By BEN SILVERMAN

June 10, 2002

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DotcomScoop.com

THESE guys would make even R. Kelly blush.

Marc Collins-Rector, Chad Shackley and Brock Pierce, the disgraced co-founders of Digital Entertainment Network (DEN.net), have been arrested in the Spanish resort town of Marbella, The Post has learned.

Collins-Rector had been indicted by the U.S. District Attorney in Newark in August 2000 on five counts of transporting a minor across state lines for the purpose of engaging in sex.

Shackley and Pierce were arrested when a warrant on Collins-Rector was served, said a Spanish law enforcement official. The source, and U.S. law enforcement officials who confirmed the arrests, said charges relate to child pornography found where the two were living.

"Enormous amounts of child porn" were found in the house, the Spanish law enforcement source said.

Michael Drewniak, a spokesperson for the Newark District Attorney's office, said papers for Collins-Rector's extradition are being prepared. Each charge against him carries a maximum prison sentence of fifteen years.

Pierce is a former actor who starred in Disney movies such as "The Mighty Ducks" and "Little Big League" in the early '90s.

The men have been sued in the past for allegedly raping, drugging and threatening to kill teenage boys while they still ran the now-defunct DEN.net.

"We knew for some time that [Collins-Rector] was essentially in the wind and we will be happy to have him back, thanks to the Spanish authorities," Drewniak told The Post.

Representatives of the National Police in Spain, the FBI-type organization that arrested the trio, declined comment.

New lawyers for the three could not be found. A lawyer who did some work for Collins-Rector said he was unaware of the trio's arrest, and a civil lawyer who represented the three in lawsuits said he has not had contact with his former clients in more than a year. He said he was "shocked" by the arrests.

The FBI would not confirm that Collins-Rector, Shackley, Pierce or DEN.net have ever been the subject of an investigation. But press reports indicate the FBI has been investigating the trio since late 1999. Sources said their arrest has reopened the investigation.

Published reports indicate that the FBI has been tailing the trio for some time, but their whereabouts has been thought to be anywhere from Florida to Thailand.

As recently as December 2001, a Web site for a murky Internet company based in the Caribbean but with offices in London listed Collins-Rectors and Shackley as founders. The Web site has since disappeared. The three were running at least one Internet-based business at the time of the arrests, said a source in Spain.

This twist could be DEN.net's final chapter.

A one-time high-flying Internet company that tried to capitalize on the growing broadband entertainment market, DEN.net fell to earth just weeks before a scheduled $75 million initial public offering in late 1999. That's when a New Jersey youth sued Collins-Rector, claiming he had been seduced by him while working for Concentric Networks, a network services company that Collins-Rector founded and later sold to XO Communications.

The news sent a shock wave through DEN.net. Collins-Rector, who was indicted, Shackley and Pierce resigned and then fled the country following reports of a possible FBI inquiry.

Press reports indicate the three had lived in an Encino mansion and turned it into a sex den. Ex-employees of the company deny knowing what they were up to but told The Post they felt something "wrong was going on."

A lawsuit brought by three young men resulted in a $4.5 million default judgment against Collins-Rector, Shackley and Pierce. Another lawsuit filed against the three, the company and other directors was settled for an undisclosed sum late last year, according to Brian Brandt, the lawyer for that minor. The lawsuits claim the men raped, drugged and threatened to kill the youths, some of whom were on DEN.net's payroll.

"We were really interested in finding these guys so they could face justice for what they've done," Brandt told The Post.