February 20, the Securities and Exchange Commission in the U.S. (SEC) posted a communique reporting it detected three swindlers who raised about $1.8 million for a fake multi-million dollar movie project that would supposedly star Jean-Claud Van Damme. Six suspects in total are being under investigation.
According to the regulator, over 60 investors nationwide have suffered from the fraudulent scheme. The SEC alleges that Los Angeles-based lawyer Samuel Braslau was the architect of the scam business. He was assisted by Rand Chortkoff and Stuart Rawitt. In early 2011, Braslau set up companies named Mutual Entertainment LLC and Film Shoot LLC. Mutual Entertainment spent $25,000 to purchase the rights to Marcel, an unpublished story set in Paris during World War II. The film script was given a new title, The Smuggler.
Shortly thereafter, Mutual Entertainment began raising money from investors through a boiler room operation for shooting the screen version. Investors were falsely told that Hollywood stars ranging from Donald Sutherland to Jean-Claude Van Damme would appear in the project. The swindlers flaunted a baseless projected return on investment of about 300%.
The gang convinced investors that Mutual Entertainment was a hugely successful company which track record encompassed the Harold and Kumar movies produced by Carsten Lorenz in 2004. Michele Wein Layne, director of the SEC’s Los Angeles Regional Office said, “Braslau, Chortkoff, and Rawitt sold investors on the Hollywood dream. But the dream never became a reality because they took investors’ money for themselves rather than using it to make a movie.”
Besides, according to the SEC’s complaint, Rawitt was the subject of a prior SEC enforcement action in 2009. The regulator warned potential investors about being more careful and making inquiries about their business partners.
During trial proceedings, the Securities and Exchange Commission is going to insist on life-long barring the fraudsters from the brokerage industry and cash penalties. On February 20, the U.S. Attorney’s Office for the Central District of California announced criminal charges against Braslau, Chortkoff, and Rawitt. In case they are found guilty, they will face imprisonment up to 20 years.