TELECOM Digest OnLine - Sorted: Ex-Head of Cass Tel in Missouri Gets Prison Term

Ex-Head of Cass Tel in Missouri Gets Prison Term

Associated Press News Wire (ap@telecom-digest.org)
Fri, 19 May 2006 16:21:22 -0500

By Associated Press
May 19, 2006, 3:19 PM EDT

KANSAS CITY, Mo. -- In a government fraud case prosecutors linked to
the mob, a judge on Friday sentenced the former president of a small
rural Missouri telephone company to 15 months in prison for defrauding
two federal program of $8.9 million.

Kenneth Matzdorff admitted inflating expenses by millions of dollars
to draw money from the Universal Services Administrative Co., which
subsidizes rural phone companies, and the National Exchange Carriers
Association, which collects and distributes money phone companies pay
for using other companies' systems.

Prosecutors say he conspired in 1998 with brothers Richard T. and
Daniel D. Martino, controlling owners of a business that owned
Matzdorff's Cass County Telephone, or CassTel.

Richard Martino is alleged by the government to be a "made" member of
the Gambino organized crime family in New York.

Both brothers pleaded guilty to mail and wire fraud in the case.
Richard Martino, of Tuckahoe, N.Y., was sentenced to four years and
nine months; Daniel Martino, of Hawthorne, N.Y., was sentenced to five
years.

Matzdorff, 49, of Belton could have received five years but cooperated
in the investigation.

Matzdorff and Richard Martino also are among those who pleaded guilty
last year in what federal prosecutors in New York said was a scheme
that charged consumers hundreds of millions of dollars for
unauthorized phone services and Internet pornography. Matzdorff's
six-month sentence in that case will run concurrently with the one he
received this week.

In a brief statement Thursday, Matzdorff apologized to his family,
friends, and employees of the phone company. "I know my actions were
wrong and I wish to apologize. I'll regret this for the rest of my
life," he said.

CassTel, which had about 8,000 customers in Cass County, south of the
Kansas City suburbs, and some across the state line in Kansas, has
since been sold.

Copyright 2006 Newsday Inc.

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