The pleas, along with roughly $23.4 million in surrendered assets, brings to an end the wire fraud case that began within an Federal Trade Commission sanction in 2001.
“The 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,” said U.S. Attorney Roslynn R. Mauskopf.
In a 2003 indictment, prosecutors alleged that the men were involved in a two-pronged scheme to defraud users using both 1-800 phone numbers and “free” tours of adult websites.
According to the indictment, the group trapped callers to the phone numbers and then charged them recurring monthly charges for things like “voice-mail services.”
The scheme also involved offering Internet users access to “free” website tours in exchange for “verifying” their ages by taking their credit card information. The users were then billed between $20 and $90 a month.
“The defendants bilked thousands of unwitting consumers in the United States, Europe and Asia of more than $200 million through bogus free tours of adult entertainment websites, which resulted in fraudulent charges on the credit cards of more than a million consumers,” Mauskopf said.
The scheme was so profitable, according to the Department of Justice, that it allowed those involved to purchase the Cass County Telephone Co. in Peculiar, Mo., and the Garden City Bank in Garden City, Mo. The conspirators then used both properties to engage in more fraudulent behavior, according to the government.
Robert Nardoza, spokesman for the U.S. Attorney of the Eastern District of New York, told XBiz that the guilty pleas came on the first day of jury selection for the trial and was preceded by an entire weekend of plea bargain discussions.
The accused men agreed to the deal only after the government dropped the organized-crime racketeering allegations that had been leveled against them.
The six men who pleaded guilty include: Salvatore LoCascio, son of imprisoned Gambino consiglieri, who admitted to money laundering and faces up to 10 years in prison and agreed to forfeit $4.7 million; Richard Martino, a supposed capo within the Gambino family, who pleaded to conspiracy to commit mail and wire fraud, and conspiracy to commit extortion and will forfeit $15 million and faces up to 10 years in jail; and Zef Mustafa, who pleaded guilty to money laundering and faces up to 10 years in jail and a $1.7 million forfeiture.
The other three men, Daniel Martino, Thomas Pugliese and Andrew Campo, all pleaded guilty to conspiracy to commit mail and wire fraud and face up to five years in prison and forfeitures ranging from $300,000 to $1.5 million.