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Ken Guarino Ken Guarino, who dined with Gambino crime family leader John Gotti in 1992, ranks among porn's most powerful. Lucky to avoid MIPORN conviction, Ken controls one of the four main producers of sex videos along with Vivid, VCA and Leisure Time. Owner of the North Star distributorship, the Italian-American took over Intropics and Cal Vista Video, revived dormant lines like Paradise Visuals and Soho Video and added a magazine publication company to create, wrote AVN in 1994 "the closest thing to vertical integration in the entertainment industry, period." Majority owner of the porn conglomerate South Pointe Enterprises, Inc., the corporate parent of Metro Home Video, Guarino sent his company public in 1994 "to become more acceptable" by buying an inactive corporate shell rather than using the traditional method of a public offering. An expert corporate shell shuffler, Guarino, like Sturman, Mohney and Milton Luros, spends his considerable talents creating dummy corporations and business spider webs to launder mob money, avoid taxes and set up large offshore savings accounts. Adult Video News gushed about the mobbed-up company's NASDAQ listing in its 10/94 issue: "...no move in industry history; no television interview or personal appearance; no post-adult career of an actress or actor; no court victory; no business success or humanitarian gesture; does more to promote the social and legal acceptance of adult entertainment than the simple act of placing South Pointe on the same legal and financial level as thousands of other public companies that provide jobs, make products and provide services to the consuming and investing public." In January 1997, Guarino and Natale Richichi plead guilty to charges of conspiracy to defraud the government. Had the case proceeded to trial, the government said in the Memoranda of Plea Agreement that it would have presented evidence that Richichi is a "capo in the Gambino crime family of Cosa Nostra" and that Guarino made "tribute payments" to Richichi for protection of his multi-million dollar pornography empire against extortion attempts by other factions of the Mafia. By signing the agreements, Guarino and Richichi acknowledged that "each understood the factual basis for his plea. "Unlike most [captains] who can only deal with the boss of their family through an adviser, and who would not be in a position to advise higher ranking members of other La Cosa Nostra families, Richichi has dealt directly with John Gotti… "…He has also been intercepted providing extensive advice to Frank Salemme Jr., the boss of the New England La Cosa Nostra family. Richichi is also known to be highly respected by other La Cosa Nostra families and (captains) of various La Cosa Nostra families who reside in the Las Vegas area appear to give Richichi deference as well." Ken paid Natalie Richichi, a confidante of John Gotti, and his son Salvatore $15,000 a month and laundered millions of dollars for them to prevent invasion of his porn empire, to get permission from the New England branch of Cosa Nostra to operate a precious metals business in the Northeast and to use their influence with union officials for favorable treatment. Court documents describe Richichi as "the last living member of Albert Anastasia's Murder Incorporated." In April 1997, Guarino was sentenced to 16 months in federal prison and fined $250,000. Kenny G. is close friends with many leading pornographers such as VCA's Russ Hampshire, who describes him as a "family man." 12/10/99 AVN.com reports that Metro Global Media has been delisted from NASDAQ. From http://www.avn.com/html/avn/news/nws/news1051.html: Metro Los Angeles spokesman Greg Alves says NASDAQ told the company there "is a public interest concern" with a Metro shareholder, which is unrelated to a class action suit filed recently by another shareholder accusing the company of financial impropriety. "It's not tied to the class action suit," Alves tells AVN On The Net. "(NASDAQ)'s a business like any other business, and they can choose who they want to do business with and who they don't." He also says the Metro de-listing won't affect four other adult entertainment businesses that trade on the NASDAQ composite. "Although we are disappointed by their decision, day to day business will be unaffected," says chief financial officer Janet Hoey in a company statement, adding Metro stock will now trade on National Quotations Bureau (www.otcquote.com). "Revenues continue to rise and the company continues to build shareholder equity." Metro had been suspended from NASDAQ listing earlier this fall because it was late in filing the required 10k report with the Securities and Exchange Commission. Hoey says NASDAQ de-listed Metro despite acknowledging that, in an statement she attributes to NASDAQ, "[Metro] currently appears to be in compliance with the filing, audit committee, and independent director requirements." Metro has until Dec. 22 to ask NASDAQ to review the decision. Hoey says the company will make that request while considering listing options with still other stock exchanges, both at home and abroad. ........... Guarino began working in porn in his teens and within ten years became New England's major porno dealer. "With assistance from a Danish associate, Guarino began producing a line of pornographic magazines which were distributed to more than 150 retailers and wholesalers across the nation. The success of his magazine ventures led him into the peep show business. One of his firms installed and supplied peep show booths in most of New England's 70 adult book stores... Guarino owned a chain of 14 adult book shops in Massachusetts, Connecticut, Rhode Island and New York, all controlled by a third company. "Since the MIPORN sting Guarino's business has undergone a few subtle changes. He has renamed most of his companies and relocated his distribution warehouse to North Providence. He has had to hire a new accountant after his old one pleaded guilty to embezzling $146,000 from General Dynamics Corporation in a scheme the accountant claims was masterminded by Guarino. Finally, he has had a changing list of business associates necessitated by several unfortunate events such as the untimely demise of one associate who fell out of a moving car. "Guarino has been charged with criminal offenses at least a dozen times since 1970, including distribution of pornography, tax evasion and gambling." (Porn Merchants, p. 112) Writes Gary Potters on page 121 of the 1986 book The Porn Merchants: "...[T]he pornography industry is organized by means of a pyramidal hierarchy, with retail stores being dependent on local pornography distributors, who are in turn dependent on regional porn networks, who are finally dependent on a national and international network for their supplies. This highly organized structure, in its own right, reflects a trend toward centralized control and monopolization in the porn business. "Second, it should also be clear that the pornography business, even at the regional level is marked by acts of violence as a business strategy. The attempts by Thevis, for example, to drive competitors out of business through bombings and even assassination clearly indicate the acceptance of violence as a means of marketing pornographic goods and services. The reliance on violence as a means of regulating competition is indicative of organized crime activity. "Third, evidence of intense and close collaboration between and among individuals in the pornography industry suggests a syndication of the business at both the local and regional levels. The degree of mutual dependence which exists in the pornography industry creates a climate in which organized criminality could be expected to flourish. "Fourth, it is clear that many of the key actors in the pornography business are also involved in other forms of illicit enterprise. In the case of the New England operations a consistent theme has been the involvement of these individuals in gambling and even narcotics distribution. This overlap suggests the involvement of local organized crime networks in pornography as both a means of control and as a means of diversification of illicit investments. "...[A] pornography cartel...monopolizes distribution and allows local entrepreneurs to stay in business only at the suffereance of larger distribution networks. In addition, the frequency of threats and violence, along with the apparent overlap with other organized crime groups strongly suggests a link between organized crime and pornography. In fact, the data presented with regard to both local and regional pornography operations suggest that the pornography industry itself might be defined as organized crime because of an apparent pattern of racketeering and extortionate business practices which appear with regularity in industry business dealings." 07/11/94 The Wall Street Journal But even as he plots the future, Mr. Guarino is dogged by his past. He is facing federal charges in Las Vegas of conspiring to bribe a union official in 1991, in a case linking him to Natale "Big Chris" Richichi, who the government alleges is a capo in the Gambino crime family. But Mr. Guarino's hopes for a cleaner image for South Pointe could be spoiled by the conspiracy charge against him. Wiretap records in the case indicate that Mr. Guarino asked Mr. Richichi to help him out of a financial bind when a Las Vegas musical in which he had invested, called "Nightdreams," bombed. Mr. Richichi, who lived in Las Vegas, phoned a man he thought was the stagehand union's president and tried to bribe him to get out of payroll obligations, the government claims. The man turned out to be an undercover federal agent. Mr. Richichi, who is 77 and appeared at an arraignment last year tethered to an oxygen bottle, denied the charges, as did Mr. Guarino. Mr. Guarino says that he did nothing wrong and that Mr. Richichi has no involvement in South Pointe. Federal investigators maintain that the two have had frequent contacts in the past. In court documents, prosecutors also allege Mr. Guarino made cash "tribute" payments of as much as $15,000 a month to Mr. Richichi. It isn't clear whether the alleged payments were voluntary. This isn't the first time Mr. Guarino has tangled with the law. He has been charged repeatedly with selling and transporting obscene material, and in 1984 he was indicted for income-tax evasion. But all of those cases were dismissed or overturned on appeal. Mr. Guarino knows that his business offends some people and that his films are considered obscene in parts of the country under the Supreme Court's "community standards" test, which takes into account prevailing local attitudes. "Adults have a right to see them if they want to," he says. "If it offends you, don't buy it." Mr. Guarino says the actors in the films he produces are consenting adults and there is no violence. And the flicks, which his company churns out at a rate of about one a month, now feature less-kinky sexual content -- not for fear of prosecution, but because softer fare is acceptable to a much broader market. All his films are now shot in hard-core and soft-core versions; the latter sell quickly in the pay-per-view market. Graff Pay Per View Inc., the publicly traded New York operator of Spice adult pay-per-view network, is one buyer. Spice now rings up more than 800,000 sales a month among its 8.3 million subscribers, about double the buy-rate most pay-per-view services get. "This thing is a freight train," say Steven Saril, Graff's vice president of marketing. Graff just launched a second pay-per-view cable service, and buys 22 new adult films a month from South Pointe and other suppliers to feed its programming needs. "Over the last few years the taboos have broken down, in part because cable operators can offer parental lockout," which prevents children from watching adult fare, says Stephen Astor, a marketing vice president with Playboy Enterprises Inc., which has bought some softcore South Pointe films for the Playboy Channel. After operating for more than 20 years through a thicket of corporate entities, Mr. Guarino has had some difficulty with all the disclosure required of a public company. Eric Barr of Trien, Rosenberg in Morristown, N.J., South Pointe's auditor, says his team "spends a lot of time on affiliated transactions to make sure they are at arm's length." Another element that complicates the company's finances is that instead of having an initial public offering of stock, South Pointe went public by buying an inactive corporate shell. The decision to go public was made in part "to become more acceptable. I'd say more `legitimate,' but I've always been legitimate," Mr. Guarino says. "If I had any skeletons in the closet, I sure as hell wouldn't have gone public." Still, he won't describe his relationship to Mr. Richichi, citing the pending litigation. "The Las Vegas situation has nothing to do with South Pointe," he says, repeating that Mr. Richichi "has no connection with the company." According to government testimony presented at a hearing on the bribery charges last year, Mr. Guarino advised his aging friend Mr. Richichi on ways to avoid legal prosecution. In a Jan. 6, 1992, phone conversation taped by federal agents, recounted by a federal prosecutor at the hearing, Mr. Richichi complains bitterly about being dogged by the government. "Any little thing, they make racketeering," he says on tape. "It's getting worse and worse . . . . I don't know what the hell I'm going to do." Mr. Guarino proceeds to discuss Mr. Richichi's plans to relocate to the Dominican Republic and asks whether Mr. Richichi can avoid extradition by paying public officials there, according to the testimony. Whatever Mr. Guarino's relationship with Mr. Richichi, prosecutors say organized-crime influence in the adult business has weakened as new players enter the industry and the market itself grows. Michael Warner, president of Great Western Litho, a Van Nuys, Calif., printer serving the industry for 25 years, agrees. "The VCR changed everything," he says. "It's a much larger, more open business." Great Western prints adult-video boxes, "and we're running 24 hours a day five days a week, printing 2.2 million to 2.5 million a month, double what we did just three years ago." 01/11/97 W. ZACHARY MALINOWSKI Journal-Bulletin Staff Writer The Providence Journal-Bulletin Kenneth Guarino, whose multimillion-dollar erotic empire has gone global, is going to prison. The Cranston-based pornographer pleaded guilty yesterday to a federal conspiracy charge in a Las Vegas courthouse. Just a few miles away, a provocativebillboard on "The Strip" promotes his latest X-rated film, Zazel, The Scent of Love. The plea, after four years of delays, averted a two-month trial that would have shed light on Guarino's multifaceted adult entertainment business, and his ties to the underworld. Now, fantasy has taken a back seat to reality.Under the terms of Guarino's guilty plea, federal prosecutors anticipate that he will be sentenced to 16 months in prison and fined $250,000. Sentencing is set for April 25. Yesterday's plea agreement said Guarino, 47, and his business interests have been controlled for years by a top-ranking member of the New York-based Gambino crime family, Natale "Chris" Richichi. Yet Guarino said late yesterday, in a statement from his lawyer, that his conviction has nothing to do with Metro GlobalMedia Inc., his publicly traded pornography empire. "Normal business operations will not be interrupted by the resolution of these matters," the statement said. On Thursday, Richichi pleaded guilty to conspiring to hide more than $1.7 million incash that Guarino allegedly paid him "to protect his multimillion-dollar pornography empire from being invaded" by New England's Patriarca crime family. Guarino and Richichi admitted that they defrauded the government by failing to declare the cashtribute payments for tax purposes. Richichi's wife, Joan Richichi; their son Salvatore Richichi and reputed mob associate Stephen Cino, all of Las Vegas, were charged with related crimes. The elder Richichi, 80, who is tethered to an oxygen bottleand suffers from several ailments, is described by authorities as a capo regime in the Gambino crime family, and a confidant of jailed mob kingpin John Gotti. Guarino's conviction comes at a time when Metro Global has ridden a wave of success. Last November, the day before he and his co-defendants were scheduled to plead guilty in the case, Guarino stepped down as Metro Global president for "personal reasons." Guarino, however, remains a major shareholder, owning 2.2million shares of Metro Global stock - about 60 percent - according to the company's most recent filings with the federal Securities and Exchange Commission. Guarino has stepped aside before. In July 1994, he relinquished his role as president, chairman and director of the company, then called South Pointe Enterprises, after a Wall Street Journalarticle drew unwanted attention. He returned in December 1995. Guarino's relationship with mobsters is well-documented. In 1991, the Journal-Bulletin reported that Guarino, Natale Richichi and Gotti met at a Johnston restaurant with other mobsters. The seeds of the criminal charges were planted in February 1993, when Guarino, Natale Richichi and Cino were indicted on charges that they conspired to bribe the president of the Las Vegas stagehands union. The men were accused of seeking to obtain favorable treatment in afinancially troubled stage show, at the now-defunct Dunes Hotel, that Guarino had invested in. As part of yesterday's plea, the government dropped those charges. Following that indictment, prosecutors said, they captured Guarino on federal wiretaps, offering his own contacts in the underworld to help Richichi get fake identification so he could flee to the Dominican Republic. Subsequent indictments in 1994 and 1995 charged Guarino and Richichi with additional counts of conspiring to defraud the government. Guarino admitted yesterday that, from 1985 to 1995, he paid Richichi $16,000 to $20,000 a month in cash "tribute." In exchange, the agreement says, Richichi protected Guarino and his business ventures from otherorganized-crime factions, including La Cosa Nostra in New England and elsewhere. The plea agreement further says Guarino and others who worked for him in his American pornography business adjusted bookkeeping journals to conceal the payments toRichichi. One of the workers identified was Jeanette A. Whitham of Johnston, Guarino's bookkeeper and "trusted ex-mother-in-law." She was not charged. The agreement says Guarino also provided Richichi and his wife with health insurance, two Mercedes-Benz sedans, leased cars and a corporate credit card - even though Richichi had no visible means of employment for at least 20 years. Richichi apparently considered himself more than Guarino's protector. The plea agreement says federalagents intercepted Richichi telling Patriarca crime boss Francis P. "Cadillac Frank" Salemme "that everything of Guarino's was (Richichi's)." Salemme is awaiting trial in Boston on unrelated racketeering charges. Prior to this week's pleas, OscarGoodman, Natale Richichi's Las Vegas lawyer, who has defended several prominent mobsters, brushed off the government's assertion that his client is a high-level mob figure. "(Richichi's) a very nice man with a beautiful family as far as I'mconcerned," Goodman said in a telephone interview. Not everyone agrees. Last Nov. 1, a federal judge in West Palm Beach, Fla., characterized Richichi as "the devil," before he sentenced him to six years in prison in an unrelated racketeering and extortion case. The charges stemmed from his secret financial interest in a Pompano Beach strip club. Guarino has had past run-ins with the law. In June 1985, he pleaded guilty to federal tax-evasion charges. He served three months in prison and wasfined $5,000. In 1980, Guarino was arrested with 44 others in gambling raids in 12 Rhode Island communities, and charged with operating an organized-crime gambling business. Seven years later, in 1987, he pleaded no contest to bookmaking charges andwas fined $250. KEY FBI TAPE ON MAFIA FACING STIFF LEGAL TEST 06/22/97 The Hartford Courant Organized crime investigators and defense lawyers from Connecticut and around New England were focused last week on a courtroom in U.S. District Court in Boston, where a bruising hearing was unfolding over the legality of one of the most important clandestine tape recordings ever made by the FBI. On the recording, made on Oct. 29, 1989, the then-most powerful members of the Patriarca organized crime family can be heard as they gathered in a suburban Boston home to participate in the crime family's secret initiation. Four new members pricked their trigger fingers, burned images of the family saint and swore the family's blood oath. The tape has become a law enforcement legend, the first-ever recording of a Mafia initiation. It has been played as evidence at mob trials around the country, first at the 1991 trial of seven Patriarca family members in Hartford, and, later, at Gambino family boss John Gotti's trial in New York. But last week, the ceremony recording and another tape made secretly in an East Boston hotel room were undergoing a withering legal assault by lawyers defending Francis "Cadillac Frank" Salemme, the Patriarca family's latest boss. Salemme, from the Boston area, is trying to have the tapes barred from evidence at his upcoming racketeering trial. For its part, the government is playing the aggrieved party. Publicly, prosecutors have complained that it is wrong to force them to identify informants, violating a nearly sacred promise of confidentiality. Privately, they say Salemme's defense is nothing more than a front for the Mafia's powerful yearning to identify and kill informants. And, they complain, Wolf is playing right into Salemme's hand. No one familiar with the hearing is betting on how it will end or its possible consequences. "I want to see what the ultimate ruling is," said Vincent Bongiorni, a defense lawyer from Springfield who has been involved in a number of mob cases and in efforts to challenge the ceremony recording. "It's too early to do anything." Anything but speculate. If Salemme's laywers, led by Boston attorney Anthony Cardinale, prevail, the immediate effect could be to reduce, at least, the charges against Salemme and his codefendants. The wider effect could be to jeopardize mob prosecutions that have been brought since the ceremony tape was made in 1989 -- such as the seven convictions in Hartford in 1991. The ceremony recording has become a powerful prosecution tool. It is long -- a transcript has been published as a short book -- and compelling. On it, there is dark talk of Sicilian vendettas, quasi-religious rituals, rules for mob behavior and promises by inductees to murder their relatives if it should serve the Mafia's purposes. Jurors in the Hartford case were captivated by the melodramatic recording; they had it replayed during deliberations as they considered evidence in one of the most important Mafia prosecutions in New England. On trial in Hartford were then- family boss, Nicholas Bianco, four sworn Mafia soldiers and two of their associates. They were variously charged, among other things, with murdering family underboss William "The Wild Guy" Grasso in a mob power struggle, burying the body of another victim, gambling and extortion. They were apprehended in an unprecedented crackdown which resulted in about 25 mob arrests in Connecticut, Rhode Island and Massachusetts. Should Wolf rule that the secret bug at the initiation ceremony was authorized on the basis of a deceptive application from the government -- and if his decision is not overturned -- there likely would be defense efforts to have the tape retroactively removed from evidence in the Hartford trial. Further arguments could follow that jurors might have reached different conclusions had they not heard the recording. Prosecutors cherish the ceremony recording because it is indisputable proof that the Mafia exists as a continuing criminal conspiracy -- a fact prosecutors must prove in order to win a racketeering conviction. The tape is a direct refutation of decades of claims by defense lawyers that the secret society is the by- product of the overwrought minds of federal lawmen. For years, the justice department has ferried high-ranking Mafia turncoats around the country to appear as government witnesses at mob trials. These witnesses could testify to the mob's existence and operations, but their credibility was subject to defense attacks because of their own sleazy criminal histories and compromised loyalties. The ceremony recording had none of those problems. Until now. So far, Salemme's lawyers have extracted admissions that three powerful Boston mobsters secretly were working for the FBI while being publicly portrayed by the government as significant threats to the public safety. The defense implication is that the influential gangsters could have provided their FBI handlers with a wealth of information over the years that should have eliminated or, at least, limited the need for intrusive electronic surveillance. The mob informers are: * James J. "Whitey" Bulger, brother of the former president of the Massachusetts state Senate. Bulger operated out of the Irish neighborhoods in South Boston and collaborated with the Italian mob in the city's north end. He has been a fugitive for two years, and speculation is rampant in law enforcement circles that he fled after being tipped by someone in the FBI that he was about to be arrested. * Stephen J. "The Rifleman" Flemmi. He was Bulger's partner and was, according to defense sources, the one who confirmed to Salemme's lawyers that the two were government informants for two decades. Mercurio admitted he was an informant in court last week, after intense prodding by Wolf. The defense is pressing to have two other mobsters from Rhode Island declare under oath whether they were informants. One, pornographer Kenneth Guarino , has denied being a snitch outside of court. The other, Anthony "The Saint" St. Laurent, also denied being an informant outside the courtroom. In one of the ironies that so often color the Mafia's legal comings and goings, Bulger and Flemmi are two of Salemme's four codefendants in the upcoming racketeering case. If and when the case ever comes to trial, the government will allege the existence of a criminal conspiracy in which two-fifths of the participants were working for the government. 3/14/99 LA Times A Beverly Hills house owned by the Sultan of Brunei has been purchased for about $ 5 million by Kenneth Guarino, who is moving his publishing and entertainment business from Rhode Island. The house was one of two, next door to each other, that the sultan listed in October at $ 6.4 million each. The other home was sold for about $ 5 million in January. The Mediterranean-style 9,000-square-foot houses were newly built when the sultan bought them in 1989. Each house has four family bedrooms and quarters for two maids. Valerie Fitzgerald of Coldwell Banker-Jon Douglas Co., Beverly Hills, represented Guarino in his purchase, according to local real estate sources. 7/27/99 CRANSTON, R.I.--(BUSINESS WIRE)--July 27, 1999--Metro Global Media, Inc. (NASDAQ:MGMA - news), today announced the signing of a licensing and production agreement with New Frontier Media (NASDAQ:NOOF - news) valued by management at approximately $10 million. Metro Global Media is an international, multimedia and adult entertainment enterprise; New Frontier Media is an emerging leader in the electronic distribution of adult entertainment via its five cable television and satellite networks. The licensing provision allows New Frontier Media the right to utilize Metro's entire adult film and video library for all formats of electronic delivery, including but not limited to, dial-up Internet, Broadband Internet, Video-On-Demand, subscription and pay television, and other video delivery mechanisms. Metro's 3,000-plus film and video library and multi-million still photo archive is one of the most diverse and extensive libraries in adult entertainment and includes the award-winning Cal Vista line, the Amazing Collection, and 18 volumes of Taboo, one of the most popular adult video series of all time. The production deal calls for Metro to generate more than 400 big-budget feature and premier titles and a series of high-visibility special programming events for New Frontier Media's five adult networks, and Internet sites that are part of a pending acquisition by New Frontier of Interactive Gallery, Inc. (I Gallery), a world leader in Internet delivered adult entertainment. In addition, Metro will create an original, high-end video line branded by New Frontier for distribution by Metro to the home video/DVD market. The global agreement also includes a five-year provision for cross promotion. Under the terms, Metro will promote New Frontier's networks and web sites in all its adult publications, videos, and product lines, while New Frontier will promote Metro's products and retail product web sites on its networks and Internet sites. The cross promotion deal is expected to generate significant revenue increases for Metro after its new online mall web site, www.amazingonline.com, is launched August 31, 1999. Metro will be paid a combination of stock, warrants, and cash during the next five years of approximately $10 million, which management believes will make Metro one of the largest suppliers of adult entertainment products and programming worldwide. Based on the value assigned to the electronic rights portion of Metro's library by New Frontier Media, the Company places a global value on the entire library of more than $30 million. ``New Frontier Media has grown into a powerful player in the delivery of electronic programming to cable television operators and satellite providers. This is the first of numerous strategic alliances planned by Metro that will enable us to dominate the world's adult entertainment industry,'' said Greg Alves, vice president of Metro, Inc. 7/30/99 Today's Boston Globe reports on scandal at Kenny Guarino's Metro Global Media. I've written about the corruption of this company for years. They routinely bounce checks to people, smug in their belief that through their ties with the Gambino organized crime family, they can get away with murder. Here are excerpts from the Globe's story: Metro Global Media Inc., a very small public company in an unsavory business, moved a step up the financial food chain in May when it hired accountants from the Boston office of squeaky-clean Grant Thornton to serve as its auditors. But Grant Thornton dropped the international adult entertainment empire based in Cranston, R.I., like a hot potato just a month later. Grant Thornton said it discovered that founder and former president Kenneth Guarino, a minority shareholder with alleged ties to organized crime and a previous pornography conviction, was actually calling the shots from the background. In the SEC filings, Metro Global Media disputed claims that Guarino was making decisions. It said the power rested exclusively with the company's board. ''We didn't agree with what they had to say,'' said Janet Hoey, the treasurer at Metro Global Media. ''It was a huge surprise to us.'' Hoey said she was fielding our call because Metro Global Media president Dan Eberly left the job a month ago, a development that did not appear to be publicly announced. That would have been about the time Grant Thornton resigned the company's account. Guarino, who could not be reached for comment, has gotten a lot out of his career in pornography. He bought a 9,000-square-foot Beverly Hills house for $5 million from the Sultan of Brunei earlier this year, according to the Los Angeles Times. Metro Global Media recently said that it was moving its corporate headquarters to a Los Angeles suburb. Guarino appears on paper to have a relatively small stock holding in Metro Global Media. A limited partnership based in Bermuda, Briana Investments, owns more than 20 percent of the company, according to SEC reports. Guarino has bobbed in and out of the picture as a public figure affiliated with Metro Global Media for years. He stepped down as president the first time in 1994, when a Wall Street Journal article drew attention to his role at the company, which was known at the time as South Pointe Enterprises. Guarino returned in December 1995 but resigned again for ''personal reasons'' in late 1996, when he was originally scheduled to plead guilty in Las Vegas to a federal conspiracy charge. Luke F-rd: Porn's trade magazine, Adult Video News, appropriately chose Metro as its sponsor for its recently disastrous trade show at the VSDA, the AVN Expo. AVN publisher Paul Fishbein knew well about Metro's ties to organized crime but it didn't deter him from the opportunity to line his pockets. In April, AVN hosted a "Murder Luke F-rd" trade conference which was written up in the August 19, 1999 issue of Rolling Stone thus: "When the leaders of the top adult video and Internet companies gathered at a secretive conference in Cancun, Mexico, in the spring, Ford was a prime topic. The owner of a chain of adult stores [Edward Wedelstedt] was reportedly heard saying not only that Ford is a "menace to society" but "no one should worry about him anymore - Luke's going to end up as a spot on the pavement."" Wedelstedt, the owner of Goalie Entertainment who's threatening to murder me, received a Special Achievement award from Fishbein and AVN at the January, 1999 AVN Awards Show. His accomplishments include burning down the buildings of his competitors, stealing Reuben Sturman's store empire and extensive dealing in stolen property with his buddies in organized crime. In his acceptance speech, Wedelstedt praised such porn luminaries as Michael Thevis, a convicted murderer, and the late Gambino crime family capo Robert DiBernardo as well as porn godfather Reuben Sturman, who dealt in child porn. Randy Kaplan addresses Luke F-rd on the 8/2/99 edition of www.geneross.com: "Dear Luke: I appreciate your resurrecting the quotation from my AVN story about Metro going public from nearly five years ago. The paragraph you quoted remains my personal favorite quotation from all my years in porn journalism, and I am still proud of the prose and the sentiment. If Metro had fulfilled its promise, it would be all the more true. Public companies have to adhere to certain legal standards of disclosure, and publicly-owned adult companies can be a factor in public acceptance of adult entertainment, so I continue to think that this is a good thing. "That is the argument in the abstract, however, and I think everyone would agree that both individual and corporate citizens should also adhere to certain standards of conduct as well, and if they do not, it doesn't reflect well on the industry from which they spring, nor does it help public acceptance of the industry. This is painfully obvious. What is not so painfully obvious is whether you or anyone else has credible evidence of some of the allegations you make about corrupt or criminal activity. "If memory serves correctly, Grant Thornton is now the third CPA firm to resign the Metro assignment. I have not read the Globe article, but if you are quoting the article and the Grant Thornton spokesman accurately, Kenny Guarino's ostensible presence in decision-making is a matter of concern. As we all know, Mr. Guarino cannot serve as a board member of a publicly-owned company, due to his felony conviction. In turn, a publicly-owned company cannot allow him to serve in a similar behind-the-scenes role without the official title, and they cannot allow him to take a role in senior management, officially or unofficially, without prior and concurrent disclosures, and at great risk to the company's legal status. "My major personal objection to your use of my prose, Luke, is that it ignores a very simple fact: nearly every public statement I made since, including frequent statements printed in AVN, make it very clear that I regarded Metro's performance as a public company as dismal in the extreme, judging it simply on business and financial standards. I reported virtually every quarter on Metro's financial reports, usually in scathing terms. "Literally hundreds of people can attest to my making the following statement on hundreds of occasions: "Metro is the worst-managed company in porn." By the way, there are now so many competitors for this title that my statement may no longer be true. I also believe, and I have also stated so publicly and privately, that Metro has improved its business performance somewhat over the last year to eighteen months. But the fact of the matter is that, according to its financial reports, Metro has earned a mere pittance in porn. "Metro did make a risky move into mainstream magazines that so far has apparently earned a decent return, but that does not mask their relative failure, business-wise, in porn. I have also recently stated, both publicly and privately, that although I had a strong initial negative reaction to replacing Marco DiMercurio with Greg Alves as head of Metro's West Coast operations, that I have been pleasantly surprised by Alves's performance. (For that matter, I also was critical of Steve Karmelin's departure, way back when.) I think Alves probably deserves some of the credit for what I characterized above as a modest improvement in Metro's performance, as does Quasarman. But Metro still isn't making any significant profits making porn. "On any number of occasions, I attributed part of Metro's underperformance to instability in management. If Grant Thornton's statements are true, Mr. Guarino's influence can be cited as one of the primary reasons for such instability. Some of my sources implied as much over the years I covered Metro. "Inquiries were made on two previous occasions by SEC and NASDAQ officials. To my knowledge, that was as far as it went. That is why I never pursued it as a story; in any event, my brief in covering the quarterly and annual reports of public companies in the adult business was to interpret the numbers, which don't lie. "If I had uncovered solid evidence of undue influence, I would have pursued the story, written it, and I personally believe that Paul Fishbein would have printed it in a second, because I remember him telling me that he was proud to print the paragraph you quoted. I believe that if Metro loses its status as a public company, that it would be harmful to the business, and I believe that such a happenstance would be more important to Paul Fishbein than any personal or financial relationships he might have with any individual or company. I saw him risk such relationships constantly for similar reasons of integrity. "I regard Metro's performance as a failure in management. I said so on any number of occasions, and I said it to stock analysts, who regularly contacted me for my professional opinion. I have no knowledge of corruption or illegal acts. If you do, Luke, you have a citizen's duty to notify the Securities and Exchange Commission. The Boston Globe or the Wall Street Journal or the Providence or Cranston newspapers would be happy to print such a story. If you want my opinion, you should call or email me and ask me. It's a little sloppy to imply that a five-year old statement represents the state of my current opinion (or, for that matter, AVN's current opinion, of which I have no knowledge, since I have no connection any longer with the magazine), especially when subsequent information is easily available. "One last nitpick: while I am indeed known in print to much of the porn world under my nom de plume of Rich C. Leather, I wrote my business articles, and appeared on the AVN masthead as Business Editor, under the nom de plume of Jack Point. I developed these noms de plume when I began to write for AVN, because my office duties at the magazine required uncluttered business relationships with porn companies who were clients and advertisers as well as subjects about which to write, and I did not wish anything I wrote to interfere with the care and feeding of those relationships, which, after all, was what AVN paid me a salary to do. Once I left the direct employ of AVN and continued as a freelance writer, I kept the noms de plume as a matter of continuity, and also because they amused me; however, I immediately disclosed what I had previously kept secret; i.e. that I was Rich C. Leather and Jack Point. Just about everyone in this business knows me as Randy, not as Rich or Jack. Any correspondence I have made to you or to Gene Ross's website has been under my real name. The article you quoted was written under the name of Jack Point." 11/08/99 Angry porn talent are descending today on broke Metro Home Video, which did over $30 million worth of business last year, demanding to be paid for their dozens of sex scenes in Mexico. Some performers did 10-15 scenes three weeks ago, and are owed thousands of dollars. But Metro hasn't been paying people, as is their custom, smug in their self-assurance as a Mafia company that they can get away with murder. "A lot of people are having trouble getting paid by Metro from that Mexico trip," a source told Luke Monday. "Talent are screaming. It was supposed to be seven days, then ten days, now it's 18 days... They keep putting everybody off. Surprise!" Luke has long warned porners to avoid Metro. But talent said, oh no, it will be great. We'll get to go to Mexico. Yeah, go to those third world countries and shoot porno and see what happens when they throw your ass in jail. Meanwhile, Metro's stock (MGMA) hasn't traded for two months on NASDAQ and to the best of my knowledge, no one who has ever been delisted that long has ever again returned to trading. Metro is toast. That chapter is over. Porner: "Nobody ever knows in this business. You can be on top and have no cash flow, or you can be on the brink of extinction and some owner decides to throw in a chunk of dough to keep rolling....like betting on the come, or cum. All I know is that they make good s---. The features are great, their catalogue drops are fresh and well priced, and they are super easy to deal with. Like you even care about that....you wanna hear about bodies in the dumpster behind the warehouse." Another weary porner told Luke: "I guess it's like this anywhere in the world where money is involved. It seems like the people in this business are the worse people on earth. With their morality and the way they do everything. I'm tired of not being able to trust anybody. It's a hard way to live when you can't believe anything that anybody says to you. It's become distasteful to me to go through my life everyday thinking that everybody is lying to me. "I don't want to be a part of this anymore and if I stay in it, I am them. As long as I am around it I am them, I am just as big a scumbag as anyone else. "Metro is typical of the porn mentality. Nobody will know, let's f--- around with this. Everybody's stupid but us. But you don't f--- with the SEC (Securities and Exchange Commission). They'll be right up your ass every time. "Yeah, you'll probably make less money outside the business. But what is peace of mind worth. Self respect? Not having to do a lame-assed f---ed up job with a bunch of idiots... Porno makes you feel that everything you do is for nothing. That it is not even valid. I'm a foreign guy in this business. I don't belong around these people. It's tough for me to live like a scumbag." 11/09/99 Kenny Guarino A search reveals that Kenny owns lots of cars and property and yachts in Florida. There's a hot new craze in wallpaper - Metro stock certificates! Baytola called Metro headquarters for investor relations rep Jennifer St. Cyr. "I was able to get through and SUPPOSEDLY she's on maternity leave. Her replacement didn't return my calls - surprise!" Jldacre: "Has anybody heard this rumour that some involved with this company were caught washing dirty money in the Grand Caymans or was it a different porn company? Could explain the non response from the company lately. The money laundering by a porn company through a grand cayman bank is fact I just dont know who was involved for sure." XXX: "Kenny Guarino looks like somebody who ought to be in the Godfather. He'll stiff you for sure." 11/11/99 Rayveness stopped by Metro Home Video Thursday and threw a fit over their non-payment of her and other talent. Metro has long been the king of not paying, and they are over three weeks late paying her and other talent. Lev Bronstein analyzes Kenny Guarino's background check: 1. Is his wife really named Elvira? 2. I take it he is a honcho in this Metro corporation that you write about from time to time, that was de-listed by NASDAQ. There are probably publicly available documents, e.g. SEC or RI Secretary of State documents, that might be more interesting. (The RI Secretary of State keeps track of companies that are incorporated in RI, just like the California Secretary of State keeps track of corporations that are incorporated in California.) 3. Sounds like he has a house in Rhode Island and Florida, and likes boats. I speculate that he has a pretty good life. I further speculate that he is wealthier than you or I. One of my former law partners is from RI. Maybe he knows something about the neighborhood where this guy lives. 4. This guy isn't mafia, is he? Are Vito Corleone and Luca Brasi going to visit me if I say anything derogatory? 5. What's with all the automobiles with Maine license plates? If he lives in RI, why license plates from ME? Am I reading this right? 6. I might be inclined to phone the data base vendor and ask them for an explanation of some of this stuff. 7. What's with all the other folks who seem to have Mr. Guarino's social security number? That's not supposed to be possible, is it? I wonder who else has my social security number? (Whoever it is, I hope he has been paying in lots of money into the account, so I can have a good retirement.) 8. I don't understand why Robert Beaver or Theresa Cleveland show up in the listing under automobiles. I suspect that there is more information in the print-out than meets the eye. KENNETH GUARINO DOB: JUN 1949 SSN 039-XX-XXXX issued in Rhode Island between 1963 and 1965. Possible AKAs for Subject GAURINO, KENNETH F SSN: 039-XX-XXXX GUARINO, KENNETH P SSN: 0XXX Possible Other Social Security Numbers Associated with Subject GUARINO, KENNETH F SSN: 393-07-XXXX ** ALERT ** SSN 393-07-XXXX was issued to OCONNOR, THOMAS, and a Death Claim for this ssn was filed in SEP 1984. Possible Other Records/Names Associated with Social Security Numbers GODEK, KIMBERLY A SSN: 039-30-7162 HATCHER, COUNCIL D SSN: 039-30-7162 1/25/01 Metro's Buddy Natalie Richichi Dies From today's Las Vegas Review Journal: Former Las Vegas resident Natale Richichi, a reputed captain in the Gambino crime family and close associate of New York crime boss John Gotti, has died in a federal prison. Richichi and Rhode Island resident Kenneth Guarino pleaded guilty in January 1997 to one count of conspiracy to defraud the United States. Prosecutors alleged that Guarino secretly paid Richichi about $1.7 million to protect his massive pornography businesses from infiltration by organized crime. 2/24/05 Mr. Metro Says: Deadbeat Kenny Guarino Pays Promises to Metro Employees With Lies
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