LOS ANGELES (CBS) — Federal agents have broken a financing scam that targeted independent Hollywood producers.
At least 18 people have been charged in two separate indictments stemming from charges that they mislead investors in a $27 million scheme — much of which went directly into their pockets.
KNX 1070′s Chris Sedens reports that as many as 500 investors may have gotten duped in the alleged fraud and money laundering scam.
Assistant United States Attorney Steve Cazares said the alleged scammers made “misrepresentations and concealed important facts” when soliciting funds from potential investors.
In one case, the indictment alleges the defendants said they needed to raise $5 million to produce “From Mexico With Love,” but ended up with much more than that.
“In fact, they raised three times that, used a third of the money to pay commissions to salesman, and essentially kind of burned away the other third of the money,” said Cazares.