State of California Sues Movie Producers Over Alleged Ponzi Scheme - 2012-09-20
The state of California has sued Windsor Pictures, Skyline Pictures and a group of related financial entities and individuals charging them with operating a Ponzi scheme and committing fraud in raising more than $23 million to make and distribute movies.
According to a lawsuit filed Thursday in Los Angeles Superior Court and obtained by The Hollywood Reporter, the defendants used the money raised to pay large commissions, skim money to various interrelated companies and distribute dividends to investors until that abruptly stopped in August 2011.
"Defendants specifically targeted unsophisticated senior investors," says the suit, filed by the state's corporations commissioner Jan Lynn Owen. The targets allegedly were invited to "free" seminars where they were told they would get investment advice and were then offered a "no risk" investment in movies that would have "high rates of return."