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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