Movie financing scam results in 11-year prison sentence

A Palm Springs man who, court documents show, helped fraudulently raise millions of dollars for independent movie productions – money that primarily went to the fundraisers – has been sentenced to 11 years in federal prison. Paul Baker was sentenced yesterday by United States District Judge John F. Walter, who also ordered him to pay $2,688,433 in restitution.

Baker is the eleventh defendant to be sentenced after each was convicted of participating in a scheme to raise money for two films with false promises of huge returns and misrepresentations as to how investor funds would be used.

While some of the movies were actually produced, the defendants lied, gave half-truths and concealed material facts from investors around the nation, according to court documents. (Baker was previously sentenced to more than 16 years, but that sentence was overturned by the U.S. 9th Circuit Court of Appeals, which found an error in how his previous convictions were factored into the sentence.)

Baker’s conviction by a jury in June 2012 on charges of conspiracy, mail fraud, wire fraud and the sale of unregistered securities was related to the activities of Cinamour Entertainment LLC, which bilked investors who put money into independent motion pictures called “From Mexico with Love” and “Red Water: 2012.” The defendants in the case raised money for the films through boiler room telemarketing operations, which made fraudulent pitches to investors, prosecutors said.

As part of the scheme, telemarketers made “cold calls” and solicited investments with false claims, such as that 93 percent of investor money would be used to produce and promote the films, and that investors would receive returns up to 1,000 percent. In fact, little more than one third of investor funds were used to actually produce and promote “From Mexico with Love,” and the second film was never made.

The scheme raised more than $17 million.

“Investors must beware when presented with extravagant promises of profits,” said United States Attorney Eileen M. Decker. “These defendants used the glamour of the film industry to make their false promises more attractive, which enabled them to steal millions of dollars from these victims. The sentences imposed in this case are a testament to the dedication and persistence of the law enforcement agencies which dismantled this fraudulent scheme, preventing further harm to victims.”

A total of 11 defendants have been convicted in the Cinamour case, including:

  • Daniel Toll, of Encino, the president of Cinamour, who pleaded guilty to conspiracy and selling unregistered securities and was sentenced to eight years in federal prison;
  • James Lloyd, of Lake Arrowhead, a “closer” for Cinamour and later operated his own boiler room, pleaded guilty to wire fraud and was sentenced to 13 years in prison; and
  • Bart Douglas Slanaker, of Panorama City, another closer who helped raise funds for Cinamour in several capacities, pleaded guilty to wire fraud and tax evasion and was sentenced to 145 months in prison.

 

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