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Net pornographer jammed up in Federal probe

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Federal officials in the USA are investigating renowned Internet pornographer Seth Warshavsky and his on-line porn company, Internet Entertainment Group (IEG), on suspicions of credit-card fraud and income tax evasion, the Washington Post reports.

It wasn't long ago that IEG won praise in the mainstream press as one of the Internet's original commercial successes. Warshavsky attracted considerable media interest when he acquired and distributed a video of model Pamela Anderson having sex with her husband Tommy Lee. But the company has suffered a string of legal difficulties since allegations of credit card overcharging began to surface last year.

Several IEG employees testified to the allegations of overcharging, but the sworn statements were sealed when Warshavsky settled a lawsuit. Warshavsky then sued two former managers and the lawyer involved in the claim, alleging they violated a non-competition clause in their contracts and stole a company e-mail list.

Warshavsky has maintained that all the overcharges were accidental and that customers have since been reimbursed.

Now it appears that the Feds are investigating Warshavsky for possibly laundering money through foreign bank accounts to evade US income tax. Four potential witnesses have been interviewed by Assistant US Attorney Mark Bartlett and representatives from the Internal Revenue Service and the FBI.

Warshavsky said he has not been notified by the Feds, but had heard that he was under investigation. "If that is the case and there is an investigation, I'm sure they won't find any wrongdoing, and they'll drop it," he told the Post on Monday.

Warshavsky has hired a new chief accountant and says he is concentrating on putting his financial affairs in order. As for the tax evasion allegations, perhaps he will revive his previous legal strategy and cop to depositing money off shore 'accidentally'.

Well, a thing like that could happen, you know. ®

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