Trial begins in Louisiana film industry fraud case

The state of Louisiana has been actively working to develop filmmaking as a viable industry. Part of those efforts have included generous tax credits and other incentives for those who are willing to invest in building the infrastructure needed to support a thriving filmmaking community within the area. Multiple businesses and individuals have signed on for such projects, and have reaped the rewards offered. However, authorities believe that not all of these efforts have been made in good faith, and one group is being accused of fraud in connection with filmmaking tax credits in a trial currently before the court.

The case centers on the renovation of a New Orleans mansion owned by two of the defendants. That property was purchased in 2007, and the owners wanted to turn the home into a post-production facility by means of a $14 million overhaul. In doing so, the owners became eligible for $1.1 million in tax credits.

Prosecutors allege that a portion of the $14 million spent on the renovation project was not, in fact, put to use in that manner. They claim that the partners who are involved in the project own or have a controlling interest in as many as nine corporations, and that a significant amount of money that was slated for use in the post-production facility was actually just transferred between these entities. In this way, the partners are accused of orchestrating a scheme that made it appear as if more money was being invested in the Louisiana filmmaking industry than was actually put to that use, in order to receive the tax incentives offered by the state.

The group adamantly denies any wrongdoing in the matter, and has pledged to fully defend their project in court. Three individuals are charged in the matter; those charges include conspiracy, wire fraud, mail fraud and making false statements to the Federal Bureau of Investigation. As the case moves forward, the Louisiana legislature is scheduled to begin a new session, in which changes to the filmmaking incentive program will be a topic of focus.  

Source: The New Orleans Advocate, "High-stakes trial over Louisiana film program sets up showdown between powerful groups in New Orleans federal court", Gordon Russell, April 14, 2015

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