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Regpay Co In Middle of Kiddie Porn Sweep

NEWARK, N.J. — Two leaders of a Belarus company admitted Monday that it processed $2.5 million to $7 million in membership fees that gave subscribers around the world access to child pornography Web sites.

The guilty pleas from Regpay Co. Ltd. president Yahor Zalatarou and technical administrator Aliaksandr Boika are the latest developments in a global investigation that has led to more than 1,200 arrests. Nearly all of those arrested, including about 200 people in the United States, are charged with purchasing child pornography subscriptions from the Regpay sites, according to U.S. Immigration and Customs Enforcement.

Zalatarou and Boika are among a handful of individuals who had key roles in the scheme, according to investigators.

Their company was “one of the biggest players in the world doing this at the time,” Assistant U.S. Attorney Carlos Ortiz said.

The arrests led to a Florida company that has admitted laundering proceeds from the sales of memberships on behalf of Minsk-based Regpay by transmitting the money to accounts in Latvia.

Zalatarou and Boika each pleaded guilty to money laundering conspiracy, which carries up to 20 years in prison and a fine of up to twice the value of the funds involved.

Zalatarou also pleaded guilty to a conspiracy to transmit child pornography by computer, which carries a sentence of five to 20 years in prison and a fine of up to twice the profits from the enterprise. Boika also pleaded guilty to conspiring to advertise child pornography, which carries a sentence of 15 to 30 years in prison and a fine of up to twice the profits.

Zalatarou, 26, and Regpay marketing director Alexei Buchnev, 27, were extradited from France last month. They had been in custody in Paris since July 2003. Boika, 30, was extradited from Spain in June. Buchnev pleaded guilty Feb. 16 to conspiring to transmit child pornography by computer.

All three men are being held without bail. A fourth company official remains at large.

In court, Zalatarou said the scheme began in July 2002, initially through a company he called Trustbill. Two months later, when authorities told him the payments were for child pornography and he should stop, the company name was changed to Regpay, he said.

Boika said Regpay operated a now-defunct Web site, www.redlagoon.com, which advertised memberships to child porn sites. The site gave a description and ratings of 11 of the sites, Ortiz said.

Zalatarou also said he hired Connections USA Inc. to process credit card transactions on behalf of Regpay customers.

In May, Connections USA pleaded guilty to a conspiracy charge and agreed to forfeit $1.1 million and dissolve its business. The Fort Lauderdale-based company operated as iServe.com.

The owner and president of Connections USA, Arthur Levinson, of Fort Lauderdale, pleaded guilty several weeks ago to illegally structuring currency transactions involving company funds.

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