US gang admits $650m internet porn fraud

US gang admits $650m internet porn fraud

Six alleged members of the New York-based Gambino crime family have pleaded guilty to a $650m (£345m) internet and telephone fraud, one of the largest consumer scams in US history.

One of the reputed Gambino mobsters, Richard Martino, admitted to conspiring to extort money from the magazine business controlled by Richard Desmond, the owner of Express Newspapers.

Mr Desmond's Northern & Shell, then owner of adult titles including Asian Babes and Forum, was threatened after one of its former executives was beaten by Gambino gang members.

The six, led by reputed Gambino "captain" Salvatore Locascio, pleaded guilty on Monday before the beginning of their trial to a series of charges including money laundering and conspiracy to commit fraud. The crimes carry sentences of less than two years to 10 years and the men have agreed to hand back $23m in assets that they are alleged to have amassed from the fraud.

"The defendants bilked thousands of unwitting consumers in the United States, Europe and Asia of more than $200m through bogus free tours of adult entertainment websites, which resulted in fraudulent charges on the credit cards of more than a million consumers," said US attorney Roslynn Mauskopf.

"Today's guilty pleas not only ensure that the perpetrators of one of the largest consumer frauds in history will serve significant time in prison, but they will also forfeit the spoils of their crimes, including luxury homes and other significant assets, which will be used to compensate the victims of their crimes."

Prosecutors said the men, including a reputed Gambino "soldier" and four associates, set up shell companies advertising free phone services such as psychic readings, horoscopes and phone sex. In a fraudulent practice known as "cramming", people calling the 1-800 numbers were hit with unauthorised monthly charges on their phone bills that saw the gang cream off about $420m.

Martino, 45, identified as a Gambino soldier by FBI agents and the mastermind of the consumer fraud ring, had also been charged with placing unauthorised charges on the credit cards of customers seeking free tours of pornographic websites.

Visitors to the sites were told that their card details were needed for "age verification" and were charged up to $90 on their cards. Prosecutors said the fraudulent charges raised $230m.

According to prosecutors, Martino was a favourite of the late John Gotti, the former Godfather of the Gambino clan who sprang to notoriety in the 1990s as a latter-day Al Capone.

Martino became a "made" member of the Gambino family around January 1990, where he was described at the ceremony as a "big earner" who generated substantial income from the the telecoms industry. He faces a 10-year jail sentence and a restitution bill of up to $75m. The six have not admitted that their crimes were linked to the Gambino family.

print this article

Return to internet news headlines
View Internet News Archive

Share with: