A total of 14 people were indicted in Colorado on 84 counts, accused of
bilking investors out of millions of dollars to start a children's cable network
known variously as KidZtime and Children's Cable Network.
The defendants allegedly solicited investments, especially from senior
citizens, for the programming network. Investors bought regional licenses, at
$10,000 a pop, to locally market clean, kid-centered programming.
The Colorado indictments, handed down Feb. 9 and unsealed Tuesday, were the
result of a joint investigation by the state attorney general's office, the
Colorado Division of Securities, the Securities and Exchange Commission and the
Internal Revenue Service, the attorney general's office said.
The defendants -- residents of Colorado, Ohio, California, Montana and
Florida -- were indicted by a grand jury for charges including securities fraud,
theft, racketeering and computer fraud, the attorney general's office said.
The 14 individuals were officers of KidZtime TV Inc., KidZtime TV Management
Group, related fund-raising entities Capital Funding and Capital Group and the
owners and managers of independent sales offices, according to the attorney
general's office and published reports.
Investors were supposed to buy local cable time and sell the advertising,
which would generate profit for them. But many complained that the old shows
they were provided, such as Dusty's Treehouse, were of poor quality. And
many reported that they received no tapes at all.
The Colorado indictment claims that the venture raised $47
million.
