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USP&C allegedly served as the agent between those lines and the local phone companies that billed customers. The generic name "USP&C" shaded the charges' true origin; vague and misleading terms ("Call Mgr Plus," "Dial Plan") provided an additional layer of camouflage.
The scheme generated staggering amounts of money -- as much as $600,000 a day, according to the indictment. Martino, Chanes and their associates guarded the enterprise, authorities say, using a host of disposable companies to distract attention, even creating a call center to handle complaints. Only insistent customers received full refunds, according to the indictment.
Local phone companies and regulators presented a challenge for the mobsters, though. A high refund rate prompted Pacific Bell (now SBC) to stop carrying USP&C's charges. Undaunted, USP&C started contacting customers directly, authorities allege, mailing bills made to look like SBC's -- all the way down to the blue stripes along the margin of the page. Customers were threatened with canceled service if they failed to pay the bill from "Southwest Region Bell," a fiction controlled by Martino and Chanes, according to the indictment.
Authorities believe the scheme grossed $200 million from 1997 to 2001. Roslynn R. Mauskopf, the U.S. attorney in Brooklyn, called the enterprise one of the largest consumer frauds in American history. Last year, several of the same men were charged with running an Internet pornography scam similar in design and scale.
Brooklyn is a long way from Belton, where Kenneth Matzdorff is considered an upstanding citizen. "He's a super guy. He's a real asset to our community," Mayor Lewis says. Matzdorff is a successful businessman -- not one who has to cheat, Lewis says.
"As far as I'm concerned, I'd trust him with the keys to my house, my wife and my cat," Lewis says.
The Missouri Public Service Commission heard similar statements at the April presentation. England, Matzdorff's attorney, described a twenty-year veteran of the trade who first worked for a phone company while he was an Iowa State University student. Matzdorff serves today on the board of a Missouri telecommunications trade group. "Word gets around if you're not a person that plays by the rules," England tells the Pitch. "Ken wouldn't have lasted nearly as long as he has if he wasn't someone who did play by the rules."
CassTel is a respected company. An auditor told the commission that CassTel had spent a great deal of money upgrading its technology. Mayor Lewis says phone service in the area used to be terrible; a call from Peculiar to Raymore once drew a long-distance charge. "I think we now have one of the finest phone systems in the state of Missouri," Lewis tells the Pitch.
But the indictment charges that the system is owned by the mob.
CassTel is held by an entity called Local Exchange Company. Matzdorff told the Public Service Commission that he founded the holding company after a bank told him about an opportunity to buy the phone service. Matzdorff said that 46 investors joined him, some of them acquaintances, others referred by people he trusted. As for specifics, Matzdorff was not forthcoming. "I'm hesitant to name names," he said. (Matzdorff did not return the Pitch's calls.)
The indictment alleges that Local Exchange Company is owned in part by five of the defendants, including Martino, Chanes and Salvatore LoCascio, who is identified as a Gambino family captain. (LoCascio's father, Frank, was convicted on racketeering charges alongside Gotti in 1992.)