FBI Hikes Gambino Site Take at $750 Million

Rhett Pardon
OVERLAND PARK, Kansas – Federal authorities now believe that the Gambino crime family’s online adult business generated $750 million in revenue, XBiz has learned.

XBiz reported last month on new federal indictments alleging that Lexitrans and other shell companies in Overland Park, Kansas, were used to help run adult Internet sites and 900 numbers that advertised free trials but charged customers anyway.

Thousands of adult surfers who thought they were taking a free peek at the sexually explicit material actually were charged $59.99 a month, FBI spokesman James Margolin told XBiz.

“Based on our belief, this is the largest consumer fraud in U.S. history," Margolin said. “The FBI is working with the Federal Trade Commission on the case, and we’re confident the figure will exceed $750 million – the numbers are growing, not shrinking.”

The scheme originally was thought to have bilked customers out of $230 million when the FBI made the indictments Feb. 10.

Lexitrans Inc. 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 moved from New York in 1996, after up-and-coming members of the Gambino crime began looking for a new home.

The company’s Overland Park offices contained 7,000 square feet of data center space, with redundant power and huge fiber-optic pipes. One source said 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 idea was to create Internet sites for the magazines, according to court papers.

A source said that at one point the company was spending $100,000 a day for placement on search engines such as AltaVista.

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.

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

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.