An Overland Park, Kansas company has pleaded guilty in the case of a telephone and Internet porn scam tied to reputed members of the Gambino crime family.
USP&C pleaded February 17 to conspiracy to commit mail and wire fraud, letting any local phone companies with billing relationships to the company back out of their contracts without fear of litigation, according to federal prosecutors.
USP&C was believed under the control of Gambino Family caporegime Richard Martino and his brother Daniel, both of whom pleaded guilty in the case earlier this week. The company was considered the middleman between local telephone companies and third-party companies offering private 1-800 numbers—offering adult entertainment services and psychic hotlines—voice mail, call forwarding, and other services.
Victims who called the 1-800 numbers asking for free samples unwittingly kicked over a recurring monthly charge on their phone bills from USP&C, according to prosecutors, charges made to resemble standard phone charges hiding the adult entertainment and psychic hotline triggers. This was believed to be good for $50,000-60,000 a day from 1997 through 2001 and over $420 million gross overall, prosecutors said.
USP&C was launched in 1997 by Kenneth Matzdorff, who runs Cass County Telephone Company in Missouri, with a reported $200,000 in startup funds Richard Martino provided. Two years later, Matzdorff sold his shares to Michael Lauro.
Matzdorff pleaded guilty in January for his role in both the phone cramming and a scam involving purportedly free tours of Internet porn sites, said to have been masterminded by Martino.
He told the court that after he bought Cass County Telephone, with apparent help from the Martinos, Richard Martino suggested he launch USP&C. He also told the court he was unaware that Martino controlled the new company's clients or that they'd be responsible for excessive chargebacks thanks to later customer complaints of improper charges.
The Martino brothers and four other Gambino-tied defendants pleaded guilty February 14 in the phone cram and porn scams. The Martinos also face charges in Kansas City involving a plot to fatten Cass County Telephone's expenses—a case in which Matzdorff pleaded guilty to inflating the expenses to qualify the company for federal subsidies and reimbursements, according to published reports.
Matzdorff told the court during his plea date that he met the Martino brothers when looking for financing to buy Cass County Telephone, with the Martinos presented as prime players in a New York pay phone company, InfoAccess, reputed to make money setting up services for children to call Santa Claus during Christmas holiday season.
