Porn in the USA

Internet smut peddlers reaped millions from unsuspecting credit-card holders. Their partner in slime was right here in the heartland.

Xpics is defunct, but Shuster and Carmona remain in the porn business. Their businesses include an Internet-porn company called Global Reach Inc., which appears to employ marketing practices similar to those of Xpics. Trial memberships are free, but Global Reach requires a credit-card number to verify age. Carr says Global Reach uses foreign banks to process its credit-card transactions as a result of pressure by Visa and Mastercard in the United States.

As part of its out-of-court settlement with the FTC, Shuster and Carmona agreed to spend $125,000 on Internet banner ads offering a refund to any Xpics customer who wanted one. Refund requests went to an independent claims administrator. Shuster says the administrator did not receive a single refund demand, showing that Xpics didn't do anything wrong. FTC attorney Cohen says he hasn't received a report from the administrator, so he can't confirm that there were no refund demands.

As for Ken Taves, he's charged with lying to the FTC and disobeying a court order, but he hasn't been charged with fraud or any other crime related to bilking credit-card holders. Carr can't understand why. "It's just amazing," he marvels. "They claim that 91 percent of his transactions were a crime. You can go out and steal $19.95 hundreds of thousands of times with no problem, but if you go steal $19.95 from a convenience store, you get how many years?"

Neither can Carr understand why more of Taves' victims haven't come forward. Either cardholders got ripped off or the banks that issued their credit cards did, but fewer than 10,000 victims have been identified by the receiver, according to court documents. No card-issuing bank has submitted a claim against Taves, Carr says. The simplest explanation, he says, is that cardholders simply overlooked the charges.

"It just blows me away," Carr says. "It's amazing how many cardholders don't look at their monthly bill; they just pay it. Being in the business, I make sure we check ours every month."

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