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Video Game Seller Misled Investors, State Says in Suit

August 21, 1986|GREG JOHNSON | Times Staff Writer

SAN DIEGO — A Westlake Village company that sold video game machines patterned after the popular Trivial Pursuit board game attracted buyers by falsely representing itself as being allied with the Anheuser-Busch brewery, according to lawsuits filed recently in San Diego and Los Angeles.

The supposed involvement of Anheuser-Busch, headquartered in St. Louis, helped to persuade at least 40 California investors, including at least three in San Diego, to purchase varying numbers of the $3,500 coin-operated machines from Westlake Village-based Telstar Products Division Inc., according to a lawsuit filed Wednesday in San Diego Superior Court by the state attorney general's office.

Anheuser-Busch distanced itself from Telstar Products Division on Aug. 13 when it filed a 31-page complaint in Superior Court in Los Angeles that accused Telstar and a New Jersey company that manufactured the devices of trademark and trade name infringements and unfair competition. The machines display the brewer's logo and play its commercial jingle when the game is under way.

Attorneys for Anheuser-Busch in Los Angeles were not available for comment.

'Quality of Locations'

"Everyone we've spoken to has been misled by Telstar Products Division through substantial misrepresentations about the amount of money the machines would return and the quality of locations in which they'd be located," said Deputy Atty. Gen. M. Howard Wayne, who has been investigating complaints about Telstar since February.

The suit, which charges Telstar with violating disclosure requirements and taking excessive down payments, seeks to stop the company from selling the machines in California. It also seeks restitution for buyers and at least $500,000 in civil penalties.

Telstar "denies the allegations" contained in both suits, according to Gerald Chizever, a Los Angeles attorney for Telstar, who characterized investors who complained to the state as "a group with sour grapes."

Although Telstar has refused to turn over customer lists, the attorney general's office believes that Telstar has sold machines to at least 40 investors in California. One Florida investor also has complained, leading Wayne to believe that Telstar sought investors in other states.

"They broke every law there is," alleged San Diegan Jerry Delman, who said he paid $36,000 for 12 machines. "They promised that with Anheuser-Busch behind (the games) we'd get Anheuser-Busch's help with advertising and promotion. And nothing sounded better than having Anheuser-Busch behind you with national and local ads."

Although Telstar promised to place the machines in "quality business locations," Delman said, his machines returned an average of $40 a week, far below the $100 to $200 that Telstar representatives had promised.

'One Big, Happy Family'

"Telstar tried to paint the picture that we were one big, happy family, which, it turns out, we were not," Delman said. "And we believed that Anheuser-Busch was behind us."

Bill Worth, an Air Force retiree in San Diego, said the eight machines he purchased from Telstar are returning between $30 and $50 a week.

"I'm really upset with (Telstar)," Worth said. "We bought the things based on the fact that Anheuser-Busch had its name on them and (Anheuser-Busch) hasn't produced like they said they would."

"This is just the tip of the iceberg," said Chester Cruse of Los Angeles, who said he bought four of the machines a year ago after seeing Telstar newspaper advertisements.

"You've got to remember that a lot of people are ashamed, because you don't want to tell anyone about making bad business decisions," said Cruse, who added that two machines he placed in Pasadena bars have returned less than $5 a week in profits.

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