The Mel Brooks classic The Producers made hay out of two movie executives who purposely defrauded little old ladies out of their cash. Today, three men were arrested on charges they defrauded victims with the promise of big movie investment returns, part of a four-person operation.
Two were arrested early Monday–Gregory Pusateri, 49, of Woodland Hills, and David Pritchard, 66, of Malibu–while a third Christopher Blauvelt, 58 of Woodland Hills, was arrested hours later. The fourth defendant–Cheri Brown, 65, of Studio City, will surrender.
The group members were hit with a 36-count indictment, which accuses them of mail fraud, wire fraud, attempted wire fraud and offering for sale unregistered securities.
The defendants were part of a company called Gigapix, and they allegedly hired telemarketers to find potential investors. Part of the deal involved pitching Gigapix as a Pixar-like firm.
The indictment alleges that telemarketers–known as “fronters”–used lead lists purchased by the defendants to find potential investors and then used scripts touting the supposed merits of Gigapix. When investors expressed an interest, materials about the investment were mailed to them. At that time, the potential investor was turned over to Brown and Pusateri–who were known as “closers”–to collect their money.
In or around 2008, the defendants allegedly shifted their focus to raise funds to produce a movie titled “OZ3D,” while continuing to solicit funds for Gigapix. In soliciting money for Gigapix and “OZ3D,” the indictment alleges that the defendants made numerous misrepresentations to potential investors and withheld material facts. For example, the indictment alleges that investors were told that Gigapix was a financially successful company, that they would receive high returns on their investments in less than 18 months, and that the investments carried little or no risk. Investors were also told there was an urgency to invest in Gigapix and “OZ3D” because the window of opportunity to invest and the number of shares available were limited.
They face decades in federal prison if convicted.