It's a Hollywood heist outrageous enough to inspire a movie of its own. Federal authorities have indicted four men on 29 counts of fraud, and allege that the group conned dozens of people into funding a fake film starring a bevy of celebrities — including Jean-Claude Van Damme, John Cusack, and Gerard Butler.
The group members, who operated under the guise of a company called Mutual Entertainment, LLC, were indicted yesterday on federal fraud charges for running the scam. Three of the men are also being hit with a civil suit filed by the Securities and Exchange Commission (SEC), which alleges that they defrauded some 60 individuals. "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," a statement from the SEC reads. "[But] the investor funds that remain aren't enough to produce a public service announcement let alone a full-length motion picture capable of securing the theatrical release promised to investors."
The group racked up $1.7 million
According to federal officials, the con was an elaborate process that dates back to 2010, when Mutual Entertainment spent $25,000 to acquire the rights to a story called Marcel, set in Paris during World War II. Team members cold-called individuals across the country, posing as a research firm doing surveys for movie companies. Anyone who expressed an interest in investing in films would then be mailed a package of information on the faux flick — including cast members and shooting locations — and its profit potential. Investors would then send Mutual a check, often for a five-figure sum, to help fund the movie. All in, officials say, the group racked up $1.7 million — and split most of it amongst themselves — before getting busted.
And unfortunately for wannabe film investors, this is only one of several similar ruses that date back decades. "This is a long-lasting scam that's been going on for at least 10 years," Ellyn M. Lindsay, an assistant US attorney, told The Daily Beast. "There are multiple boiler rooms in the Los Angeles area that are pulling this movie-investment scam, and we're only able to go after some of them since it's just so prevalent."