Porn-Network Operator Agrees To Pay $20,000 To Settle Civil Case

A Seattle entrepreneur linked to a lucrative dial-a-porn network being investigated for possible criminal wrongdoing has agreed to pay $20,000 to settle a civil debt-collection case filed by the Justice Department.

The deal to settle the civil case with Arthur Joel Eisenberg was negotiated months ago with the Federal Trade Commission, but not filed in Seattle federal court until yesterday, officials said.

Eisenberg, also known as Jack Starworth, is listed in the civil filing as the president of five corporate defendants: Infophone Inc.; Laserquest Inc.; Salt Lake City Audiotext Services Inc.; Ultraphone Inc.; and Phonequest Inc.

All five corporations were also listed in a 1991 criminal search warrant that is part of an ongoing investigation, authorities said today.

The civil settlement is related to the criminal investigation in that five Eisenberg-operated corporations listed in the civil case are also listed in the search warrant as being part of the Megaquest Group - an Eisenberg-run operation that offered sexually explicit conversations to callers dialing numbers with a 976 or 900 prefix.

IRS agents alleged that Seattle-based Megaquest failed to report more than $126 million in taxable income over a four-year period ending in 1989.

The criminal investigation was revealed when the IRS raided Megaquest business offices in 1991. A federal prosecutor said today the investigation is still alive.

Eisenberg, the former owner of Seattle-based Aeroamerica, an airline, and Air Club International, a tour operation, has a history of business ventures that ran into financial difficulties.

The civil complaints filed yesterday against Eisenberg, his five firms, and a Seattle attorney, Arnold Joseph Barer, allege they illegally pressured a number of people to pay phone charges for dialing the 900 and 976 numbers.

The civil complaints were accompanied by consent decrees calling for fines, among other conditions, to settle alleged violations of the federal Debt Collections Practices Act.

The defendants neither admit nor deny liability under the consent decrees, which don't become final until signed by a federal judge.

Seattle attorney William Erxleben, who represents the defendants, was unavailable for comment yesterday. Erxleben was Northwest regional director of the FTC from 1972 to 1979.

Chuck Harwood, regional director of the FTC, said the filings were spurred by consumers who complained after receiving demand letters from Eisenberg's companies on Barer's stationery, and using the lawyer's rubber-stamped signature.

Harwood said Eisenberg drafted the demand letter, and Barer agreed to allow his signature to be used on letters.

Thousands were sent to consumers who had contested charges on their phone bills to the defendants' 900 and 976 numbers.

The demand letters were sent after the phone company charged the calls back to Eisenberg's companies after consumers contested the calls.

All the demand letters shared the same Seattle address: 219 First Ave. N., Suite 176.