Maker of `Girls Gone Wild' Runs Afoul of Law on Minors

Under the terms of a deal with the Justice Department, Francis agreed to personally pay a $500,000 fine to settle charges in Los Angeles that he failed to keep records of the ages and identities of the women who appeared in his films. As a result, Francis said in a statement, footage of minors engaging in sexually explicit conduct appeared in at least two DVDs he released.

The videos, which feature young women exposing their breasts and engaging in other racy activities, are sold through late-night advertisements on cable television. Francis' company, Mantra Films Inc., takes in an estimated $40 million a year from the sale of videos such as "Ultimate Spring Break, Vol. 4" and "Girls Gone Wild on Campus Uncensored," according to people familiar with his business.

The 33-year-old entrepreneur, the subject of a Los Angeles Times magazine cover story last month, has come under mounting scrutiny for his personal and business conduct.

As part of Tuesday's pact, Mantra Films agreed to pay $1.6 million in fines and restitution to settle similar charges in a separate case in Florida. Mantra pleaded guilty in U.S. District Court in Panama City, Fla., to 10 counts of breaking federal record-keeping and labeling laws for sexually explicit material.

MRA Holdings Inc., another company owned by Francis, entered into a so-called deferred prosecution agreement under which the government would dismiss all charges if MRA abided by the accord for three years. MRA must hire an outside company to monitor its records and production facilities to ensure compliance with federal law.

"Today's agreements ensure that 'Girls Gone Wild' will comply with an important law designed to prevent the sexual exploitation of minors and puts other producers on notice that they must be in compliance as well," Assistant Atty. Gen. Alice S. Fisher said in a statement.

Francis could have faced more severe punishment including jail time had he not reached the Justice Department settlement.

Aaron S. Dyer, a lawyer for Francis and his companies, said Mantra changed its business practices before the Justice Department launched its investigation.