GoFuckYourself.com - Adult Webmaster Forum - 3 Are Accused of Swindling Visitors to Internet Sex Sites for $230 Million

http://www.nytimes.com/2003/03/19/nyregion/19PORN.html

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3 Are Accused of Swindling Visitors to Internet Sex Sites
By WILLIAM GLABERSON, New York Times

ederal prosecutors in Brooklyn accused three men yesterday of exploiting people's prurient curiosity in what they called an Internet pornography scheme that illegally billed Web users $230 million.

Announcing the arrests of the men yesterday, Roslynn R. Mauskopf, the United States attorney in Brooklyn, said the scheme involved pornographic Web sites falsely offering ``free tours'' and then billing visitors as much as $90 a month.

``The defendants created a web of lies and deception to trap unwary consumers on the Internet,'' Ms. Mauskopf said.

A federal indictment said Web sites that were run by the men and by five companies that were also charged asked visitors for their credit card numbers, ostensibly to obtain proof of their ages. The indictment said the men ensnared their virtual visitors in the Web sites by disabling the ``back'' buttons on the users' Internet browsers.

Those charged were Richard Martino, 43, of Harrison, N.Y.; Bruce Chew, 50, of Lloyd Harbor, N.Y.; and Norman Chanes, 56, of Manhattan. All three pleaded not guilty. According to the charges, the defendants bilked thousands of people in the United States, Europe and Asia.

The prosecutors said that Mr. Martino is a soldier in the Gambino crime family and that he had passed more than $8 million from the scheme to the crime family.

The prosecutors said Mr. Chew was the chief executive of the Crescent Publishing Group, a publisher of explicit magazines, including Playgirl and Live Young Girls. The indictment said the swindle used Web sites that offered material from the magazines.

Crescent Publishing, based in Manhattan, was not charged, and the prosecutors said the company was cooperating with the investigation.

A woman who answered the telephone at the company said Mr. Chew was no longer employed there.

Mr. Chanes was identified as the president and owner of Harvest Advertising, a Manhattan company that placed advertising in magazines and on the Internet. Harvest was one of the companies charged in the indictment. Also charged were companies that the prosecutors said were in the phone-sex business and were controlled by Mr. Chanes and Mr. Martino.

The men were charged with conspiracy to commit wire fraud and credit-card fraud and money laundering. If convicted, they could face prison sentences as long as 20 years. In addition, the prosecutors are seeking to seize assets of the men, including the Southampton homes of Mr. Martino and Mr. Chanes, valued at $4 million and $11 million.

After consumer complaints to credit card companies, the Federal Trade Commission and the New York State attorney general sued Mr. Chew, Crescent and other companies in 2000. In 2001, the defendants agreed to pay $30 million without admitting liability.

Prosecutors said the Web sites were designed so that an inquisitive Web surfer might become distracted. During the ``free tour,'' the prosecutors said, vague language about the price of a visit was placed ``in the midst of sexually explicit text which was superimposed over sexually explicit images.''