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Confirmed User
Join Date: Sep 2002
Location: Hollyweird adjacent
Posts: 977
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?I like the Richies?
?I want guys that done more than killing,? Capeci quotes Gotti as saying on the tape, obtained from a listening device planted in an apartment above the Ravenite Social Club in Manhattan?s Little Italy. ?I like the Richies. ? They?re young ? twenty-something, thirty-something -- ? They?re beautiful guys. ? Ten years from now, these young guys we straightened out, they?re going to be really proud of them.?
Gotti died in prison at the age of 61 on June 10, 2002, from complications of head and neck cancer while serving a sentence of life without parole for murder and racketeering.
The criminal case was filed more than three years after the FTC announced that it had filed suit, along with the New York attorney general?s office, to stop Crescent Publishing from ?illegally billing thousands of consumers for services that were advertised as ?free,? and for billing other consumers who never visited the Web sites at all.? The suit did not address the phone billing portion of the scam.
In announcing the suit in August 2000, the FTC estimated that the "free tour Web sites" had generated income of $188 million between 1997 and October 1999, including $141 million in the first 10 months of 1999 alone.
According to Luke Ford, a pioneer blogger and keen observer of the Internet porn scene, the scheme was able to roll up such huge numbers because of deals Crescent made with two Internet traffic brokers ? Serge Birbrair and Yishai Habari ? that resulted in millions of porn-seeking surfers a day being directed to the sites.
Traffic brokers allegedly ?made millions?
?Yishai and Serge made millions off the scam and escaped FTC prosecution because they only functioned as traffic brokers,? Ford wrote on his Web site.
Neither Birbrair nor Habari responded to e-mail requests for comment.
In November 2001, the FTC announced that Crescent Publishing and the company?s principal officers, Chew and David Bernstein, had agreed to pay $30 million to settle the suit. The settlement also barred the company from "charging, debiting or billing consumers" for any Web site services without first obtaining a $10 million bond that could be used "to satisfy any judgment entered against the defendants" following trial.
Doug Wolfe, an FTC attorney who worked on the case, said that despite the settlement, many victims never received compensation.
?Our biggest problem was we had to rely on the company?s data to link individuals to cards,? he said. As of late 2004, the redress center established to administer claims had issued refund checks to 189,646 accounts but had been unable to match names and credit card information for 887,793 others, he said.
Wolfe said the agency never uncovered any link between Crescent and organized crime, but there were signs that this wasn?t your run-of-the-mill Internet fraud case.
?It certainly was unique in my experience in terms of the number of entities through which the money appeared to be moving,? Wolfe told MSNBC.com. ?At the same time there were some unusual legal maneuvers. Individuals on the eve of testifying would suddenly fire their lawyers ? and there was a general reluctance on the other side to engage in civil discovery.?
Phone bill ?cramming? comes under scrutiny
While the Internet operation was taking a hit, the scheme in which consumers' phone bills were being improperly charged ? a practice known as "cramming" ? also was coming under scrutiny.
Martino et al bought the Cass County Telephone Co.,or CassTel, a county telephone company in Peculiar, Mo., (pop. 2,600) with 8,000 customers, using Matzdorff as a front man and hiring him to run the company, according to the indictment. Martino also gave Matzdorff $3 million in February 2001 to buy the Garden City Bank in Garden City, Mo., for purposes of credit card processing, it said.
At the same time, prosecutors say Martino also formed a billing company called USP&C to place the bogus charges on customers? phone bills and charge the credit cards of surfers who visited Crescent Publishing?s porn sites.
Matzdorff told prosecutors in New York that USP&C set up a call center to handle complaints from outraged customers that handled an average of 17,000 calls a week at the height of the scheme.
Though USP&C billed telephone customers on behalf of numerous companies and gave varying descriptions of the services allegedly provided, the billing agent?s high charge-back rate began to attract attention from phone regulators.
Complaints prompted wave of refunds
In 1999, the California Public Utilities Commission investigated USP&C?s business conduct and found that of $51.5 million in billings to California customers over the previous 18 months, 52 percent were refunded after customers complained. The PUC eventually fined USP&C $1.75 million for improper billing, but it was never able to collect it.
Estimates of the amount netted by the scam have grown steadily since the March 2003 indictment was unsealed, when prosecutors estimated that the Internet end of the operation netted $230 million while the phone scam brought in approximately $200 million in revenue.
Later, federal charges filed in Kansas added $9 million to that tally, money that prosecutors said the mob-run companies stole by overbilling two federally supervised telecommunications funds ? the Universal Service Administrative Co. and the National Exchange Carriers Association.
But sources familiar with the case told MSNBC.com that the estimate swelled recently when prosecutors obtained more information indicating that the phone "cramming" actually generated at least $420 million, bringing the overall total to $659 million.
Given the riches the Gambino family allegedly struck in what experts say apparently was its first major foray into Internet crime, it is surprising that authorities say the Crescent Publishing case is still the exception to the Cosa Nostra rule.
Dave Thomas, chief of the FBI's Computer Intrusion Section, said in an interview published Nov. 29, 2004, by the trade publication Network World Fusion that there is no evidence indicating that the Mafia has moved into Internet crime in a big way.
No ?big move? to Internet
?We haven't seen a big move with the traditional Italian-based Mafia groups to the Internet ... not like we have with the Eastern European hacking groups,? he said. ?But as the money (to be made) becomes more and more widely publicized, they probably will.?
Capeci, the crime reporter who specializes in the mob, said there should be no doubt about that.
?There?s no question Locascio?s crew is a bit more advanced or sophisticated than many other mob families, but the trend among the gangsters is to move away from the stuff that the law enforcement community is well aware of and to move into new things,? he said. ?And there?s nothing they won?t do if they can figure out how to do it.?
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