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Indictments Outline Web Hosting Plan

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Mar 10, 2004 10:58 AM PST    Text size: 
OVERLAND PARK, Kansas -- Overland Park doesn’t come to mind first as an ideal spot for an adult Web hosting operation, particularly with its many office-park developments that serve as headquarters for many national companies, such as Sprint and Accenture.

But the city, which has built more than 20 million square feet of commercial space since 1990, is tech-smart. The city, adjacent to Kansas City, Mo., is highly networked with fiber-optic capabilities, and an ideal spot for adult Web hosting.

U.S. prosecutors in new indictments made last month allege that Lexitrans Inc. and other shell companies in Overland Park were used to help run adult Internet sites and 900 numbers that advertised free trials but charged customers anyway.

According to the indictments, the scheme netted $230 million to the conspirators.

Lexitrans was allegedly founded by members of the Gambino family, including Richard Martino, who partnered with Norman Chanes, producer of several low-budget Hollywood movies and an alleged associate of the Gambino organization, to create an informal joint venture with Crescent Publishing Group Inc.

Lexitrans Inc. moved from New York in 1996, after up-and-coming members of the Gambino crime began looking for a new home. According to The Business Journal of Kansas City, the company’s Overland Park offices contained 7,000 square feet of data center space, with redundant power and huge fiber-optic pipes. The paper quotes one source as saying that Lexitrans paid $50,000 a month for Internet access alone.

The adult websites Lexitrans ran were flourishing. “Ridiculous amounts of traffic, ridiculous amounts of refunds,” a former employee said in court papers.

Before federal indictments started landing, Lexitrans attracted little attention.

Crescent owned adult magazines such as Playgirl and Live Young Girls, and the ideas was to create Internet sites for the magazines, according to court papers.

“They were getting 25 to 50 memberships a day for playgirl.com,” said a former Lexitrans employee, who asked not to be identified to the Business Journal. “Then it was 100 memberships a day.”

The source said that at one point the company was spending $100,000 a day for placement on search engines such as AltaVista. He also said that Lexitrans paid $50,000 a month for Internet access alone.

Lexitrans programmers, the source said, hatched the idea of inundating users with pop-up ads for related pornographic sites. With a fraction of people going to those sites and signing up for free tours, the idea worked.

According to the federal indictment, “these technological mechanisms were intended to increase the likelihood that visitors would inadvertently trigger charges to their credit cards by proceeding through the free tour.”

Lexitrans eventually subleased space to Cyber Data Processing Inc., Overland Data Center Inc. and USP&C Co. Although all are mentioned in the indictment, only USP&C is named as a defendant.

Each of the companies was controlled by the Mafia and used to defraud consumers through Internet and telephone schemes, according to the indictment.

Federal prosecutors contend that the Overland Park operation resulted in a huge number of complaints by users of the sites having their credit cards charged.

The Federal Trade Commission and the New York State Attorney General settled a lawsuit against Crescent in 2000. Crescent, according to the indictment, has been returning one of every three dollars of revenue the sites generated in 1999 as part of the settlement.

So far more than 450,000 claim forms have been mailed to potential claimants to those who were billed for the following sites: Playgirl.com, Playgirlde.com, Playgirldeutschland.com, Playgirldeutsch.com, Playgirlmag.com. Allwetsex.com, Bi-curioustv.com, Candygirlsmag.com, Chateudesade.com, Cheri.com, Cherimag.com, Cheritv.com, Climaxmag.com, Cock-tv.com, Cun-tv.com, Hotyounghunks.com, Fastlanesex.com, Fleshfest.com, Freeskinparty.com, Fukvision.com, Hawkmag.com, Highsociety.com, Highsocietymag.com, Highsocietydeutsch.com, Highsocietydeutschland.com, Highsocietytv.com, Lusthighway.com, Planetflesh.com, Schoolgirls4u.com, Sexundersurveillance.com, Sexcityintl.com, Sexonthestrip.com, Teenplaythings.com, Xxxposure.com and Ygal.com.

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