio companies to identify successful models for moving businesses to the Internet and helps to optimize revenue and traffic on Indus portfolio company websites. Netserv's CEO, Archie Rosenblum, spent ten years at Prodigy Communications, where he developed some of the earliest applications for the Internet.

new globecom telecommunications inc.
New Globecom is a facilities-based inter-exchange carrier that provides dedicated and switched service as well as data and Internet networking. Through its strategic alliance with other international long distance providers, New Globecom has the ability to exchange capacity, thereby creating a seamless transport product with competitive rates in all regions of the world. This unique networking capability also allows a single source for provisioning service to multinational companies that generally favor a "total" telecommunications solution. New Globecom is based in New York.

international
Our international properties include Mediaserve Israel, a technology and business development center in Israel. Mediaserve Israel's 10 employees are closely linked with Indus, providing Israeli entrepreneurs a seamless Israeli-New York connection vital to the development and growth of Israeli companies looking to enter the U.S. market and U.S. companies searching for Israeli partners. We maintain a satellite company in India and are establishing an India-based software development and service center as well. We also maintain a 100-seat call center in the Dominican Republic.

kevin fortuna, managing partner
Kevin Fortuna has worked in the Internet space since 1996. From 1999-2000, he served as Vice President of Business Development at NBC Internet, where he closed several of NBCi's largest revenue deals and managed joint strategic initiatives with NBCi's parent companies, the NBC Television and Cable Networks and General Electric Co. From 1996 to 1999, he served in senior product management and business development roles at Juno Online Services, where he built Juno's electronic commerce division and sourced and executed many of Juno's largest strategic partnerships. Prior to Juno, he launched and managed a profitable division of a family-owned retail business, Fortuna, Inc. He graduated summa cum laude from Georgetown University in 1993.

alan surchin, principal and general counsel
Alan Surchin has been providing business and legal counsel to technology companies since 1996. As an Associate with Kramer Levin Naftalis & Frankel's corporate and technology departments, he advised startup and growth stage companies and venture capital funds on various financing and technology transactions. From 1995 to 1998, Alan was a member of the corporate group at Simpson Thacher & Bartlett, where he specialized in M&A and securities deals, including the initial securities offering of Sprint PCS and the sale of Universal's television assets to QVC. Alan has also lived and worked in Israel, and he maintains strong ties to the Israeli technology community. A native of New York, he holds a JD from the Duke University Law School and a Bachelor of Arts from the University of Virginia.

guhan selvaretnam, principal and business development specialist
Prior to joining Indus, Guhan served as a Manager in the Business Development Group at NBCi, where he was responsible for numerous high-profile strategic and revenue partnerships and the integration of various NBCi properties into the NBC family, including AllBusiness.com. From 1997 to 1999, he served in Price Waterhouse Cooper's Entertainment and Media Corporate Strategy Group as a consultant for several global media companies, including Time Warner and Disney. While at Price Waterhouse Coopers, he led the most comprehensive analysis to date of telecommunications procurement, a project for Disney. Prior to joining Price Waterhouse Coopers, Guhan was at Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C., where he worked on numerous public offerings and was part of the team representing America Online in its acquisition of Compuserve.

joey fortuna, cto
Joey Fortuna comes to Indus from his position as Vice President of Technology at Pseudo Programs, Inc. - a New York-based broadband entertainment company. In his five years with Pseudo, Joey managed a team of 30 programmers and network engineers and established many of the systems which enabled Pseudo to establish a firm first-mover advantage in the broadband space. His contributions included developing a information and development platform; engineering a communications client which included streaming video, instant messaging functionality, gaming features, and avatar creation; and inventing an operating system for producing entertainment on a global communications network, which is currently awaiting patent approval.

Joshua M. Harris is the Chairman of Pseudo Programs, Inc., and a founder of Jupiter Communications. Pseudo Programs is the premier provider of online entertainment and the first-ever Internet television network. Mr. Harris founded Pseudo in 1994, after recognizing the burgeoning demand for original and compelling web-based programming. Prior to founding Pseudo, Mr. Harris started Jupiter Communications, LLC (which recently merged with Media Metrix), one of the Internet’s most highly regarded research and consulting firms. Mr. Harris served as President and CEO of Jupiter from 1986 to 1994, and as Chairman from 1994 to 1997. Previously, he was the Senior Videotex Analyst for LINK Resources, an online analyst with Arlen Communications and an editor for CBS ExtraVision Teletext. Mr. Harris is frequently quoted in the national press and on television. He holds a bachelor's degree in communications from the University of California at San Diego. Joshua M. Harris, age 38, currently resides in New York City.

Roy Rodrigues is a Vice President in the Technology Group within the Investment Banking Division of Bear, Stearns & Co. Inc. A native of India, Roy has over seven years of professional experience in the technology industry. Previously, Roy was a member of the Corporate Development team at NBC Internet. From 1991 to 1995, Roy was a Senior Consultant at the Business Advisory Division of Arthur Andersen in Bombay, India, where he worked with companies in the IT sector.

Raj K. De Datta has served as Senior Vice President, Strategic Development and Commercial Affairs for FirstMark Communications since September, 1999, prior to which he was Vice President, Business Development. Mr. De Datta is a founding member of the FirstMark management team and has been a key factor in expanding the Company to its current size and scale. FirstMark Communications Europe recently raised $1bn in private equity and debt (known to be the largest private equity raise in European history) to create a Pan-European broadband communications network, providing phone services, high-speed internet connections and video services for small businesses. As a provider of broadband access through fixed wireless, fibre and DSL, FirstMark's strategy is to fill the gap between the giant corporations that can afford high-speed, fibre-optic links, and traditional monopolies relying on the older, clunky system of copper phone lines. Prior to joining FirstMark Communications, Mr. De Datta was an investment banker in the Global Telecommunications and Technology Group at Lazard Freres & Co. LLC in New York where he advised clients including SBC Communications, US WEST, Baan Company, MCI Communications, Viatel and Phillips.

......................

Alli at Topbucks.com writes on YNOTNews.com 11/28/02: Habari began the seminar with some interesting statistics. “Three to four years ago, the U.S. represented 85% of adult Internet traffic”, he stated. “However, recently, those numbers have changed as foreign Internet users grow in quantity ten times faster then U.S. users. Now, statistics show that adult Internet traffic is currently only 30% U.S. users and 70% foreign users.” Although these are significant changes, they do not have to affect the bottom line of adult Internet companies. There is money to be made on international traffic and Habari says, “The key to making the money is knowing how to bill.”

Although credit cards are the most prominent way for billing in the U.S., they can be problematic in other countries and Habari commented that there were two specific problems associated with foreign credit cards. The first problem that exists is that there is a very low penetration of the credit card in foreign countries. So much of the foreign population either does not have or does not use credit cards. The second problem is that international charge backs on credit cards are very high. With the lack of success of foreign credit card processing, it is necessary for companies to determine other ways of billing this high quantity of foreign traffic.

Alternative billing companies specialize in making the most of this foreign traffic. “Using dialer technology, an IP look-up can be done to determine where the surfer is coming from and compare it to a detailed breakdown of the best billing methods for that area, sending the surfer to a page offering their preferred processing method,” said Habari. Dialers are often the preferred method of billing for foreign surfers. Foreign surfers on broadband connections, however, are unable to use dialers, so dialer technology offers a solution to that as well. SMS (Short Message Sending, also known as mobile messaging) billing bills surfers through their mobile phone numbers for access to the site content. Habari also mentioned that some dialer technology can even go as far as automatically determining the connection type and send dialer candidates using broadband to a SMS billing page. By using the surfers' preferred billing method, a company is able to maximize earnings as well as minimize charge backs and credits.

Another Mobster Busted In Crescent Case
2003-05-21 07:40:10

From New York Times:

Federal prosecutors yesterday charged a fourth man, whom they described as a captain in the Gambino crime family, in a scheme involving pornographic Web sites that investigators say were used to bilk Web users of $230 million.

Linda Lacewell, an assistant United States attorney in Brooklyn, said the man, Salvatore Locascio, 43, of Naples, Fla., was in custody yesterday and had been charged with conspiracy to commit money laundering. Lacewell said Locascio was involved in the scheme through an associate in the Gambino crime family, Richard Martino, one three men charged in a federal indictment on March 18.

Prosecutors said Martino passed $8 million in proceeds from the illegal Internet operations through Locascio to the Gambino family.

In announcing the initial indictments in the case, Roslynn R. Mauskopf, the United State attorney in Brooklyn, said the scheme involved pornographic Web sites that falsely offered "free tours," and then billed customers as much as $90 a month.

Besides Martino, 43, of Harrison, N.Y., the indictments on March 18 named Bruce Chew, 50, of Lloyd Harbor, N.Y., and Norman Chanes, 56, of Manhattan. All three pleaded not guilty. They were charged with bilking thousands of people in the United States, Europe and Asia.

Investigators said the Web sites were run by the men and by five companies that were also charged. The sites asked visitors for their credit card numbers, ostensibly to obtain proof of their ages, investigators said.

They said the Web sites were set up so that an inquisitive Web surfer might become distracted.

Prosecutors said that in what were promoted as "free tours," vague language about the price of a visit was placed "in the midst of sexually explicit text which was superimposed over sexually explicit images."

The original indictment said Mr. Martino passed $8 million to the Gambino family, in which he operated as a soldier. But it did not identify Mr. Locascio as his captain.

...........................................

Junior Calls People in Sex Industry "Pimps" and "Rats"

From The New York Daily News: