Pair Charged With Fraud, Perjury : 2 Former Top Executives of Video Station Indicted
Criminal charges of securities fraud and perjury have been brought by a federal grand jury in Los Angeles against George W. Atkinson and his brother, Edward J. Atkinson, former top executives of Video Station, a Los Angeles firm that pioneered the videocassette rental business 10 years ago.
A former employee, Robert A. MacNeil Jr., was also indicted with the Atkinsons on a charge of lying in sworn testimony during a Securities and Exchange Commission investigation. The SEC filed a civil fraud case against the Atkinsons last Sept. 24.
The defendants are to enter pleas at an arraignment Nov. 30 before a federal magistrate.
The indictment, returned Tuesday, charges that George Atkinson, then president of Video Station, and his brother, then its secretary-treasurer, conspired with the firm’s chief financial officer to falsely report profits in 1982, although the firm lost money.
D. Keith Bjelajac, who was not accused in the indictment, was named as the financial officer who carried out the false reporting. Bjelajac was accused in the SEC’s civil suit and consented to a permanent injunction against him without admitting the SEC allegations.
Edward Atkinson was also accused in the indictment of selling 45,000 shares of Video Station stock without disclosing that the information in the SEC filings was false. The Atkinsons and Bjelajac left the company in 1983, and subsequent management filed for protection from creditors under Chapter 11 of the U.S. Bankruptcy Code in December, 1984. The firm resumed operations in 1985 after a court-approved reorganization.
According to the indictment, the Atkinsons arranged to have Bjelajac conceal about $300,000 in accounts payable invoices from the annual financial report for the fiscal year ended Sept. 30, 1982. This resulted in reporting a $203,434 profit instead of a loss for the period, the indictment said.
In a report for the quarter ended Dec. 31, 1982, the invoices that had been concealed were recorded, contributing to a net loss of $387,943, the indictment charged. It added that the Atkinsons caused the loss to be falsely reported as due to expenses of moving to Santa Monica.
Video Station was one of the nation’s major video rental firms in the late 1970s, with 550 outlets operated by individual store owners authorized to use the name.
