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Confirmed User
Join Date: Sep 2002
Location: Hollyweird adjacent
Posts: 977
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update from today:
Alleged mobsters guilty in vast Net, phone fraud
Mafia scheme said to have netted $659 million over 7 years
ganglandnews.com
Salvatore Locascio, left, said to be a "capo" in the Gambino Mafia clan, and Richard Martino face up to 10 years in prison for allegedly orchestrating what authorities say is one of the biggest consumer frauds in U.S. history.
By Mike Brunker
Reporter
MSNBC
Updated: 7:37 p.m. ET Feb. 14, 2005
Writing a sudden ending to what authorities say is one of the biggest consumer fraud cases ever prosecuted, alleged members of one of New York?s most notorious Mafia families pleaded guilty Monday to conspiracy and fraud charges stemming from an Internet and phone billing caper that bilked consumers out of more than $650 million.
Prosecutors say the principals of the scheme, which ran from 1996 to 2003, are members of the Gambino crime family, an outfit better known for such muscle-and-blood criminal enterprises as gambling, loan sharking, protection rackets and creative bookkeeping for construction projects and garbage collection.
But in this case, prosecutors said, the hoods targeted phone customers and Internet users, tricking them into responding to too-good-to-be-true offers of free porn, psychic readings, dating services and sports picks, and then putting the hurt on their pocketbooks with a series of unauthorized credit card and telephone charges.
The mobsters also ripped off two federally supervised funds that subsidize rural phone companies through another billing scam.
Alleged mastermind, Gambino ?capo? enter pleas
Among those who entered guilty pleas Monday in U.S. District Court in Brooklyn ? on the day jury selection was to have begun ? were the alleged mastermind of the scheme, Richard Martino, 45, known in the New York tabloids as the ?X-rated mobster,? and 45-year-old Salvatore Locascio, described by authorities as a Gambino ?capo,? or captain.
Under the plea bargain, Martino pleaded guilty to one count of conspiracy to commit mail and wire fraud and one count of extortion for forcefully trying to extract a $1 million payment from a porn industry rival. Martino faces up to 10 years in prison and agreed to forfeit $15 million under the deal.
Locascio entered a guilty plea to a single count of money laundering and also faces up to 10 years in prison and forfeiture of $4.7 million.
Three other alleged mob associates ? Dennis Martino, brother of Richard Martino, Thomas Pugliese and Andrew Campos ? pleaded guilty to a count of conspiracy to commit mail and wire fraud. A fourth man, Zev Mustafa, pleaded guilty to money laundering in connection with the scheme.
Daniel Martino, Pugliese and Campos each face up to five years in prison and agreed to forfeit a total of $2.1 million, while Mustafa faces up to 10 years in prison and will forfeit $1.7 million.
Prosecutors allege that Richard Martino, a Gambino ?soldier,? directed the scheme and paid $8 million of the proceeds directly to Locascio, the leader of his ?crew,? and funneled at least $40 million more into Gambino family coffers.
Bank, phone company purchased
The elaborate scheme brought in so much money that the defendants and various co-conspirators were able to purchase a telephone company and bank in Missouri, according to court documents. They also created at least 64 shell companies and opened a host of foreign bank accounts through which to pass their ill-gotten gains, the documents said.
In an indictment returned in March 2003, prosecutors alleged a two-headed scheme:
People who called 1-800 phone numbers advertising free samples of phone sex, psychic hot lines and dating services unwittingly triggered recurring monthly charges that appeared on their phone bills as ?voice-mail services" and other innocuous services.
At the same time, the scheme trapped Web surfers seeking adult content on the Internet by enticing them to enter their credit card information for ?free? tours, only to begin billing them between $20 and $90 a month.
The defendants routinely changed corporate billing names and merchant banks to stay one step ahead of authorities and foil Visa USA?s fraud-detection system, according to court documents. In 1999, they began processing credit transactions in Guatemala to further muddy the waters, the documents said.
Prosecutors charged that the Web sites used in the Internet scam were part of a joint venture formed in 1996 between Crescent Publishing Group Inc., a Manhattan company that published such high-profile adult magazines as Playgirl and High Society, and Lexitrans Inc. of Overland Park, Kan., a Web hosting company that they said was secretly controlled by Richard Martino.
The surprise guilty pleas on Monday, following negotiations that lasted through the weekend, pre-empted what would have been one of the most closely watched mob trials in years.
Using the power of plea bargains, prosecutors already had peeled off a number of alleged co-conspirators who were expected to testify against Martino and Locascio, including:
Norman Chanes, a 58-year-old millionaire advertising executive and movie producer (co-producer of the 2000 film ?Blue Moon,? starring Ben Gazzara, Rita Moreno and ?Sopranos? cast member Vincent Pastore), who allegedly advertised the 1-800 phone numbers used in the telephone fraud in magazines and newspapers around the country.
Bruce Chew, 57, who was CEO of Crescent Publishing Co. Chew was a defendant in a Federal Trade Commission lawsuit against Crescent Publishing that led to a $30 million settlement in November 2001.
Kenneth Matzdorff, a 48-year-old Missouri businessman who allegedly acted as a front man to purchase the Cass County Telephone Co. in Peculiar, Mo., and the Garden City Bank in Garden City, Mo., on behalf of Richard Martino and others. Matzdorff pleaded guilty in January to conspiracy to commit mail and wire fraud charges under a plea agreement.
Another figure in the case who might have been called to testify is Carl Ruderman, a 60-something-year-old publisher and philanthropist who reportedly was the secret owner of Crescent Publishing.
?The invisible man? of porn
Ruderman, dubbed ?the invisible man? of porn by fellow skin magazine publisher Al Goldstein in 1989 for his low profile, was never charged with any crime, reportedly because he told authorities that he delegated responsibility for day-to-day operations of Crescent Publishing to Chew and had no knowledge of the billing scam.
One former Crescent employee said that Ruderman certainly lived up to the ?invisible man? sobriquet at the company?s Manhattan offices.
?We used to call him the Wizard of Oz, because you never saw the guy,? said the employee, who spoke with MSNBC.com on condition of anonymity. ?I saw him twice the whole time I worked for him.?
Former Gambino crime boss John Gotti Sr., forever known as the "Dapper Don," also had been expected to testify from the grave.
Longtime New York newspaper crime reporter Jerry Capeci, who now publishes his work on the Ganglandnews.com Web site, said prosecutors had planned to play a tape of a wiretapped conversation from January 1990 in which Gotti sings the praises of newly minted mobsters Martino and Locascio, who had just been inducted into the Gambino family.
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