Scandal-Rocked Firm to Open Airport Store : Burbank: Paradies Shops has a contract for four outlets. The owner was convicted in Atlanta of conspiracy and mail fraud.

An Atlanta-based concessionaire convicted last month of felony mail fraud and conspiracy in a corruption scandal that rocked the Georgia capital is scheduled to set up shop at Burbank Airport in April.

The Paradies Shops, one of the nation’s largest airport news and gift concession agents, will take over three stores at Burbank and open a fourth after the current concessionaire’s contract expires March 31. The 34-year-old company outbid five others for the space and won the contract in December.

However, a federal jury last month found The Paradies Shops and its owner, Daniel M. Paradies, guilty on 83 counts of mail fraud in one of the most politically charged trials in Atlanta history.

Daniel Paradies was also convicted on one count of conspiracy for his role in a scheme to funnel more than $1 million in illegal payoffs to a prominent former city official and airport commissioner.

Burbank Airport officials said Thursday that they are aware of the conviction, but that their agreement with The Paradies Shops would stand.

“I accept the fact that there’s been a judgment rendered. . . . But we’re not going to say that because there was a conviction back East there’s automatically a loss of your concession out here,” said Robert Garcin, president of the Burbank-Glendale-Pasadena Airport Authority. “We have a contract,” Garcin said. “We have to honor the contract.” But he added that the matter has been referred to the airport’s legal counsel but did not elaborate.

Richard Dickson, senior vice president of The Paradies Shops, insisted that his company would have no trouble meeting its obligations at Burbank.

“We don’t have any question that we would be able to perform all of our commitments,” Dickson said.

However, in a letter sent to authority members last week, Assemblyman Richard Polanco (D-Los Angeles) urged the airport to cancel its contract with Paradies as “a prudent public interest decision.”

In an interview, Polanco acknowledged that his letter was spurred by a complaint from an unsuccessful rival bidder for the concession, MBE Inc. in South Pasadena. But he reiterated his contention that the contract does not represent “good public policy.”

“Do you want to reward the leadership of companies that have been convicted of felonies?” Polanco said. “I don’t think so.”

He noted that Denver city officials have decided to end their relationship with Paradies, even though opening day for the new Denver International Airport is scheduled in less than two weeks.

But Mark K. McBee, Burbank Airport’s manager of contracts and properties, said the airport’s contract with Paradies does not allow for termination solely because the vendor has been convicted of criminal charges.

“We don’t feel it’s going to impact their ability to operate at Burbank Airport from what we know,” he said.

A spokeswoman for John Wayne International Airport in Orange County said the company’s two stores have performed “very satisfactorily” since they began four years ago and that there are no plans to review The Paradies Shops’ 10-year contract. The company does not do business at Los Angeles International Airport.

The company, which logged $100 million in sales last year and operates in 38 cities around the country, landed the Burbank concession after a search process spanning several months. Six proposals were submitted to Burbank Airport, and the list was winnowed to two in November: The Paradies Shops and British concern W.H. Smith, both of which guaranteed the airport at least $2.4 million in rent over a five-year period.

At the time, Daniel Paradies and his company were under indictment on fraud and conspiracy charges, and as required, his bid mentioned that both he and The Paradies Shops had been named as defendants in a criminal action in Georgia.

But based on expected revenue and the company’s plans for a golf-themed specialty shop, Burbank Airport staff members recommended approval of the Paradies bid as “a superior proposal,” according to an agenda report. The airport authority voted unanimously to award the contract to Paradies at its Dec. 20 meeting, praising Paradies-owned shops as “just outstanding” and “a beautiful, quality operation.”

The 5 1/2-minute discussion did not raise the indictment issue. Authority and staff members agree that commissioners had been briefed, but officials said Thursday that it did not seem necessary to bring up the matter again.

“It was no secret,” said Thomas Greer, director of airport services.

Convictions in the Atlanta case were not handed down until Jan. 22, after a sensational three-week trial.

Within days of the verdict, Denver Mayor Wellington Webb announced that he would seek to end his city’s relationship with The Paradies Shops. Officials say The Paradies Shops has agreed to let other companies buy out nine of the contracts where it is the sole owner and an additional nine contracts where it forms part of a joint venture.

“The mayor just felt that he didn’t want that cloud over the new airport. He felt that was not a standard that Denver could live with,” said Briggs Gamblin, an aide to Webb.

For its mail fraud convictions, the company faces maximum fines of $500,000 for each count. Daniel Paradies, who remains free on bond, could receive up to five years in prison and a $250,000 fine for each mail fraud count. The conspiracy conviction could also net a five-year prison term and $250,000 fine.

Sentencing is scheduled for April 15. Paradies, 72, has vowed to appeal.