Mobsters and super hackers have joined forces to shut out sex industry rivals, a Nevada public hearing heard this week.

Larry Duke Reubel, 63, told the Public Utilities Commission hearing how his business had been closed by telephone hackers using lax security at telecoms company Sprint to redirect calls to rivals.

Reubel publishes a sexual services magazine which is distributed by hand to thousands of passing tourists up and down Las Vegas Boulevard every day. If anyone rings one of the services, Reubel gets a commission.

He told the hearing that the phones suddenly stopped ringing for no apparent reason. He blamed Sprint for the problem, which told the hearing that it had run tests on the phone and found nothing wrong.

The telco ran a script at its switching control centre that periodically checked Reubel's lines for covert call-forwarding, but did not find any evidence. It also examined his lines and found no physical taps.

Eddie Munoz, 43, who brought the case, claimed that the Las Vegas telecoms infrastructure is secretly controlled by super hackers working for mobsters.

Others at the hearing are expected to tell of similar cases. Munoz said that he will present evidence of calls diverted or tapped by competitors.

Reubel's is the most common situation, where calls are blocked and the caller hears silence or an engaged signal.

Six members of the Gambino crime family were actually caught by an undercover investigation as they tried to muscle in on the phone racket in 1998, according to an FBI testimony at the hearing.

Although that criminal case was successful, Sprint denied all responsibility for the hacks.

But Sprint's security has been compromised before, including more famously by Kevin Mitnick between 1992 until his February 1995 arrest. Mitnick's access gave him the power to monitor or reprogram any phone line in town.

Munoz also suffered from a similar scam which he claims is still operating. He said that the 15 to 20 calls a night he received for each advertisement is now down to just one.

Callers from outside Las Vegas, or from payphones and mobile phones, are able to get through, he said, but hotel callers frequently get false busy signals, or silence, driving them to competing services.

His first complaint against Sprint was filed with the Public Utilities Commission in 1994. It took two more complaints and an abortive Federal writ before Commission staff launched an investigation.