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LOS ANGELES (AP) - Six Southern California men have been charged with stealing millions of dollars by offering investments in phony movies with names like "The Smuggler" that supposedly featured well-known actors such as Donald Sutherland, federal authorities said Thursday.
The men were charged with fraud in two federal grand jury indictments and could face up to 20 years in prison if convicted, prosecutors said.
Arrested Thursday were Samuel Braslau, 53, of Los Angeles and Rand Jay Chortkoff, 64, of Los Angeles, who co-founded the company Mutual Entertainment LLC (later renamed Film Shoot LLC), along with an alleged salesman, Stuart Rawitt, 47, of West Hollywood, prosecutors said.
Rawitt pleaded not guilty several weeks ago, said his attorney, Bernard J. Rosen.
Messages left for the other men's lawyers were not immediately returned.
Another alleged salesman, Robert Matias, 50, of Los Angeles, is a fugitive, prosecutors said.
Also arrested Thursday was Anthony David Millan, 37, of Chula Vista, who was chief executive officer of a company called C22, authorities said.
Millan has pleaded not guilty, said his lawyer, Tim Scott.
C22's president, Mack Machen, 70, of Los Angeles, was expected to surrender. A messages left for his attorneys was not immediately returned.
Prosecutors contended that companies were "boiler room" telemarketing operations that called people around the country and convinced some 140 people to invest nearly $5 million in bogus film projects, prosecutors contend.
"While one movie script was written, no movies were ever actually produced," the U.S. attorney's office statement said in a statement.
C22 claimed to be raising money for a movie called "Beyond the Mat," authorities said.
The other company raised money for a film initially called "Marcel," authorities said.
However, in 2011, the Alabama Securities Commission filed an order against the company for violating state investment law, so the company name was changed and the movie renamed "The Smuggler" to hide the order from potential investors, the federal indictment alleged.
Also Thursday, the Securities and Exchange Commission filed a civil lawsuit alleging that Braslau, Chortkoff and Rawiit defrauded investors.
"Investors were falsely told that actors ranging from Donald Sutherland to Jean-Claude Van Damme would appear in the movie when in fact they were never even approached," an SEC statement said.
The men "sold investors on the Hollywood dream," Michele Wein Layne, director of the SEC's Los Angeles regional office, said in the statement. "But the dream never became a reality because they took investors' money for themselves rather than using it to make a movie."
P.T. Barnum was so right.......
WHAT AS-HOLES THEY MAKE IT BAD FOR THE REAL INDEPENDENT PRODUCERS
Is it any really any worse than the now majior studio's charging such a high precentage to the theater's ( up to 40 %of ticket sales ) and the theater's passing it on to each of us that has to pay hi cost of movie ticket and at the consession stand ?
Look at the AGES of these people: 53, 64, 47, 50, 37, and even 70. I would have thought only idiot kids would think they could get away with something like this. For the guy who's 70, any sentence is likely to be a life sentence. Worth the risk?
Some people are too gullible.
What none of theses people saw The Producers ?
Here I thought they were selling pirated movies. My bad. No movies at all
These crooks will beat the system in Court ,,IF THEY HAVE GOOD EXPENSIVE LYARS,,, I MEAN LAWYERS
Not to worry - another scam will certainly follow and more investors will be bilked - it's the way of life here when there are people who don't do their homework and check things out throroughly. Sort of like curing a deadly disease - another always pops up - a no win situation!
I guess you'll be hearing more and more of this kind of scams as the economy gets worst, I don't mean to justify, this people but when you have to eat, you make sacrifices, whoever things that will get away with things like this today, you’re out of your mind.Bernard Madoff did, Michael Milken in the 80's did and so on, this is nothing new, for those that have money to invest? Take a good vacation and think of how many people go hungry every day and give thanks that you're not in that position.