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RJB Telcom, Other Porners Busted By FTC 10/31/00 The Federal Trade Commission has filed charges against leading internet porners such as RJB Telcom and other alleged net scam artists. The bust of RJB Telcom is a "total nightmare" to the porn internet industry. From the AP: "RJB Telcom of Scottsdale, Ariz., was sued along with its principals for offering a free "viewer" or "dialer" program to access free adult material. The government alleges that without consumers' knowledge, the program disconnected users' computers from their own Internet providers and made an international call--typically to the Caribbean--to another Internet provider. Without their knowledge, consumers racked up hefty long-distance charges, the government alleged. The company and its executives also are accused of billing credit-card holders for services that consumers say they never used." L-ke Ford says: "The FTC has asked that RJB Telecom be put in receivership. You can't fight the FTC. All RJB can do is sign an agreement with the FTC to not sin again, and then pay a huge fine. "As for the GIA [an internet porn trade group of the biggest players], this sinks the GIA. RJB was a key player in the GIA, a key funder. This news devastates the porn net industry. All the major net porn players do major business with RJB. "This news comes as a shock to porners. RJB is generally regarded as having the highest ethical standards. He's gone from nobody in the industry four years ago to the top of the pile, without making enemies. RJB is popular and respected by his peers. What probably happened is that RJB did not keep technical inhouse control of customer complaints, thus allowing chargebacks to spiral out of control." RJB means the business owned by the brothers Richard and Robert Botto. They operate Karas Adult Playground, one of the two biggest adult sites on the web, and MaxCash which pays about $4 million a month to webmasters for traffic. On Thursday, October 26, the FTC won a temporary restraining order against RJB, with asset freeze and receiver obtained. A rival of RJB tells Luke Tuesday morning: "This really pisses me off. It totally messes things up." RB (Rich Botto) posts on Netpond Tuesday evening: "Firstly let me say that I appreciate the support and it has been duly noted...May I also add that the silence from certain cirlces has been deafening. RJB operations ARE continuing. We will continue to keep you aprised of all developments. Calm, people, calm..." Luke talked weeks ago with a competitor of RJB who said there was no way he was going to offer dialers [charging people $2-$9 per minute for access to porn net sites through telephone billing] because it would bring an FTC crackdown. Which is exactly what has happened here. XXX: "This RJB crackdown is not just about dialers. It's also about credit card fraud. RJB has major problems and I don't know what the industry is going to do. I thought RJB was a 100% straight arrow. Completely ethical. The FTC doesn't shoot empty bullets. Like the FBI and CIA. They come in when they've already got the case. When they ask you questions, they already have the answers. They just want to see if they can add perjury as a charge. "This has been an extensive investigation of RJB. The complaint says it dates back to 1999." Billing issues are huge for net porn and phone sex. And whenever a method has started doing huge volume, the FTC has cracked down on fraud, both purported and real. From the FTC Complaint: Plaintiff Federal Trade Commission ("FTC") brings this action to halt a multi-million dollar scam involving unauthorized credit and debit card billings, as well as telephone billings. The FTC seeks a temporary restraining order ("TRO") with an asset freeze, and appointment of a Receiver in order to halt unfair and deceptive acts and practices... Defendants RJB Telcom, Inc., Robert J. Botto, Jr., and Richard D. Botto - operate a company in Scottsdale which offers adult entertainment on the Internet through a series of web sites. Acting without consumers' authorization or knowledge, defendants post charges for their services to credit and debit cards and phone bills. During the current year alone, as indicated in the attached declarations from financial institutions, credit card networks, and from information supplied to the FTC by AT&T, there have been more than 200,000 charge-backs, credits and telephone bill refunds involving defedants' business practices. Moreoever, as this complaint is filed, defendants' fraudulent practices continue unabated. Defendants' revenues from their business are huge: between June 1999 and May 2000, two merchant accounts utilized by defendants received a total of at least $48 million in deposits. (...[T]hese numbers are based on information supplied to Visa nad MasterCard by Benchmark Bank, which maintained an account on behalf of defendants from May - August 1999 and by Am Trade International Bank, which has maintained an account for defendants from August 1999 through the present... In fact, defendants have at least two other operative merchant bank accounts - both in overseas banks and both established in recent months. Thus, the $48 million figure clearly understates defendants' gross revenues.) By May 2000, defendant's monthly reveues exceeded $6 million. Although a portion of defendants' business may be legitimate, it is abundantly clear from the exhibits submitted in support of this motion that the overall business of defendants is permeated by fraud and that the fraudulent and legitimate portions of the business cannot be meaningfully distinguished. It is also clear that defendants have earned and continue to earn millions of dollars from their illicit activities, and that these activities are increasing. Finally, defendants' recent establishment of merchant accounts at two overseas banks underscore the danger of asset dissipation through extraterritorial transfers of funds. Given the defendants' egregious conduct, the broad relief sought in the FTC's proposed TRO is clearly warranted. Without it, defendants will continue to defraud numerous consumers on a daily basis, and dissipate assets which could be used as redress for the countless consumers they have already defrauded. In addition, plaintiff's motion for a preliminary injunction, including appointment of a permanent receiver, should in all respects be granted. Under community property laws of Arizona, a party seeking to proceed against the assets of a marital community must sue both spouses jointly in order to afford due process. Therefore, Suzette Botto [wife of Robert] and Anne Botto [wife of Richard], spouses of the individual defendants, are being named as relief defendants. Defendants' Business Operation 1. Beginning on December 19, 1997, and continuing as recently as September 6 of this year, RJB has registered 82 different Internet web sites with Network Solutions - each with a separate, sexually explicit descriptor advertising the type of adult entertainment it offers (e.g., "Asianpleasures.com" "Clubcock.com" "AbsolutelyMale.com" "Wetlesbians.com" "Majormelons.com")... The web sites all have a common modus operandi: through a series of sexually explicit pictures and statements, they attempt to persuade viewers to purchase a trial membership (typically $2.95) using either their credit card or a check, or, if that fails, by accepting a telephone billing option which provides for a significantly more costly connection to defendants' web sites. On the majority of defendants' web sites, the credit or debit card/check payment option is offered first. In their "Terms and Conditions," defendants state that their memberships are automatically renewed at "the standard one month rate" unless cancelled "within 1 day to expiration." Unless viewers separately click on the "terms and conditions" option at the time they sign up, they will be unaware of this. Moreover, as indicated in the materials from defendants' "Major Melons" web site, defendants do not indicate the amount of their "standard one month rate." Viewers who decline the credit or debit card/check payment option and elect to close the web site are unable to do so; they are instead "mouse trapped" within defendants web site and hyperlinked to a new web page which promotes a phone payment option with the inducement: "NO CREDIT CARD NEEDED!...PAY BY PHONE!" The web page indicates that "PAYING BY PHONE is as easy as 1,2,3." This payment option is far more costly than the credit/debit option and is billed at a rate of up to $7:34 per minute. Consumers who were billed, accumulated charges as high as $1938. The "pay by phone" billing option installs a dialer on the viewer's computer which disconnects his modem from his usual Internset service provider and reconnects the computer's modem to the Internet, via an international call, opening to the advertised pornographic site. Prior to choosing the "pay by phone" option, viewers must indicate that they have read a disclaimer which, among other things, states that the viewer must be eighteen years of age or older, and indicates that billing for RJB's services will be in the form of an international call billed to the line subscriber. If the viewer chooses the "pay by phone" option, an icon appears on his computer's desktop screen to simplify future use of the web site through telephonic billing. Viewers refusing the "pay by phone" are nonetheless hyperlinked to several more pages containing explicit sexual imagery and more invitations to join before they are able to close down the web site. Defendants' "pay by phone" option provides no mechanism or process to assure that the person making the purchase is the line subscriber. As a result, line subscribers get billed for charges made from their telephone line even if they did not make or authorize the calls. Advertising materials from defendants' billing company, Global Internet Billing, indicates that the "pay by phone" billing option is targeted at teenagers and other unauthorized minors who do not have credit cards. On its web site, Global Internet Billing describes the phone option as a way to solicit "kids and freespending teenagers" since they do not have credit cards. Defendants web sites purportedly offer a cancellation option for previous viewers who are seeking to terminate their memberships. In fact, however, as indicated in the Vera declaration, exercise of this option is difficult and time consuming. Moreover, there is evidence that the cancellation option is ineffective, because defendants billed viewers who canceled their memberships immediately. 2. Defendants' Billing Practices and Revenues As indicated in the accompanying exhibits from financial institutions, Visa, MasterCard, and complaining consumers, defendants have been billing consumers' charge and debit cards using two descriptors - "DBL*RJBTE" and "RJBTELCOM WWW.FSX2.COM"... ...Although AT&T ceased handling calls to defendants' Madagascar number on July 23 of this year, defendants have continued to use the number, apparently by substituting other carriers and intermediaries for AT&T. In fact, one such intermediary, Verity International Ltd, is now the subjec tof an ex parte TRO, as a result of deceptive billing practices which caused more than 540 consumer complaints to the FTC in a five day period. C. Defendants Billing Scam 1. From at least June 1999 (the month after defendants Benchmark Bank account was established) to the present, there has been an outpouring of consumer complaints regarding RJB's credit and debit card billings. As indicated in the declarations supporting plaintiff's present motions, virtually all of the complaints involve a common theme - that defendants are engaging in unauthorized billing. In fact, the vast majority of the declarations indicate that consumers did not know who defendants were or what services they were offering until they inquired about the charges on their credit and debit card statements. The declarations also made it clear that there is no conceivable way the consumers could have authorized defendants' charges. For intance, one consumer - a mother of four girls eleven years and younger - had no computer in her house when the charges were purportedly authorized. Another consumer was overseas on vacation when the charges were placed. The credit card on which the charges appeared arrived during this time and had not been activated. Another consumer had cut up the credit card on which the charges were placed several months before the charges were purportedly authorized. Yet another consumer had not used the credit card with the charges in two years and kept it locked in her home. Still another consumer was an 88 year old woman with vision impairment. Another consumer who had no knowledge of what RJB was until she received her credit card statement, testified about subsequently seeing more than 100 complaint messages regarding RJB's unauthorized billings from consumers at a shopping coupon web site which she used. The credit and debit card statement containing defendants' charges set forth a phone number for customer complaints. However, as indicated in the declaration of FTC investigator, Martha Vera, this connects consumers to a separate entity, incorporated in California, which identifies itself as "Jettis.com." Thus, consumers are not able to identify the merchant who actually placed the charges. Moreoever, even after complaining to RJB's customer service number and receiving assurances that the charges would stop, some customers continued to be charged in subsequent months. The customer declarations just described are not isolated occurrences; rather, they are evidence of a broader pattern - one that indicates a business permeated by fraud. This is apparent from the declarations of Visa, MasterCard, and American Express ("AMEX") representatives, all of which describe disciplinary actions taken against RJB as a result of excessive chargeback patterns involving credit and debit cards. It is also apparent from the declarations of representatives of two banks - Chase Credit Card Services ("Chase") and Capital One - each of which describes their institution's extensive, recent complaint activity involving RJB charges. The Visa declaration indicates that, as a result of RJB's excessive chargebacks, it has taken the extraordinary step of notifying AmTrade - the United States bank at which RJB currently maintains a merchant account - that it intends to disquality RJB from the U.S. region. This step - decided at a July 26 Visa meeting and announced in a letter to AmTrade dated August 9, 2000 - followed a six month period during which RJB's average monthly chargeback rate exceeded Visa's chargeback monitoring guidelines. Because of its chargeback problems, RJB has been monitored in Visa programs for high risk merchants - first, in Visa's Merchant Chargeback Monitoring Program ("MCMP") and subsequently, from April 2000 on, in Visa High Risk Merchant Monitoring Program. As indicated in the Visa declaration, the MCMP applies to only a statistically infinitesimal number of Visa merchants. In a typical month only 70-80 merchants out of the 3-4 million in the Visa system, are placed in MCMP; of this group an even smaller number - a mere 4 to 8 per month - enter "active monitoring." Defendants' horrendous chargeback numbers placed them in this latter group. Even more tellingly, from a global perspective, in four of the first eight months of this year (March, April, May, and August), RJB generated more chargebacks and penalties from their merchant bank than any other merchant in Visa's global risk management program. Incredibly, even after AmTrade was notified of the impending Visa disqualification, RJB continued to violate Visa's chargeback guidelines. Indeed, its August chargeback and chargeback/credit rates - 4.4% and 14.76% respectively - were its highest this year. Put another way, in terms of individual sales, there were a total of 181, 218 Visa-related chargebacks and credits involving RJB for the first nine months of this year. Of this total, 44, 491, or 24.6% of the nine-month total, were in the months of August and September. The Visa declaration also underscores the difficulty of curing RJB's fraud without judicial intervention. During June 2000, RJB established a merchant relationship with Aval Card, an offshore bank located in Costa Rica; in August, RJB established a second merchant account with Banco Uno, a Panamanian bank. These actions placed RJB beyond the jurisdiction of Visa USA. With respect to MasterCard, it has recently completed an audit of RJB's AmTrade merchant account. Like the Visa investigation, it showed a pattern of excessive chargebacks and credits. For the first six months of this year, RJB's total chargebacks and credits involving the Mastercard network, averaged 14.4%, reaching a high of 16.8% in June - the last month for which Mastercard obtained data... As in the case of Visa, RJB's chargeback/credit problems place it in a highly unique category of problem merchants. The Visa and Mastercard declarations also indicate that they encountered excessive chargeback problems during the period in 1999 when RJB business was being processed through a merchant account at Benchmark. ...total chargebacks and credits during the four month period this account was operated amounted to 11.3%, when measured as a percentage in dollars of total deposits. Finally, the American Express declaration indicates that it had an RJB merchant account which was opened on July 29, 1999, and canceled a mere nine months later - on April 28 of this year. As in the case of Visa and Mastercard, the cancellation was due to a pattern of excessive chargebacks - a pattern which first appeared in 1999 and escalated in the first four months of 2000. Six weeks after cancellation of the RJB account, individual defendant Richard Botto opened up a new American Express account with a new descriptor, "RJBT." Although the ccount was operative for less than two months - from June 8 to August 4, it was flooded with even more chargebacks than its predecessor (20.5%)... The declarations from Chase and Capital One banks show the recent impact of defendants' fraud. According to the Capital One declaration, between January 1, 2000 and July 30, 2000, 40% of attempted charges by RJB were rejected. Of the remaining charges, 7% were subject to fraud complaints. As for Chase, between February 1 and August 15, 13% of RJB's billings were the subject of consumer complaints. 2. Complaints About Defendants' Telephone Billing Defendants' telephone billings, like those involving credit and debit cards, have also generated massive consumer complaints. As indicated in teh appended consumer declarations, these customers, like those complaining about defendants' crediut and debit card billings, assert that the charges were unauthorized and that they were unaware of them until receiving their phone bills. Some declarants were charged without authorization for multiple calls on the same day... In addition, some consumers suffered a loss of telephone service when their phone company disconnected service as a result of the astronomical charges. The declarations from consumers who were charged on their phone bills are further evidence of a business permeated by fraud. This is apparent from a chart furnished to the FTC by AT&T, which lists total charges and adjustments due to consumer complaints for a Madagascar-based phone number which was utilized by RJB between March and July of this year. The Madagascar phone number generated $1,119,744 in charges before being cut off by AT&T on July 23 of this year. However, as of August 31, AT&T reported making $320,654, or 28.6% in refunds to complaining customers. D. Scope of Defendants Fraud Defendants' revenues from tehir business are substantial. A spreadsheet prepared by MasterCard concerning the merchant account at Benchmark which handled defendants' claims indicates that at total of $10.0 million in Visa and MasterCard business for RJB was processed between May and August 1999. With respect to AmTrade, $39 million was deposited to defendants' merchant accounts between September 1999 and May 2000. Records of Visa/MasterCard deposits to RJB's AmTrade account show a steady increase in defendants' revenue flow: from a net revenue of $1.06 million in September of 1999 to nets of $6.2 million and $6.05 million in April and May of this year. Finally, defendants processed $2.7 million in sales through American Express... Although a reasoned inference can be made that some portion of defendants' business is legitimate - that is, results from charges for actual use of their web sites - it is also clear...that a substantial portion is the result of blatant fraud. This fraud began as early as May 1999, and has continued unabated through the present time. To prevent the defendants from committing further law violations pending resolution of this action and to preserve the possibility of effective final relief, the FTC also seeks an ex parte TRO, asset freeze, appointment of a receiver over defendants' businesses, immediate access to defendants' premises, expedited discovery, and an order to show cause why a preliminary injunction should not issue. ...[D]efendants misrepresent material facts in order to induce consumers to pay for services taht they neither purchased nor authorized. By billing consumer credit and debit cards, and by placing charges on consumers' telephone bills - in both instances without any prior authorization or awareness by consumers - defendants misrepresent that consumers are legally obligated to pay charges for defendants' sexually-explicit Internet services. Consumers receive the bills and believe that they are obligated to pay them even though they never authorized defendants' services or the charges. In addition to deception, the complaint also alleges that defendants unfairly: (1) charge and debit consumers' credit or debit card accounts without authorization; and (2) attempt to bill and collect from line subscribers who did not access defendants' web sites. Click here for the list of folks busted. Click here for charges against porner Ian Eisenberg. Ian gave Seth Warshavsky his start in phone and internet sex. Then they quarelled, sued each other and later resumed doing business. Charges against porner Ed Lipton at WorldNet. For background on this story, check out these links: Joe Elkind. Serge Birbrair. Vivid. Carl Ruderman. Listen to this 10/17/00 edition of L-ke Ford Live about the CEN controversy. Rich Botto appears 100 minutes into the show.
Serge Birbrair writes on Netpond: Yes, Luke, I agree. Porn on the internet is VERY vulnerable at the moment. Government doesn't need a new laws Supreme Court and other drastic measures, all they have to do is take 3-7 key players and vou-a-la, free sites are gone, as WHERE ELSE WILL YOU SEND YOUR TRAFFIC with our beloved industry leaders tied up with FTC? I said to myself, if somethign happens to RB money wise, I'm closing down completelly, as I'd rather do that than send traffic to some unknown dick and harry who are not only shave you but pay you late as well.... Ryan writes on Netpond: "Luke, I am sure RB's team of attorney's will have no problem fighting this - most likely winning as I am "SURE" they REALLY looked at the dialer they were using and whether it had the proper warnings... But it is going to cost a nice chunk of change to fight this regardless. I personally have seen the dialer figures on some of my checks and they are so small it is not worth the hassle IMHO, you are also clearly raping the consumer regardless of how you look at it for a few cents a minute. Definatey not a way to achieve repeat visitors to your website when the consumer does end up with a credit card he is willing to take out... I still think dialers were a bad idea, I am really looking forward to atmbilling.com though. I am sure this is just the first of a string of suits to be filed against adult websites using dialer software regardless of how clearly the warnings were on the software. "Uh oh... After reading a bit closer I see it is on the CC end of things also, definately not good.. The main argument they have against RJB is the consumers are complaining they didn't signup. How many of us running adult membership sites that have had to deal with the customer support before have recieved e-mails stating they didn't signup for the account but you could see in your logs they logged in and they are writing you from the e-mail address they used on the join page? This is fraud alright, against us though... not the consumer." NotShocked writes on Netpond: "luke you are shocked? go on! I am shocked that it took so long to nail another theif on the net like rjbt! $100 payouts, f--- all of ya that fell for it and got f---ed too! and stick it in your ass before ya jump to defend rb, he is nailed!!!!! xpics ieg rjb seeyalateralligator" Carnz.com writes on Netpond: RB and Bob have helped honest webmasters since day 1. Unlike other per click, signup, or partnership programs that are here today and gone tomorrow; RJB has been a pioneer, a trend setter, and developed into a cornerstone institution of the adult internet. They aren't just 'old school' webmasters, they helped build the f---ing building! Being one of the biggest means that they make a wider target. I regret that RJB has to go through the burden of proving what a top notch, ethical and honest company they are... Anyone who posts otherwise is just a waste of pixels; but real webmasters knew that one already... Melody writes: "L-ke Ford, this was irresponsible *as hell*. I hope whomever tipped you off is proud of her/himself. RB, you know that Tweet and I are behind you and believe in you 100%. Let us know if we can help. "Any of the predatory creatures who think they're going to make bank on RB's problems should know that anyone with sufficient traffic uses, to some extent, Max Cash. You start using this situation for personal gain, and the rest of us will remember. I'll take it VERY personally, as I not only consider RB and Bob and Co to be the best of businesspeople in this industry, but also friends. There's a lot of this going around, and why Max Cash was "reported on" is the problem. I promise you, I'm going to get to the bottom of it. Hell hath no fury like a Scots-Cherokee woman in a way bad mood. "Luke, you're a jackal and a pariah (and please accept my apologies, all the jackals and pariah of the world for the association -- Diogenes himself does not deserve the label beside Ford), you also are talking out of your ass. I sincerely hope that RB sues your ass for this garbage you're spewing. "How on earth can you attack the very field in which you make your living? If you want to be some mistress' bitch, kindly do it in a dungeon where it will do no one else harm. Richard Metzger says you're one of the most disturbing people he's ever interviewed, for your working in the very realm you seek to destroy. Who is paying your way these days? Why are you still around? Who is catering your daily epiphany? I think the answers to these questions would make for some true journalistic discovery. I suggest people start considering who serves to gain from RJB being hung with all this -- it's a cynical, brazen, greed-driven attack on a rival, in order to save someone else's hide. Whomever is behind it is not as opaque as they would like to believe." CyberErotica Club Pix Asian Frenzy FF5 Homegrown Video Serge writes on Netpond: "RB, I have only 1 {ONE} question: will this FTC debacle affect checks suposedly leaving on 10th of November or not? simple YES or NO will do..." Todd SexToy King writes on Netpond: "Rb and Maxcash, don't sweat it, you will survive this..... not to be the asshole and say i told you so everyone, but remember when those dialiers hit the market again, a few of us said, the Ftc will come down again, as they did a couple of years ago.. I know it sucks!!! All I can say, is we are waiting for the day when you enter a pin# with your CC, or swipe it or something.... until then, it could be any of us, getting hassled by the Ftc.. Shit this aint nothing, compared to if BUSH wins in 1 week!!!!!!!!" AdminX writes on Netpond: "RB & the Maxcash crew are probably the most honest sponsors on the net. The disclosure on billing practices on Maxcash sites is so clear even Ray Charles can read it. Ryan You hit it on the head. Unfortunately for RB & crew, their size and sheer volume has put them in the spot light. This snowball is defiantly gonna roll down hill and hit everyone that has used dialers. The credit card portion of the complaint just compliments the dialer issue. The FTC will fling as much shit against the wall to assure themselves that some will stick. Hopefully the efforts of the GIA will alleviate the whole credit card crisis before the FTC lowers the boom." Mark Tiarra, an industry leader and head of United Adult Sites, writes on Netpond: I think people are missing the bigger picture here: Anyone remember the Reagan years? The Meese commission? Look, the new political climate coming forth is going to bring about a lot of UNDESERVED legal scrutiny to many UPSTANDING members of our community. While all of us know that there are sites/companies that have walked the tightrope of ethics and deserve scrutiny, RJB IS NOT ONE OF THEM. They have kept up good and responsible business practices from long before it was "vogue" to do so. I understand what the FTC is trying to do in general and I appluad efforts to make sure consumers are fairly treated, but keep in mind folks, the FTC doesn't even yet grasp the whole idea of THE BIG COMPANIES SOMETIMES BEING THE VICTIMS OF FRAUD! There are quite a few scumbags out there that find ways to run blocks of stolen numbers so they can collect their pay per sign up fees and what is being done to stop that? I hope that the powers that be in the government are HONEST in their cause and listen to the truth behind this (and the many others that are soon to come) situation and that only people deserving of action are at the butt end of such action. So long as truth and just action are the goals of the FTC and the government, people like RJB will be just fine, and people that are finding ways to screw them will be sought after instead trying to blame the victim for the crime. Luke: What the heck are you talking about? How does this sink the GIA? Please don't talk about things that you have no idea about. The GIA is fine and will hopefully play a key role in establishing "best practices" so that this kind of crap doesn't happen to people who don't deserve it. Know your history - RJB isn't the first company to face this scrutiny and the last notable one who did face it did not nearly have the responsible policies that RJB practices. That company is still out there. They just had to work out an agreement and change their practices (and I do believe a fine was involved - not sure on that point). Anyway, MY POINT is, RJB is not going anywhere - they haven't done anything wrong, the facts just have to be presented and hopefully this will be a positive step in establishing industry wide practices as well waking up the government to the problem of fraud from people cheating the programs through false and stolen credit card numbers. Click here for FTC's report on DotCons. Here some key links: http://www.ftc.gov/opa/2000/10/category.pdf (Go to page 24 for RJB) http://www.ftc.gov/os/2000/10/rjbtelcomtromemo.pdf (The entire complaint against RJB) Dravyk writes on Netpond: Luke, you don't KNOW this industry. You are NOT a part of it. You couldn't run a paysite to save your ass. You couldn't run a freaking free site without losing money! Stop talking like some authority, when you haven't the first clue. My dead grandmother is more of an authority on this industry than you will ever be! You get your "wisdom" from the same anonymous f---s that post here and merely parrot back whatever they say. Unfortunately they are almost people nearly (but not as quite) as clueless as you are, or they are folks with axes to grind who use you as the little puppet and pawn you are. So, essentially, shut the f--- up. RJB was picked on for one reason, they are the biggest and the most successful. Period. Since someone posted the entire docket, I point out the blatant bullshit in paragraphs 21 and 22 whereby consumers claim that they are being automatically rebilled, that they never called it, and that they had to change their phone numbers. What shit! Dailers and long-distance doesn't and can't work that way for godssakes!!! Obviously a few dick-in-hand horndogs ran up so many large amounts of calls whacking off night after night that they shocked themselves when they got the bill, and then couldn't or wouldn't pay up, and therefore lodged fraudalant complaints that "oh, the phone took over" or that "I didn't make no calls" .... And since the FTC in their infinite (lack of) wisdom has no idea how anything works, took the consumers word for it hook, line and sucker. Persian Kitty writes on Netpond: "My maxcash banners will remain exactly where they are, as they have since the program was first opened! RJB Telcom is beyond reproach and has always been steadfast and on the forefront for not only webmasters but consumers. As one who's been singled out for outrageously absurd lawsuits in the past (none of which has ever gotten anywhere other than being the cause of unnecessary worry and sleepless nights only to end up being dropped or dismissed), I know that they're being singled out because of the sheer size and popularity of their sites. It's a shame that many choice to contribute to the witchhunt rather than stand behind one of our own." Hooper writes: They [FTC] had 2 valid points. 1) There is no way of verifying that the person you are billing is the person who made the connection. Although that should apply equally to 900 numbers. 2) Unlike 900 & 976 numbers, you can't block intl numbers. This seems like the key point. JMHO, but I'm taking down all of my dialers. Here's a copy of much of the complaint: David R. Spiegel, NY Bar No. 1592724 UNITED STATES DISTRICT COURT DISTRICT OF ARIZONA, PHOENIX DIVISION Federal Trade Commission, Plaintiff, v. RJB Telcom, Inc., a corporation; Robert J. Botto, Jr. individually, and as an officer of RJB Telcom, Inc., and Robert J. Botto, Jr. and Suzette Botto, as Husband and Wife; Richard D. Botto, individually, and as an officer of RJB Telcom, Inc., and Richard D. Botto and Anne Botto, as Husband and Wife, Defendants. COMPLAINT FOR INJUNCTIVE AND OTHER EQUITABLE RELIEF RJB Telcom, Inc., a corporation; Robert J. Botto, Jr. individually, and as an officer of RJB Telcom, Inc., and Robert J. Botto, Jr. and Suzette Botto, as Husband and Wife; Richard D. Botto, individually, and as an officer of RJB Telcom, Inc., and Richard D. Botto and Anne Botto, as Husband and Wife, Defendants. Plaintiff Federal Trade Commission ("Commission"), by its undersigned attorneys, alleges: 1. This is an action under Section 13(b) of the Federal Trade Commission Act ("FTC Act"), 15 U.S.C. § 53(b), to secure injunctive and other equitable relief, including restitution and disgorgement of ill-gotten gains, for defendants' deceptive and unfair acts or practices in violation of Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), in connection with unauthorized billing for Internet services. JURISDICTION AND VENUE 2. This Court has jurisdiction over this matter pursuant to 15 U.S.C. §§ 45(a) and 53(b), and 28 U.S.C. §§ 1331, 1337(a) and 1345. 3. Venue in this District is proper under 15 U.S.C. § 53(b), and 28 U.S.C. §§ 1391(b) and (c). PLAINTIFF 4. Plaintiff Federal Trade Commission is an independent agency of the United States Government created by statute. 15 U.S.C. §§ 41-58. The Commission enforces Section 5(a) of the FTC Act, 15 U.S.C. § 45(a), which prohibits unfair or deceptive acts or practices in or affecting commerce. The Commission may initiate federal district court proceedings to enjoin violations of the FTC Act and to secure such equitable relief as may be appropriate in each case, including restitution for injured consumers. 15 U.S.C. § 53(b). DEFENDANTS 5. Defendant RJB Telecom, Inc. ("RJB") is an Arizona corporation that does or has done business at one or more of the following addresses: (a) 7702 East Doubletree Ranch RD, #305, Scottsdale, AZ 85258; (b) 8601 N. Scottsdale RD, Ste. 330, Scottsdale, AZ 85253; (c) 10785 E. Salt Bush Dr., Scottsdale, AZ 85259-8843; and (d) 13771 Fountain Hills Blvd., Ste. 247, Fountain Hills, AZ 85268. RJB was incorporated in May 1999, and transacts or has transacted business in the District of Arizona. 6. Defendant Robert J. Botto, Jr. is the President and Secretary of corporate defendant RJB. He resides and transacts or has transacted business in the District of Arizona. At all times material to this complaint, acting alone or in concert with others, Mr. Botto has formulated, directed, controlled or participated in the acts and practices of RJB, including the acts and practices set forth in the complaint. 7. Relief defendant Suzette Botto is named as wife of defendant Robert Botto. At all times Robert Botto has acted on behalf of the marital community and Suzette Botto is being named for community liability purposes. 8. Defendant Richard D. Botto is the Vice President and Treasurer of corporate defendant RJB. He resides and transacts or has transacted business in the District of Arizona. At all times material to this complaint, acting alone or in concert with others, Mr. Botto has formulated, directed, controlled or participated in the acts and practices of RJB, including the acts and practices set forth in the complaint. 9. Relief defendant Anne Botto is named as wife of defendant Richard Botto. At all times Richard Botto has acted on behalf of the marital community and Anne Botto is being named for community liability purposes. COMMERCE 10. At all times material hereto, defendants (sometimes hereinafter referred to collectively as "RJB") have been engaged in the business of offering for sale and selling Internet-related services to the public, including access to sexually explicit Web sites, in or affecting commerce, as "commerce" is defined in Section 4 of the FTC Act, 15 U.S.C. § 44. DEFINITIONS 11. For purposes of this complaint, "Local Exchange Carrier" or "LEC" means the local telephone company from which a line subscriber receives his or her telephone bill. 12. For purposes of this complaint, "line subscriber" means an individual or entity who has arranged with a LEC to obtain local telephone service provided through an assigned telephone number, and to be billed for such service on a monthly (or other periodic) basis. 13. For purposes of this complaint, the term "Defendants" refers to individual defendants Robert J. Botto, and Richard D. Botto, as well as corporate defendant RJB Telecom, Inc. The term "Relief Defendants" refers to Suzette Botto, and Anne Botto. DEFENDANTS' BUSINESS ACTIVITIES 14. Since May 1999, defendants have engaged in a plan, program or campaign to bill consumers throughout the United States on their charge cards or debit cards, and more recently, on their telephone bills, purportedly for access to sexually explicit web pages and web sites. 15. A "web page" is a single electronic file or document displayed on the World Wide Web ("WWW"). Web pages include at least the following elements: copy, graphics, layout, and internal technical design. Web pages are housed within a "web site," which is a home or location on the WWW. Web sites are usually comprised of a home page and subordinate pages. 16. Defendants have registered and own and/or operate sexually explicit web sites with descriptors including "AsianHeat.com," "Teensteam.com," "Clubcock.com," and "KarasXXX.com." The sites are configured so that after an initial "teaser" layout, viewers are shifted to a screen which offers them either a trial membership (e.g., $2.95 for five days) or a longer membership (e.g., $29.95 for a month). Viewers are offered the option of paying by either credit or debit card or by check. Viewers who sign up are then provided with additional sexually explicit images. 17. In numerous instances, consumers have complained that they have been billed by defendants on their credit or debit cards, purportedly for access to defendants' web sites, without their authorization or knowledge. Many such consumers have never accessed defendants' web sites, yet defendants have obtained and continue to obtain these consumers' credit and debit card account numbers and have caused and continued to cause charges to be posted on, or monies to be withdrawn from those accounts, without consumers' authorization. 18. Viewers who close the credit card membership screen or attempt to exit the web site are shifted to a new screen which indicates that there is "NO CREDIT CARD NEEDED!" Instead, the viewer is offered the opportunity to "PAY BY PHONE!" Whether the viewer clicks on the phone option or simply attempts to exit the web site, he or she is referred to a new set of screens which advertise a phone dialer option. This option installs a dialer program on the viewer's computer which disconnects the viewer's computer modem from the viewer's usual Internet service provider, dials an international telephone number and reconnects the viewer's computer modem, via an international call, to the Internet, opening at defendants' sexually explicit web site. 19. As a result of the action of defendants' dialer program, telephone line subscribers are billed for defendants' "adult" Internet-based entertainment via their monthly telephone bills, or are invoiced directly for the charges by a billing company. These bills describe the charge for defendants' adult entertainment as a toll charge for telephone transmission -- i.e., the charge looks like a charge for an ordinary international long distance call. 20. Defendants do not take any steps to verify or confirm that the telephone line subscriber that they ultimately bill for access to sexually explicit material is in fact the person who downloaded and used the dialer software. Defendants do not know if the line subscriber's minor children, house guests or others with access to the phone line used the dialer software, or whether any such usage was authorized by the line subscriber. 21. In numerous instances, line subscribers have complained that they have been billed on their telephone bills for access to defendants' web sites without their authorization or knowledge. Many such line subscribers have never accessed defendants' web sites, have never placed calls to the phone numbers used by the dialer software on defendants' web sites, and have never authorized anyone else to do so. 22. In many cases, consumers have had to cancel their existing credit or debit card accounts, or line subscribers have had to change or disconnect their telephone numbers in order to stop incurring continuing additional charges from defendants. VIOLATIONS OF SECTION 5 OF THE FTC ACT 23. As set forth below, defendants, individually and in concert with others, have violated Section 5(a) of the FTC Act in connection with the marketing, promotion, offer and sale of access to their sexually explicit Internet-based entertainment services. COUNT I 24. In numerous instances, in the course of billing, attempting to collect, and collecting money from consumers, defendants represent to consumers, expressly or by implication, that consumers purchased or agreed to purchase goods or services from defendants, and therefore owe money to defendants. 25. In truth and in fact, in numerous instances, consumers did not purchase or agree to purchase goods or services from defendants, and therefore do not owe money to defendants. 26. Therefore, defendants' representations, as set forth above, are deceptive, and violates Section 5(a) of the FTC Act, 15 U.S.C. §45(a). COUNT II 27. In numerous instances, defendants charge or debit the accounts of consumers, purportedly for access to their web sites. 28. In truth and in fact, in numerous instances, consumers have not accessed, contacted, been contacted by, purchased, or agreed to purchase or pay for any goods or services from defendants or from anyone for whom defendants purport to bill. Large numbers of consumers have never heard of RJB Telcom, Inc. prior to receiving their account statements, and therefore cannot reasonably avoid defendants' billing for services that they did not purchase. 29. Defendants' practice of charging and debiting consumers' credit or debit card accounts without authorization causes substantial injury that consumers cannot reasonably avoid and that is not outweighed by countervailing benefits to consumers or competition. 30. Therefore, defendants' practice, as outlined above, is unfair and violates Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). COUNT III 31. In numerous instances, defendants represent, expressly or by implication, that because a line-subscriber's telephone was used to access Internet web sites through the line-subscriber's computer modem using the Defendant's dialing program, the line subscriber is legally obligated to pay defendants for that access, whether or not the line subscriber actually accessed such web sites. 32. In truth and in fact, in numerous instances, the line subscriber is not legally obligated to pay defendants for accessing Internet web sites through defendants' dialing program. 33. Therefore, the representation set forth in Paragraph 31 is deceptive, and violates Section 5(a) of the FTC Act, 15 U.S.C. §45(a). COUNT IV 34. In numerous instances, defendants bill or cause to be billed, and attempt to collect or arrange for the collection of payment from, a line subscriber whose telephone may have been used to call an international telephone number through the line- subscriber's modem, using the defendants' dialing program in order to access an Internet web site, but who did not himself or herself access such site or use the defendants' dialing program, or authorize anyone else to do so. 35. Line subscribers cannot reasonably block telephone calls to international numbers. Therefore, line subscribers cannot reasonably avoid defendants' billing and collection efforts for international telephone calls made through the defendants' dialing program by others while using those line subscribers' computer modems and telephone lines. 36. Defendants' practice of billing and attempting to collect from line subscribers whose computer modems and telephone lines may have been used to access Internet web sites using the defendants' dialing program, but who themselves have not accessed such web sites or used the defendants' dialing program, causes substantial injury to the line subscribers that is not outweighed by countervailing benefits to consumers or competition. 37. Therefore, Defendants' acts and practices, as alleged in Paragraphs 34 through 36, are unfair, and violate Section 5(a) of the FTC Act, 15 U.S.C. § 45(a). CONSUMER INJURY 38. Consumers in many areas of the United States have suffered substantial monetary loss as a result of defendants' unlawful acts or practices. In addition, defendants have been unjustly enriched as a result of their unlawful practices. Absent injunctive relief by this Court, defendants are likely to continue to injure consumers and harm the public interest. THIS COURT'S POWER TO GRANT RELIEF 39. Section 13(b) of the FTC Act, 15 U.S.C. § 53(b), empowers the Court to grant injunctive and other equitable ancillary relief, including consumer redress, disgorgement, and restitution, to prevent and remedy violations of any provision of law enforced by the Commission. PRAYER FOR RELIEF Wherefore, plaintiff requests that this Court: 1. Award plaintiff such preliminary injunctive and ancillary relief as may be necessary to avert the likelihood of consumer injury during the pendency of this action, and to preserve the possibility of effective final relief; 2. Permanently enjoin the defendants from violating the FTC Act, as alleged herein; 3. Award such relief as the Court finds necessary to redress injury to consumers resulting from defendants' violations of the FTC Act, including but not limited to rescission of contracts, the refund of monies paid, and the disgorgement of ill-gotten monies; and 4. Award plaintiff the costs of bringing this action, as well as such other and additional equitable relief as the Court may determine to be just and proper. Greg Geelan writes on YNOTmasters.com about the Mike Jones and the RJBT busts: I think the most important thing to take out of these two events is to realize that the proverbial shit has finally hit the fan - and the new president hasn't even been sworn in yet! While the two events are completely unrelated, the writing is on the wall - government, whether big or small, is finally starting to investigate us and to MOVE on those investigations. That means that if you don't have your shit together, you better do it damn fast. For the small minority of you who are engaging in illicit practices - get out of child porn, bestiality, celebrity content, spamming, credit card and dialer fraud, and misrepresenting what's on your websites NOW. On Netpond, net porners are scared by the RJBT bust. Serge writes: I see interesting pattern developing: 1) XPICS was the first one nailed by FTC 2) Seth Warshawsky is having encounters with FBI and IRS 3) Crescent Publishing is under FTC investigation 4) RB is the latest victim What [do] ALL of the above have in common? only ONE thing: they were (or percieved to be in Seth's case) the BIGGEST, Numero UNO sites on the adult Internet. IF RB falls, I see clear Ron [Levi] to be next and as Stalin's right hand man Beria used to say: "Give us a person and we'll find something to charge him with." 11/2/00 Rich Botto of RJB posted on Netpond Thursday afternoon: In my personal opinion, RJB is not guilty of the allegations in the FTC complaint filed last week either in regard to credit card cramming or the dialer. It looks forward to vindicating its right in court. RJB, like Microsoft and other top internet retailers, has been victimized by fraud. The FTC's complaint against the company only highlights the losses which fraudulent webmasters cause by defrauding unwitting consumers, banks and credit card companies. RJB uses state-of-the-art techniques to discover and prevent fraud. It has worked closely with its credit card processors to detect fraud. RJB in every instance it has discovered or has been made aware of that fraud might have occured has fully refunded its customers. From August of 1999 through September of 2000, RJB has refunded millions of dollars to customers it felt might have been defrauded by deceptive webmasters. It hopes to assist federal investigators in a cooperative effort to eradicate this fraud. RJB expects to be completely vindicated of all charges. The company's operations, in cooperation with federal regulators, are continuing and no interruption in operations is expected at any time. Luke says: Most of RJB's competitors are keeping quiet about the FTC bust. Why? Because they're also getting monitored by the FTC. And all the big internet porn companies are also in Visa's Merchant Chargeback Monitoring program (only about 70 merchants total, about ten percent of them are porners). Porners can learn from Cybererotica.com's program which has a huge inhouse customer complaints department that answers the phone 24/7. RJB outsourced complaints to Jettis.com (also owned by RJB?). Putting things on a third party will serve as no excuse in the eyes of the FTC. You're held responsible. And third party customer complaint operations are rarely as efficient and accurate as a smoothly operating in-house deal. RJB complainers would get the runaround from Jettis, according to the FTC complaint. All the big porn paysites are getting fined regularly by Visa for excessive chargebacks. The fines range from zero to over a million dollars a month. Visa levies fines if chargebacks exceed one percent and customer disputed complaints exceed 2.5%. Fines range from $25 to $100 a chargeback. Third party processing of consumer complaints can be a nightmare. If they're doing it for a number of people, and if they don't have great reporting and great statistics... Jettis just started processing after DMR collapsed and probably have not had the technical ability to handle it. It's difficult to believe that RJB has not known for weeks that they were under intense FTC scrutiny. XXX says: Their problems are probably a lack of technical expertise, rather than deliberate fraud. Here's how it works. You sign up for an RJB site. Then you cancel with your credit card, and not by calling RJB's customer service. Eventually Jettis gets the notice but they don't get back to RJB in time to stop them from billing you again. The consumer has already received a charge and a credit on their statement, and now they're getting charged again. Unless you have all your ducks in a row, and getting all that information as it comes in, every day that goes by, you're billing another group of cancellees. And the FTC can call that fraud. If you go to a 404 error page on any of Voice Media's site, you'll pop an RJB console. So a few weeks ago, JoeE's servers probably went down and kicked in a 404 situation, where he started sending traffic to Karas (RJB) and Vivid. And the biggest problem was that JoeE did not come on to the boards and defend himself. If you're an industry leader, you have to be accountable. Sometimes you're going to come out looking guilty when you're only defending yourself, but that's the price you pay as a leader who must stand accountable. The FTC is on a rampage now. They have more power than ever. The FTC is hurting American porn far more than the Department of Justice (DOJ). The FTC and the DOJ are in a competition to see who can get more headlines. That determines their funding. RJB is not going to hire lawyers to fight this. You can't fight the FTC. RJB will just sign a consent decree. You agree not to do certain things again and pay a fine. John@Jettis.com writes on Netpond: L-ke Ford, I'm afraid your information regarding credit card processing and customer service, not to mention the Jettis.com background, is a bit off-base. Jettis.com was processing well before the demise of DMR; technical capability is not, and never has been an issue. Additionally, we handle customer service requests for many of our clients; also working closely on disclosure and availability of support links. Processing the transactions positions us to provide the highest level of support, as we have everything which is needed, at our fingertips. Luke, do not worry about us, we know what we're doing. 11/3/00 Pervatronic writes: Luke -- Congrats on your comprehensive coverage of the much deserved, and long-time-coming, RJB bust. I've scoured the various adult webmaster boards and sites, over the last couple of days, and was surprised to see such paltry coverage of such a major event. The silence indeed was deafening, but I'd imagine this has more to do with apprehension to criticize RJB (and commend the government) than any fear that the FTC might be monitoring anyone who wrote in on the subject. As a porn webmaster who has avoided affiliation with RJB for the last two years, I can release a long sigh of relief, that FINALLY some sort of comeuppance is being administered (call it karma, for the more spiritually minded). I've been in this business for three years now and have joyfully watched X Pics go down, followed by IEG, and now RJB feels like the crowning denouement. I unequivocally believe the allegations that the FTC has landed on the company, regarding abusive billing practices. Any company that would employ dialers on their site automatically qualifies as first-rate assholes. Why would a company, making over 45 million dollars a year, need to use such a deceptive tool as a dialer to insure their cash flow? It's not like they were hurting for profit from their site's usual cc processing payment option. Greed, plain and simple, coupled with unchecked hubris, will always invite a downfall. All of the missives that you've posted from "friends" of RJB demonstrate how little conscience or ethics operate within this biz, and how much self-generated delusion/denial (and forked tongue asslicking) can cloud reasoning once bank accounts are threatened. Anyone who didn't stop and consider how they were receiving $75.00 to $100.00 per RJB signup had to have their head buried up their ass. Money like that can not be paid out unless someone, somewhere is getting ripped off. Everyone who advertised RJB's sites off of their own -- and made money in the process -- was aiding and abetting thievery and deception across the Net. Plain and simple. This hurts legitimate webmasters like myself, who run ethical sites, with high membership retention and very low (way below 1%) charge back complaints/requests, to my cc processor. You wrote: "RJB is popular and respected by his peers." That's just plain wrong. I've never respected their predatory approach and their blatant disregard for how their actions reflect on net porn in general, indirectly making it more difficult for me to run my sites. I know scores of other webmasters who feel the same way. Believe it or not there are many successful web pornsters who do not circulate within the booze and shmooze coteries that use "adult" web expos and conventions as an excuse for a social life. Most of us run our businesses quietly from our home offices, and pursue other non-porn, non-web related, interests and pursuits. What a concept, huh? I've had frustrating -- indirect and direct -- interactions with RJB from the get go. When I was naive and green in this biz, I tried using their reseller programs, along with several other webmaster programs, off of my sites, and after over a month of supposed "no sales" (when all my other programs were converting very nicely) I could only surmise that RJB's reseller program was ripping me off. I've no proof of this, but numbers and logic dictated accordingly. More thievery: Because several of my websites rank high in the search engines, RJB's search engine mavens and operators have, for the last two years, brazenly hijacked my sites' meta tags and front page text to try and duplicate search engine result placement for their sites. They do this by building scores of bogus "doorway" pages, and peppering them across the net. These seem like minor complaints, no doubt, but they've done little to generate any sympathy for RJB's debacle. I'm hoping they go down hard, and, again commend the FTC for choosing such a bloated, insouciant player to set a precedent with. I'm hoping RJB's debacle helps clean up this business, and snaps some reality into those other site owners, who, disregarding their customers (and fellow pornsters), feel the need to press the envelope way too far in the name of profit. Do that, and eventually there will be a reprisal. Luke says: Nick@Ilynx.com, the owner of Netpond, pulled my post of the above letter. Nick writes on Netpond: "post 116097 from L-ke Ford is gone. pulled for errrrrr publishing an email/spam/ errrr fucvk it I pulled it...so shoot me" Fred Winters writes on Netpond: "Hmmmmm...the FTC complaint against RJB started in May 1999. Hmmmmm...seems some people were in with the FTC back around that time." Check out the Condom Chronicles 4/13/99: "Many well-informed people believe that the FTC, in particular, will begin enforcement in the area of sales practices very soon. What seems to be at the top of the FTC's target list are sites that use misleading and unethical tactics to attract customers and trap them into a billing cycle with no clear way for them to cancel their memberships. One of the FTC's main areas of focus is the use of the word 'Free' when associated with trial memberships." Dogbreath writes: The Truth, this is good shit man! I can read betweeen the lines! Look at some of this shit! Quotes from Fantasyman. Cybererotica #topic is 'CONDOM WORKSHOP on Saturday Apr 10th..FANTASYMAN reveals secrets!!!' "this means that if you use our Adult Hosting and credit card processing offshore you will not be governed by Visa Domestic or the FTC" "on top of all that we have secured banking relations with a bank offshore" Bill writes Luke: luke why do just print claims people send you? i'd encourage you to enage in some sort of professionalism if you're going to report on the adult industry or any other industry for that matter and check things out! if you're incapable of that then shut your site down and get a job. 12Clicks writes on Netpond: Luke, if you've got something interesting, post it. Otherwise, what's your point? Robert Botto from RJB writes on Netpond: Luke, (yawn) Congrats...You provide more inaccurate information than the Enquirer and others COMBINED. (yawn) JohnIP writes on Netpond: Hey Luke if I ever see you in Public...I hope you bring that BIG gun I saw you with in the pic the other day...your gonna need it. Jim@Oculus.net writes on Netpond: Brilliant Ford. Did you make that up all by yourself or did you have a group of monkies working 'round the clock trying to conjure up more BS? What a prick! RawAlex writes on Netpond: Yup, Luke really did it again. Sometimes, just when I think the guy is getting a little bit of a clue, he lets a moron "anon" have a say. Don Henley called it "Dirty Laundry".... the reporting of all that is bad. Luke takes it one step further by posting unverified opinion and calling it news. Luke, if you can't put a name to an opinion piece, then the opinion is worth crap. Lee Noga writes on YNOTMasters.com: If you talk to a "pornographer" who survived the Bush/Reagan era [pre-web], ya know what they would say after hearing the industry bad news this week, "Shame, he was a nice guy"..and thats it, business as usual... Old timers in porn lived every day as if it would be their last [meaning busted or deceased]...and made contingency prepartions from every dollar made in the event it came to fruition, the remainder of the monies was used to prevent taking a bullet and be face down in the desert. To this day, some show off the bullet holes in their house. One cannot be in the porn business without having hidden reserves...so blame Clinton for letting these overnight pornographers loose site of the high stake poker game in which they play. If you deal in adult, you risk your family, your assets, your future, its been this way for years. Some escape the wrath, others bail out cuz' the risk is beyond their comfort level, or they get raided. So for anyone caught or to be caught from the Gov'ts point of view and that of society, justice has been long overdue. The raid on Mike is exactly how the raids were 10 years ago on the BBS, they walk in, take the stuff, and leave you home to fill your pants. Steve Easton of APIC writes on YNOT: There was no censorship or pornography raid involved in the RJB case. It was actually under investigation for quite some time. This is an example of greed and poor business ethics. It would not have mattered if it was an adult site. There were so many consumer complaints for fraudulent charges on credit cards that they had no choice but to follow the yellow brick road. The government has been watching for years, and letting the adult web happen. Fraud is another situation. Ethics need to be addressed. 1/11/00 I interviewed the suave confident handsome guido Rich Botto around noon. Rich: "Maximum Cash is doing extremely well [sponsor program]. Karas Adult Playground is still ranked by PC Date as the number one trafficked adult site. Since early December, our numbers have just gone off the charts. We're paying out close to five million dollars a month. We ended last January at about two million a month. "I think Sex Tracker.com buying YNOT is a good move. Rick was very good for YNOT, he's a great young mind. He wants to go in a different direction. Andy at SexTracker.com will lead it in the right direction. I think we all need one controlled organization with top names in the internet having a say in what direction we go in... If anything political or legal problems or more VISA/Mastercard type things or with banking or merchant accounts, we'll have an organization to discuss it with people who are in the know. Rich: "YNOT is very well respected [within the porn net community] and I think it will be even more respected now. Andy's trying to get the top names in this business, in hosting, content, sponsorships, clickthru programs...to get them all together... "We do our third-party credit card processing through Jettis.com. Great people. In business since 1996. They took 18 months to put this company together because they wanted to do it right. They researched everything, aligned themselves with the right people, and got the proper infrastructure to make this thing work. A couple of other major people in the industry are major stockholders in the company... Since we've switched over to Jettis.com, our numbers have gone crazy. "The VISA problem was restricted to [third party credit card processor] DMR. It was a special situation. DMR have been doing very shady things for years. Most people who are knowledgeable in this industry saw this coming two years ago. And this is no surprise [DMR recently announced that it would no longer process VISA]. We were with DMR and in 1997, we took our database from them because we knew that we saw the first signs of the snowball rolling downhill and it was only a matter of time..." Luke: "What are you trying to accomplish at this show?" Rich: "These shows become more about putting faces to names and people coming to see who is sending them the big checks every month. It's becoming more Newbie oriented... People new to the business who've heard there's money to be made in the business..." Luke: "What sort of job is AVN doing?" Rich: "I think AVN is doing a terrific job. The one thing that AVN needs to learn and they're starting to... AVN came into this business blind. They knew the video business. This end, at the very beginning, they were giving a lot of attention to the video companies, not realizing the hierarchy of the web. Now that they are learning that, that it is a completely different animal... They are starting to realize that the money is in different areas, not just video. They're starting to realize who they need to give priority to and who they should be putting in the limelight, just like they do with the video show. They are doing a great job and I think it will only get better. This is a really big step up from last year... It's a 100% improvement. I'm expecting that New Orleans in September will be even better." Read Luke's report on Rich Botto and the May 1999 Cybernet Expo. 11/6/00 Webmasters Freak Over MaxCash RJB Telcom's webmaster affiliate program MaximumCash.com is probably the industry's largest. Ten days ago, the Federal Trade Commission (FTC) charged RJB was fraud and took a temporary receivership of the company. Internet pornographers are freaked about how this could affect their income from MaxCash. I hear that Ron Levi of Cybererotica.com will fly to Las Vegas next week for Adultex to meet with Rich Botto from RJBT. Ron was not planning to go, but now he's decided that he needs to meet with RB to work things out face to face. RB writes that JW's letter alleging that Ron Levi sold out RJBT to the FTC is 95% accurate. VeryConcerned writes on Netpond: Does anyone know if this PROPOSED restraining order has been approved by the courts: http://www.ftc.gov/os/2000/10/rjbtelcomtroorder.pdf If so, it looks REAL REAL BAD for Maxcash, that TRO includes total asset freezes, etc etc Alyssa@RJBTelcom.com writes on Netpond: As RB stated on the board a couple of days ago, it is business as usual over here. We will release more information when it is possible for us to do so. JustReading writes on Netpond: Aly, Business as usual doesnt mean a dead checking link for 5 days? That is not rjb style to have the #1 paysite have a link on the join page dead for 5 days.. Has Epoch ended checking for everyone or just rjb? Alyssa@RJBTelcom.com writes on Netpond: justreading ~ Yes the check link is not functional - Perhaps webmasters should call Epoch/Paycom and ask them why the link is dead considering there are no allegations of checking fraud in the complaint against RJB. My opinion is that Paycom has absolutely no risk processing a check signup for RJB. For those with short term memories, let me remind you that Max Cash has always compensated their webmasters fairly and timely for any disruption or problems with signups, regardless of whether it was in their control or not. I have to believe that history will repeat itself in this situation. Julie Winters writes: Luke: Finally time to tell you what is really going on with the RJB shakedown. First, let me say I'm not someone who has a hard-on for them or anyone else in this business, but I do consider myself a top 10 player for sure. I have nothing to gain or lose by telling you this, but unless I do it anonymously I will totally destroy my business relationships with those mentioned below. Let me start by saying that I don't know every fact, but more than enough to see through all this. There are several things at play here. One is the that the federal government does not have the power to regulate porn the way they would like to, through legislation, so they had to find another way. There has been an influx of cash into the FTC and other agencies as of late, and with this being an election year, what better timing than to come out with the Top Ten Dot Com Scams a week or so before the elections. If you read the FTC press release and have half a brain, you probably can figure out that the "scams" they uncovered are not even close to the largest scams out there on the net. The feds did a sloppy job and I believe we will see that in the long run. The door is still open though, and there are other agencies, such as the DOJ, poised to attack the adult internet. Is Visa working with the FTC? Could be. I know from a very good source that RJB's chargeback rate since 1999 has been under 2.5% overall and that they hardly qualify as a major offender. I have done business with RB and company and know they are light years ahead in customer service, fraud control and business practices. What you see in public is just a hint of the tight ship they run inside. Problem with our industry is not consumer fraud, it's webmasters who take advantage of programs like Max Cash, who end up as much of a victim as the consumer. Every one of us that run such a program knows this to be the hard truth. So why RJB? First, they are the biggest. Period. Nothing looks better for the FTC and their Dot Com campaign than going after the biggest. If anything this sends a signal and makes it appear that they are doing something productive. Problem is, they picked the wrong company. The FTC gets a few credit card fraud complaints and they are off to the races with accusations. Again, I know RJB and their principals well enough to know as a fact that the fraud allegations are not only false, but can be literally blown out of the water with proof. The dialer issue is another story. Perhaps they thought that there was full disclosure on this product. Perhaps they took a risk because all they think about is their webmasters which I think they give too much back to. That remains to be seen. Second, and more importantly, there are competitors that would like nothing more than to see RJB go under. Amazing to think that with enough traffic to go around, the major players all do business together that there should be a happy coexistence, but sometimes that is not true. When you have people like Ron Levy of Cybererotica involved, who's jealousy of RJB has been palpable since day one, the happiness ends. It has been known among the players that Ron despises RB and as is the case with Ron, he never hides it. Anyone that has dealt with him knows that the slightest thing can send him into an angry, nasty frenzy. There is not one person I know that hasn't had a war with him, including his partner Paul who is one of the nicest guys you will ever meet. Let's add to the mix that Levy has been quietly fighting with the FTC over several issues, and has been claiming all over the place that he has the FTC's blessings on all his sites. He has a "good relationship with someone in the FTC". He spoke openly at a workshop in May about working with the FTC to keep free memberships and on disclosure issues. He's been in bed with them for some time now trying to stay alive with "free" memberships and what better way to cure your own ills than to point the FTC in another direction? Most important thing to Levy is who has the biggest dick and who is #1 in market share. I have also been told of a disturbing quote that was relayed to me by 3 different people (who heard it first hand). I would not have believed it except two of the three people are people I would trust with my life. Around May of this year, Jonathan Silverstein, President of Cybererotica (and former crony of Seth Warshevsky) was overheard at an "adult internet function" as saying "RJB has big problems coming and they will never make it through the month of October. Mark my words, I know." It has also been said that "Python is next to go down" was also stated. RJB coincidentally was served Oct 27. Seems many other people that travel in Levy's and Silverstein's circles knew that the FTC was investigating RJB for a "long time" yet from all I have heard, RJB had no clue. Levy's win at all costs mentality has finally taken him too far. Now he, and other companies have to worry if RJB is going to blow the whistle on all the scams that are apparent in the adult industry, several of which point right back to CE among others. If RJB got consumer complaints, I can't imagine how many Levy has piled up from the double and triple site billing he was doing. Good luck RJB, though I doubt you will need luck at all. Luke writes on Netpond: Ron Levi had no comment on these charges. He refuses to reply to anonymous accusations. Cybererotica.com President Johnathan Silverstein writes: Luke, This is BULLSH*T, utter BULLSH*T! Factless/faceless accusations and propaganda! JW is so readily able to name names - except they're own and they're "sources"! Credible? NOT! Here's a little bit of perspective: The following is in RESPONSE to a post I made last week on Netpond regarding "Larry Flynt On Stern With Bush Abortion Shocker" "J$style$, I have 3 women and 2 goats who will testify before a court of law you sodimized a racoon while in New Orleans. Not only that, but they you forced the coon to pretend to be a Daniel Boone Hat to cover your bald head. Then you you shaved COERCED and BULLIED it into shaving his balls - while you chanted " I am El Presidente' dance you shaven Coon" Now am I to beleive this?? Are others on the board to beleive it?? Oy Vey! Rich Botto Speaks Out Rich Botto (RB) of RJB Telcom writes Luke: "Just keep up your irresponsible reporting. Haven't seen one accurate depiction yet...I would expect nothing less from your "sources" however. Most of them are well known. Having an agenda is one thing, but you better cover your tracks. Knowledge is king and right now I am sitting on a shitload of knowledge. Some people have been very, very sloppy in their plotting." Luke replies: RB, I did print voluminously the supportive comments made about you on Netpond... I think what i ended up publishing was 50-50...with most of your critics being those who did not want to be named (as is typical)...and those who put their names on comments, were overwhelmingly supportive of you. Though i do try to keep my site entertaining, I published most everything interesting or provocative i could find on your situation, or any relevant situation i cover... From my perspective, I simply want an interesting and exciting story, and to cut to the chase of what people are really thinking and saying (rather than PR hype). I told a Wired.com reporter that this FTC vs RJBT is the most significant story yet in the history of the adult web. I'm convinced that we're only scratching the surface of it. As I have very limited personal involvement in this industry, I have limited personal agenda beyond crafting an entertaining and revealing story. You've always been courteous to me and I appreciate that. I realize that I have printed many nasty and harsh comments about your company. It's my modus operandi. I'm not a businessman. I'm not a conventional journalist. I'm a story teller/entertainer/lunatic. I've stated almost nothing on your situation. I publish the thoughts and opinions of others. I don't expect you not to harbor ill feeling to me over this. I don't expect anything from you. But to look at this on a deep level, you will see that I act primarily as a conduit for others views, and as an instigator, yes. But not as an originator. RB replies: "No shit...I've been courteous and you've stated opinions and non facts as well as BS comments regarding my company...That will be remembered. Not everything I saw posted had quotes around it, Luke." Luke replies: "True... I am rather sloppy with my attributions and quotes and journalistic protocol...but I am still just talking to people and repeating back and summarizing what they say... Yes, I have to be (legally and morally) responsible for what I publish. I am. I publish what people tell me, and as time goes by, I can weed the wheat from the chaff. This story is very much alive and ongoing." RB writes: "Sure, the story is alive...very much so. But, as I mentioned in my statement, in my opinion we will be vindicated. And, we hope to assist the FTC in every way possible. Look, you're not exactly Mike Wallace (I think most people think of you as some sort of cartoon character). And I know you thrive on attention. But, you can show a little accountability from time to time." Luke writes: "I've stated almost nothing on your situation. I publish the thoughts and opinions of others. I don't expect you not to harbor ill feeling to me over this. I don't expect anything from you. But to look at this on a deep level, you will see that I act primarily as a conduit for others views, and as an instigator, yes. But not as an originator. So can you clarify if you are in receivorship? Did the FTC win its TRO vs you?" RB replies: "Not commenting any further except to say that nothing has been won or lost yet. Don't believe the hype, Luke...I haven't seen one thing close regarding this situation until that letter you sent me this morning. That's about 95% accurate. As for all the other stuff you've asked me about, amazing what people will do or say in times like this...That's alright though...I've received a great deal of information and I have a mental list a mile long...I'm an Italian with a long memory. Enough said." 11/20/00 Law Student Comments On RJB Case Bob Jones writes from the Deep South: Luke, I read the reports on your site regarding the action taken by the FTC against RJB telecom. I would like to respond to some of what's been said. I'm a law student at an ivy league law school, and thought I had something to add. A lot of those supportive of RJB seem to be under the mistaken impression that webmasters are like blind shopkeepers; they simply take money for their service and don't have to care about who's buying. The law doesn't work that way. The days of "buyer beware" are long gone. The law RJB is accused of violating doesn't ban stealing from customers. It bans any _unfair_ or _deceptive_ practice. That's unfair from an objective point of view, not from the point of view of the webmasters. These folks seem to think that as long as there is a disclaimer telling customers not to use other people's credit cards, and _some_ way to cancel an account, that they're not violating the law. That's just wrong. The basic rule is that if its cheaper for the website to take some precaution to prevent erroneous billing than it is for the customer to avoid being charged for something they did not purchase, the website has to take that precaution. That the website managers are technically unsavvy, that the industry is organized in a way that separates billers from site managers and makes it difficult to monitor billers, is totally irrelevant. The websites can hire better staff; they can invest in better software to handle cancellations. If websites know, or should know, that dialers are primarily being used by children, the websites need to stop using dialers. They can't just post a sign saying "no-one under 18" and think that they're O.K. To be crystal clear: The law makes it the responsibility of the seller to avoid unfair and deceptive practices, not the responsibility of the credit card holder of phone user to prevent another from using their card or phone line. Further, it appears from the complaint that RJB was not just failing to take precautions, they knew _exactly_ what they were doing. Apparently they had the highest rate of erroneous credit card charges of anyone in the world. For each person who noticed the charge and complained, there must have been many people who got erroneously charged and never noticed. (The usual statistical rule is that for every person who complains, ten people don't.) They were using billing methods advertised for their ability to get children to spend money. They were changing merchant accounts each time they were threatened with having the previous account closed for fraud. And they were hiding their identity on the credit card and phone bills. Anyone who has ever tried to cancel a web porn account, or who tried to identify who was charging them from a credit card statement, knows that the industry puts great effort into making it hard for people to cancel. Some examples: Nearly all require you to remember which credit card you used, and provide no way of helping you find out. If you have more than one credit card, there is just no way to cancel. It would, of course, be extraordinarily easy for the sites to permit cancellation by username and password. Consider the popular ccbill service; unless you remember the credit card you used, there is no way to cancel an account without entering every credit card you have. And you never receive notice that the account has been cancelled. I've tried cancelling accounts through ccbill (after the first disaster I kept a record of which credit card I used for each site) and had the billing continue! Consider Evil Angel's site for instance. A few months ago their cancellation page listed several e-mail addresses to send a cancellation message to. Every single address bounced, saying that the address did not exist. There was literally no way, from looking at the information on the website, to communicate the message that a user wants to cancel. Almost all of the sites obfuscate their ownership. Try running traceroute or whois on some of them! Many are hidden behind multiple shadow companies and domain names. None of this, of course, is new for the porn industry, as anyone who got home to find a portion of the tape blank, or the sound missing, or a different tape in the box, knows. Of course the companies will replace them if you complain; but who complains? It's amazing to me that the industry fails to recognize how much business they lose because of their reputation for dishonesty. Perhaps it is a collective action problem; a few bad apples spoil it for the bunch. Maybe. But if so, then FTC action like this is exactly what the industry needs to shake out the dishonest players and permit the honest ones to build a reputation for trust. The industry has certainly proven that it can't police itself. A final comment: One thing consistently strikes me when reading comments and interviews by people in the industry. This industry must be made up of the absolutely most self-centered, irresponsible, maleducated, poorly behaved people on Earth. They apparently steal from each other constantly; not one has a sense of responsibility to each other or to their customers. Each e-mail from them posted on your site or on usenet demonstrates less integrity than the previous, as each one inflicts a new wound on the English language. One description keeps coming to mind: A total lack of class. RJB Telcom Controversy RB (Rich Botto) writes from the FTC besieged RJB Telcom: "Look, it's common knowledge that I am not a fan of anonymous letters/posts etc (ask Nick over at Netpond about this), but I have to say that JW's two letters have been about as accurate as anything I have read. At least in regard to the events involving my company. "Yes, RJB did receive donations to aid with legal fees during this FTC matter. Many of these donations did come from the "mid level" webmaster. In fact, the overall support from the smaller to mid level webmaster community has been overwhelming. When this first came down, I expected that there would be a rally amongst the larger companies...A circle the wagons mentality. That has not happened. We requested public and/or financial support from some and in almost all instances we've been ignored. In fact, many of them have gone the complete opposite direction and pulled traffic from us. People who we vigorously supported during their times of crisis have turned a blind eye. Meanwhile, we feel that we are fighting this battle for the entire industry. To say we have been disappointed would be the understatement of the century. As for the rest...I have no comment." JW writes: Luke, I am writing you again to clear up a lot of the rumors and confusion that is going on with the RJB/FTC case. I wish to remain anonymous as I did in my first letter, as it would destroy my reputation and business should I not do so. [Ron Levi from CE responds: "It seems to me the only rumors and confusion is being caused by JW himself. Who is this anonymous person, why doesn't he reveal himself since he has all this knowledge? I do not like responding to anonymous emails but these statements are so damaging I will make an exception."] Again, I do not know every fact, but know more than enough to do more than just guess about things as most in this community seem to do. [Ron Levi responds: "This is obviously not a true statement because he is not telling the truth, just spreading his own rumors."] There have been many of us that have supported RJB during their undeserved crisis, both with kind words and legal fees. I am one of these people. However, I find it odd that there are players larger than I that have not even contributed in any way. It seems that the larger players have gone into a shell, treating RJB like they have some sort of disease. The list of supporters that I have seen and heard about looks like a "who's who" from the mid to small adult companies. I know several people that have very little funds that contributed to RJB's legal defense, while some of the biggest names in the business haven't even offered to help. What is really going on here? Perhaps they feel that they are next on the government's hit list? Maybe they think that RJB is blowing the whistle on their well-known billing scams? I hope they are. Ron Levy is included in the non-supporters. [Ron responds: "I have repeatedly tried to contact RB - I talked to him once on the phone and he didn't have time to talk. We went to Adultdex in hopes of talking to him, he did not show up. I have put in another call for him this morning, no response."] I confirmed this. As I recently stated, Levy not only knew about this action but also is the most likely candidate to have caused this action. Levy has been quietly fighting with the FTC over several issues, and has been claiming all over the place that he has the FTC's blessings on all his sites. He has a "good relationship with someone in the FTC". He spoke openly at a workshop in May about working with the FTC to keep free memberships and on disclosure issues. He's been in bed with them for some time now trying to stay alive with "free" memberships and what better way to cure your own ills than to point the FTC in another direction? Most important thing to Levy is who has the biggest dick and who is #1 in market share. [Ron responds: "I had no knowledge of this action until everyone else did, I learned it from the Netpond Board. Yes, we're currently working on our own investigation with the FTC. We're in compliance with the FTC's guidelines as per their website. I have no relationship with any person from the FTC. The FTC communicates with our FTC attorney, who then communicates with our Corporate Attorney who then communicates with our in house counsel. I hear what is going on with the FTC from our in house counsel. "Again, we are in compliance with the FTC's guidelines for disclosure on our billing practices as per their website. We supplied the FTC all documentation they requested, I guess that means we were working with the FTC. " I do not communicate with the FTC personally. We are able to stay within the FTC's guidelines with our Free Trial Membership. "We compete with many Paysites, who needs to be #1, there is enough business for everyone. We have promoted more healthy competition than anyone in this industry, we introduced many content providers to the industry and sold our marketing software to many paysites that are our competitors."] Luke, a few hours after I send you my original letter, Silverstein is fired as president of CE. That's right, fired. The "resignation" approach was pure bullshit. It was classic Levy damage control. Someone had to take the fall for Levy's ill-fated plot against RJB and Silverstein's inability to keep his big mouth shut. You don't need to be too brilliant to figure out that not only was my story true, but the fact Silverstein took the fall a few hours later confirms it. Silverstein was at adultdex looking for any small job he could get his hands on. That doesn't seem like the sign of an employee that resigned because he had another job lined up or wanted to move into another industry. Not many people just resign as a president of a company for no reason, with no backup. He was fired for revealing Levy's plan. [Ron responds: "Jonathan and I had been trying to renegotiate his contract for about three months. We reached an impasse and mutually agreed to sever our relationship. It had nothing to do with the RJB situation. Jonathan will have no trouble getting employment in the AdultNet - he is in very high demand and has had many offers which he sifting through."] Does anyone remember Xpics problems with the FTC? Someone ask David (of Xpics) who he felt was responsible for all of his problems? He swears to this day that Levy deflected the FTC in his direction, coincidentally at a time when Xpics was #1. [Ron responds: "Xpics had their problems with the FTC way before we were ever contacted by the FTC."] This is not a big secret among the players. Nor is it a secret that Levy is a predator. Ask anyone who does or has done business with that animal. [Ron responds: "I see, because I have been in this industry since the beginning and have helped numerous folks into this business I am now a 'predator' and an 'animal'. JW, too bad you're such a coward that you remain anonymous but at the same time poison the minds around the industry with your lies."] Is it surprising that the usually vocal Levy has not stated a word in support of RJB? Not to me. [Ron responds: "I have tried to contact RB and have not been successful in doing so. I await his phone call. If he called me he would get all the support he needs from us, but without communication, it's tough to help him."] I know someone that knows one of the players that attended a dinner at Adultdex recently. JB of CEN was overheard cracking jokes about RJB and stating that they were going down and not going to survive. I tend to know otherwise. I wouldn't be surprised if you hear some very promising news from them regarding the FTC very shortly. I believe RJB will survive this and feel horrible that such a well run, above board business could be so wrongly accused. Perhaps JB should not be cracking jokes and CEN and Levy should not be pointing fingers at others, as their companies are two of the shadiest scammers in the business. Once again, good luck RJB. The Mouse In Your Pocket [Ron responds about the JB allegation: "I have no knowledge of this but doubt that JB would make a joke about a serious matter like this."] A Source from CENCash.com replies to JW: Thats total bullshit. We have and always will support RJB. Perhaps this Julie Winters should get her facts straight. I was instrumental in pushing Epoch to turn back on the checks for RJB and continue to send them mounds of traffic. Was in epoch's office asking for there help. Find it funny how this Julie Winters wants to remain anonymous. In addition I spoke with Ron Levy and he is willing to support RJB 100%. I too shall remain anonymous as I never get into dirty laundry. Luke says: Among most of my sources, Ron Levi of Cybererotica has an impeccable reputation for honesty. He's treated me with integrity. My sources and I find it impossible to believe that Levi fingered anyone to the FTC. He's laying low right now because he has his own FTC investigation to deal with. Other major porners are laying low for similar reasons. Ron Levi and Johnathan Silverstein deny that Silverstein's departure from Levi's employment has anything to do with JW's letter of 11/6/00. Levi and Silverstein attended Adultdex last week to meet with RB and straighten out miscommunications. But RB and his brother Robert were tied up with their FTC litigation and were unable to make the show and meet with them. Johnathan Silverstein writes: Luke, The only "pure bullshit" I see here is this anon JW person. To me, JW seems more like like an outsider (who wants SO BAD to be an insider) than someone with "top 10 player" status. This letter is pretty much the same as the last one - just with more he said/she said conspiracy crap and accusations! Re-reading BOTH letters, I came across what seems to be totally consistent - a lot of BS propaganda and character assassination based NOT on what the author (JW) KNOWS, but rather what you're supposed to believe are the authors "reliable sources" - case and point: "I know several people...", "I have seen and heard about...", "I confirmed this.", "I know someone that knows one of the players that...", "I have also been told of a disturbing quote that was relayed to me by 3 different people (who heard it first hand).", AND MY FAVORITE - "Jonathan Silverstein, President of Cybererotica (and former crony of Seth Warshevsky) was overheard at an "adult internet function" as saying..." Re-read the letters and judge for yourself! As far as me looking to take "any small job I can get my hands on" at Adultdex, that's just laughable! Most people were disappointed with the turnout at Adultdex, but I wasn't! I had meetings with people everyday throughout the show and got some business done - so for me it was a huge success! On another note, 5 minutes after I posted about my departure from CE, my email box was full with offers AND just for JW's information - between Adultdex and those emails, I ended up with over 40 that I'm reviewing right now! To further that, only a handful were actually job offers - the rest comprised of people that want to retain my services as (A) a Consultant, and (B) people that have offered me equity in their company(s) or (C) full partnerships! Outspoken webmaster Brad Shaw writes: Luke, I have no comment on the rumors. I will sit back and wait for the rumors to separate themselves from the truth as I have had nothing but positive dealings with Jonathan and Ron Levy over the years. As for the RJB situation, I am 100% behind RJB in their situation with the FTC. Our traffic is still pointed to RJB's sites as it has been for 2.5 years. In my opinion after reading the FTC'c complaints it is obvious it was more a matter of being number one and volume that led the FTC to look into the operations of RJB. There are few people in our business who I would vouch for, RB is one of them. I will say I am very disappointed in some of the larger companies not coming to RJB's aid. But it can not be too surprising since a couple of these same guys would double bill their own mothers credit card if that's what it took to be number #1. I have a feeling they are so desperate to be number one that a few of them are pleased to see RJB encounter these troubles. Do not let anyone fool you, in our business friends are few and far between. People are out for themselves and the greed with catch up with these guys. Alien from SinCityFilms.com posts this Rashi-like commentary to JW's controversial letter: Please Note that this is RJB's initial encounter with the FTC. The FTC seems to always introduce itself in the mannor that it has with RJB. Nothing New here. Asset freezing?? Why of course! It is there hallmark of love and preservation. You can bet the FTC is in Cybererotica and advises what it would like implemented, Cybererotica does not want the FTC to crunch them and they avoid this crunch by having open relations with the FTC. This is highly advisable to any Minor league player. When I launch SinCity for the bigger picture rest assured I will try and talk with the FTC just to make sure everything is good with them. It ought to be standard procedure. RECENTLY: I have noted that Cybererotica now ensures that every subscriber reads a terms and conditions page before actual sign-up. This was just implemented, and I am sure it was implemented because the FTC advised it. When XPICS was really in deep they got $2 million in relief. The big guys are like big brothers and if they see a brother really hurting they will help him but not until it is dire, even though they may not want to. RJB is not in deep and if they can pull themselves through it with the FTC by themselves, they will recieve no help. The bigger guys will do something if it appears to be a FTC Fatality which to date does not exhist. You can bet that Levy will not put up the money though. Levy is business, knows business and indeed likes being #1. But we all have our own unique personalities now don't we?? It might be safe to think that the Bigger players did not like what RJB was doing with dialers. The "scams" will be revealed obviously, and I am sure are already known to the FTC. The FTC will stop what it wants to stop. The dialers. Besure to understand Cybererotica did not do dialers. RJB did, and RJB must have known he was taking a risk. You can bet that Ron knew RJB was going down from his open relations with the FTC before it happened. It's not a conspiracy to figure out and you can bet Ron was told not to say shit to no one about the date RJB would get tackled by the FTC. I personally do not support the use of dialers and it is a viable form of fraud and they enable access to explicit matter without legal verification of age. Ron is not the bad guy here, if your big and he is, your gonna be very aware of what the authorities want. He listens and does not f--- with them. Smart. Plain and simple. Thats what ya do if your Ron or any big player. You think for a second RJB called the FTC himself to make sure everything was okay on his networks with the Trade Commission? Silverstein been doing adult web for a very long time. Some leave the business because it is time to find other fun and other things to do. "He was fired for revealing Levy's plan." What plan is that? The knowledge that RJB was gonna be hit with the FTC?? Once again Levy just came accros the information, through dialogue with the FTC. Why the f--- is that a plan? Levy couldnt stop the FTC, Levy couldnt do shit about it except keep quiet. When will people face that? I f---en knew RJB was gonna get hit week's before it happened just because of what they were doing and my sources. The dialers were completely new and undealt with by the government and RJB was the biggest of em for that. I have been telling David they, Dialer's will be bad news and we had to avoid there use. David the smart man he is, know's when something is bad and it did not take more than a small explanation for him to see why. The dialer; though looks like a good idea is one of the most f---ed things to do when it comes adult entertainment online. It is no small matter when it comes to children getting access to hardcore subject matter with our government. That is literally the fastest way to extinguish an adult company. I would not be to surprised if the DOJ step's in on RJB with proof that underage netizens were accessing hardcore content through the dialer service coupled with a few dozen families who say there children have been "poisoned" by adult pornography. That would sink RJB into rubble and is a possible scenario once the FTC finds all the treasures RJB has stored. I personally hope that does not happen. RJB is not bad I think they just made a mistake in judgement of what they were doing. It happens sometimes, it happens to all of us. If you run a yellow light your taking a chance to get pulled over. People seeing you get pulled over will laugh. We are talking about one hell of a speeding ticket here however. WHO IS DAVID AT XPICS? I was 5 Years at XPICS I NEVER KNEW A DAVID. Mario? Brian? Blaine? Kevin? John? George? Me? I am not David. I am Alien. The XPICS issue was warranted when the FTC came down. I know what it was, why and how it was fixed. Was it all that bad?? No. Think Brian, when talking about the FTC does not crack a smile when it is mentioned? Hind site is often funny no matter how dire. Predator is harsh... I suppose Business men and Predator are synominous. The will to win is not the trait of a predator. You can bet there would be jokes. I laughed when the FTC came to XPICS while outside having a smoke. No surprise. Of course RJB will survive the FTC.... Joe Musacha writes: Mr. Ford- I have a "good friend' who works at a company which supplies dialers to the adult market. I know exactly what went on, and I would like to set the record straight. I would like to correct for the record some of the "facts" that Alien from SinCityFilms.com wrote in commentary to JW's controversial letter. First off, Alien writes: "It might be safe to think that the Bigger players did not like what RJB was doing with dialers." Cybererotica and nearly every other major player were using USA dialers. They have all since been pulled. In fact, Cybererotica used the words "free" all over their dialer solicitation, something RJB NEVER did. To imply that the dialer is "free" was a much more misleading tactic to the consumer when compared to RJB's tactics, and Cybererotica is 100% guilty of this. [Ron Levi from CE responds: "We have never used USA dialers."] One or two of the bigger players were smart, they only used the dialer on credit card rejects, or used the dialer on foreign traffic. This kept it a bit more discreet. But most of the big boys did not do it this way, and if the FTC wanted to f--- them all, they could tommorow. No doubt about that. The fact is that RJB was the biggest, and this FTC crackdown is more about CC and debit card fraud than anything else. The dialer charges were thrown in there at the last moment once the Verity International case hit the street. Verity was the company controlling the USA to Madagascar route, which was being used for most of the USA outbound traffic dialer minutes. Verity has since been sued by the FTC, and the case is in court and yet to be decided. This case will largely determine the future of dialers working from the USA. Once the shit hit the fan with Verity, the FTC saw they had an opening in attacking RJB on the dialer issue. And they most certainly did. The facts remain: Cybererotica used dialers, from at least 2 different major dialer companies. Alien should get the facts straight and don't simply blame the dialers for this mess. The dialer is an easy scapegoat for the industry's problems. Just read the complaint against RJB, perhaps only 15% of the complaint is dialer related. One last thing about the dialers. Other countries, such as the major European countries and Japan allow dialers to be used. They are regulated by various governing agencies, (kind of like 900 #'s) and a totally legal and viable form of payment. Obviously, the FTC has no jurisdiction over using foreign dialers on your website. And wait for the Verity case to be resolved before determing that USA dialers are deemed fraud. Ron Levi from CE responds: "We have never used USA dialers." RB (Rich Botto) from RJB Telcom writes at noon Monday: "Have to catch a flight...Haven't had much time over the last 3 weeks to speak with anyone...Also want to make it clear that we contacted a few people about the legal relief, but that much of it came from a grass roots movement amongst the community. We owe a great deal of thanks to those people. Don't have much time to elaborate. "One more quick item...Joe Musacha's points about the dialer in regard to our case is the most accurate account to date. For anyone who actually read the complaint, that should be crystal clear." 12/3/00 Rich Botto of RJB Telcom posts on Netpond: Today, RJB Telcom, Inc. and its principals, Richard (RB) and Bob Botto entered into an agreement with the Federal Trade Commission in the recent lawsuit that was initiated by the FTC. This agreement (a stipulated preliminary injunction) allows RJB to immediately pay webmasters outstanding payments owed by RJB and reverts control of the company to the Bottos. As part of the agreement RJB Telcom and the Bottos made no admission of liability and specifically denied the charges in the FTC’s complaint. The stipulated preliminary injunction was the result of on going negotiations with the FTC since the filing of this lawsuit on October 27, 2000. From the day this lawsuit was filed, the Bottos have denied the serious allegations of credit card fraud contained in the FTC’s complaint. The Bottos cooperated fully with the FTC to educate them about RJB’s business and about fraud in all aspects of e-commerce including the adult industry. RJB is proud of the innovative and proactive fraud detection and prevention measures that it has employed since 1996. Further, it has led the adult industry in crediting consumers and providing exceptional customer support. The Bottos feel that they have been the victims of a witch-hunt. The complaint filed by the FTC contained allegations that they crammed credit cards and otherwise defrauded consumers. As attorney for RJB, Theodore Monroe stated: “The allegations by the FTC were false. The evidence was unrefuted that RJB never defrauded a single consumer out of a dime. Instead, RJB was the victim of several renegade webmasters who attempted to defraud RJB out of commissions using stolen credit cards or a credit card generator. We believe this is why the FTC agreed to a stipulated preliminary injunction allowing the Bottos to get back their business without paying any fine or consumer redress.” Richard (RB) Botto stated: “While RJB was under the control of the Federal Receiver, we were not allowed to pay RJB’s affiliates. This has caused us irreparable damage. Now that we are back in control of the business, RJB fully intends to pay all webmasters immediately and will continue to do so in the future." Mr. Botto continued: “We would like to thank everyone who has supported us through this ordeal.” 12/6/00 RJB Still In Receivership That means that Rob Evans is still running RJB Telcom? Check this link: http://robbevans.com/html/rjbtelcopage.html I wouldn't want to run my business under such oversight. On October 26, 2000 the United States District Court, District of Arizona, Phoenix Division, appointed Robb Evans & Associates as Temporary Receiver of RJB Telcom Inc. The Temporary Receivership was ordered at the request of the Federal Trade Commission who had filed an action alleging violations of the FTC Act. Here's the December 1st, District Court order: "The parties have stipulated to a preliminary injunction. The Court has reviewed the terms of the stipulation and notes that, among other safeguards, it lists prohibited practices, sets forth procedures for Defendants to detect and prevent fraud, and provides for lifting of the freeze on assets only when Defendants establish an escrow account with an initial deposit of $750,000. Defendants also agree to additional deposits in the escrow account totaling $1,250,000 over the next 90 days. Moreover, the receiver retains responsibility for oversight and monitoring of Defendants, business activities. Good cause appearing, the Court will order that a preliminary injunction shall issue containing the terms provided in the parties' stipulation. The hearing on the motion for preliminary injunction will be vacated." Rich Botto from RJB replies on Netpond: "Luke, um, no...Get your facts straight, douchebag. (bowing to sweett) and I say that with all the love I can muster. Business as usual at RJB." Melody writes on Netpond: "Everyone I know with more than a quarter inch of forehead loves RB and his whole crew. In the fullness of time, as Hillary says, when all the truth is known, the Max Cash webmasters will be stunned at what RB did to get them their checks before Christmas? Think most sponsor programs would have done that? Think again. "Most would have shaved and never said a thing. There is no better captain for a ship than RB or Bob. Poor Luke, not only do your sources suck, hell, YOU suck. While you're excerpting this, add the link too would you? http://www.pay-dirt.com/l-ke-f-rd-sucks/" Luke says: I quote from the receivor's website (http://robbevans.com/html/rjbtelorder02.html): This paragraph does not stay: "4. Disqualification or other adverse actions by credit card networks, banks, or other related entities, such as VISA, MasterCard, and AmTrade Bank, provided however, that Defendants may take any reasonable steps, including filing of a lawsuit, with respect to any such disqualification or other adverse action." Luke says: This means RJB can sue AmTrade. And that, and ten cents, will get them a cup of coffee. RJB's credit card processing is threatened. As I understand it, AmTrade stopped processing credit cards for RJB November 9th, 2000. If RJB can't process credit cards, then they are still in deep trouble. RJB must post a $2 million dollar escrow and pledge to abide by FTC guidelines (including not using dialers). RB responds to Luke on Netpond: "Luke - Warned you before about being irresponsible. In fact I gave you 2 chances. Now, you're shit out of luck. Take care." Sharpie writes on Netpond: "A 2 Million dollar escrow....wow! and people are wondering of RJB is going to pass out bonuses for late payment. I would say that we are pretty darn lucky that we are getting checks this soon, or at all. Not too many sponsors could take this hit and still pay us." Frank writes: "Careful with RB man! It's really pissing people off bad. The FTC is like a tick and it don't come off easily till it's victim is nearly paralysed. AVN won't do anything till after the Awards in LV, I think. I hope your being very careful, on a legal standpoint. Let Extreme and Gene do there thing, it's brutal and it's gonna erupt large lawsuit's. I know you guys enough to know that you expect lawsuits. Black can afford it, and he has intention's you can bet. Those are other stories I suppose with plans within plans..." MaxCash.com (RJB's webmaster affiliate program) says: "Please be advised that all CHECKS [to webmaster affiliates] have been mailed today. As I had posted yesterday: This payment includes October payment (usually mailed Nov. 10th) and September payment (if your Sept. check bounced). Wires for aforementioned payment periods will be done tomorrow (Thurs.) or Friday (we have to reset up the wire transfer info. with the bank). If you have any further questions, feel free to contact me at alyssa@rjbtelcom.com." RB writes on Netpond: "Keep going, Luke...Hope you're coming to Vegas. :)" MikeFold writes on Netpond: "Why should anyone affiliated with RJB try to tell you...you are already getting your information tailored and supplied to you." DiamondJ writes: "Luke's ventriloquist act is getting lame... Must hurt to have that hand up his ass..." Luke writes on Netpond: "Why doesn't someone explain to morons like me what the Dec 1st rulings mean?" Vegas Lee replies: 1. No one cares what you have to say since you admit that you do not report facts. 2. What business is it of yours since you also admit that you just want to see all of us in hell and out of business as soon as possible. 3. If you do not understand legal doc's. Pay your own attorney instead of leaching off the people that you claim to hate so much. Anything Else you need explained Luke? The Jimmy writes on Netpond: " Now Luke getting fisted on film would be an incredible seller for the inside of Maxcash's sites...albeit mostly webmasters coming to watch...but I'm sure it'd bring in as much cash & viewing as Houston's surgery. ;)" Jimmy Slits: Yawn! Must be another slow day for the news dick! Diamond Jim how perceptive you are my friend...Time for someone to take the hand out of his ass.... Dravyk writes on Netpond: >>> I wouldn't want to run my business under such oversight. Luke, LMAO! What business is that? How much do you make? Do you make anything at all? Do you know what a Business even is??? Agreed, Mutt. Mikes "uh-oh" was like a defeaning thunderclasp to everyone here with a brain. To, Luke it was a one word, sentence without meaning ... Yet. :-))))) VoodooChile writes: It means that no one here cares what you have to say so f--- OFF! How was that explanation? If you can't understand that I can go into more detail if needed. Scott writes Luke: I decided to write once again today after reading the nonsense you encountered on netpond. I've been slightly concerned since the initial "Everything is cool again!!" announcement from RJB. Initially after the charges they announced "Everyone is still cool!! Keep sending your traffic!!". Shortly thereafter payments were due, and "Oppps! We can't pay you sorry, but we just realized it now, never knew this would happen, etc". So why believe this new announcement? Sure people will be paid, but business is certainly not back to normal. There are larger issues to be resolved beyond webmaster payroll. Luke, I like your site, its great entertainment, but.. No one should trust RJB, You, or Me. They should trust themselves. They should read the actual stipulated preliminary injunction and judge for themselves what is going on.. A final point that shouldn't be missed here is that you provided the link for the injunction, to my knowledge RJB has not provided such information. Only their censored version of the events. RB said he "has a long memory", so do we, we've been lied to and most of us haven't forgotten the story line and its lies. That comment of his raises yet another question in my overly curious mind. Is RJB involved with the mob? I would never had asked myself that question before, but the long memory thing sure sounded like a goodfella comment or threat depending on how you want to perceive it. Perhaps RB should worry about what he says as much as he is worried about what you have to say. 1/17/01 I'm working on a fascinating story on the internet porn industry which involves major players, a major law firm and some angry content providers. I'm learning about an ongoing battle regarding ALSSCAN images and a webmaster or two working on a MAXCASH account on Spanish freehosts. Numerous websites are popping up on Spanish freehosts with these stolen images and they have specially designed consoles to send traffic to RJB's sites. This has led to online lilitigation between attorneys. The message from RJB attorney Greg Piccionelli, which I learned second hand Tuesday afternoon, was: "I will not dignify the accusations with a response." Maxcash (RJB) has refused to cut off the offender's account, according to sources, and now responds via legal counsel. RJB is not cooperating in any way with concerned content reps, say content sources. RJB is refusing to identify who's doing it, according to content sources. RJB would know, as the checks they are sending must go somewhere. RJB Telcom has long had a reputation within the industry as doing everything by the book, and being one of the few good guys in an industry of outlaws. Content folks are having a hard time getting the Spanish freehosts to take down the pages with the stolen content. Sources in content believe now that Major Porn Player was building these pages on foreign freehosts for the sole purpose of stealing traffic with the powerful ALSSCAN magic. These sites were designed by one person, and they appeared as banners for TEEN-X but were actually pages full of ALSSCAN and SUZE's images with the copyright data removed. Guess who represents RJB? The law firm of Greg Piccionelli, Braun. Who else? Piccionelli seems to frequently represent internet players accused of copyright infringement. Aren't these the same people who want you to use their BayTSP software to stop infringement? Doesn't Piccionelli have a financial interest, if not outright ownership, of Bay TSP? I sent emails Monday evening to RB of RJB Telcom and his lawyers but so far they have failed to respond. Mark Ishikawa from BayTsp.com writes: "Luke, I received your e-mail regarding Greg Piccionelli's involvement with BayTSP. Greg, is on our board of advisors, and has a very small amount of stock options available to him. Greg and his firm have basically agreed to swap reduced legal fees for some stock. This is a practice that is now becoming widely accepted in the legal world. Mr. Piccionelli is not involved in the operations or management of the company. "Luke, There's just one clarification that I would like to make for you. Mr. Piccionelli was not one of the founding partners of BayTSP, he was one of the founding partners of the law firm B,P,S,B,& V, and it appears that someone misinterpreted that from our web site. If you are ever up in the Silicon Valley area, I would like to show you a demonstration of how our record keeping software works, and how it will protect the identity of the performers while helping webmasters be compliant with the federal laws during these frothy times. Too many people are sticking their heads in the sand hoping that when the bubble bursts, it will be someone elses door law enforcement is knocking on." Luke says: When AgeCheck was accused of copyright infringement, they were defended by Piccionelli and another attorney named Steiner. I've heard that Piccionelli and Steiner are not connected, yet aren't they next door to each other? A few years ago, IGallery was accused by content providers of stealing images and using them on banners. IGallery was defended by Greg Piccionelli. I also believe that Piccionelli represented Brian and Gary Shuster of Web1000. Piccionelli is a well known force in the adult industry. I believe he's spoken at several adult industry panels. He's regarded as one of the adult industry's leading lawyers. Content folks are taking a hard look at Lex Van Aram in Toronto. He operates Webdream.com. He places full pages ads in AVNOnline magazine. He's tussled in the past with content folks and recently got into the sale of content himself. He's alleged to have sold as his own property Color Climax images. VXI Multimedia (Marty Stein's 21adultnet.com), also in Toronto, Canada, has its own issues with content providers. They were accused last year of selling CDs with hundreds of stolen images. A source tells Luke: "Do a story on why the major content providers are boycotting APIC [a major enforcer of copyrights]? If there wasn't an APIC, there wouldn't be any content providers. Most of the CD distributors don't know if they're selling legitimate product or not. They handle so many CDs that they don't ask for nothing. They don't ask for proof of rights. They'll sell anything. Set one up and see. Tell them you have a CD to sell. "The adult internet is going to go down the tubes if operators don't start operating by the law. Only the strong will survive. Net porners are scared of the new administration enforcing obscenity laws. Many people will try to go to offshore servers but they won't help because they'll be blocked from the US anyway." Notorious law student Bob Jones writes: Luke, We never got to talk about the new Piccionelli info on your site last night. There isn't much information there, but here's what I think about it. First, I do doubt that the sum of the relationship between P. and BayTSP is a tiny number of options for reduced legal fees. (This arrangement, by the way, has never been common.) P., and one of his partners, are listed on the website as "founding partners" of BayTSP. Also, BayTSP has more than privacy prevention products; they have a variety of things (apparently) to help adult industry sites maintain legal compliance. There are a lot of ways a deal might be structured, for entirely legitimate reasons, that would make Ishikawa's statement to you literally true, but misleading. But of course there's no way to know, and it doesn't really matter because either way it doesn't appear to be anything unethical or illegal. There's nothing necessarily untoward about an attorney being financially involved in a company in his field. Attorneys invest in new business ventures _a_lot_, usually as silent partners. It doesn't disturb me that an attorney who handles a lot of internet infringement and adult industry cases might come up with ideas for, or be approached for funding (and introductions to his clients) by, a company that makes electronic products for infringement and the adult industry. This is common in other industries, and not unethical. There are ethical concerns about owning stock in a company you represent, but its not (I think generally) illegal, it is possible to do it entirely ethically, and its not even clear if P. is BayTSP's attorney. Second, it is very common for an attorney to specialize in suits involving a single industry (adult, for instance) or a single area of law (internet infringement defense, for instance), and there isn't anything unethical or illegal about it. It's also common for attorneys who have no formal or regular business relationship to be brought in together on a case. (The Steiner thing.) Small law firms often have offices in buildings who's residents are all, or mostly, other small law firms, so that isn't disturbing either. Third, the story about RJB and infringement on the Spanish websites seems dubious because there's no discernible motive. Regardless of how well RJB is doing financially overall, they appear to have a whole lot of free websites sending traffic to them. It's difficult to believe they would expose themselves to additional litigation risk to protect just one of those free websites, especially when the only payoff is ads with a different set of dirty pictures. If the story has a substantial basis in fact, it seems more likely that they would simply be playing hardball, trying to avoid acting like they are responsible for the behavior of the webmasters. Although I've never spoken to P., you do know my opinion of the remainder of his legal time and his clients. 2/14/01 Elton writes on Netpond: Hey any one notice whats up with maxcash? none of their sites say RJBT Incorporated.. any more karas says. 2000-2001 Crowngate International Inc and most of their other sites say Copyright 2000-2001 Greensted Commercial Corp. whats the story with this? Chad writes: I swear Luke, sometimes you can be so clueless. The issues of Crowngate and Greensted is an old one. It has been brough up and answered several times over on the Max Cash board. You might want to ask yourself who owns those companies. Many companies have changed their info over the past few months just to be safe. Take a look at the whois for siccash.com - Did Brad Shaw sell his company to Global Internet Unlimited? Or is this just normal, smart business? Must be a slow news day if you are putting this at the top of your page. Luke asks: Why is this good business? Chad writes: No idea why they do it.. maybe for added security? I know of lots of normal companies that are owned by another company that is owned by another company - all with the same owners.. good question to ask a lawyer.. Luke says: FIRST: go to karasxxx.com and you get: Copyright © 2000-2001 Crowngate International Inc. THEN click on their privacy statement. You get: Privacy Policy Statement This site is licensed to Greensted Commercial Corp. Our postal address is 11083 Prospect Road Cleveland, OH 44136 We can be reached via e-mail at webmaster@greenstedcom.com ALSO: note that the server IP address is the same on both these domains ... Has RJBT been sold? Or are they using another address so they can get new credit card merchant accounts? Maxcash.com is still: Copyright © 1996-2000 RJBT Incorporated. All rights reserved. Domain Name: GREENSTEDCOM.COM Registrar: TUCOWS.COM, INC. Note the name server is same as all three RJBT sites. Note: This traceroute shows greenstedcom.com terminating at Level 3's Phoenix hosting facility ... RJBT is in Phoenix, right? Ok, the plot thickens: CROWNGATE INTERNATIONAL, INC. The fax number is obviously bogus. So we search on Crowngate International: http://www.anywho.com/ http://www.anywho.com/ http://www.555-1212.com/Rev.jsp NOTE THAT THE ADDRESS THEY GAVE IS *NOT* IN CLEVELAND, BUT SOME DISTANCE (20 miles) AWAY in Strongsville, OH If you call the admin contact number, you get an answering machine for "Gatefold productions." Registrant: Michael Mihalko (GATEFOLD-DOM) Technical Contact: Domain Administrator (DA9434-ORG) admin@NATIONAL-NET.COM NationalNet, Inc. 3588 Highway 138 SE Suite 318 Stockbridge , GA 30281 US 404-899-6001 Record last updated on 18-Sep-2000. Record expires on 08-Sep-2001. Record created on 07-Sep-1996. Database last updated on 14-Feb-2001 10:18:16 EST. Domain servers in listed order: NS1.NATIONAL-NET.COM 216.99.40.3 NS2.NATIONAL-NET.COM 216.99.40.4 Note: The IP address is the same host as for KarasXXX.com. And FROM: http://www.gatefold.com/privacy.html LEGAL WARNING AND DISCLAIMER Privacy Policy Statement This is the main web site of Gatefold Productions. Our postal address is 11083 Prospect Road Cleveland, OH 44136 We can be reached via e-mail at admin@gatefold.com Or you can reach us by telephone at 440-238-4466 For each visitor to our Web page, our Web server automatically recognizes no information regarding the domain or e-mail address. We collect information volunteered by the consumer, such as survey information and/or site registrations. The information we collect is used to notify consumers about updates to our Web site and not shared with other organizations for commercial purposes. If you supply us with your postal address on-line you will only receive the information for which you provided us your address. Please provide us with your exact name and address. We will be sure your name is removed from the list we share with other organizations. Persons who supply us with their telephone numbers on-line may receive telephone contact from us with information regarding orders they have placed on-line. Please provide us with your correct phone number. We will be sure your name is removed from the list we share with other organizations. Gatefold Productions is in no way affiliated with Playboy Enterprises. MAIN PAGE (c) 1998 Gatefold Productions, Inc. You must be of LEGAL age to continue. So, Crowngate must be Gatefold. The address is the same. Who is Michael Mihalko? XXX says: "MikeFold.. everyone (except you I guess) knows him. Very good guy and close friends with RB and most people in the biz." He appears to be the webmaster for Playboy Playmate Terri Welles. Check out: http://terriwelles.com/order_01.htm So, why is changing your company name smart business? And this is more than just a name change. They (RJBT) are implying that greensted/crowngate owns or is licensing the sites? And why this just after the FTC stipulation? It's not like they've been changing their name every six months for the past five years. 2/15/01 Amber@EroticVideos.com writes Luke: I read a comment by Raw Alex, on your site that said "all the issues of RJB Telecom. Private moves of a Private company are really NONE OF YOUR BUSINESS. Might I suggest that you just back off?" I'm sorry Alex but on this issue you are wrong. The financial issues of RJB are all of our concern considering the fact that their traffic comes from us and if they can't pay us then we are in fact wasting on traffic on them, when we could be sending it to a company like pussy.com (igallery.net) or whoever that actually DOES and CAN pay us. So L-ke Ford.com is only doing a public service by keeping the scary issue of RJB's current financial status in the news, so that none of us will be shocked when our RJB check isn't in the mail. I have no personal knowledge of their financial situation, I am only telling you what COULD happen. I do however know that something IS going on because their staff is making threats against ANYONE who speaks their name, even sites that speak of them in a positive manner. That being the case, something is wrong. Why don't they want people to talk about them - even in a positive way?? Doesn't it make you wonder?? So Raw Alex, go ahead and get screwed by information you didn't know. But as for the rest of us, thank you l-keford.com for keeping us informed as to what is going on with companies that owe us money. Rich Botto (RB) of RJB Telcom writes Luke: Dude, I'm WAY to busy to be dealing with this or playing with you today. Since Ms Stevens thinks she knows so much, I'll address this and then I have work to do. Our business structure has NOTHING to do with the webmasters getting paid. We've made it clear that we are owed big money from many sources. Beyond that fact, conspiracy theories are just conspiracy theories. Webmasters will get paid as they have been. Additionally, why would we discourage any positive talk...Surely, even to you, that has to make no sense. I would argue that Raw Alex knows much more about RJB than Ms Stevens does, but what do I know, I just run the company. Really, Luke...Just nothing to see here...We are running operations as normal...Moving along...getting back on track. I'm surprised at you, man...Thought you learned your lesson... Now, go check the wire...I hear Brittney Andrews just cracked a nail...If you're quick enough, maybe you can scoop Gene Ross. Luke, one more thing...let me make this perfectly clear, we are planning on being here for the long haul. We've bounced back in sound fashion...We're building, not dissolving. And, check out the new issue of Razor Magazine on newsstands now - http://www.razormagazine.com. Back to work. 2/16/01 Clash Of The Titans - RB vs FM Rich Botto's MaxCash board hosts a thread entitled "Cybererotica Going Down." FM aka Ron Levi, owner of Cybererotica, responded on the Max Cash board: CyberErotica is not going down - it's going up - hook up with us and make bigtimegreen!! RB - I find it very surprising you allowed this thread to be posted on your board - I guess I'll post on my board that RJB is again 10 days late with their checks, etc. etc. Remember, you drew "first blood" as Rambo said.... The bottomline is the money - BigTimeGreen as I call it - all of our Webmaster Checks will be sent out "ON TIME" tomorrow - all $3 Million Dollars - just like we have been doing for the last 5 years, twice a month - $6 million per month, like a clock!! As far as the employee layoff - OMPI employs people - I guess that some were layed off - has nothing to do with CE - that's his call as they are his employees and managed by him - not CE. ....and since we're airing dirty laundry all of a sudden - RB - We've continued to send your affiliate payments while your other "buddies" played scared and paid you by offsets - shown you "Maximum Respect" just to get dissed by you... I've done this even with the knowledge that you've spread bullsh-t rumors about me reporting you to the FTC - well let's get it out in the open - you must think I'm g-dlike - while having the FTC investigating CE - I was able to say "look Mr. FTC - don't investigate me - look at RJB - wow - what power I must have - yeah, give me a break - it's sad when I see a guy who professes to be the" bomb" on the net not being able to take responsibility for his own f-ck up or actions - when you put those dialers up - you brought bigtime heat to yourself, why don't you just accept the fact you messed up instead of blaming me? At the time you started incorporating dialers into your programs I made a post on CONDOM stating we were not going to use dialers because I thought they would bring heat... ... remember when Serge did the dialers for Peter Knoble way back and had an entire country's long distance billing in, Moldova, brought down - I remember - I guess you forgot, I tried to indirectly give you a hint by that post - sorry you missed it!! You come from audiotext, just like us - how could you not have known it would bring you "CONSUMER COMPLAINTS" when folks started getting $700 phone bills and if they didn't pay, their phones would be disconnected - that's what generated tons of "CONSUMER COMPLAINTS" to the FTC Also, I've told Alyssa that MAXCASH's traffic to our programs has dropped of to nothing while all of our traffic to Maxcash has remained the same - all of our 404's and headlines in RiskyMail and Teen-Mail rotation - now I'll do something about it... I'm pulling all RiskyMail and Teen-Mail Maxcash Banners - I'm going to redirect all of our 404's to someone else that will act professional and appreciate the business. Here are our January 2001stats http://63.67.231.12/rjb.jpg Webmaster's you don't have to like us, you can even hate us - but always remember - our money spends just like anyone elses, it's just business, not a popularity contest. We started paying Webmasters bigtimegreen before anyone else - and we'll continue to do so - our programs convert better than anyone's and you always get paid ontime because we really care about people whether you want to believe it or not... Watch for our new programs coming out that will blow away RB's EE and anyone else's email programs - it will have 3 different payouts and it converts at 1:5 - pay attention, it doesn't cost any money - we've always stayed on the cutting edge and always taken the lead - no reason for us to stop now!!! as Jim Carey said in the Mask ....somebody stop me, I'm smokin'!!! SPAM http://cybererotica.com/money.html I'll bet this post gets pulled real quick :-) peace out! fantasyman one more thing.... RB are you aware that I passed on Razor and then it was brought to you? Prove me wrong - I couldn't see how you could advertise any adult in it, just another Maxim knockoff - only firsts make the big bucks!! Good Luck!! RB responds: FM - Why doesn't this surprise me in the least. If you know anything about this board, you know it is open...There are as many Max Cash bashing threads as there are good posts about our program. We allow it all and we do not censor...I get KILLED on this thing regularly. But, did you see me contribute to this forum? No. Did you see me bash you? No. Now you come in here like a 5 year old, attack me, my program and my business decisions. I'm not going to censor that either. Once again your ego overtakes your common sense. How about giving me a call before attacking? How about returning Aly's calls? I know she's been calling you for two weeks. Spreading BS rumors about the FTC thing? I told you personally what I knew to be fact, the rest, well, you believe what you want to hear and I will just keep working. My banners to you were still in place during the whole thing weren't they? As for Razor, it has nothing to do with adult and I was in negotiations on that deal at the same time you were. Regardless, thanks for wishing ill on that as well. You're coming out with all these great programs? Great. You're going to bury me? Great. I really don't care, man...Blow your wind. But, when your pissed off, which appears to be quite often, learn where to direct your anger, man. Just as a side note, as I've mentioned, Ron, the FTC thing had little to do with dialers and no evidence of fraud to date has been brought against us. As for being the "bomb"...what the hell is that? What are battling for who is sitting at the "cool kids table"...Come on, man...Calm down. Drew first blood...LOL...A little paranoid, man. FM aka Ron Levi responds: RB - your the best spin control person I've ever seen - you're the Teflon Don - it all just bounces off of you... You accuse me of acting like a 5 year old? No, I'm a businessman trying to protect my business, just as you do, this thread is a complete attack on my company. We've paid out over $250 Million to Webmasters since Feb '96 and I think I just might have something to protect just as you do. You want to take this off the boards - give me a call - you know my business number and my cellular number - I'm leaving here 11am pst to take my 9 year old Son to Disneyland for his birthday - I'll still have my cell phone - if you don't have it, just ask JoeE for it..... You say why didn't I give you a call - you've never been available by phone, you know that and I know that. I tried to talk to you numerous times by phone, I called your cellular phone, left messages, no response. Every Vendor in the industry knows that about you, it's common gossip amongst us. Aly called me once, I was in Daytona Beach watching the 24 hours of Daytona, we had a car in the race, I couldn't hear her, I asked her to call me back on Monday, she has my cellular number, she never did. And why was I calling her in the first place, because your traffic to use tailed of to nothing why we continued to send you traffic from RiskyMail and Teen-Mail as well as all of our 404's - anyone can type in http://cybererotica.com/error and they will see this is true. You never told me anything about the FTC thing you knew to be a fact - you just had your people spin it out in ICQ's - I have numerous ICQ logs that folks sent me evidencing my statement. Our banners may be in place - if nothing changed by looking at your position on PCDATAONLINE you would be earning the same $86k to $150k we were paying you since the New Orleans Show.... As for RAZOR - I never wished you ill on Razor - there's your "spin" again - I just said that only firsts make big money - that's my opinion. Yes, we are coming out with new programs, once again your spin, you interpret that to say that I said we're going to bury you, I never said that. Boy you should have been Al Gore's spin monster - he would have won!! More soin.... you speak of my anger? RB it's obvious you haven't spoken to me for quite a while - I've put it in check for over two years - ask anyone. My post wasn't anger - my post is fact. As for the dialers and the FTC - all I said was that was the FTC "hotbutton" that brought their attention to you. In reading through your FTC public documents I would say the affidavit that VISA supplied the FTC is what brought you your real heat - read Martin Elliot's statent again - you should probably sue him and Visa. Now I've even given you a way to cash out big time with Visa. RB as you can see I'm very calm - I just love to watch you do do your thing - spin, spin, spin...... peace out! RB responds: FM - I love the Telfon Don comment...LOL That post was more reasonable, man. Just so you remember, we did speak about the FTC thing and I did tell you the one thing I knew as FACT...Not going to get into it again and once I told you about it, it was dropped. No spin on the way you came in here...I've seen Hurricane Ron before...Just don't shy away from it like others do. As for ICQ...I don't even have it...Privately, however, I would love to see the logs. As for this thread bashing your company, you're right, it does. However, if you read any of my posts, you will see I don't condone it and when my program gets bashed on MY boards, I still do not censor it. I try to promote positive conversation here. "Common gossip amongst the webmasters"? Please tell me you have better things to do with your time than play washer woman with other webmasters spreading gossip about me...Please! If you want to travel down that road, I could write a book about all the s*** I've heard out of your camp about your feelings regarding me...Personally, I don't have time for that crap. I'm available...Sometimes it may take me a while to get back to people, but I am running 2 companies and working my ass off. I never said you stopped sending me traffic...Don't know where that came from. Listen, Happy B'day to your son and go have a great time...Relax...I'm taking a few days to myself as well and getting the hell out of dodge. You want to talk, Monday or Tues...Absolutely fine by me. 2/27/01 RJBT says: Today, RJB Telcom, Inc. and its principals, Richard (RB) and Bob Botto entered into an agreement with the Federal Trade Commission staff resolving the October 2000 lawsuit brought by the FTC. The agreement is subject to formal approval by the Federal Trade Commissioners and such approval is expected. Under the terms of the settlement, set forth in a Final Injunction, RJB Telcom, Inc. will not pay any fine or restitution, and RJB will continue the fraud prevention and detection programs that it currently employs. It is highly unusual in a case of this type for the FTC not to require substantial monetary payments and a performance bond. The FTC’s decision not to seek these remedies demonstrates the weakness of the FTC’s lawsuit against RJB. The Bottos and their counsel strongly believe that the FTC brought this lawsuit without any factual and legal basis. The FTC's own complaint and declarations were riddled with inaccurate and unsubstantiated representations from consumers and the FTC's investigator. Nevertheless, in October, the FTC was able to obtain an exparte order, without knowledge of the Bottos, seizing their bank accounts, locking them out of their own business and installing a receiver. The FTC then released a provocative press release labeling RJB as one of the "Top 10 Dot-Cons" in America. According to Peter Morris, a Los Angeles attorney who represents RJB, “The FTC staff conducted an exhaustive investigation into the operations of RJB, searching for evidence to support its complaint. As hard as they looked, they found no evidence that RJB or the Bottos defrauded consumers out of a dime and the Final Injunction demonstrates this point.” Richard (RB) Botto stated: "We are thrilled to be completely vindicated of all the accusations presented in the FTC’s complaint. This final agreement is evidence of our integrity and should prove that all RJB operations have been, and continue to be, honest and above board." Questions regarding this press release can be addressed to Peter Morris, Esq. at Altman & Morris, 1880 Century Park East, Ste. 613, Los Angeles, CA 90064. Telephone (310) 277-8481. RJBT sent out this email today to its webmaster affiliates: Just to keep you informed - - - please be advised that January checks will be sent out on Friday, March 2nd. We thank you for your patience. We are doing EVERYTHING possible to ensure February checks go out on time. If you have any questions, feel free to contact alyssa@rjbtelcom.com. 3/30/01 RJBT Flips CE The Bird - Debuts Sharky Live April 9 RJB Telcom has hired a big name in webmaster internet radio, Michael "Sharky" Vifquain, to do a new show. Sharky was fired by Ron Levi's Cybererotica less than a year ago for theft. RJBT and CE are the two biggest pay site operators in porn. This new show by RJBT strikes me as a big "F-ck You" to Cyberotica. Alyssa from MaxCash aka RJBT writes on Netpond: Pleased to announce the launch of Max Cash Live!, a bi-weekly internet show focusing on webmaster education. Max Cash Live! will be hosted by the king of internet "radio" shows, Sharky. The show will air every Monday and Thursday with the debut on Monday, April 9th at 8PM EST. Max Cash Live! will be a show BY webmasters FOR webmasters. This show will be all about educating webmasters on every aspect of the adult business. Guests will include experts in every field from content to hosting to sponsors, etc, etc, etc. Brad Shaw writes on Netpond: Great to see Sharky back on the air, sure miss those old Sharky Live shows, still the best show ever done. On March 14, Cybererotica announced: CE (Voice Media, Inc.) is pleased to announce that it has reached a resolution with its former employee Michael "Sharky" Vifquain concerning the legal action initiated by VMI in which it alleged various violations of Sharky's employment agreement. As part of the resolution, VMI will receive an undisclosed cash settlement in addition to acquisition of the following websites: tenderamateurs.com; tenderasians.com; tenderebony.com; tenderfetish.com; tenderlatinas.com; tenderlesbians.com; tendervirgins.com; tendervoyeur.com; tendercash.com and tendersupport.com XXX writes: "Did you see how Ron Levi headlined his email to webmasters earlier this week as "The Humbling Of Cybererotica." Levi allowed his ego to get out of hand and he started paying people more money than he could for some of his programs. He'd pay out $50, more than he could afford for signups. So now it is down to $40 and expect other to follow suit by reducing their payouts. "How can other programs pay out $40 for people who sign up for $3:95 trials? Fifty percent of those people don't convert. The only way you can do this is by shaving, by not counting signups. "We're headed for another realignment of the adult internet industry. CE started out at two cents per raw click, then three cents per unique. Then CE starting paying out according to the productivity of the traffic. But CE found out that webmasters could abuse even this with phony credit cards. So now CE has gone to paying out per active member. "Many webmaster affiliate programs haven't even moved to the per active model. And with what they pay for credit card processing and charge backs and charge back fines, they are in trouble. We didn't have these expenses a year ago. Webmasters are scrubbing their credit card databases harder which makes it harder to get signups. "CE may lose ten percent on April 1, when the new lower payouts go into effect. But the traffic will come back when webmasters realize how unreliable the other programs are. "Don't expect FM (Ron Levi) try to match these crazy $75 and $100 per signup offerings. Just like FM let Xpics rule the roost for a while with their 18c per click payouts. "Did you see that post by Tom Blanchard on Netpond? Tom used to own NationalNet, the hosting company, until he sold it to Tony." Tom Blanchard writes on Netpond: I have great respect for FM but I personally do not like him worth a damn. His e-mail cutting rates and offering the reasons why was a class move on his part. I really do not think we will see much of a domino effect as there are few sponsors with that much class and how would they explain the f---ing that they have been giving us for so long? FM wrote "CyberErotica's motto is where Fantasy Meets Reality. Our vision in the past 5 years has made literally thousands of Webmasters millions of dollars". I am so sick of hearing that crap from FM and other sponsors. What he should be saying is over the years webmasters have made much money while making him millions of dollars. He is not in this business, nor any other sponsor, for the benevolence of mankind. I haven't heard any plans for the Pope to name a Saint Levi of Diamond Bar. XXX says: "CE's margins, and CEN's and RJBT's profit margins are not grand. At least Levi gave webmasters a couple of weeks notice on his lower payouts. "CE and RJBT no longer exchange as much traffic as they used to. "The webmaster posting boards used to be for business. But Rick Muenyong from YNOT did away with that kind of stuff and turned it into a social event. Everybody got mesmorized like a snake charmer, so that when somebody would post about their program, it was regarded as spam. "Does everybody really want to be buddies? We're probably the only industry where the fiercest and biggest competitors do a lot of business together. "Tony from NationalNet, a prince, gave Ron Levi some VIP passes to his Club Humor at the January AVN Expo. While Ron sits in an executive sweet, Samantha Lee, VP of Operations at InsiteAdult.com (formerly of YNOT) walks by, sees the CE logo on the door, and says, 'Oooh, I'm staying away from there. I can't stand him.' Ron walked out he was so offended. "InsiteAdult.com, owned by John Epp, are buddies with RJBT. So goes RB, so goes Insite. Insite seems to believe that Levi snitched on RJBT to the Federal Trade Commission. "Samantha's boyfriend Skinny Phillip Arumbula (premierpornpics.com) ripped off Levi for hundreds of thousands of dollar with the help of Sharky. That's why Sam doesn't like Ron Levi. "Levi mentored Skinny Phillip, got him into DMR [credit card processor] and his own pay sites. And then one day he stopped coming into Levi's office and started visiting Sharky. And Phillip started cutting Sharky checks back. "Levi fired Pattycake a few months ago and she went to work for Rosecash.com, owned by a Canadian. She had her heart broken by years ago by Tarbash, aka Scott Allen Baldwin, the ARS webmaster accused of murder. "Marc DeForest was with a girl. They were engaged to be married, and then suddenly Marc's showing up at the show with Kimmy Kim. Marc recently sold his paysites to Michelle in Canada. Probably because of fears of the new Attorney General John Ashcroft. Birds of a feather - DeForest and Michelle - flock together. "Michelle used to be partners in UltraCash.com with Jim Barnett. Michelle screwed Jim over and Jim moved on to CE. "Marc DeForest from ARS used to own BreathlessBoys.com. Then he came out with LiveBoyToys, a live gay feed which offered three different packages. One low cost to get in, then two upsells. And the two larger packages, he put in his house account code instead of the webmaster code. So webmasters didn't get credit for the upsells. "Levi exposed that on YNOT and DeForest went away for a year or so, then came back strong with AdultRevenueService.com, which is now number two in the traffic rankings among adult sites. "ARS is paying over $40 per signup on paid trials ($4 pay trials). I don't know how they can. That business model doesn't work. Or are they getting creative? "ARS has benefitted the most from RJBT's problems. And ARS has now surpassed them and CE in the PCData traffic rankings. CE's programs are CGI run, which means that PCData don't pick up its real numbers." Veronica Snake writes: I see you really don't have the balls to post anything derogitory about your master. But I think you should at least clarify your totally ignorant post about ARS being bigger than CE or RJBT You know this one "ARS has benefitted the most from RJBT's problems. And ARS has now surpassed them and CE in the PCData traffic rankings. CE's programs are CGI run, which means that PCData don't pick up its real numbers." Those numbers are comparing all 1500 of ARS's sites to Cybererotica or Kara's alone, throw in all of Ron's or RB's sites into the pot and ARS is not even close. Shit Luke do a little research. |