Dallas- The owner of a local adult entertainment store is facing jail time and heavy fines after a federal grand jury in Dallas returned a 23-count indictment on racketeering, obscenity and tax charges.

Edward Joseph Wedel-stedt, owner of Colorado-based Goalie Entertainment Holdings Inc., is one of seven people named in the indictment.

Goalie Entertainment is the parent company of adult entertainment centers in 18 states , including Studio One in Sioux Falls. The store, located at 309 N. Dakota Ave., remains open.

Among the charges in the indictment, which was returned last month, is that Wendelstedt filled out false sales-tax forms in South Dakota.

Wedelstedt is out on bail until his jury trial, which is scheduled to start May 9. He and the other defendants have requested a continuance until January 2006.

The indictment is the result of a 10-year investigation that culminated in 2,080 boxes of documentation. Charges include racketeering, selling and transporting obscene material and conspiracy to defraud the United States in the ascertainment and collection of taxes.

Each obscenity, tax fraud and conspiracy charge could bring Wedelstedt up to a $250,000 fine and five years in jail. Racketeering charges could bring up to 20 years in prison and a $250,000 fine. The U.S. also seeks forfeiture of assets.

Included in the indictment is the allegation that Studio One employees were ordered on four separate occasions to fill out false sales tax forms. The forms were understated and excluded gross sales from video arcades and bill changers, according to the indictment.

The amount of taxes owed to the state was not available. Stores in Iowa and North Dakota, also are alleged to have filled out fraudulent sales tax forms.

Wedelstedt and several others also are accused of defrauding the Internal Revenue Service by concealing the amount of income, true management, control and operation and source of funds used to grow the business, which led to the impaired reporting of personal and corporate income taxes.

The indictment goes so far a to allege Wedelstedt took cash from the arcades in Texas and flew the money to Colorado on the company’s Lear Jet.

“These charges allege that the defendants ran a criminal enterprise that pandered obscene materials throughout the United States,” said Christopher Wray, assistant attorney general of the criminal division.

“Effective use of law enforcement’s full arsenal is essential to stop purveyors of obscenity from distributing their offensive and degrading material.”

Wedelstedt pled not guilty to the charges and his lawyer, Henry Asbill, expects him to be acquitted.

“He definitely plans to stay in business, not only between now and the time of the trial but after as well, because we expect to win the trial,” Asbill said.

Besides selling explicit videos, magazines and novelty items, the stores have video arcades or “peep-show arcades” where customers can view selected movies, according to the indictment.

Six videos are named in the indictment that were found by the grand jury to be obscene using the Miller Test.

According to Bryan Sierra, a spokesman for the U.S. Department of justice, the Miller Test includes three criteria:

The material is obscene according to community standards. It has an unhealthy interest in sex and is patently offensive. It lacks any serious artistic, literary, political, educational or scientific value.

Asbill said he was unsure what locations were sent copies of the six video titles. Since the jury and community decides, one community could decide a video is obscene while another community might not, Asbill explained.

“The bottom line here is there is nobody who has ever purchased these movies from my client who is not an adult,” Asbill said.

Also named in the indictment are Goalie Entertainment Holdings Inc., Vivian Lee Schoug, Arthur Morris Boten, James Randal Martinson, Jeffrey Mark Parrish, Leroy Moore Sr. and Beverly Kan Van Dusen