Home > News > SEC Charges Penthouse, Others With Fraud • Bookmark   • Newsletters   • Register Search Options

NEWS STORY

SEC Charges Penthouse, Others With Fraud

SEC Charges Penthouse, Others With Fraud
Get XBIZ News
Jan 24, 2005 3:17 PM PST    Text size: 
NEW YORK — Penthouse International Inc., former Penthouse officer Charles Samel and former Penthouse shareholder Jason Galanis were charged with accounting fraud Monday by the Securities and Exchange Commission.

The scheme, the SEC said in a suit filed in U.S. District Court, converted a $1 million quarterly loss to a profit.

Regulators said Penthouse issued inflated quarterly results in March 2003 with an electronic signature certifying they had been reviewed by Penthouse founder Robert Guccione, then the chief executive and chief financial officer.

But the SEC said the report was not reviewed by Guccione or the company's outside auditor and general counsel. Guccione resigned from the company in 2003.

The SEC said Guccione was hit with violating the Sarbanes-Oxley Act, a package of accounting reforms adopted by Congress in 2002. Guccione wasn't fined, but he agreed to cease and desist from future violations.

Regulators said Samel and Galanis filed the quarterly report and included a $1 million payment on a multiyear business agreement that wasn't signed until the following quarter.

The SEC's lawsuit seeks to fine Penthouse, Samel and Galanis, and bar them from future accounting violations. Regulators also want to ban Samel and Galanis from serving as officers or directors of a U.S. public company.

Samel, who lives in Sherman Oaks, Calif., owns about 4 percent of Penthouse’s common stock, according to court documents.

Galanis, of Santa Monica, Calif., owns about 8 percent of Penthouse shares through Molina Vector Investment Trust, where he serves as chairman and CEO.

Galanis is the son of white-collar criminal John Peter Galanis, who bilked investors of more than $400 million, and was arrested but not charged in a San Diego drug bust targeting ecstasy manufacturers and distributors.

Galanis and Garrett Bender, iBill’s former chief executive, created Media Billing, which was formed last year to purchase iBill.

Galanis told Forbes magazine last year that he was only acting as an intermediary for a “handsome fee” in the iBill deal, not as a principal, on behalf of Luis Enrique Fernando Molina, who was the majority stockholder of Penthouse International.

IBill is now owned by PHSL, a division of the Molina Vector Investment Trust.

At the time, Galanis described himself to Forbes magazine as a “part of the investment banking team” that took Penthouse magazine public in 2002, then helped Molina in a deal in November to put another $107 million into Penthouse in a real estate/equity swap.

Galanis was also identified in 2003 as the only person associated with Penthouse Financial, a separate company that controls Penthouse’s website. Galanis at the time said it was more of a licensing deal, and that the contract has since been terminated.

Penthouse is currently published by Penthouse Media Group, formerly known as General Media. Penthouse Media recently emerged from Chapter 11 bankruptcy protection and reorganized under the majority ownership of financier Marc Bell.

More ways to get XBIZ News:  RSS Feeds  |  E-Newsletters  |  Desktop Widget  |  Mobile
Looking for porn star news and behind-the-scene videos? Check out XFANZ.com !

OPINIONS & VIEWS

Adult Industry Keeps Fighting On

On Nov. 8, we had one of the most momentous — and to political observers, improbable — victories in the history of our industry. We defeated, by popular vote, a purportedly progressive measure... More »

Finding the Right Payment Business Model

One consistency among nearly all paysite owners is that they are creatures of habit. After all, how else could someone tirelessly produce or procure similar content steadily in order to update their commercial... More »

What Payment Plan Suits Your Bottom Line

The most disappointing aspect of merchant processing is having to tell a merchant that all domestic options have been exhausted and that there isn’t a bank in the U.S. willing to open a merchant... More »
XBIZ NEWSLETTERS
Stay informed of the latest industry developments. Get XBIZ newsletters delivered to your inbox. Subscribe today!
Enter email address:

* To manage existing subscriptions click here.






POPULAR PRODUCTS & SERVICES
Submit your press release to
multiple news outlets with 1 click.
Subscribe to RSS news feeds or
add free content to your website.
Access XBIZ news and articles
with your mobile device.
Subscribe to XBIZ World magazine, the industry's leading e-commerce trade publication, delivering in-depth coverage of the online, mobile and ancillary digital markets.

UPCOMING EVENTS

XBIZ 2017

Jan 09 - Jan 13
Hollywood, CA

XBIZ Awards 2017

Jan 12 - Jan 12
Los Angeles, CA

ANME Founders Show

Jan 14 - Jan 15
Los Angeles Marriott Burbank Airport

Everything To Do With Sex Show

Jan 20 - Jan 22
Montréal, Québec
Everyday thousands of business professionals browse XBIZ's industry directory for quality products and services. Not listed yet? Your company could be losing potential new business. Submit your company today!
Use XBIZ RSS feeds to stay informed of the latest industry developments or as a content syndication tool for your website!