Indictment charges 3 men with bilking movie investors

Posted at 9:26 PM, Jun 28, 2016
NEW YORK (AP) — Three men were arrested Tuesday on charges that they cheated investors who thought they were contributing over $12 million to produce major films, only to discover their money went to other projects and to pay personal expenses, officials said.
U.S. Attorney Preet Bharara in Manhattan said in a release announcing charges against James David Williams, Steven Brown and Gerald Seppala that the defendants used "lies about making feature-length films and documentaries" to entice investors. An indictment did not identify the films.
A 2014 civil lawsuit against the men in Los Angeles federal court said they claimed investors' money would go toward films starring Nicolas Cage, Willie Nelson and Harry Connick Jr., among others.
In the criminal case, Manhattan prosecutors said the defendants made false promises and representations from 2012 to this year. They said the money was used to fund other projects, pay back previously defrauded investors and to pay personal expenses, including the purchase of a car and house for Williams.
Williams, 54, of Calabasas, California, was arrested in Los Angeles. Brown, 46, of Santa Monica, California, was arrested in New York City, while Seppala, 47, of Wayzata, Minnesota, was arrested in Wayzata. The men face conspiracy and wire fraud charges that carry potential penalties of decades in prison.
Brown was freed on $200,000 bail. His Manhattan attorney, Walter Mack, said only: "Innocent until proven guilty. Stay tuned." It was not immediately clear who was representing Williams and Seppala in the criminal case. A lawyer who represented the men in the civil case declined comment.
The lawsuit, brought by Bill A. Busbice Jr., of Jackson, Wyoming, said that he and two companies lost $10.9 million in "a bold and brazen securities fraud" as the defendants claimed they were investing in four films: "Made in America," ''The Letters," ''Left Behind" and "Angels Sing."
The lawsuit said the plaintiffs discovered they had been conned because the defendants did not invest their money in the films and they provided fake business and financial records.
Paul L. Gale, an attorney for Busbice, declined comment.