FBI Investigating Internet Sex Mogul

S E A T T L E, July 7 -- Internet pornographer Seth Warshavsky, whose Internet Entertainment Group Inc. is one of the leading online porn companies, is under investigation by the federal government, according to a published report.

The Washington Post reported in Thursday’s editions that Warshavsky and his company are being investigated for possible credit card fraud and income tax evasion.

Warshavsky’s company faxed a statement Thursday saying it has not had any contact from the government.

“The government has not requested any documents and has not issued any subpoena or any letter to the company. We cannot comment on something no one has told us about,” Internet Entertainment Group said.

Suits and Countersuits

The allegations stem from affidavits filed in connection with a lawsuit against Warshavsky, which claimed that IEG was overcharging its customers’ credit cards. Warshavsky settled the lawsuit, and said the overcharged customers were reimbursed.

He then sued two former company managers and a former company attorney, who also claimed that Warshavsky misstated IEG’s revenues and financial health.

According to the Post, a federal grand jury here issued a subpoena for the lawsuit’s case file, which had been sealed. The Post said that Assistant U.S. Attorney Mark Bartlett has interviewed at least four potential witnesses in the last several weeks. The FBI and IRS were involved in some of those interviews.

“They asked me a lot of questions about Seth and about IEG operations,” Eric Blank, IEG’s former attorney, told the Post.

Federal investigators told those interviewed that they were investigating whether Warshavsky laundered money through overseas accounts to evade income taxes.

The pornography mogul told the Post that he was confident there were no tax violations. He added that he’s hired a new chief accountant and is concentrating on putting his financial affairs in order.