Former UPI and FNN Executive Convicted of Conspiracy Charge
Former UPI and Financial News Network executive Earl Brian was convicted Thursday of conspiring to cover up the companies’ dire financial straits in the late 1980s and early ‘90s.
A federal jury found Brian guilty on 10 counts but deadlocked on three others. The panel acquitted co-defendant John Berentson of conspiracy and deadlocked on 12 other counts.
For the record:
12:00 a.m. Oct. 19, 1996 For the Record
Los Angeles Times Saturday October 19, 1996 Home Edition Business Part D Page 2 Financial Desk 1 inches; 29 words Type of Material: Correction
Media fraud--Because of an editing error, a story in Friday’s editions misstated United Press International’s status. UPI filed for bankruptcy in 1991 and was sold to Middle East Broadcasting Centre in 1992.
Brian’s lawyer, Richard Marmaro, said his client “obviously is very disappointed” and planned to appeal.
It was unclear whether prosecutors would refile charges against Berentson.
Prosecutors claimed the two drafted hundreds of false invoices and other documents to conceal FNN’s losses and help the faltering cable TV network and its New York parent, Infotechnology Inc., obtain $70 million in bank loans.
Infotechnology held controlling interests in FNN and the UPI wire service.
The scheme allegedly inflated Los Angeles-based FNN’s profit by about $50 million between 1988 and 1991, when the company went bankrupt. United Press International also folded that year.
Auditors, financial underwriters and the Securities and Exchange Commission were fooled into thinking FNN and UPI were hugely profitable, federal prosecutors said.
Brian, 53, of Easton, Md., was chairman and chief executive of UPI and FNN. Berentson, 56, of New York, was executive vice president of FNN and UPI’s chief operating officer and vice chairman of the board.
Brian is scheduled to be sentenced Jan. 27. Conspiracy carries a maximum five-year sentence; the maximum for bank fraud is 20 years.
