A West Hollywood resident was among four people arrested today on federal fraud charges stemming from telemarketing scams that allegedly solicited investments in movies with false promises of high returns with little risk.
The arrests are the result of two federal grand jury indictments unsealed this morning. The indictments charge six defendants who allegedly participated in separate fundraising schemes related to films that were never made, according to the U.S. Attorney’s Office. The indictments allege that the defendants collectively caused losses of several million dollars.
The first case is contained in a 29-count indictment relating to two companies — Mutual Entertainment LLC and Film Shoot LLC. The defendants, who are charged with mail fraud, wire fraud, attempted wire fraud and making false statements, are:
- Samuel Braslau, 53, of Mar Vista, an attorney and co-founder of the companies, who was arrested today
- Rand Jay Chortkoff, 64, of Encino, a co-founder of the companies, who was arrested today;
- Stuart Rawitt, 47, of West Hollywood, a salesperson, who was arrested today; and
- Robert Matias, 50, of Granada Hills, a salesperson who is considered a fugitive.
Also today, the U.S. Securities and Exchange Commission filed a civil lawsuit that alleges Braslau, Chortkoff and Rawiit defrauded investors. Chortkoff and Rawitt have worked together on films such as “Spring Break ’83,” where Rawitt served as production executive and Chortkoff was executive producer and music supervisor.
In the second case, the operators of another company — C22 in the San Fernando Valley — were named in a 19-count indictment charging them with mail fraud, wire fraud and attempted wire fraud in connection with a company known under several permutations of C22. Those defendants are:
- Mack Machen, 70, of Sunland, the president of C22, who has agreed to self-surrender; and
- Anthony David Millan, 37, of Chula Vista, the CEO of C22, who was arrested today.
The first indictment alleges that the defendants raised money for a film called “The Smuggler” through boiler room telemarketing operations after first representing themselves as researchers. Victims were falsely told that 64 percent of investor money would be used to produce the film, and that investors would be first in line to receive any revenue, according to the indictment. It states that the defendants also falsely claimed to have contracted with well-known actors to appear in “The Smuggler.”
During the course of the Mutual Entertainment/Film Shoot scheme, the defendants allegedly persuaded more than 60 investors across the nation to invest a total of $1.8 million in the movie that was never produced.
The second indictment unsealed today focuses on C22 Capital, Inc. and C22 LLC Inc., alleging that telemarketers for C22 fraudulently induced investments to fund a movie titled “Beyond the Mat.” According to the indictment, the C22 defendants and their telemarketers made cold-calls to potential investors and told the victims that their money would be used to provide short-term “bridge loans.” Later, the defendants began soliciting money for investment in “Beyond the Mat.”
The indictment alleges that the defendants issued promissory notes and promised returns of up to 13 percent per year. Dozens of victims were fraudulently induced to invest in C22, and during the course of the scheme they lost more than $3 million, according to the indictment. The wire fraud and mail charges each carry a maximum penalty of 20 years in federal prison.