Sue Me

Mark Ehrman's last piece for the magazine was on Richard Simmons' "Cruise to Lose" program

The pictures of Luciana are not responding.” It’s 11 p.m. Seth Warshavsky is home, in a spacious condo 23 floors above the Seattle waterfront, but still awake, still working, still on the phone. His day began 20 hours earlier in Miami and, having been gone all of one weekend, a backlog of crises awaits. Most pressing: “The Mick Jagger girl.”

His company, Internet Entertainment Group, had just released nude photos of Luciana Giminez on its flagship adult Web site, Club Love, a real coup, Warshavsky says, turning gleeful, since the Brazilian model is rumored to be carrying Jagger’s baby.

It’s this kind of splashy tabloid porn that has made a 26-year-old with hyperactive business glands into the most infamous pornographer of the Internet Age. Giminez’s debut, however, is plagued by glitches. Warshavsky furiously clicks his mouse, but “the mystery adulteress blamed for wrecking the blissful union of Mick Jagger and aging wife Jerry Hall,” as the Club Love come-on describes her, refuses to inflate past thumbnail size.

“Call me right back,” he says to a tech minion and hangs up.

The photos soon join Warshavsky’s online gallery of celebrity shame. He released the Pamela Anderson/Tommy Lee “honeymoon” video after the couple lost their bid for a restraining order. He posted photos of Laura Schlessinger under the promo “amateur slut"--taken decades before her ascent to God-and-family radio personality. A peekaboo shot of Tori Spelling. Images of Keith Richards “getting some self-satisfaction.”

Endowed with the nerve to embarrass stars and the legal muscle to duke it out in court, Warshavsky puts Hollywood on edge. Most famously, actor Kelsey Grammer anonymously sued to keep a compromising home video out of cyberspace. Warshavsky denied having the video, then countersued to open court documents describing it. A reenactment (“What You Would Have Seen, Had We Had the Video”) went up on the Web instead.


The winning streak ended when he ran afoul of the Roman Catholic Church. IEG laced its Papal Visit site, detailing His Holiness’ most recent U.S. trip, with sex jokes and links to porn. Even Warshavsky’s counsel, Derek Newman, expresses moral qualms about that one. IEG later settled the case. It is appealing a preliminary injunction forbidding its release of a pre-Tommy video with Pamela Anderson and Poison frontman Bret Michaels.

Win or lose, these tangles keep the media feeding at his trough and save Warshavsky from being just another anonymous online porn-peddler. IEG, which he formed in 1995, raked in more than $45 million last year. “I don’t think anyone else has really tried to create that brand-name recognition on the Net,” Warshavsky says. “We want to be the next generation of Playboy, Penthouse or Hustler.”

Unlike his predecessors in porn, Warshavsky shows little interest in politics--or even in Larry Flynting politicians. He possesses a keen appreciation of the law and the 1st Amendment: “I passionately subscribe to what it stands for,” he says. When a case demands it, he hires Los Angeles litigator Alan Isaacman, the attorney portrayed by Edward Norton in “The People vs. Larry Flynt.” Still, obscenity-wise, Warshavsky is content to operate within the bounds staked out by skin magnates Hefner, Guccione, Flynt, et al.

His lawsuits primarily center on ownership issues. (In the Anderson/Lee case, the couple, for reasons unclear, gave up their rights to the video acquired by IEG.) The loser, time and again, is privacy.


In a world of shock TV, hidden-camera investigations and Jerry Springer, why bag on Warshavsky? “We’re just as much journalists as ‘Fox Files’ or ‘Hard Copy’ or ’60 Minutes,’ ” he says. “It’s a different kind of content.”

Different in that it goes where television’s cultural free fall cannot-- under the panty line. “The only reason ’60 Minutes’ or ’48 Hours’ doesn’t show [Pam and Tommy] is because they can’t show nudity. And the hypocrisy that comes into play when they say, ‘you’re profiting off of these people’s mistakes,’ is absurd.”

Warshavsky derives his profits not so much from famous people’s so-called mistakes as from ordinary people’s--men’s--weakness for flesh. As a teenage operator of a phone sex network, he saw in the Internet a revolutionary porn delivery system. Not just pictures and text but live video streaming right to the home PC. This would surely replace the trip to the back of the video store in the way the VCR buried X-rated theaters. The browsers Warshavsky can entice to stay cough up a monthly membership fee of $24.95, plus a per-hour premium for one-on-one encounters with women (or a couple or a guy) who fulfill requests. A Dressing Room Cam gives subscribers a peek into their changing room, and a Pee Cam is mounted above the toilet.

Hyperporn varies little from site to site and members--two converts for every 1,000 browsers--typically grow bored within a few months. Only Warshavsky seems to comprehend the value of vacuuming up cyber-peepers from beyond the hermetic spheres of the Internet and adult entertainment. That’s where the “hypocrisy” he rails against comes in: The Pamela/Tommy video is a taboo topic for mainstream news outlets unless it’s part of a larger story about legal action involving Warshavsky. And with each print or broadcast snippet, thousands of new browsers stream toward Club Love to have a look-see.

The media-crowned “Bill Gates of smut” wants it both ways. He concedes that “adult content” is his big revenue magnet, yet he chafes at the smut label. “We’re more of a diversified corporation,” he says.

IEG also runs the Psychic Zone, Zero Down (home loan “qualifications”) and the very popular Online Surgery, which Netcasts live breast augmentations, face-lifts and liposuction. He compares it to an interactive Discovery Channel. As television, the Internet and other entertainments converge, Warshavsky hopes to position IEG as “the Viacom of new media.” He has announced plans to take the company public and now he’d like a little respect. “Look at Viacom, Time Warner or the contents of CableVision,” he reasons. “All of them derive a huge amount of revenue from adult content. But they don’t call Time Warner smut.”


At corporate headquarters in a bland office tower, the glass entrance reads IFS Interfund and J&S; Communications. The receptionist answers “Communications Group.” The hurry-it-in arrangement of desks, computers and file cabinets gives it the feel of a telemarketing boiler room. Except in the space where Web site builders sit mouse pad to mouse pad, their monitors a glowing jumble of lurid text and body parts, there are no naked women to be seen.

Warshavsky arrives, cell phone stuck to his ear, and heads into his corner office. Two wakeboards, his latest toys, lean against a wall. A metallic trophy for “Hot D’or D’Honneur 1998 pour la video de Pamela Anderson” sits on the windowsill. “Totally Exposed: Sex Lives of the Stars” and other videos line a shelf. The box his cell phone came in is still on the black leather couch.

“” “” “Club Young?” The advertising director is asking if IEG should pick up available domain names for future sites. No. No. No. As Warshavsky surfs the Web, he spies some ad space. “Why isn’t [our rival] Smutland advertising there?” he asks. “Take it for $9,000.” He also notices that one of his sites “is not resolving anywhere.” Couldn’t it be pointed to Club Love?

Rather than let looky-loos exit easily, porn providers rig the browser buttons to bring up another page (and often several) of come-hither pictures and text before allowing anyone out. These users can be routed back to IEG sites or, since Internet traffic is a commodity, sold off.

Later, Warshavsky’s deep in a three-way with his director of new business development and someone on the speaker phone. They’re trying to figure out how a particular e-mail greeting card company derives its revenue. “They’re making money two ways,” Warshavsky says after logging on to the site. “They’re making money by advertising and they’re making money by building a list, so there will be an e-mail list of all people they send greeting cards to and all the people they come from.”

But Warshavsky doesn’t like to dirty his hands with inventory. “What we want to do is get into it for as little as possible . . . we’ll sell his greeting cards and we’ll pay him something for licensing the content.”

The interconnectedness of the Web opens up exponentially increasing business opportunities. To maximize his quality wheeling-and-dealing time, Warshavsky consumes a power diet. Every two hours he eats either protein only or carbs only. Judging by the turkey breast slices on his desk, it’s protein time. He chases the meat with a dozen bullet-size vitamin/superfood tablets. “I have so much energy,” he says, “that I have to take melatonin before I go to bed.”

The manpower around headquarters mostly admires Warshavsky’s ability to quickly convert ideas into low-cost/high-return Web sites. (Sometimes too quickly, as the Giminez case illustrates.) Many co-workers have even adopted his diet. But when it comes to the little man’s (their term) management style, everybody rolls their eyes. All they will say for the record, though, is “he’s getting better.” His tantrums are legendary. “I’m pretty aggressive, high energy . . . a difficult guy to work for,” Warshavsky admits.

Whether it’s the off-duty rock musicians who do the busy work or the executives lured away from Starbucks or from the porn industry, few stake their futures at IEG. “Call it an internship,” says Jonathan Silverstein, IEG’s director of sales and marketing since 1997. He’s responsible for, among other things, parceling out and repackaging Club Love and other IEG content into clones (tweaked to attract, say, a different fetish constituency) that can be launched either as a new site or be sold as a turnkey site, the Internet equivalent of a franchise. It’s been great, he says, but “I’m just to the point right now where I’m going to be 31 on Thursday. Seth is 25, you know?” By the time his boss turns 26, Silverstein has left.

The real revenue generator is a few miles away at a converted warehouse the company calls the Arcade. Here, women and a few guys perform in any of a variety of theme settings--dungeon, shower, bedroom, couples room, buddy room--as cameras beam the action live to any computer anywhere.

Customers can request specific scenarios via a toll-free number or e-mail. All the better for Warshavsky that few actually do. “It’s mostly voyeuristic,” he says. Beyond what the camera sees, the space is all exposed pipes, drywall, cardboard file drawers and nothing more decorative than a Pamela Anderson poster. In the mixing room, a staffer controls a joystick that can zoom in and out on the performers and pan to body parts.

The performers are mostly former dancers who’ve traded the fend-for-yourself catfight of strip clubs for a guaranteed $20 a hour. Plus, says one, April, “you don’t have to worry about guys stalking you in the parking lot.” Until recently. “A lot of the media now is revealing where we’re at,” she says. “It puts kind of a damper on the situation of privacy--like we have any.”


“I’m really stressed out,” Warshavsky says, returning home, one hand on the wheel of his Jaguar, the other on his cell phone. “My sinuses.” When he gets agitated, which occurs constantly, he emits Ungerian (as in Felix) “Hmpffft!” noises from deep within his nasal cavities. “This is my nervous habit,” he says, turning plaintive. “Don’t make a wisecrack about me, please.” That the noise seldom goes unnoticed in press coverage gets to him. “I’m human,” he says. “I’m a sensitive guy.”

With its panoramic windows, green marble kitchen counter and king-sized bathtub, Warshavsky’s condo--directly across the street from IEG--resembles a deluxe hotel suite. It looks unlived in after two years of residency. Back then, Warshavsky needed a place downtown. The state had declared him a “habitual offender” after he racked up 50 or so moving violations. Once again a motorist, he plans to sell the condo and move to the lake where he keeps his powerboat. Abstract art, leased-to-own from the Seattle Art Museum, decorates the walls. There are few books and no personal photographs, souvenirs or sentimental effects visible anywhere.

“Is that weird?” he asks. “I’m always working.” He says he does not feel comfortable talking about his net worth or his girlfriend. “I don’t know why I get weird about that,” he says. “Do most people get weird about that?”

In the corner, on a tripod, a telescope points out toward downtown Seattle. “You can look into the different hotels,” he says. Does he ever see people undressing? “Yeah,” he gleams. “Every once in a while.”


An internet presence is easy to construct, a life more difficult. By Warshavsky’s account, his goes like this: He was born in Queens, N.Y., and moved to Seattle at age 7. With the onset of puberty, he demonstrated a talent for turning a profit. “When I was 13 or 14, I ran a bulletin board called Dungeon Quest,” he says. “People would send an e-mail, receive e-mail, play an online adventure game. I charged $2 a month for membership and I made a couple of hundred dollars a month.” He says he earned his high school diploma through an off-campus program.

Then, at 17, he and a friend saw their first phone sex ad. Inspiration struck. Borrowing money on Warshavsky’s credit card, they started 1-900-GET SOME, and the money started rolling in. How could he start a phone sex company if he was too young legally to call one? “I don’t know,” he says. “That’s a good question.” And how did he get a credit card? Another good question. “I don’t remember.”

In 1990, to inflate his share of the phone sex economy, he says, he created his own long-distance network. Warshavsky spun deal upon deal until the FCC pulled the rug in 1995, declaring it illegal to charge for services on a pay-per-call network, then a house of cards came crashing down. Debts and lawsuits mounted. Warshavsky says his creditors were “unsophisticated” about long-distance billing issues (one even punched him out at a trade show) and that everyone was not only paid off, but “we actually overpaid around $16 million.”

Then Warshavsky discovered the Internet.

Behind the scenes, Web masters love to spew venom about Warshavsky, stemming from as far back as the purported $16-million overpayment. Few do it for the record. And those who do seldom do it twice. Jason King, chief operating officer at Vancouver-based Starnet Communications, had the kind of video-streaming operation that Warshavsky would also use to build his Internet porn empire. Earlier this year, King told the Washington Post that in 1995 Warshavsky “came up here. We negotiated a deal. He then contacted all our suppliers and did it himself,” a version at odds with the innocuous one Warshavsky tells. King now declines to confirm his account, saying, “I don’t feel comfortable going that route.”

“Seth is the most litigious person I know. And he has a way of twisting things to his perspective,” says Danni Ashe, an ex-stripper who operates the Web site Danni’s Hard Drive. “It’s a real uphill battle to try and bring some acceptance and respect to my industry,” she says, “and he makes it all that much more difficult.” Ashe says she’s through doing Internet trafficking deals with Warshavsky. “I would not do business with him again . . . for a lot of reasons. That’s about as far as I can go.”

Warshavsky acts surprised when he hears of his negative reputation among peers. As for their fears about getting sued? “People are confused and maybe a little bit jealous by how successful we’ve been,” he says.

When he’s doing the suing, Warshavsky forgets his professed passion for the 1st Amendment. In 1997, Joseph Kahwaty, owner of iBroadcast, a provider of live adult feeds to various Web sites, got into a yelling match with Warshavsky outside a downtown Seattle bar. The 6-foot-2 Kahwaty spit in Warshavsaky’s face and later trashed him on Internet bulletin boards. Warshavsky sued him for $1 million in a libel case that has been settled. “I was saying things I shouldn’t have said,” the now-contrite Kahwaty says.

More often, Warshavsky uses the legal system as a public relations tool. “Seth gets a lot of business off the media, which kind of separates him from the low-key players,” Kahwaty says. “Let’s face it, everybody has heard of IEG and Club Love. How many other adult sites can you think of?” In the beginning, Warshavsky called his X-rated site Candyland. Hasbro sued to protect the name of its children’s game, and Warshavsky issued a press release deta’iling the suit, then promptly changed the name to Club Love.

Some Warshavsky watchers wonder if his trumpeted IPO is also a ploy. They doubt he’ll ever open his books to inspection or endure the three-month media blackout required of companies going public. Yet announcing his intention put IEG on the pages of the Wall Street Journal and other publications read by affluent men with credit cards.

Warshavsky says he is neither PR-savvy nor celebrity-obsessed. He just seems to toss out media chow to reporters starved for a peek (for news purposes, of course) at his empire of titillation. Their articles repeat his detail-deficient characterization of his childhood (normal, if hyperactive) and the rote quotes: “My parents are proud of me. I’m a successful businessman.” Yet no journalist has succeeded in contacting his parents.

He modifies his self-portrayal when asked about run-ins with the juvenile justice system. “OK, I ran away from home,” he says. “I don’t know specifics. It’s nothing serious.” He put the specifics out of public reach in 1997 when he had his juvenile record sealed. In 1993, however, the file detailing an adult conviction for trying to sell a stolen laptop computer also listed the juvenile priors of “unlawful issuance of a bank check” and two counts of “felony theft (value in excess of $1,500) in the first degree.” All of which paints him as something more complex than a teenage business prodigy.

More recently, ex-girlfriend Sunawin Andrews was granted a restraining order against Warshavsky by Seattle authorities. She stated in a deposition that Warshavsky suggested that he could have her and her young daughter killed.

The civil action followed a September incident in which Andrews told Nevada police that Warshavsky tried to choke her during a trip to Las Vegas.

Warshavsky dismisses the whole story as a fabrication. “She thought that maybe she could get some money out of me,” he says. “If you call the Seattle court--case dropped.”

He had forgotten, perhaps, that a few months earlier he’d settled the civil case and had the records sealed. Court documents obtained before the file was sealed indicate that the restraining order had been renewed and remains in effect.

As for the criminal case in Nevada, Warshavsky says it was dismissed entirely.

“The case has not been dismissed,” says J. Charles Thompson, assistant district attorney of Clark County, Nev. Warshavsky was charged with “battery constituting domestic violence” and his attorney negotiated a deal with the district attorney--a $500 contribution to be split between a domestic violence shelter and a law enforcement tip line. There is also, says Thompson, “a requirement that the defendant complete some kind of impulse-control counseling and stay out of trouble.”

Meanwhile, Warshavsky’s raid on Hollywood private lives continues--the latest release, a neatly timed “Star Wars Sex Shocker.” Thousands of men with their own impulse-control issues are paying to peek into Club Love’s virtual peep show. All of which makes Warshavsky a more public figure, subject to a few embarrassing exposures of his own. “I do expect it,” he says. “I think that I put myself in a situation where this type of information on me, [they’re] definitely entitled to print it.”

But confronting Warshavsky with his past--particularly the Andrews case--results in a flurry of phone calls and a fax from his attorney claiming that Andrews’ allegations “were patently false and inaccurate” and that Warshavsky is pursuing “legal remedies” against the Seattle Weekly, which reported on his legal troubles in February. (The paper says it has yet to receive any communication disputing its facts.)

Warshavsky and his attorney still maintain that free speech should reign. “I don’t have a problem with it whatsoever,” Warshavsky says between honks and snorts. “Nobody likes having things that are negative printed about them, [but] that’s what shows the similarities between and mainstream media.”

One final thing to remember, though. “When we do something,” he cautions, “we always make sure that we have the legal right.”