Porn Site Bilked Consumers For $230 Million

[Mike AI]

Porn Site Bilked Consumers For $230 Million


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.

[Sword]

$230 M? Damn thats a lot of signups! I guess it's all fun n games until you spend 20 years in prison.

[cj]

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.
-----

so the exit button somehow is responsible for entering the surfers credit card details into the porn site?!?!

LMAO

its a new script written by a genius programmer called 'mental teleprathy charges'

ok so there's a scam here, but *really* ... this article does us all damage, not just those breaking the rules.

[Zebra]

Look at CJ's avatar! She's breaking the rules! NAUGHTY CJ!

[cj]

there was an additional sign above it that says "No Photography" ;-))))

[Mike AI]

CJ is a naughty girl, needs to be spanked!!

[cj]

if there's any spanking to be done around here i won't be on the receiving end of it!!!!

:P

[Mike AI]

Grrrrrrrrrrrrrrrrrrrrrrrrrrrrr

[sarettah]

Hmmm... read the article, etc....

This is just the criminal charges part of what the FTC brought down on them a couple of years ago from what I can tell.....

I'm just not sure how the feds are going to work it out....

When the FTC did their thing, they accused Crescent et al of generating the credit card numbers.... The criminal indictment says that they collected the credit card numbers and then trapped them in until they hit a join button somewhere along the way.... Two opposing actions it seems to me...

[XXXPhoto]

Originally posted by cj@Mar 18 2003, 09:08 PM
if there's any spanking to be done around here i won't be on the receiving end of it!!!!

Excellent CJ... in that case...

I've got this unruly monkey that is in desperate need of a good spanking... He's a very small and undersized for his age I'm afraid, but could use a good flogging none-the-less...

I saw what they were doing back in 1998. I remember talking to someone about it and he said, "stay out of it, they're the mafia".

Glad someone finally got those suckers.



Last edited by originalheather at Mar 19 2003, 12:38 PM

[Forest]

think the mob reads oprano?

[spanno]

Originally posted by cj@Mar 18 2003, 08:13 PM

its a new script written by a genius programmer called 'mental teleprathy charges'

one of my friends believes in that!

[Mike AI]

http://www.siliconvalley.com/mld/siliconva...ial/5428200.htm

Internet scam bilked porn customers
Bloomberg News


An alleged Gambino crime family member was among three people accused of running an Internet scam that bilked prospective pornography customers out of $230 million by tricking them into turning over credit card information, U.S. authorities said.

Authorities say mobster Richard Martino and two other men, Norman Chanes and Bruce Chew, ran companies that bilked thousands of people in the United States, Europe and Asia with offers of ``free tours'' of porn Web sites.

The companies conned prospective customers to turn over credit card information, saying it would only be used as a proof of age and that users would not be billed. Instead, credit cards were billed, usually at $59.99 a month after the initial visit without the consent of the users, authorities said.

``This massive scheme undermined public trust in e-commerce around the world, and now it is the defendants who will have to pay the consequences,'' said Roslynn Mauskopf, the U.S. attorney in Brooklyn, New York.

The Web sites, which include www.playgirl.com, www.highsociety.com, and scores of others, are based on magazines owned by New York-based Crescent Publishing Group, authorities said. In 2000, Crescent published more than a dozen different magazines, including Playgirl, High Society and Climax, and had almost $40 million in print revenue, authorities said. Crescent is cooperating with the investigation, authorities said.

Martino, Chanes and Chew were arrested Tuesday and charged with conspiracy to commit mail andwire fraud, conspiracy to commit credit card fraud and conspiracy to commit money laundering. The indictment also seeks forfeiture of up to $230 million in assets, including luxury homes owned by the three men in New York and California, authorities said.

In 2001, Crescent agreed to pay $30 million to settle similar civil charges brought by the U.S. Federal Trade Commission and the New York Attorney General's office. The company did not admit wrongdoing in the civil settlement.

Yup, I'm always the type to pay 30 million out when I didn't do anything wrong. That's just too funny.

[Forest]

I wonder where they got the traffic from?

Babenet?

LOL



Last edited by Forest at Mar 19 2003, 12:21 PM

[RawAlex]

Forest, you don't know?

Alex

$230 million / $60 = around 3.8 million signups, at 1:200 conversion that would mean 760 million visitors, just wondering during how long time period this happened?

[Mike AI]

I am actually happy that some people may be facing criminal charges and jail time for this scam. We all called it out back in the day, and it looked like only the FTC cared, and were doing it non-criminally.

But the bottom line is scams like this hurt the honest business person, not only the people like us slinging porn, but all commerce on the Internet.

I hope they all get substantial jail time, and more importantly are required to give up all their ill-gotten gains, AND more!

They had a shitload of sites, DaPimp, most of them based on well-known magazines that they published.

They ran HighSociety.com, which is one I remember..and a lot of people sent them traffic since they did have webmaster programs. The sites I remember are now gone, of course. They also bought keywords and banners on Yahoo and probably other se's as well. Yahoo probably made millions on them. I can remember writing to Yahoo about it back then and just getting blown off.

I first remember seeing some of their sites in 1998, meaning that they were probably online before that. . The sites were always surfer-traps. They claimed that they wouldn't charge a credit card, then the moment you went past a certain page, zap!

When technology advanced so did their scams, from what I'm reading here: disabling back buttons, etc.

[Nickatilynx]

interesting................

[cj]

Originally posted by RawAlex@Mar 19 2003, 03:35 PM
Forest, you don't know?

Alex

newbie's have to *listen* to hear important information like this alex ... when one's mouth is always going off, how can the ears have a turn?

[Peaches]

I hate to be cynical on this, but....

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.

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.

[Mike AI]

newbie's have to *listen* to hear important information like this alex ... when one's mouth is always going off, how can the ears have a turn?

CJ you need to hone this into a Pearl, it has all the makings....

[spanno]

Originally posted by Mike AI@Mar 19 2003, 01:23 PM
I hope they all get substantial jail time, and more importantly are required to give up all their ill-gotten gains, AND more!

Mike AI champion ethical porn man of the decade! we all made loads sending them traffic through serge and blindlinks and trafficinc and all those brokers at the time! you ?

I mean thats all serge did was broker traffic to these guys wasn't it ?

would serge and Oprano even be here now without them given him a business ?

[*KK*]

Originally posted by cj+Mar 19 2003, 02:19 PM-->