On behalf of Mihalek Law posted in Securities Law on Tuesday, October 20, 2015.
Fans of “The Producers” know that the premise of the Mel Brooks comedy is simple and brilliant. Two forlorn nobodies — one a hapless theatrical producer and the other a timid accountant — decide to produce a surefire flop for Broadway. They scheme to raise far more money than they need, certain that when the play closes after opening night, investors will expect no returns. The “brilliant” scam backfires when their play unexpectedly becomes a hit.
Was the director of a 2009 film flop inspired by “The Producers”? Prosecutors say writer-director Dror Soref raised $21 million for “Not Forgotten,” a movie that grossed a mere $53,723 at the box office. Soref now faces 56 counts of securities fraud for allegedly operating a Ponzi scheme that bankrolled his project.
Prosecutors say that many of the investors in the film were retired, with many of them cashing in savings and pensions to invest in a project Soref and his partner allegedly pitched as “no risk.”
The psychological thriller starred Simon Baker (“The Mentalist”) and Paz Vega (“I’m So Excited!”), both of whom were apparently paid with funds raised from the 140 investors. Prosecutors say new investments were used to pay prior investors, as well as employees, Soref and his partner.
“Not Forgotten” can’t really be forgotten because according to one source, hardly anyone saw the movie screened in only four theaters nationwide.
We don’t know if the director is guilty of securities fraud or not, but we do know that Ponzi schemes have been used many times to defraud innocent people all over the country, including right here in Kentucky.
At Mihalek Law, we have skilled attorneys experienced in representing clients victimized in these fraudulent investment schemes.