Hollywood Investment Firm Run by Ex-CIA Agent Found Guilty of Telemarketing Fraud
“… The 33 count indictment, filed June 15, 2011, focuses on Q Media Assets LLC, an independent movie company operated by Michael D Sellers [see bio at end of article], a former CIA operative who had already pleaded guilty and is identified in the indictment as ‘co-conspirator one.’ …”
Ninth Defendant Pleads Guilty to Telemarketing Fraud That Solicited Over $9 Million for Indie Films
7th Space Interactive
LOS ANGELES—The last of nine defendants facing trial next week on federal fraud charges stemming from boiler room operations that solicited investments in independent movies pleaded guilty in federal district court yesterday afternoon, admitting that he participated in a conspiracy to defraud investors that included false promises of up to 1,000 percent returns and misrepresentations as to how investor funds would be used.
Defendant Robert Ramirez, 45, of Lake View Terrace, pleaded guilty before the Honorable John F Walter, United States District Judge, to one count charging him with conspiracy to commit mail fraud, wire fraud, and the sale of unregistered securities. The conspiracy charge carries a maximum sentence of five years.
Defendant Ramirez was the last of the defendants in this case to plead guilty before the scheduled March 13 trial. The other defendants in this case all pleaded guilty earlier in the weeks and months leading up to trial.
The 33 count indictment, filed June 15, 2011, focuses on Q Media Assets LLC, an independent movie company operated by Michael D Sellers, a former CIA operative who had already pleaded guilty and is identified in the indictment as “co-conspirator one.” The indictment alleges that telemarketers for Q Media fraudulently raised funds for films called “Eye of the Dolphin” and its sequel, “Way of the Dolphin” (which was later called “Beneath the Blue”). Telemarketers associated with Q Media used “lead lists” purchased by Sellers from the San Clemente company American Investment Strategies, owned by defendant Joel Lee Craft, Jr According to the indictment, telemarketing “closers” told investors that they were producers of the “Dolphin” movies, and they “often touted [Sellers’] background as a former clandestine officer with the CIA in order to assure victim investors that representations in the solicitation materials and statements by the closers were true and investments in the ‘Dolphin’ movies were safe.” The telemarketers seeking investments in the “Dolphin” movies allegedly “made material misrepresentations, told material half-truths, and concealed material facts, when speaking to investors,” specifically concealing information about commissions and promising returns of up to 1,000 percent.
The defendants in the Q Media case raised approximately $5 million for “Eye of the Dolphin” and about $4 million for “Way of the Dolphin” from about 250 investors.
“Eye of the Dolphin” made about $70,000 in ticket sales in its theatrical release, while “Way of the Dolphin” went straight to video.
The defendants who have pleaded guilty and their scheduled sentencing dates are as follows:
James Lloyd, 48, of Lake Arrowhead, pleaded guilty on February 29, 2012 to one count of mail fraud and will be sentenced on June 25, 2012.
Allen Agler, 55, of Canyon Country, pleaded guilty on December 9, 2011 to one count of conspiracy and one count of wire fraud and will be sentenced on July 9, 2012.
Joel Lee Craft, Jr, 42, of San Clemente, pleaded guilty on January 30, 2012 to one count of conspiracy, one count of mail fraud, and one count of tax evasion, and will be sentenced on August 6, 2012.
Robert Keskemety, 58, of Hallandale Beach, Florida, pleaded guilty on March 2, 2012 to one count of mail fraud and will be sentenced on May 14, 2012.
Jady Laurence Herrmann, 35, of Lake Arrowhead, pleaded guilty on March 6, 2012 to one count of conspiracy and will be sentenced on June 11, 2012.
Joseph McCarthy, 38, of Boynton Beach, Florida, pleaded guilty on December 19, 2011 to one count of mail fraud and will be sentenced on June 18, 2012.
Matthew Bryan Wellman-Mackin, 31, of Manhattan Beach, pleaded guilty on February 22, 2012 to one count of selling unregistered securities and will be sentenced on May 14, 2012.
Daniel Morabito, 38, of Hermosa Beach, pleaded guilty February 28, 2012 to one count of conspiracy in the related case, United States v. Toll et al ., CR 11-542-JFW, also filed June 15, 2011, and agreed to pay restitution in this case. Morabito will be sentenced on May 21, 2012.
Defendants Agler and Craft also pleaded guilty to charges in the related Toll case. Agler pleaded guilty in that case to one count of wire fraud, and Craft pleaded guilty to one count of conspiracy and one count of wire fraud.
The mail fraud and wire fraud charges each carry a maximum sentence of 20 years, and the conspiracy and sale of unregistered securities charges each carry a maximum sentence of five years.
The remaining defendants in the Toll case, including defendant Lloyd, remain set for trial on May 15, 2012.
The investigation into fraudulent boiler rooms raising money for independent movies is being conducted by special agents with the Federal Bureau of Investigation and IRS-Criminal Investigation.
ABOUT MICHAEL D. SELLERS (FROM HIS BLOG)
EARLY YEARS AND CIA
Michael Sellers is a Magna Cum Laude graduate of the University of Delaware where he was a National Finalist in the Rhodes Scholarship and Danforth Fellowship competitions before going on to the Master of Fine Arts in Film-making program at New York University. Shortly after leaving NYU, Sellers’ career took an unexpected turn when was offered and accepted a position as an undercover field operative in the clandestine service of the Central Intelligence Agency. During his 10 year CIA stint Sellers served with distinction in Warsaw, Moscow, Addis Ababa, and Manila, where in the final month of his service he was directly involved in helping Philippine President Corazon Aquino survive a violent 10 day coup attempt by military rebels. For his efforts in the coup attempt he was awarded the Intelligence Commendation Medal. His work in Moscow during what journalists dubbed “The Year of the Spy” (1985) has been written about in a number of non-fiction works including Robert Wise’s “The Spy Who Got Away” (1988), Ronal Kessler’s “Moscow Station” (1990); Ronal Kessler’s “Inside the CIA” (1994); and Milt Bearden/James Risen’s authoritative “The Main Enemy” (2004).
Leaving government service, Sellers returned to film-making, first as a line producer and producer of local Tagalog language films in the Philippines (UMIYAK PATI LANGIT; CLASS OF 91; ANAK NG DAGAT); then co-producing international productions, also in the Philippines (RAGE and FORTUNES OF WAR starring Martin Sheen, Haing Ngorr, and MIchael Ironside). In 1996 his first film as writer/producer, GOODBYE AMERICA starring Alexis Arquette, James Brolin, Michael York, and Rae Dawn Chong was picked up by Buena Vista for US distribution while international distribution was handled by Quantum Entertainment, a Los Angeles based distributor Sellers founded in that year with partner Pamela Vlastas. After two more films set in the Philippines, (LEGACY starring David Hasselhoff and Rod Steiger and DOOMSDAYER starring Joe Lara and Udo Kier), Sellers relocated to Los Angeles and since then has written, produced, and/or directed 10 films, including the multi-award winners VLAD starring Billy Zane and Brad Dourif, KARLA starring Laura Prepon, Tess Harper, and Patrick Bauchau, and EYE OF THE DOLPHIN starring Carly Schroeder, Jane Lynch, and Katharine Ross. In all, his credits include 18 films since 1991. His most recent film, BENEATH THE BLUE, is slated for a 2009 release. He continues as CEO of Quantum Releasing, which as of 2008 handles worldwide distribution for approximately 50 films.