Large iBill Judgments May Not Satisfy Ripped-Off Online Adult Companies

Rhett Pardon
LAS VEGAS — The scores of online adult companies that went unpaid by iBill might want to look at the case waged by Compelling Content Creators, which alleged the defunct third-party processor breached its contract, embezzled and committed fraud.

It appears to be the story of a judgment won, but trying to collect is another issue.

Las Vegas-based Compelling Content Creators, which operates and, recently won a default judgment of $170,000 against iBill, the largest yet against the former Deerfield Beach, Fla., adult processor.

The judgment eclipsed another recent default judgment against iBill awarded to parent Mana Internet Solutions of San Jose, Costa Rica, which was ordered to be compensated $125,000.

But costs associated with litigation mount further when a bamboozled company finds their adversary has vanished into thin air.

“The fact is that it’s tough for a company that’s been ripped off,” attorney Pajman Jassim, who represents Compelling Content Creators, told XBIZ. “Collecting judgments are difficult for small businesses because oftentimes it requires funds to trace where the defendant company’s assets are – that on top of the cost of the original litigation.”

Last year, iBill officially disintegrated and its top officials have not been heard from despite attempts to find them.

Jassim said that at one point the company had attorneys but not anymore.

“I don’t think [the company] exists,” he said.

Attempts by XBIZ to reach two of iBill's former top executives, Gary Spaniak and Steve Markley, were unsuccessful.

iBill’s former law firm, Arnstein & Lehr, did not respond to XBIZ for comment.

iBill parent company IBD said in a public filing last year that it had 116 lawsuits pending against the company in an aggregate amount of approximately $52 million.

The defunct processor's tangled mess can be pinpointed at its corporate acquisition and woes it incurred with a partnering credit card company.

Its troubles date back to its notification by First Data Merchant Services that it was dropping iBill from its merchant account. iBill tried to secure another merchant account holder and, according to some, failed to tell its clients.

Webmasters were frustrated in their attempts to contact the processor, which until three years ago, was one of the top third-party processors along with CCBill and Paycom.

IBill, in most deals with online adult companies, took a 20 percent cut of the action and required a 10 percent reserve for possible chargebacks.

IBD, formerly known as Care Concepts, purchased iBill and Media Billing LLC from a consortium of companies, including Penthouse, in 2004 for $55 million in an all-stock deal.

Nearly a year earlier, Norcross, Ga.-based InterCept Inc. through its Media Billing LLC division sold iBill to Penthouse for $700,000 in cash, $800,000 in a short-term loan and the assumption of $22 million in debt.

At one point IBD housed nearly 200 employees in a 50,000-square-foot headquarters and data center in Deerfield Beach.