By Mark Kernes
02/25/2008
PHOENIX – The pre-sentence report on Five Star Video and
Five Star Video Outlet was remarkably honest.
Under "Sentencing Recommendation," Senior U.S.
Probation Officer Shawn T. Shear, after advising that no fine be levied, though
recommending a "special assessment" of $400 per count – "special
assessments" are recommended in all cases – and putting the two
corporations on two years' probation each, Ms. Shear wrote, as
"Justification" for her conclusions, "In an effort to prosecute
JM Productions and [Jeff Steward] for obscene material somewhere other than
California, the Obscenity Task Force conducted an internet search and came upon
the Five Star entities in Arizona. After ordering and receiving certain JM
Productions videos via the www.Fivestardvd.com website, several FBI agents
conducted a search on the Five Star premises. It was determined JM Productions
videos constituted less than 1 percent of Five Star's inventories. Following
the search, Five Star owners purged their warehouse of any stock which was
similar in nature to the JM Productions videos."
There it was in the pre-sentence report, the primary fact
that it took hours of questioning for an FBI agent finally to admit from the
witness stand: The government had targeted JM Productions, and realizing it
likely could not find 12 jurors in the state of California willing to convict
the company for producing "obscene" materials, looked around for an
out-of-state patsy.
Then, after managing to get Five Star Video to send the
targeted JM videos to an FBI agent in Virginia, and after browbeating then-U.S.
Attorney Paul Charlton into filing charges against the companies – recall that
Obscenity Prosecution Task Force head Brent Ward claimed that Charlton and
another U.S. attorney were "unwilling to take good cases we have presented
to them," a charge that led directly to Charlton's firing in December, '06
– the government not only failed to produce enough evidence to try JM and
Steward, but was unable to produce enough evidence to keep Five Star's owners in
the case after the prosecution had rested.
Officer Shear also noted in her report that Five Star's
owners had ordered employees more than a year before indictment to purge
inventory of material they felt might violate "community guidelines
related to adult pornography," and that the owners had agreed to testify
against JM and Steward as part of a plea arrangement, but because the
government had waited until the day trial was to begin to accept the offer,
they were unable to make the deal work.
"In consideration of all of the above ... a two-year
term of probation is recommended," Shear wrote, "as there is no
history of prior misconduct, no threat to the community, and no need of
deterrence."
And as to the "Victim Impact" of the defendants'
actions?
"There are no identifiable victims of the
offense," the report reads.
"That's the key to it: You draw a good probation
officer; she was fair, she understood; she listed all the debts in the report
and she recommended no fine, and the judge bought it," summarized Richard
Hertzberg, attorney for the corporations. "There's a fee that everybody's
got to pay, and the judge felt my clients would have to pay it as corporate officers,
and it's $800 per corporation, so it's $1600. She inquired of them their
finances, and they're going to pay it at $25 a month, but those federal fines
can be hundreds of thousands of dollars."
In fact, the now-depleted corporations could have been fined
up to $500,000 for each count, for a total of $2 million.
"If they'd been ordered to pay a fine, I don't know
what we would have done," Hertzberg said. "We couldn't have paid it.
They could have forced us into receivership or bankruptcy. They still could go
into bankruptcy because nobody's getting paid. The business is closed."
"You know, that was the deal we offered them months
ago," Hertzberg continued. "[Assistant U.S. Attorney] Paul Rood and I
had it all worked out: If you let my guys go, we'll close the businesses. We
weren't doing that well anyway. Just to escape the possibility of going to
prison. And Paul Rood, who was real sharp, knew that was the way to go."
And that, of course, was the ultimate government victory:
Even though the government spent, at minimum, several hundred thousand dollars
to bring the JM/Five Star case to trial, and though it failed to convict JM, Steward, and Five
Star's owners, it nonetheless got almost exactly what it wanted: Two more adult
businesses closed, and six more defendants forced to pay hundreds of thousands
of dollars to defend themselves against charges that at least one (now former)
U.S. Attorney was savvy enough to realize should never have been brought.
Reflected Hertzberg, "I would think this would be the
kind of jury [verdict] that would tell the government, 'Maybe we ought not go
back to Arizona, because they weren't that totally offended, as bad as those
films were, that they had to nail everybody'."
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