Richard Martino is a Gambino crime family soldier who orchestrated the Gambino fraud scheme that bilked consumers and federal funds out of more than $650 million through unauthorized internet and telephone billing between 1996 and 2003. He pleaded guilty in 2005 to conspiracy to commit mail and wire fraud and to extortion, drew a nine-year federal prison sentence, and was indicted again in 2019 for hiding income to avoid paying what he still owed under his forfeiture order.
How the Billing Scheme Worked
The operation had two engines. One ran on the web, the other on the phone system, and both relied on charging people for things they had not agreed to buy.
The “Free Tour” Website Trap
In 1996, Martino secretly controlled a Kansas web hosting company called Lexitrans Inc., which formed a joint venture with Manhattan-based Crescent Publishing Group Inc. to run adult sites tied to magazines including Playgirl and High Society.1U.S. Department of Justice. Indictment Press Release, U.S. v. Salvatore Locascio Visitors were offered “free tours” and asked for a credit card number, supposedly only to verify age. They were told the card would not be billed. It was billed anyway, at recurring monthly fees of $20 to $90.2CBS News. Mob Dot Com Cheated Thousands The internet side alone generated an estimated $230 million.3NBC News. Mobsters Plead Guilty in Massive Phone, Net Scam
Phone Bill “Cramming”
The phone operation was bigger. People who called toll-free lines for psychic readings, horoscopes, dating services, and phone sex later found recurring charges buried on their phone bills under labels like “voice mail services,” a tactic known as cramming.4The New York Times. Officials Say Mob Stole $200 Million Using Phone Bills Many customers never noticed. That piece of the fraud grossed more than $420 million.3NBC News. Mobsters Plead Guilty in Massive Phone, Net Scam At its peak, the operation’s call center was handling roughly 17,000 consumer complaints a week.
Shell Companies, a Bought Bank, and Offshore Processing
The scale required infrastructure. Martino and his associates set up at least 64 shell companies to move money and shed detection. They bought the Cass County Telephone Company in Peculiar, Missouri, and the Garden City Bank in Garden City, Missouri, to handle billing and card processing.3NBC News. Mobsters Plead Guilty in Massive Phone, Net Scam A Kansas City billing firm, USP&C, pushed the unauthorized phone charges onto consumer bills through agreements with PacBell, Southwestern Bell, and Bell Atlantic.5New York Daily News. Mob-Linked Guy Admits Phone Scam
Corporate names and merchant banks were rotated to stay ahead of fraud screens. By 1999, credit card transactions were being routed through Guatemala to get around Visa USA’s monitoring.3NBC News. Mobsters Plead Guilty in Massive Phone, Net Scam The operation also stole at least $9 million by overbilling two federally supervised telecom funds, the Universal Service Administrative Company and the National Exchange Carriers Association.
The Gambino Tribute
Martino was a soldier in the crew of Salvatore Locascio, a Gambino captain and the son of Frank LoCascio, who had been convicted alongside John Gotti in 1992. As a made member, Martino owed a cut upward. Between 1996 and 2002, he funneled more than $40 million to Locascio’s crew through a shell company called Creative Program Communications Inc., in which Locascio and associate Zef Mustafa held partial ownership.6U.S. Department of Justice. Superseding Indictment, U.S. v. Salvatore Locascio Prosecutors traced $8 million of that total to the internet fraud specifically.2CBS News. Mob Dot Com Cheated Thousands
The FTC Case and Consumer Refunds
Civil regulators moved first. In August 2000, the Federal Trade Commission and the New York Attorney General jointly sued Crescent Publishing Group, its principals Bruce Chew and David Bernstein, and 64 affiliated corporations, alleging that consumers had been billed for services advertised as free and that some had been charged without ever visiting the sites.7Federal Trade Commission. Playgirl.com Operators Pay $30 Million to Settle FTC Charges
In November 2001, Crescent Publishing agreed to pay $30 million in consumer refunds. Chew and Bernstein were barred from operating adult entertainment websites unless each posted a $500,000 bond, and the corporate defendants had to post $2 million before marketing such services again.7Federal Trade Commission. Playgirl.com Operators Pay $30 Million to Settle FTC Charges U.S. District Judge Lewis Kaplan, who oversaw the case, had earlier said the defendants “give every indication of seeking to profit from disclosing a minimum of accurate information.”8Los Angeles Times. Crescent Publishing Group Settles for $30 Million
The refund numbers hint at how many people were hit. Checks went to 189,646 accounts. Another 887,793 potential victims could not be matched to account data and received nothing.3NBC News. Mobsters Plead Guilty in Massive Phone, Net Scam
Guilty Pleas and a Nine-Year Sentence
A federal grand jury in Brooklyn indicted Martino, Locascio, and others in March 2003 on racketeering, money laundering, and fraud charges. The investigation grew out of the FTC’s earlier consumer-complaint inquiry, which led prosecutors to the Gambino connection.2CBS News. Mob Dot Com Cheated Thousands
With jury selection approaching and cooperators lined up, Martino and Locascio pleaded guilty on February 14, 2005. Martino admitted to one count of conspiracy to commit mail and wire fraud and one count of extortion; prosecutors dropped the racketeering count. He agreed to forfeit $15 million.3NBC News. Mobsters Plead Guilty in Massive Phone, Net Scam Locascio pleaded guilty to money laundering and agreed to forfeit $4.7 million. Martino’s brother Dennis, Thomas Pugliese, Andrew Campos, and Zev Mustafa also entered pleas. U.S. Attorney Roslynn Mauskopf called the operation “one of the largest consumer frauds in history.”9CBS News. Mobsters Cop to Huge Phone Scam
On January 30, 2006, Judge Carol Bagley Amon sentenced Martino to nine years in federal prison, to run concurrently with a 57-month term from a related Missouri case. By sentencing, he had paid $8.1 million of the agreed $15 million forfeiture.10The New York Times. Mob Figure Sentenced in Fraud The outstanding balance after his release has been reported as more than $300,000, though another government source puts the original forfeiture figure at $9.1 million.11U.S. Department of Justice. Captain and 10 Members and Associates of Gambino Crime Family Plead Guilty to Crimes
The 2019 Case: Hiding Money to Dodge Forfeiture
After release, Martino kept earning. Court-authorized wiretaps caught him secretly running multiple companies that pulled in millions, including construction work and pizzeria investments, while he told authorities he had limited assets and barely any job.12U.S. Department of Justice. 10 Bronx and Westchester-Based Members and Associates of Gambino Crime Family Indicted Gambino associate Frank “Bones” Tarul helped the cover by falsely claiming Martino worked at his flooring company.13New York Post. 11 Gambino Family Associates Plead Guilty to Crimes
On December 5, 2019, Martino was arrested in a sweep that charged 11 Gambino members and associates. In the Eastern District of New York (Docket No. 19-CR-575), he faced racketeering conspiracy and conspiracy to obstruct justice.12U.S. Department of Justice. 10 Bronx and Westchester-Based Members and Associates of Gambino Crime Family Indicted The same indictment charged captain Andrew Campos with running a separate construction fraud through CWC Contracting Corp. involving payroll tax evasion, wire fraud, and money laundering.11U.S. Department of Justice. Captain and 10 Members and Associates of Gambino Crime Family Plead Guilty to Crimes
In January 2021, Martino, then 61 and living in Rye, New York, pleaded guilty to conspiracy to obstruct justice, exposing him to up to 20 years in prison.11U.S. Department of Justice. Captain and 10 Members and Associates of Gambino Crime Family Plead Guilty to Crimes Tarul pleaded guilty to the same charge for his role in the cover-up.