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Bail denied for exec in $75M fraud case

The alleged mastermind of a $75-million fraud was denied bail yesterday by a federal magistrate. U.S. Magistrate David R. Strawbridge said Neal D. Saferstein posed a "significant risk" to flee and ordered him jailed pending trial.

The alleged mastermind of a $75-million fraud was denied bail yesterday by a federal magistrate.

U.S. Magistrate David R. Strawbridge said Neal D. Saferstein posed a "significant risk" to flee and ordered him jailed pending trial.

Saferstein pleaded not guilty to fraud, conspiracy and tax charges.

Prosecutors said Saferstein, 34, of Mount Laurel, N.J., posed a "significant and irremediable" flight risk.

Assistant U.S. Attorney Jennifer Williams said Saferstein had been pulled over by federal agents on the New Jersey Turnpike the morning after his indictment last week.

He was enroute to Newark to catch a flight to Los Angeles, and had PCP and marijuana in his system when arrested.

Williams also said Saferstein had international business connections and family in Israel, and had bragged to federal agents that he could create fake passports.

Defense attorney Donald Mo-ser said the circumstances were not as sinister as the feds portrayed.

Moser said that Saferstein's plane ticket had been purchased two weeks before his arrest and that he had been headed to L.A. to help his ailing grandmother.

He said that anything Saferstein told federal agents had been done so under the influence of PCP and marijuana, and that he didn't have a passport.

Carl Poplar, another defense attorney, said Saferstein had relatives in Israel but hadn't visited them recently and had "no ongoing" ties to them.

Saferstein, chief executive officer of GoInternet.net, and two other executives of the defunct company, were charged by a federal grand jury last week with bilking customers out of $75 million for Internet-related services without their knowledge or authorization.

The feds said GoInternet telemarketers duped customers into receiving a welcome packet without fully disclosing that it would trigger $30 monthly bills unless the customer called back within 15 days to cancel.

GoInternet then billed customers by placing the charges on their telephone bills, which many paid without looking at the bills.

The scheme is alleged to have occurred from March 2001 to April 2004. The company went out of business in 2004.

Williams said that during the scheme, Saferstein amassed more than $2 million in personal income, which the feds have not been able to find.

Saferstein also is charged with with filing false tax returns between 2001 and 2004, and with failing to pay more than $2.8 million in payroll taxes.

If convicted of all charges, he could face 15 to 20 years behind bars under advisory sentencing guidelines. *