Audio Exec Gets Earful From U. S. Attorney

by Shannon Maughan -- Publishers Weekly, 2/28/2005

Paul Rush, founder and former CEO of Earful of Books, the now-defunct audiobooks-only retail chain, has been indicted on 17 federal charges for siphoning money from other ventures in an alleged attempt to save his former company.

Rush, recently named v-p and associate publisher of Oasis Audio, was arrested February 16 in Wheaton, Ill., according to the U.S. Attorney's office in Austin, Tex. In the indictment filed in federal court in Austin, Rush is charged with wire fraud, bank fraud and money laundering, among other charges.

In the indictment, Rush was said to be a trustee for a trust set up to benefit the children of a friend. Between early 2001 and April 2002, he is alleged to have funneled more than $500,000 from the trust into his own pocket and into Earful of Books. In addition, Rush is charged with submitting forged loan documents to two Texas banks in 2002, for sums totaling more than $1 million. He's also charged with defaulting on a loan obtained by forging the signature of an Earful of Books board member.

Rush could not be reached for comment. But according to a statement from Edward A. Elliott, publisher of Oasis Audio, Rush will continue to work at the firm. Elliott said Oasis "has confidence in all of our staff" and will "cooperate with all the appropriate parties."

Many audiobook professionals contacted by PW were sharply critical of Rush, a former industry leader. One complained that Rush had taken the audiobook industry "down a road that was so self-serving" that it was "not a reflection of audio-only retailing at all but one man's personal greed." Another audiobook veteran said it was "sadder to hear of the [Earful] franchisees who lost their life savings because they believed in Rush's version of the future." Another professional told PW, "It was inevitable that his actions would catch up with him."

Earful of Books was one of the first attempts to launch an audiobooks-only retail chain; the company expanded quickly in the 1990s, until financial problems forced the company into Chapter 7 bankruptcy and liquidation in 2002.