Former owners of Psychic Friends Network settle SEC charges

PHILADELPHIA -- Four former executives of a defunct company that once owned Dionne Warwick's Psychic Friends Network have settled financial fraud charges with the Securities and Exchange Commission.

The SEC said officers of Regal Communications inflated the company's worth to defraud investors in the early 1990s, when Regal bought the infomercial firm that ran the Psychic Friends phone service and two other companies owned by television personality Joan Rivers.

As part of the settlement filed Friday, Regal's former chief financial officer, Bruce Edmondson, and former chief executive, Arthur Toll, were barred from serving as officers of any public company. Regal's former in-house lawyer, Elliot Fisher, was barred from representing companies before the SEC.

The SEC also ordered the executives to pay back "ill-gotten gains," amounting to about $2.2 million.

Dionne Warwick lent her name to the phone service, in which people paid to talk on the telephone with people claiming to be psychics, and pitched it in television infomercials.

In all, the executives shuffled nearly $23 million from Regal's checking accounts into the accounts of other companies they controlled, then back to Regal, in an attempt to create the illusion of a large revenue stream, prosecutors said.

The executives were not required to admit wrongdoing, but Toll pleaded guilty to securities fraud, mail fraud and other charges in 1999 and was sentenced to 48 months in prison.

Edmondson pleaded guilty to similar charges and was sentenced to 36 months.

Fisher pleaded guilty to conspiracy and was sentenced to six months in jail. Former Regal board member Gerald Levinson pleaded guilty to filing a false tax return and was sentenced to probation.