The 54-page indictment alleges that Wedelstedt, his company and co-defendants conducted “a criminal enterprise with the principal aim of distributing obscenity and mailing fraudulent tax returns.” Specifically, the government is claiming that Wedelstedt ran a cash business and conspired with his co-defendants to obscure the company’s true revenues. Goalie Entertainment Holdings operates 60 stores in 18 states.
The six other individuals named in the indictment reportedly include several managers of Goalie Entertainment’s Romantix stores and Wedelstedt’s wife. They are Vivian Lee Schoug of Littleton, Colo.; Arthur Morris Boten of Des Moines, Iowa; James Randal Martinson of Memphis, Tenn.; Jeffrey Mark Parrish of Denver, Colo.; and Leroy Moore, Sr. and Beverly Van Dusen, both of Arlington, Texas.
The obscenity charges stem primarily from the sale of six videotapes and DVDs deemed by the grand jury to contain “patently offensive depictions of adults performing sexual conduct,” while the tax-evasion charges are based on the accusation that Wedelstedt failed to report large sums of cash income generated at his stores’ video coin operated peep show services. The videos named in the indictment are “American Bukkake 7,” “American Bukkake 8,” “Cumshots 4,” “Gangbang Angels 11,” “1 In The Pink, 1 In The Stink 5” and “Tits and Ass 8.”
The indictment, filed jointly by the Justice Department, the Department of Homeland Security’s U.S. Immigration and Customs Enforcement and the Internal Revenue Service, falls under the federal government’s Racketeer Influenced and Corrupt Organizations (RICO) Act, originally designed to prosecute and break up the mafia.
Among the specific charges are conspiracy to engage in the business of selling and transferring obscene material, engaging in the business of selling and transferring obscene matter, the interstate transportation and sale of obscene materials and conspiracy to defraud the United States in the ascertainment and collection of taxes.
Each count charging substantive obscenity violations, tax fraud or conspiracy carries a maximum penalty of five years in prison and a $250,000 fine.
Prosecutors also are seeking to seize at least $48 million in assets derived from and related to the alleged criminal activities, as well as all shares of stocks and a Lear Jet owned by Wedelstedt and his company.
“The government is basically seeking to forfeit these stores or businesses that were part of the criminal activity or criminal enterprise that he ran,” said IRS investigator John Harrison.
But Wedelstedt’s lawyer, Henry Asbill, said the indictment has no basis. “He distributes adult movies to consenting adults in adults-only stores,” Asbill said. “Anyone who watches a movie that he distributes is an adult who watches it by choice. It’s legal.” Asbill added that evidence will show Goalie Entertainment Holding paid its fair share of taxes.
Wedelstedt is well known in the Denver community for his philanthropic activities. He is frequently mentioned in Colorado newspaper society columns as a generous donor to such causes as the Kempe Children’s Foundation, which combats child abuse, the Denver Nuggets Wives Organization, which funds various children’s services, and Wedelstedt’s own nonprofit foundation, Eddie’s Kids, which donates tickets to major league sporting events to poor children.