Baron of Internet porn faces jail

LIKE MANY Internet success stories, it started as a two-man firm in the backroom of a house in the suburbs. In a few months, the company was raking in tens of thousands of pounds, with a growing list of eager clients. But it was porn.

Yesterday Graham Waddon, the mastermind behind the London-based business, described as one of Britain's biggest Internet vice barons, had his sentencing hearing delayed until 6 September at Southwark Crown Court.

He was given bail but he faces up to three years' jail in what Scotland Yard believe is a landmark case that should help deter future pornographers.

Police said Waddon, 28, and his fellow computer designer, Raymond McArthur- Jones, 35, - already jailed for a separate pornography offence - were distributing some of the most obscene and vile photographs police have found on the Internet. Sex with animals, torture, and other vile activities were available for pounds 20 a month.

And both are suspected of still earning tens of thousands of pounds from the obscene pictures which remain available on the Internet. Duncan Atkinson, prosecuting, said yesterday that Waddon had benefited by pounds 800,000 but his realisable assets were worth only pounds 7,000.

Waddon met McArthur-Jones by communicating with him on the Internet and ran what started out to be a perfectly legal operation, specialising in web site design for small local firms.

The unmarried Waddon, who ran the unofficial Queens Park Rangers football club web site, had also planned to set up a local business directory.

But he moved into the lucrative porn industry. Pornographic pictures already on the Internet were repackaged onto 12 adult porn sites with titles such as Farmsex, Europerv and Schoolgirls-R'us. At one stage, one site alone was making pounds 4,500 a day.

During the past three years hundreds of thousands of photographs have been published. The sites built up a world-wide customer base that was thousands strong.

The couple first came to the attention of Scotland Yard's Obscene Publications Unit in 1997. McArthur-Jones bought a BMW convertible, a Jaguar and a Range Rover. At the time, he was supposed to be on sick leave from the Fire Service, suffering from a bad back.

The two men were enjoying a break in a plush Spanish villa in September 1997 when officers searched Waddon's home, his father's address in Worcester Park, south London and McArthur-Jones's house in Ealing, west London.

The pair were arrested when they returned to Britain. McArthur Jones was released on bail and flew to Miami where he was immediately arrested by US customs on a separate charge after being tipped off by Scotland Yard.

Last November he was given 23 months' jail for putting child pornography on a commercial Internet site. Waddon believed that by launching the adult porn sites in California he would escape British legislation. But in a landmark ruling last month at Southwark Crown Court in London Judge Christopher Hardy rejected defence submissions that publication had occurred outside British jurisdiction.

The judge said he was satisfied publication took place not only when the material was transmitted by Waddon, but that it was also going on when it was downloaded by police in London.

He also rejected defence claims that the pornography in the case was not admissible evidence.

Waddon admitted 11 sample counts of publishing obscene articles on the Internet on or before June 1997. He also pleaded guilty to one charge of having an obscene video featuring a dog for publication for gain. Yet many of the adult sites are still operating, despite appeals by Scotland Yard to American companies to have them closed down. Waddon may have sold the rights to the sites, but no-one can be certain.

Police do not know where the income is going from the thousands of porn pictures regularly being downloaded, but it is believed that an off-shore account is the most likely destination.

Vice officers are increasingly finding that porn sites siphon subscription money through companies based in countries such as Costa Rica to avoid the attentions of authorities in Britain and the States.

Chief Supt Martin Jauch, the head of Scotland Yard's Clubs and Vice Unit, said: "In our experience it's the most profitable pornography web site certainly in this country. It was being run as a cottage industry, two or three computers in a small office in a suburb by just a couple of people. The profits are simply phenomenal."

He added: "It was probably the most extreme material we have encountered on the Internet. The first part of the ruling is very important for our future work under the Obscene Publications Act.

"If that part of the ruling had gone against us it would have meant an end to investigations into anyone in this country who was dealing in that type of material."

He said the conviction showed that the Internet was not a "law-free zone".