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Wedelstedt Gets 13 Months in Englewood

Colorado- Goalie Entertainment owner Edward Wedelstedt was sentenced Thursday to 13 months in Englewood Federal Prison Camp in Littleton, Colorado. Along with his guilty as part of his guilty plea to one count of obscenity,Wedelstedt will also be making restitution to the government in the amount of $325,000.

As part of the agreement, all other charges against Wedelstedt and his wife Vivian, and Goalie Entertainment Holdings have been dismissed with prejudice. Wedelstedt also must perform 120 hours of community service to be completed within one year of his release.

Back story: Wedelstedt says he isn’t afraid to go to prison, but that he is afraid for the children’s charities he has built with earnings from his pornography empire.

The 63-year-old Greenwood Village multimillionaire is scheduled to be sentenced in Texas next month because his company, Goalie Entertainment Holdings Inc., shipped an obscene video across state lines and didn’t report to the Internal Revenue Service cash gifts that Wedelstedt gave some employees.

Wedelstedt expects to spend 13 months behind bars under the terms of his plea bargain.

“As long as they don’t mess with my kids,” he said. “Please don’t screw with the foundation. These kids deserve a break. Let’s not punish the children if somebody thinks I’m a bad guy.”

But some of the children’s charities to which Wedelstedt has contributed are uncomfortable about taking his money, after publicity about his criminal conviction and the fact that his fortune was built on the adult sex industry.

“We’re just very careful who we associate with,” said Mike McCubbin, spokesman for Big Brothers Big Sisters of Colorado Inc., which Eddie’s Kids lists among the dozens of children’s charities it has supported.

“If you know you’re getting money from a disreputable source – and I’m not saying Eddie’s Kids is disreputable – it can kind of taint what you do,” McCubbin said.

Wedelstedt, an ebullient fast-talker who calls women “honey” and describes dressing up as Santa Claus as a boy to go door-to-door giving gifts to the needy, supports kids three ways: Through direct personal donations to children’s charities; through a foundation called Eddie’s Kids, which donates tickets to sports events; and through the Goalie Charitable Foundation. The Goalie Charitable Foundation, according to its Web site, provides “financial assistance to neglected, underprivileged and abused children, children with life-threatening illnesses and children who need financial assistance for education.”

Wedelstedt said Eddie’s Kids alone probably raises about a million dollars a year – much of which comes from those in the sex entertainment business.

“In the adult industry, they write checks to me beyond belief,” Wedelstedt said.

He said Eddie’s Kids provides tickets for about 45,000 children each year to attend major-league and college sporting events, mostly in Colorado and California. At Denver Nuggets basketball games, “Eddie’s Kids” sit in their own section.

“I just care about kids, that’s all,” he said.

But some children’s charities said accepting donations resulting from Wedelstedt’s pornography business puts them in an awkward position.

McCubbin, of Big Brothers Big Sisters of Colorado Inc., said he intended to contact Eddie’s Kids to have a thank-you note from the organization removed from the Eddie’s Kids Web site.

“Your kindness provided so many wonderful experiences . . .” said the note, attributed to Kathryn Grainger of Big Brothers Big Sisters of Colorado Inc.

McCubbin confirmed that Kathryn Grainger is a former employee. But he said he had never heard of Eddie’s Kids.

The tickets that Eddie’s Kids pays for are distributed by Kroenke Sports Enterprises, operator of the Pepsi Center.

“We never received any tickets knowingly from Eddie’s Kids,” McCubbin said. “If we were to get tickets from Eddie’s Kids, we would probably thank them for their generosity and pass on the tickets.”

Kroenke spokesman Paul Andrews confirmed that the sports company’s community relations staff distributes the tickets to charitable organizations.

Andrews said Kroenke Sports officials are aware of Wedelstedt’s profession.

“The Eddie’s Kids foundation for 10 years has provided an opportunity for families and kids that would not have the ability to come to a game . . . We will continue doing business with the Eddie’s Kids foundation,” Andrews said.

Denver Public Schools and several individual schools also are listed among the Eddie’s Kids beneficiaries and mentioned on the Web site.

“Opportunities like this allow kids and their families a moment to forget about their plight and enjoy being together,” says a note attributed to Tim Tennant, Teacher, Denver Public Schools.

DPS spokeswoman Tanya Caughey confirmed that Tennant was a DPS teacher from October 1997 to August 2002. Caughey said the school district doesn’t keep track of ticket donations and doesn’t investigate “established” charities that make donations. “I believe schools would say, ‘No, thank you,’ if approached directly by a pornography business offering to donate sporting event tickets to students,” she said.

Andrews said any group that doesn’t want to accept tickets paid for by Eddie’s Kids should notify Kroenke Sports. “We will respect their wish,” he said.

At the Kempe Children’s Foundation, which fights child abuse and neglect, spokeswoman Lindsey Zimmerman confirmed that Wedelstedt has made personal donations, most recently in 2003. A 1998 newspaper article said Wedelstedt bought two corporate tables at a gala fundraising event that year.

If Wedelstedt should offer more money, “our foundation board of directors would meet to consider that,” Zimmerman said. “When donor issues of this nature are brought to our attention, we deal with those situations on a case-by-case basis.”

Wedelstedt said he was surprised that some local organizations that have accepted his donations have denied knowing about his adult entertainment business.

“Hypocrites,” he said. “They came to my parties, came to my events. Then they turn around and say they didn’t know I was adult?

“They knew,” he said.

Wedelstedt’s business, Goalie Entertainment, operates about 60 “adult entertainment” shops, offering videos, magazines and novelties, in 18 states. There are five stores in Colorado, under the name Romantix.

Wedelstedt said he employs about 1,100 people. A half-dozen of his Texas stores will be forfeited to the federal government as part of Wedelstedt’s plea, as will about $1.25 million seized in raids.

Wedelstedt’s lawyer, Hank Asbill of Washington, D.C., said his client pleaded guilty to shipping one video determined to be obscene across state lines from his California warehouse to his Texas stores via UPS.

“The movie has been deemed obscene by the court only in the Northern District of Texas, and nowhere else in the world,” Asbill said. “That’s out of some 200,000 movies he has shipped to Texas.”

Asbill said Wedelstedt also pleaded guilty to a conspiracy charge for failing to report to the IRS some cash gifts he gave to employees and others.

“Some of them actually reported the cash payments, but Eddie understood that they might not do that,” Asbill said. “Eddie also did not have his corporation deduct those payments as salaries or wages, so the corporation ended up paying more tax than it should have. It overpaid in amounts many times more than the government claimed it lost by virtue of this behavior.”

Federal prosecutors gave a different account.

A federal grand jury in Texas accused Wedelstedt of traveling the country in his company’s Learjet, stuffing cash from back-room video arcades into a black bag. Prosecutors said Wedelstedt admitted conspiring with arcade managers to hide that income from the IRS.

Prosecutors said the video “can generally be described as depicting hard-core pornography.” In exchange for Wedelstedt’s guilty pleas, federal prosecutors agreed to drop related charges against his wife, five employees and his company, and to drop plans to seize his entire multimillion-dollar business empire.

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