Desmond's links with mafia exposed in US porn fraud

LONDON - America's biggest fraud case involving the internet and telephone sex lines has exposed links to Express owner Richard Desmond, who received death threats from the mafia.

The links emerged as six mobsters from the New York Gambino crime family pleaded guilty yesterday to defrauding $650m from people across the globe in what is thought to be one of the biggest frauds in US history.

One charge the men have pleaded guilty to is an attempt to extort money from Desmond, who owned a string of adult magazines at the time. There is no suggestion the newspaper owner was involved in any criminal activity.

Desmond's life was said to have been threatened and one of his staff was attacked by mobsters and beaten.

The trouble surrounded a deal in which the mafia-connected companies would advertise in Desmond's adult titles in the early 90s.

However, disagreements led to a hotel meeting at which Desmond is said to have insulted mafia man Richard Martino.

Desmond is said to have called Martino "stupid" and "common" and told him he did not need the business in his magazines.

At the time, Desmond is known to have travelled to the US with a view to setting up his adult publishing business there. However, he was warned by Martino, nicknamed "Richie the Kid", not to try this.

Despite the warning, Desmond sent one of his executives, Philip Bailey, the former managing director of Northern & Shell, to New York. Bailey was lured into a car outside his hotel and beaten -- and a cattle prod-style device was applied to is testicles.

Bailey was told: "We're here because of your fucking boss. We want our money back. If your boss sets foot here , he's a dead man. A fucking dead man. We want our advertising money back. All the money we spent on your magazines."

Martino has pleaded guilty to conspiracy to commit fraud in the scam, which brought the mafia $650m, and has admitted to conspiring to extort money from Desmond.

The scam revolved around telephone horoscopes and porn sites, which asked web users to supply their credit card details.

"The defendants bilked thousands of unwitting consumers in the United States, Europe and Asia of more than $200m through bogus free tours of adult entertainment websites, which resulted in fraudulent charges on the credit cards of more than a million consumers," Roslynn Mauskopf, the US attorney in Brooklyn, said in a statement.

"Today's 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."

Richard Desmond sold off his adult magazine business last year to Remnant Media in a deal valued at £20m. Desmond owned titles including Asian Babes and Reader's Wives although he did sell Forum. He also owns soft por TV channel the Fantasy Channel.

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