Free Fatal System Error by Joseph Menn

Internet scams, the biggest haul in Gambino family history. The Martino racket went through several iterations as law enforcement cracked down on its techniques. It installed rogue “dialers” on home computers that called expensive overseas numbers. For a time, companies in the scheme also stuck consumers with unwarranted phone charges through 800 numbers. A later Web version of the scam was much simpler, an early system for credit card fraud. Internet visitors were asked to supply a credit card number proving they were eighteen in order to get free tours of membership porn sites—including HighSociety.com , Cheri.com , and Playgirl.com —owned by a company named Crescent Publishing Inc. Then they were charged as much as $90 a month by a revolving cast of businesses with names unrelated to the sites.

    After hundreds of consumer protests, the Federal Trade Commission sued Crescent in August 2000. But the full extent of the scheme didn’t emerge until federal prosecutors brought criminal charges in 2003 and filed a more comprehensive indictment in 2005. The second indictment named Martino, alleged Gambino captain Salvatore LoCascio, and four Gambino associates. Facing insider testimony, all pleaded guilty.

    Though he was not named in the court filings, Yishai Habari, a major traffic broker to porn websites, almost certainly was involved in the fraud. Along with the indicted Harvest Advertising, Habari’s WebMedia Interactive Inc. sought to bring Web surfers to Crescent websites, according to officials, employees, and porn publishers. Habari directed projects at the Martino operation, employees said, and his company and Harvest were based on the same floor of the same building in New York. “It was my feeling that they were one and the same,” said the FTC’s lead attorney on the case. A Crescent employee from before the FTC case said Habari was a significant part of the operation at least as far back as 1999. She asked not to be named out of concern for her physical safety. In late 2000, San Francisco businessman Gary Kremen and attorney Charles Carreon flew to meet Habari and negotiate whether he would steer visitors to Kremen’s Sex.com . After a sushi lunch, Habari took them to meet with Martino, and Carreon said it was clear that Martino was in charge of their business.

    Because the FTC suit didn’t extend much beyond Crescent, Martino and Habari continued to operate with relative freedom for some time. Investigators who worked on the case said they were most concerned about working upward and arresting the full-fledged Gambino mobsters collecting money from the scam. All the same, Habari left the country as the probe accelerated.

    While he might have had reason to worry about the law, Habari had no reason to worry about money. He could deliver Web surfers to the sites that were willing to pay. For that reason, he had been popular in the world of Internet porn, and some of his friends and associates were now moving from porn to poker, where their sites also needed high-volume traffic.

    AMONG THE CONVERTS WAS Habari’s old friend Ruth Parasol, who was on her way to becoming the richest self-made American woman. More than anyone else’s, Parasol’s path to epic riches illustrates the Internet’s windfall potential for a post-Sacco generation unconcerned with moral issues.

    In high school, even her friends called her Ruthie Ruthless. Her prep school in Marin County, the wealthy, wooded enclave just across the Golden Gate Bridge from San Francisco, was filled with characters. There were plenty of richer kids, several teens from famous families, and some close to the raven-haired Parasol’s league in great looks. But the laid-back style in most of the cliques at Marin Academy was to play down one’s natural intelligence and camouflage material ambition.

    Not Ruthie Ruthless. One of the most polarizing figures there, she didn’t give a damn who knew she was on the make or what they thought of her. She