Univision subsidiary pleads guilty to payola scheme

A Spanish-language media firm pleaded guilty today in Los Angeles in a cash-for-airplay scheme.

Univision Services Inc., a subsidiary of Univision Communications Inc., entered the plea in U.S. District Court in downtown Los Angeles to one count of conspiracy to commit mail fraud, according to U.S. Attorney Andre Birotte.

The company also agreed to pay a fine of $500,000 to settle the charge, he said.

A call for comment to a Univision representative after regular business hours was not immediately returned.

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According to court documents, Univision Communications formerly owned Univision Music Group, a collection of companies that produced records and published music for the Latin music market.

Univision Services admitted that executives, employees and agents of Univision Music Group conspired to commit, and did commit, mail fraud from about 2002 to September 2006, Birotte said.

The mail fraud was related to a nationwide scheme in which Univision Music Group executives, employees and agents made illegal cash payments to radio programmers and managers in exchange for increased airplay for Univision Music Group recordings, according to prosecutors.

The cash payments were made without on-air acknowledgments or payment of broadcast fees to the radio stations, as required by law, Birotte said.

Employees of Univision Music Group also used bogus invoices and payments to conceal the nature of the cash that funded the payola scheme, he said.

"Illegal cash payments never make for a good business model,'' said Lanny A. Breuer, assistant attorney general of the Criminal Division of the U.S. Justice Department. "Listeners have a right to know if someone has paid for increased air time or promotions.''

Under the plea agreement, Univision Communications, which is no longer involved in the Latin music recording and publishing business, also agreed to cooperate fully with the Justice Department and other law enforcement agencies in related matters, Breuer said.

In a related administrative proceeding, Univision Radio Inc., another subsidiary of Univision Communications, agreed to pay the U.S. Treasury $500,000 and implement a compliance plan to end a parallel investigation by the Federal Communications Commission, Birotte said.

Univision owns 57 TV stations across the U.S., and also owns or programs 70 radio stations in 16 of the top 25 largest Hispanic markets.