On June 15, 2011, a federal grand jury returned two Indictments, which charged 17 defendants with allegedly participating in fraudulent fundraising activities related to the operation of a boiler room that was pushing independent film projects.
No, I didn't make a mistake. This modern-day boiler room wasn't pumping pennystocks. That's so 80′s and 90′s.
The younger and hipper hucksters have moved into more interesting scams. Ya gotta go with the times dude. Everyone wants to be in
films these days. You're no one without an entourage and endorsements. The bucks are in indie films. Ask anyone.
Naah, you don't want to invest in Disney or Sony when you can own a big chu
nk of a small studio and, well, you know, what can I say - the big fish in the small pond. Right? And whaddya talkin' about with Apple? Apple TV? Apple iTunes. C'mon, there's n
o upside left there. Know what I'm sayin'? Lemme tell ya about this fish film we're making . . . bikinis, blue water, sushi . . .
NOTE: An indictment contains allegations that a defendant has committed a crime. Every defendant is presumed innocent until and unless proven guilty beyond
On June 16, 2011, the feds arrested ten defendants; one person in Florida and nine people in Southern California. On June 17, 2011, another two Florida defendants were rounded up.a reasonable doubt in a court of law.
The Cinamour Indictment
One indictment concerns the activities of Cinamour Entertainment LLC, which raised funding from early 2004 through May 2009 for "From Mexico with Love" and "Red Water: 2012." Investors targeted by Cinamour were located on "lead lists" acquired from American Information Strategies, Inc. The leads were called by telemarketers, who sort of never quite got around to disclosing that they would receive as much as 1/3 of funds raised as commissions. Anyway, the telemarketers solicited investments by making false claims - can you imagine such brazenness? For example, one of the allegedly bogus pitches was that 93 percent of investor money would be used to produce and promote the films. Then there was the equally flamboyant promise that investors would receive returns up to 1,000 percent.
Not that I want to give away the ending but, spoiler alert, of the $15 million raised from 450 victimized investors to produce and promote "From Mexico With Love" wound up in the film: The movie cost about $5 million to produce and generated approximately $550,000 in its theatrical release in October 2009. Ya gotta wonder where that other $10 million bucks wound up.
These same defendants raised about $2.7 million for the "Red Water" movie from about 100 victim-investors, but essentially none of the money was used to produce the film, which was never made.
Like From Russia With Love But Further South And Without Sean Connery: In case you missed the stirring "From Mexico With Love" I've gone to great expense to provide you with a clip.
There's Maria, her boxer fruit picker boyfriend, the sick mother, the wealthy Gringo farm owners, the wealthy Gringo farm owner's boxer son, the guy who trains the boxer fruit picker over chess with slaps to the face, and, well, imagine Karate Kid meets Road House, except it's Mexican rather than Korean, there's more fruits and vegetables, and the bad guy isn't Ben Gazzara:
The 45-count Cinamour Indictment charged Defendants:
Daniel Toll, 56, of Encino, CA, President of Cinamour;
Joel Lee Craft Jr., 41, of San Clemente, CA, CEO of the San Clemente-based American Information Strategies, Inc., which sold investor lead lists to telemarketing operations that solicited investors through telephone cold calls; appeared in court yesterday;
James Lloyd, 47, of Lake Arrowhead, CA, a closer for Cinamour and later operated his own boiler room that raised money for Cinamour and Q Media;
Paul Baker, 50, of Palm Springs, CA, a closer for Cinamour, who later operated his own boiler room under the name Independent Essentials that raised funds for Cinamour;
Bart Douglas Slanaker, 48, of Panorama City CA, (who was already in custody after being charged earlier in 2011 in another movie-related telemarketing case), was another closer who helped raise funds for Cinamour in several capacities;
Allen Bruce Agler, 54, of Canyon County, CA, a closer who used the name "Paul Kingman" and raised funds for "From Mexico With Love;"
Albert Greenhouse, 58, of Delrey Beach, FL, raised funds for "From Mexico With Love;"
DeLitha Jones-Floyd, 54, of Lancaster, CA, a closer;
Brian Emmanuel Ellis, 35, of Saugus, CA, a closer;
Daniel Morabito, 31, of Redondo Beach, CA, a closer;
David Nelson, 40, of Eagle Rock, CA, a closer; and
Daryll Van Snowden, 40, West Hollywood, CA, a closer, was being sought by authorities at the time the Indictment was filed.
All 12 defendants are charged in a conspiracy count, as well as in several of the 15 mail fraud counts, nine wire fraud counts and 13 sale of unregistered securities counts that are alleged in the indictment. Additionally, Defendants Craft, Toll and Floyd are each named in at least one of five money laundering counts. Defendant Slanaker was charged with two counts of tax evasion.
SIDE BAR: These are the statutory maximum prison terms:
Conspiracy: 5 years
Sale of Unregistered Securities: 5 years.
Tax Evasion: 5 years
Money Laundering: 10 years
Wire / Mail Fraud: 20 years
The Q Media Indictment
The second indictment alleged that Q Media Assets LLC. fraudulently raised funds for the "Eye of the Dolphin" and its sequel, "Way of the Dolphin" (which was later called "Beneath the Blue"). Using lead lists from the same source that provided names to Cinamour, the Q Media telemarketers pitched their deals in the same allegedly fraudulent manner, promising a similar 1,000% return.
The defendants in the Q Media case raised approximately $5 million for "Eye of the Dolphin" and about $4 million for "Way of the Dolphin" from about 250 investors. "Eye of the Dolphin" made about $70,000 in ticket sales in its theatrical release, while "Way of the Dolphin" went straight to video.
FISH FRY (I know, Dolphin's aren't fish): Now available for limited release via "Street Sweeper," I am pleased to announce the Platinum Edition Director's Cut promotional trailers for these two cult classics:
The 33-count Q Media indictment charged Cinamour Defendants Lloyd, Agler, Craft and Morabito; and also:
Robert Keskemety, 56, of Hallandale Beach, FL, a closer;
Jady Laurence Herrmann, 34, of Lake Arrowhead, CA, a closer;
Joseph McCarthy, 37, of Boynton Beach, FL, a closer;
Matthew Bryan Wellman-Mackin, 30, of Manhattan Beach, CA, a closer; and
Robert Ramirez, 44, of Sunland, CA, who was hired by Sellers to handle investor relations.
All nine defendants in the Q Media case, including those also charged in the Cinamour case, face charges of conspiracy, mail fraud, wire fraud and sale of unregistered securities. Lloyd is also charged in this indictment with two counts of money laundering. Craft is also charged in this indictment with two counts of tax evasion.
Oh, here's a fun tidbit: the indie movie company Q Media Assets LLC, was operated by an individual identified in the indictment as "co-conspirator one." And just who, exactly, is CC1? Well, none other than Michael D. Sellers, a former CIA operative who had already pleaded guilty to conspiracy, mail fraud and tax charges in relation to the fraudulent boiler rooms.
By March 2012, all but one of nine Defendants facing trial had pleaded guilty:
Lloyd: one count of mail fraud;
Agler: one count of conspiracy and one count of wire fraud;
Craft: one count of conspiracy, one count of mail fraud, and one count of tax evasion;
Keskemety: one count of mail fraud;
Herrmann: one count of conspiracy;
McCarthy: one count of mail fraud;
Wellman-Mackin: one count of selling unregistered securities:
Morabito: one count of conspiracy in the related case, U.S. v. Toll et al., (CR 11-542-JFW, June 15, 2011), and agreed to pay restitution in this case;
Agler and Craft also pleaded guilty to charges in the related Toll case. Agler pleaded guilty in that case to one count of wire fraud, and Craft pleaded guilty to one count of conspiracy and one count of wire fraud.
On March 7, 2012, the last of nine defendants facing trial, Defendant Ramirez, pleaded guilty to one count charging him with conspiracy to commit mail fraud, wire fraud, and the sale of unregistered securities.
NOTE: The remaining defendants in the Toll case, including defendant Lloyd, remain set for trial on May 15, 2012.