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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.
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.
....................................
Luke asks: Yishai Habari worked directly with Richard Martino. They
controlled all companies involved. Richard's 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.
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:
[Yishai] 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.
Feds: Mob behind massive Internet fraud
2003-06-02 12:05:05
From
Newsday.com:
(AP) NEW YORK -- In the late 1990s, Richard Martino and other investors
made a killing by peddling pornography on the Internet.
The problem, federal prosecutors now say, was twofold: Customers'
credit cards were billed without their permission. Worse, millions
of dollars went to the mob.
The $230 million Internet fraud scheme _ believed to be the largest
ever prosecuted _ produced a series of recent arrests of alleged
members and associates of the Gambino organized crime family in
New York and Florida. And it's brought shame on self-proclaimed
gangland purists who consider profiting from porn a sin.
"I have never been involved ... with any business regarding the
sex industry _ EVER!" John "Junior" Gotti, the former acting boss
of the Gambinos, wrote in a published letter after reading about
the case in prison.
His dignity intact, young Gotti put down his pen and resumed serving
a 5-to-7 year federal term for racketeering, bribery, extortion
conspiracy and illegal gambling.
Gotti's reaction aside, authorities say the case shows a new generation
of mobsters has rewritten the code of ethics since losing much of
its grip on the gambling industry, construction unions and other
traditional sources of income. They allege Martino, as customary
for a Gambino soldier, "kicked up" an $8 million cut to Salvatore
LoCascio, a reputed Gambino captain.
With his gift for consumer fraud, Martino became one of the Gambino's
major assets, authorities said. His schemes allegedly earned LoCascio
more than $40 million, including $8 million for the Internet porn
scam.
Prosecutors say the evidence includes a 1990 surveillance tape of
"Junior's" father, the late Gambino boss John Gotti discussing Martino's
future with the family. On it, the late "Dapper Don" tells his cohorts
that he likes prospects like Martino who can "do more than killing."
Said Gotti: "Ten years from now, these young guys we straightened
out, we're going to be really proud of them."
Gambino
thugs plead guilty to X-rated ring
1/15/05
A half-dozen Gambino mobsters copped pleas yesterday to the biggest
consumer fraud in U.S. history - preying on hapless porn Web site
users and phone sex customers in a huge $650 million scam.
Brooklyn U.S. Attorney Roslynn Mauskopf said thousands of customers
in the U.S., Europe and Asia were victimized by the vast operation
- which pelted dupes with bogus credit card and phone bill charges
- between 1996 and 2002.
Martino and a business partner,
Norman Chanes, devised the Internet and so-called "phone cramming"
scams, which grossed sums that dwarfed the mob's traditional bread-and-butter
rackets like gambling and loansharking.
Operating behind a maze of 64 companies, they lured suckers to X-rated
Web sites promising "free tours" of the lurid content. The viewers
were required to give their credit or debit card numbers as proof
of age. Then the unwitting victims were hit with charges of up to
$90 on their card.
Under the deal struck yesterday, just hours before jury selection,
Martino will serve 10 years and forfeit $15 million.
LoCascio will get seven years and have to pony up $4.7 million. Gambino
associate Zef Mustafa will get five years and forfeit $1.7 million.
Gambino soldier Andrew Campos and associate Thomas Pugliese face
two years and $300,000 in restitution. Family associate Daniel Martino,
Richard's older brother, will serve five years and pay $1.5 million.
Richard Martino
Salvatore LoCascio
Two Years After Indictment, Richard
Martino Pleads Guilty
Carles Carreon (who won back
sex.com for Gary Kremen) writes at 4:25pm, February 19, 2005 on ragingblog.com:
For those of you watching the Crescent Communications imbroglio over
the years, you may remember Luke F-rd's opening post on the topic. (It's
at the bottom of this post, if you need a refresher on the facts). Well,
the other shoe just dropped with some Federal convictions of several
very financially successful webcriminals. A dozen more cases like this,
and we'll be making a good start on cleaning up the Net for ordinary
decent pornographers.
I remember meeting Richard Martino after a day of meetings back in
December 2000, right after Gary Kremen and I won Sex.com. Yishai and
Richard were both very polite and pleasant, and were talking about the
plan to buy the Missouri phone company he turned into a fraud and money-laundering
operation. At that time, I had no experience with the online adult business,
and was impressed by their operation, which seemed entirely devoted
to counting clicks and dollars, and primarily employed accountants,
not techies. In retrospect, I'm certainly glad I didn't continue to
do business with him, although he seemed a nice enough man, a respectable
businessman, you might say.
Kansas Company Pleads In Mob-Tied Phone, E-Porn Scam
From
AVNOnline.com 2/19/05:
BROOKLYN - An Overland Park, Kansas company has pleaded guilty in the
case of a telephone and Internet porn scam tied to reputed members of
the Gambino crime family.
USP&C pleaded February 17 to conspiracy to commit mail and wire fraud,
letting any local phone companies with billing relationships to the
company back out of their contracts without fear of litigation, according
to federal prosecutors.
USP&C was believed under the control of Gambino Family caporegime Richard
Martino and his brother Daniel, both of whom pleaded guilty in the case
earlier this week. The company was considered the middleman between
local telephone companies and third-party companies offering private
1-800 numbers—offering adult entertainment services and psychic hotlines—voice
mail, call forwarding, and other services.
USP&C was launched in 1997 by Kenneth Matzdorff, who runs Cass County
Telephone Company in Missouri, with a reported $200,000 in startup funds
Richard Martino provided. Two years later, Matzdorff sold his shares
to Michael Lauro.
Matzdorff pleaded guilty in January for his role in both the phone
cramming and a scam involving purportedly free tours of Internet porn
sites, said to have been masterminded by Martino.
The Martinos also face charges in Kansas City involving a plot to fatten
Cass County Telephone's expenses—a case in which Matzdorff pleaded guilty
to inflating the expenses to qualify the company for federal subsidies
and reimbursements, according to published reports.
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