Fast Company

A high-flying Web start-up, DEN imploded among allegations of drug use, guns, and pedophilia


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A BOY'S LIFE The pilot episode of DEN's Chad's World tells the story of a boy who is adopted by two wealthy gay benefactors

Even in an era when catching pedophiles makes for must-see TV, the picture in the UK Sun was remarkable. Marc Collins-Rector, nattily dressed in a tan blazer and blue shirt, sporting a pair of Wayfarers and carrying a silver-topped cane, stands outside a PC World in London, accompanied by a teenage boy lugging a newly purchased set of high-end computer speakers. The headline: "Tycoon Paedo on Prowl in UK."

Historians of the Internet bubble might remember Collins-Rector as a cofounder of the Digital Entertainment Network, an online video empire that was one of the most talked-about new media launches of its day, before its spectacular flameout. Accused of molesting numerous teenage boys who worked for him, the 48-year-old entrepreneur went on the lam to Europe. Apprehended 21 months later, he was extradited to the United States, where, after what seems a rather lackluster prosecution, he pled guilty to eight counts of luring teens across state lines for sex, and paid a small fine. Two years later, here he was, as the Sun put it, "swanning around Britain in a chauffeur-driven limo and surrounding himself with young boys."

PASTY MONSTER Collins-Rector strikes a pose for the Florida sex-offender registry
Such brazen behavior wouldn't surprise anyone who knew Collins-Rector back when DEN was riding high. In those heady days before the Internet bust, a Who's Who of gay Hollywood flocked to notorious all-night bashes at the "M&C estate," so named for Marc and his twentysomething cohort Chad Shackley. The pair, who met on an online bulletin board (remember those?) when Shackley was just 15, collaborated on a number of tech start-ups, including an early Internet service provider, Concentric Network Services. Flush with cash from their successful ventures, Collins-Rector (who had changed his name from the more pedestrian Rector) and his young colleague landed in Encino, California, where they took a special liking to a $4.2 million Spanish colonial McMansion that had previously belonged to Death Row Records rap impresario Suge Knight. Streams and waterfalls traced the carefully manicured 1.5-acre grounds, which housed a tennis court, an enormous gazebo, a swimming pool, aquariums, a home theater, and a hot tub built for 12. Among their new acquaintances in Los Angeles were such industry heavies as David Geffen, uber-manager Sandy Gallin, then–NBC Entertainment president Garth Ancier, and Usual Suspects director Bryan Singer. It's also where they hatched an audacious plan for a Web-based television venture that was to consign the networks to the dustbin of history. They called it DEN, and staked its business model on "narrowcasting," or marketing to thin demographic segments. An early attempt to capture the online video zeitgeist that eventually blossomed with YouTube, den.net was instead rooted in original programming. The plan attracted major investments from key players in Hollywood, the tech industry, and Wall Street, ranging from Geffen and Singer to Intel, NBC, and Microsoft. Representative Michael Huffington wrote a check for $5 million after a lavish dinner party at M&C, boasting to a friend that he expected to reap at least a tenfold gain from his investment.

Another regular at the mansion was DEN executive VP Brock Pierce. He was aggressive and self-assured, with blond hair and an insouciant pout. He was also still a teenager—17 years old and coming off a successful career as a child actor, with The Mighty Ducks and First Kid among his credits. According to a DEN board member, Pierce was hired as "the guy who could tell us what Gen Y-ers were likely to think." This talent came in handy not only in targeting the youth demographic, but also in bringing a supply of beautiful young men to the estate, lured with vague promises of fame as the Internet's first TV stars.

Eventually, a number of these acolytes would file lawsuits alleging they were raped and/or sexually abused at M&C by the three cofounders. Their charges are remarkably consistent—all claim they were bullied and drugged to coerce sexual compliance, and in some cases, threatened with loaded guns. When the plaintiffs filed civil suits against Collins-Rector, Shackley, and Pierce, the three suddenly disappeared with what remained of their fortune—turning up two years later living in a villa in Spain. They were arrested by local authorities, who uncovered "an enormous collection of child porn," according to Spanish police reports. In their absence, the plaintiffs were awarded default judgments in the amount of $4.5 million, but have collected only a small fraction of that. And while Collins-Rector is living it up in London—taking his young friends to lunch at Gordon Ramsay's restaurant in Claridge's hotel, according to the Sun—Pierce has recently been lauded yet again as a New Economy genius for his role in a fast-growing Internet venture that's drawn praise from the likes of Fortune and CNN.

DIRTY MOVIES Before cofounding DEN, Brock Pierce starred in a string of Disney hits, including the 1996 schlockfest First Kid
For a company that brought in nearly $100 million from world-class investors and made the lofty promise that "global entertainment will be delivered over the Internet; [DEN] will create the last network," its product was stunningly bad—even by dot-bomb standards. The business plan was lacking in many respects. A major selling point that Collins-Rector touted to investors was a feature that would allow viewers to click on, say, a shirt or lamp in one of the shows and immediately buy it online. Unfortunately, the click-to-purchase technology never materialized, and the venture was vexed by a more troubling technological issue: Broadband was still a rarity in the late '90s, so most of the intended audience had to access the programming via 56K modems. "We all bought into [Marc's] vision of the technology," says DEN's chief marketing officer, Edward Winter, now chairman of the youth-marketing firm Tracy Locke, "but soon we were being told by Internet experts that 'you can't stream video right now.' It became pretty clear that it wasn't going to work."

Still, DEN pressed on, shrinking the format and utilizing shots with as little movement as possible. The company built a space-age headquarters in Santa Monica, furnished with $1,800 chairs and a state-of-the-art newsroom that was put to little use. Instead, DEN's founders devoted most of their attention to the network's flagship show, Chad's World, which targeted gay and questioning teen boys. Filmed at the M&C estate, Chad's World was the founders' most personal creative effort. Co-written by Collins-Rector, produced by Pierce, and loosely based on Shackley's life, it featured one of the boys who would later accuse the DEN founders of molestation.

Chad's World starred a 14-year-old actor named Brian Stark as Chad, and Seann William Scott—who shortly thereafter won a starring role in American Pie—as Jim, a California entrepreneur based on Collins-Rector. While the film's production quality was more in line with down-market porn than network programming, the producers doled out a mind-boggling $12 million in salaries for the series. (Contacted by Radar, Stark declined to comment on the show. Scott's agent thanked Radar for "thinking of Seann" but similarly declined to comment.)

The pilot episode revolves around two young men coming to terms with their sexuality. Chad convinces his close friend Paul to come out of the closet to his cartoonishly repressive parents. Upon learning that his son is gay, Paul's father calls him an "abomination against God," provoking the spurned boy to blow his own brains out. "It's for the best," Dad muses. Brushing off the brains of his friend, a despondent Chad runs outside and makes a "Why, God?" gesture to the skies as grunge rock burns in the background.

Before long, he meets his high-flying benefactor, Jim, who lives with Chad's older brother at a suspiciously familiar mansion. The duo, who are shuttled around in dark sedans and surrounded by phalanxes of black bodyguards, invite young Chad to live with them, generously dispatching a few of their bodyguards to stomp Paul's homophobe dad on his lawn.

Cheerfully, Chad moves to Encino to play-wrestle with his new roomies and enjoy a lavish new lifestyle. "Oh, yeah!" he exults after being presented with a BMW and black driver of his own. "I think I'll be able to hang here!"

When Chad's World debuted on den.net in June 1998, many critics couldn't even download it—which was probably a blessing for all involved. "Chad's World was the first signal that maybe things weren't right [with the company]," says Winter. "It was definitely, um, ahead of its time."

It felt like a "gay pedophile version of Silver Spoons," adds another industry observer who saw the pilot and five unaired episodes. "I first thought it was some sick fantasy of theirs," he adds. "When I found out about the molestation charges, I realized that it was more a case of art imitating life."
A Web-based TV hub, DEN promised to make the networks history, and drew major investments from Hollywood A-listers, the tech industry, and Wall Street

Other DEN shows also targeted thin slices of the adolescent male demo, including young Latinos (Tales From the Eastside, in which, according to one former employee, every line of dialogue began, "Yo! Ese!"), Asians (The Chang Gang), Christians (Redemption High), frat boys (Frat Ratz), and punks (Fear of a Punk Nation). Though the company promised to reach 1.5 million viewers, den.net never surpassed 5,000 hits per day.

A $75 million IPO was planned for October 1999, but days before it was filed, a young man from New Jersey, identified in court filings as Jake W., served papers for a lawsuit claiming he'd been molested by Collins-Rector for three years, beginning in 1993 when he was just 13. Collins-Rector quickly paid a settlement, and his attorney fired back in the press, calling the suit "classic IPO blackmail" and describing the settlement as "a token payment to save the company."

In the same way he'd met Chad, Collins-Rector had connected with Jake via an Internet bulletin board. The executive offered the boy a job at his pre-DEN venture, Concentric, and Jake began working from home for $10 an hour. Soon, though, Collins-Rector decided he needed Jake at the Michigan office and flew him out from New Jersey, lodging him in a spare bedroom. During the visit, according to the lawsuit, Marc repeatedly asked, "Do you trust me?" with his hand roaming across the boy's body. Then he performed fellatio on him.

With the FBI investigating Jake's allegations and investors panicking, all three founders immediately quit their executive posts (retaining substantial stock positions), leaving DEN's new chairman, Howard Ritts, in charge of the company.

Within months, all three of the company's founders had been hit with a flurry of civil lawsuits. Boys who had been paid for vague jobs with the company under the condition that they agree to attend parties at the M&C estate began telling stories of sexual abuse at the hands of Collins-Rector, Shackley, and Pierce, as well as other highly placed Hollywood figures.

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GUN PLAY A scene from Chad's World

One of the alleged victims was identified as Mike E. The slim, dark-haired 14-year-old, who attended a small private high school in the Valley, befriended Chad's brother Scott, who led him to DEN. Mike had an interest in acting, so when Collins-Rector outlined the possibilities for stardom offered by the site, the boy began spending time at the mansion, where there was one key rule. He recalls: "If you were going to sleep over, you had to get into either the pool or the hot tub—and you had to be naked to do so." In an exclusive interview, Mike E. confirms having been forced to engage in anal and oral intercourse with Collins-Rector, Shackley, and Pierce while under the influence of drugs that he claims were fed to him without his knowledge. At the same time, he says, Collins-Rector and Shackley were pushing him to become a legally emancipated minor. Although Ronald Palmieri, Collins-Rector's lawyer at the time, dismisses the allegations, saying, "There was never any such discussion that I know of," Radar has obtained correspondence sent by Shackley to Palmieri's law office requesting an update on the status of Mike E.'s emancipation filing.

Meanwhile, in addition to paying the boy $1,000 a week, Collins-Rector dangled a starring role in a DEN series called The Royal Standard, which was being developed by Randal Kleiser, the director of Grease and The Blue Lagoon.

Another alleged victim, Daniel, tells a similar story. After being subjected to sexual abuse at M&C, he wrote a suicide note: "I can't stop crying! Please God help me. I can't go on. I let them use me as a sex tool. I let those assholes do all those terrible things to me. Goodbye." His brother found the note and alerted their parents before Daniel made any attempt on his life.

Another young man who frequented the estate, Alex B., was not a minor at the time, but also eventually became a plaintiff against the men. Alex claims he was threatened with physical harm, often after being given drugs. At one point, Alex secretly shot a video inside the M&C estate to document what was going on. In a jittery scene, he removes a canvas bag from a closet and shows off a massive stash of drugs in amber vials—Percocet, Vicodin, Xanax, Valium, marijuana, and ecstasy among them.One industry observer describes the series as "a gay pedophile version of Silver Spoons," adding, "it was a case of art imitating life."
Another former DEN employee tells of receiving and rejecting numerous sexual advances at the M&C mansion—until one evening when he was surreptitiously drugged and woke up nude in Collins-Rector's bed, with Collins-Rector asleep beside him.

In addition to the money and promises of stardom, Collins-Rector allegedly used physical threats to keep the boys in line. One tactic, according to several victims, was to brandish a gun. "Do you know what I can do with this?" he would say, leveling the barrel at them, "and get away with it?" He also threatened the lives of their families. On one occasion, Alex recalls, Collins-Rector asked a bodyguard to stand in the room wearing earmuffs. The DEN chairman told Alex the guard would choke him if he didn't consent to sex. (Radar tracked down the guard in question, who had gone on to do security work for a big Hollywood talent agency. He confirmed the basics of the boy's account and seemed disgusted by the memory. "Marc told me to put on the earmuffs and stand in the room facing him and Alex," he says. "I was there for about two hours, but that is all I want to say about what happened.")

As the lawsuits against the company mounted in early 2000, DEN—in which Pierce held nearly one million shares and Collins-Rector still owned a majority stake—began to hemorrhage money. The planned IPO, which was postponed after the first abuse allegations surfaced, was permanently shelved. A crumbling Nasdaq didn't help the situation. By May 2000, the start-up was bankrupt. Before long, its headquarters were gutted, the expensive computer equipment and office chairs sold off for a fraction of their original cost. Around Hollywood, rumors flew that Collins-Rector, Shackley, and Pierce were about to be arrested on embezzlement and sexual offenses. Before any charges were filed, though, the three men disappeared.

They didn't turn up again until May 2002, when a tip to Interpol led authorities to raid their luxury villa in Marbella, on the Spanish Riviera—an area British tabloids have dubbed the Costa del Crime due to its high population of English-speaking fugitives. Among the items recovered from the residence were guns, machetes, a trove of jewels, and child pornography. Pierce and Shackley were held for about a month by Spanish police and then released.

The prosecution of Collins-Rector also proved difficult. He remained in a Spanish jail for almost two years, fighting extradition, before finally being brought to the United States, where he pled guilty to eight charges of child enticement, a comparably minor offense. He was soon out of prison—receiving credit for the time he'd served in Spain. Since most of his alleged crimes took place at the mansion in Encino, it was up to L.A. County prosecutors to make any further charges stick, but the DA never took steps to do so. (The L.A. County district attorney's office refused to comment about the status of any DEN investigation.) The victims sought justice in the civil courts, however, winning a total of $4.5 million in summary judgments. Except for a small side agreement with Pierce, the award has yet to be paid, lawyers say.

And like O.J. Simpson, who wound up in a similar legal situation—unpunished for criminal wrongdoing but subject to a large civil judgment—Collins-Rector seems to have little incentive to earn enough money to start paying the plaintiffs. At least, not in his own name. Evidence uncovered by Radar suggests the dot-com pedophile may once again have struck it rich, this time concealing his wealth through a new Internet venture controlled by Brock Pierce. As founder of IGE (Internet Gaming Entertainment), Pierce has made a killing selling broadswords, battle axes, and other assets to enthusiasts of multiplayer online games like EverQuest and World of Warcraft. Headquartered in Hong Kong, the company hires gamers—thought to be Chinese nationals working in virtual sweatshops—to rack up items inside the games and sell them for real-world dollars to participants who have more money than skill. While not illegal, such deals do run afoul of game rules and are detested by many players.

Sales of digital assets could soon be a $7 billion-a-year industry, according to IGE. Pierce, it's safe to assume, has made a fortune. Upon his return from Spain, he made out-of-court settlements for his role in the M&C debauchery.

BAD END Chad's World's bloody denouement
There is good reason to believe, however, that Collins-Rector also has a stake in the company. Daniel Cheren, a lawyer who represented three of the boys in their civil suits, openly voices his suspicions about Collins-Rector's involvement, and suggests that money from the new venture should go to the victims. Among other indications, when IGE first surfaced, it listed an address in Marbella, Spain, the town where the trio hid out. Paperwork for the company's incorporation in the United States was filed by Matt Rector, Collins-Rector's brother, along with Collins-Rector's former business partner, attorney Randy Maslow—then IGE's executive vice president.

The company is under no legal obligation to publicly disclose its finances or investors, and the bulk of its operations remain in Hong Kong. Without a court order obliging IGE to open its books, it's impossible to know whether Collins-Rector is in on the action. The company didn't return calls seeking comment.

Meanwhile, Collins-Rector appears to be up to his old tricks in London. In 2006, a U.S. District Court judge granted him "emergency" permission to leave the country to receive treatment for a brain tumor. Every week, his physician must assure a U.S. probation officer that the medical leave is vital. A spokesperson for the U.S. Attorney's office in Newark, New Jersey, which prosecuted the case against him, acknowledged being aware of Collins-Rector's residence in London, but said his parole was being handled by court officials in Florida and refused further comment.

After Collins-Rector made his cameo in the Sun, it appeared that officials were losing patience with the arrangement and making an effort to bring him back to the United States. "It's a slap in the face to the victims," says attorney Brian Brandt, who represented Daniel.

In a 2007 motion requesting termination of Collins-Rector's supervision requirement, his attorney argued that "life-changing medical events he has experienced have profoundly affected him and augur well for the success of his rehabilitation." In its response to the motion, the U.S. Attorney's office revealed that Collins-Rector had come up with what it called another "ploy to circumvent British immigration law," by claiming he "fell in love" and will form a civil union with a British citizen—which would allow him permanent residence status. As it happens, his love interest—who also works as his personal assistant—is a young man who just turned 18.

This article is from the November issue of Radar magazine. Click here to get a risk-free issue.

11/05/07 2:14 PM
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For what it's worth, here is the original 2000 LA Times expose:

Posted by: joemenn on November 15, 2007 7:13 PM

Oh and one other thing. They fled the country as the Times reported its story, despite multiple legal threats, and reinvigorated the FBI probe--not after the DEN lawsuits. Thanks.

Posted by: joemenn on November 15, 2007 7:48 PM

Posted by: meehawl on November 15, 2007 9:38 PM