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3 men indicted in alleged movie financing scheme

Films that are made in Seattle often require financing from investors who are promised a share of the profits. On June 28, three men who claimed to be movie financiers were charged for allegedly using a fraud scheme to net $12 million. The three men named in the Manhattan federal court indictment are accused of fraudulently soliciting funds between 2012 and 2016.

According to the indictment, the three men talked investors into giving them $12 million by showing them falsified documents and making misleading statements. The investors were told that they would receive a return on their investments from the profits that were made from the films. However, prosecutors say that the money that was invested was not used to produce movies, but to pay back earlier investors and buy personal items.

A lawsuit that was filed in 2014 by one of the investors may involve the same alleged movie-financing scheme. The plaintiff in the lawsuit alleges that he invested $10.9 million in four different films, including the films "Angels Sing" and "Left Behind". In the criminal case, all three of the defendants have been charged with wire fraud and conspiracy to commit wire fraud. Two of the defendants were also charged for conspiracy to commit money laundering.

When a business venture is not successful, investors may falsely accuse the business owners of fraud. However, obtaining a conviction on fraud charges requires proof beyond a reasonable doubt that the defendant had the specific intent to defraud someone, and a criminal defense attorney will often attempt to show that the prosecutor failed to meet that burden of proof.

Source: Reuters, "Three charged in New York over $12 mln movie finance fraud," Nate Raymond, June 28, 2016

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