This is a Sept. 5, 1995, story by The Associated Press on the indictment of Earl Brian and other top UPI officials:
EXECUTIVES HID POOR LEDGERS, FCC SAYS
LOS ANGELES (AP) --Two former top officials of United Press International and Financial News Network were indicted Tuesday on charges of conspiring to conceal the companies' poor financial condition in the late 1980s.
Former UPI and FNN Chairman Earl W. Brian and his chief operating officer, John F. Berentson, were accused in the 24-count indictment of lying to obtain $56 million in bank loans in 1989.
Brian headed Infotechnology Inc., a New York company with controlling interests in UPI, the international wire service, and FNN, a business and financial news cable TV network.
Brian and Berentson are accused of falsifying FNN's books to deceive banks, regulators and investors, using millions of dollars from fraudulent lease transactions to keep the companies running, and lying to their outside accountants to conceal the scams.
Brian's attorney, Richard Marmaro, said he hadn't seen the indictment and declined comment. Berentson's attorney, Mark Beck, said Berentson will dispute the charges.
In 1993, Brian settled Securities and Exchange Commission charges of inflating FNN's revenues by millions of dollars, with no admission of guilt.
Three executives named in the SEC suit, C. Steven Bolen, Gary A. Prince and Mitchell H. Young, were named as co-conspirators in the indictment. Prosecutors said Bolen and Prince were cooperating with the government.
Bolen has pleaded guilty to charges of conspiracy, securities fraud and bank fraud and Prince to charges of conspiracy and making false statements to the SEC. Young was to be arraigned Monday.
Los Angeles-based FNN, which sustained losses totaling $72.4 million in 1990, filed for bankruptcy protection in 1991 and later sold its core media operations to CNBC, a division of the National Broadcasting Corp.
UPI, once the second-largest U.S.-based news service after The Associated Press, was founded as United Press by E.W. Scripps in 1907 and merged with William Randolph Hearst's International News Service in 1958. It was sold in 1982 and filed for bankruptcy protection in 1991. It was sold in 1992 to Middle East Broadcasting Centre.
Brian, 53, was secretary of California's Health and Welfare Agency when Ronald Reagan was governor. He sought the GOP nomination against Democratic Sen. Alan Cranston in 1984, but lost in the primary.
Key Dates in UPI History
Here are some important dates in the history of United Press International: * June 21, 1907 - United Press founded by E.W. Scripps as a privately owned wire service. Transmits 12,000 words of Morse code over leased telegraph lines to 369 afternoon newspapers. *1935 - Begins tailoring news for broadcasters. *1952 - Scripps sells UP its Acme Newspictures photo agency, which formerly operated as a sister company to UP.
*May 1958 - UP merges with William Randolph Hearst's International News Service and is renamed United Press International. UPI has 6,000 employees and serves 5000 newspaper and broadcast clients.
*1982 - After subsidizing UPI's losses for years, the Scripps family sells the service to Tennessee businessmen Douglas Ruhe and William Geissler for $1 and agrees to contribute $5 million to see the service through the transition.
* 1984 - Financial difficulties force mployees to take a 25 percent wage cut to keep UPI afloat.
* 1985 - UPI files for protection from its creditors under Chapter 11 of the federal Bankruptcy Code and a wave of layoffs begin.
* June 1986 - Ruhe and Geissler sell UPI to Mexican businessmen Mario Vazquez-Rana and Houston real estate developer Joe Russo, who were selected over rival bidder Financial News Network, for $41 million. Vazquez-Rana, who controls 90 percent of the company, promises to continue UPI as a general news service.
* February 1988 - Vazquez-Rana sells 10-year management rights to UPI to Infotechnology Inc., which owns 46 percent of Financial News Network. UPI, which lost $40 million in the past two years, seeks to differentiate its news service by covering less local news and focusing on major news events, enterprise stories and explanatory journalism.
* September 1990 - New round of financial problems prompt another massive wave of layoffs.
* November 1990 - Company seeks and wins employee approval for 35 percent wage cut while new investors are sought.
* March 1991 - Infotechnology and FNN seek Chapter 11 protection from creditors.
* Aug. 28, 1991 - UPI seeks to reorganize under Chapter 11, listing $65.2 million in liabilities and $22.7 million in assets. The company says it has 586 employees.
* June 28, 1992 - Middle East Broadcasting Centre Ltd. of London purchases UPI for $3.6 million. The principal owner of Middle East Broadcasting, Sheik Walid Al-Ibrahim, is a brother-in-law of Saudi King Fahd.