L.V. firm named in kiddie T.V. scam

Tuesday, May 12, 1998 | 10:16 a.m.

Investors were swindled out of more than $17 million by promoters affiliated with a Las Vegas company that promised to launch a cable network devoted to wholesome children's programming, a lawsuit claims.

The Children's Cable Network never aired more than a few hours of programming a week on some channels, according to a class-action lawsuit filed on behalf of 1,200 investors last month in Los Angeles County Superior Court.

The Federal Trade Commission is investigating several companies and individuals in connection with the network, the Los Angeles Times reported Monday, citing sources it did not name.

In addition, securities regulators in Utah, Kansas and Alabama have prohibited trading in the stock of Olympic Entertainment Group Inc., the Las Vegas company that owns CCN.

Nevada securities regulators haven't moved against Olympic.

"We have not taken any action," said Charles Moore, director of enforcement for the Nevada Securities Division. "Today is the first I've ever heard of the company."

Olympic denied any wrongdoing.

"No one I know in this entire operation had any intention of defrauding anybody," Dominic Orsatti, chairman of Olympic Entertainment Group, told the Times.

The lawsuit accuses Olympic, Orsatti, former Children's Cable Network President Michael Marcovsky and dozens of investment promoters of fraud, negligence and conspiracy.

Orsatti said Olympic buys cable rights to nonviolent children's shows, then relicenses the programming for an annual fee to independent "affiliates" on an exclusive regional basis.

Some of those affiliates may have been unable to find cable systems to carry their programming or to sell advertising on shows that aired, Orsatti said.

"I'm sorry these people lost money, but I can show you franchises from major corporations that haven't made it," Orsatti said.

In a news release, Orsatti said the company has never sold any securities to any of the people who filed the suit.

"The lawsuit is without merit and is based on ignorance of the facts and will be vigorously defended," Orsatti said in the statement.

But investors want their money back.

"It appears we were totally swindled of our funds by the people involved," said Walter Stump, a Pennsylvania Realtor who sank $90,000 into the cable venture. "Long term, it could have been a sound investment if we weren't dealing with unscrupulous people."