After launching an investigation into Hollywood's Gigapix Studios last month, the FBI has arrested three people connected to the company, with a fourth expected to turn herself in. In 2011, Gigapix acquired the rights to film an animated 3D version of The Wizard of Oz in what would have allegedly been known as OZ3D. However, the FBI states that the project was a scheme, used to defraud hundreds of investors who were promised high returns on their money.
Soliciting money based on lies
Gigapix, known for helping produce the Comedy Central series Workaholics, allegedly used investor capital to finance and produce OZ3D. According to the FBI, the project has been in development for some time; a memorandum for OZ3D, LLC printed in 2008 states thats that the company was trying to raise $20 million to help finance the film, all by soliciting investors without giving all the facts.
However, the movie was never made, and Gigapix has been in hot water ever since. Last year, investor Daniel Zucker sued the studio for $1.2 million. Another 750 victims collectively lost $22.6 million on the fake film. Gigapix is now facing a 36-count indictment for mail fraud, wire fraud, attempted wire fraud, and offering for sale unregistered securities. If convicted, the four people arrested face maximum prison sentences of 20 years on each count.