MEXICAN CHILD PORN RING SQUASHED : INVESTIGATORS SAY NETWORK USING ACAPULCO BOYS WAS RUN BY 3 AMERICANS.

Byline: Julia Preston The New York Times

On any sultry Acapulco night, Mexican boys move among the partying crowds on the oceanside boulevard, doing whatever they can to make a small living.

For a dollar or so, the street boys will dive from a high rock into roaring surf. At busy street corners they become human flame throwers, spitting mouthfuls of lighted kerosene into arcs of fire, then passing the cup to motorists before the traffic signal turns green.

Some of the boys who roam the streets used to earn a meal and a place to sleep by following American men to their Acapulco hideaways and having sex with them or with one another in front of a video camera, investigators say.

With a series of arrests that began in May, the United States Postal Service closed down what it said was the biggest child pornography production and distribution ring American law enforcement had ever seen. The $500,000-a-year business was run by three Americans, they said, and was based in a high-priced hillside home overlooking Acapulco's world famous bay.

In the thousands of videos and photographs seized from the business by Mexican and American police officers, investigators counted about 300 boys who appeared to be underage Mexicans. Many were recruited on beaches, in public parks and on the doorsteps of bars in Acapulco, they say. The youngest children looked to be no more than 7 years old.

So far, 56 people across the United States have been arrested and charged with receiving by mail order videotapes showing sex involving underage boys. Officials expect the number of arrests to exceed 100.

Postal investigators say the ringleader was Clair Anthony ``Troy'' Frank, a fugitive from American justice with a criminal record for molesting minors and selling child pornography that stretched from Colorado to the Netherlands. He made hundreds of videos in and around Acapulco, including many at poolside on his own front patio. In some of the films, sex with minors was accompanied by violent beatings.

The breakup of the operation, which has prompted Mexico's attorney general to call for tighter laws, has exposed an underside of the global economy that is rarely seen. The explosion in travel and free trade between the United States and poorer countries like Mexico and the myriad new possibilities for cross-border electronic communications have made it harder to track the international flow of child pornography, investigators and child abuse experts said.

With enforcement more difficult, the market in the United States for child pornography is expanding, and with it the risk that foreign children will be used to meet the demand.

American officials said Frank's film business was finished. On Aug. 2, 1995, he was found dead at the age of 46 in his residence here with a gunshot wound to the head, in what the local police have so far described as a suicide. One man wanted in the United States and Mexico as a partner, John William Willets of Sunnyvale, Calif., is a fugitive. Another man accused of being a partner, James Leroy Kemmish, was arrested in San Diego in 1994 and pleaded guilty seven months ago to charges of distributing child pornography through the mail. He is serving a five-year sentence.

But many people who inhabit Acapulco's central square, where the lush shade trees and the quaint gazebo serve as shelters and the stone benches serve as beds, still talk abou the ``gringo,'' the American's who offered to pay them to perform on camera.