February 25, 2014
(Editor’s Note: This post is an excerpt from an article appearing in Practitioner Insights on WestlawNext)
A California lawyer took in $300,000 in “legal expenses” as part of a motion picture finance scheme that defrauded dozens of investors of $1.8 million, according to a Securities and Exchange Commission lawsuit filed in Los Angeles federal court.
The agency’s complaint alleges lawyer Samuel Braslau, of Los Angeles, Rand Chortkoff, of Encino, Calif., and Stuart Rawitt, of Marina del Rey, Calif., fraudulently sold securities in the form of “membership units” to finance a movie that was never produced.
The defendants “sold investors the dream of a glamorous, multi-million dollar movie production starring A-list celebrities sure to generate exorbitant returns through numerous revenue streams,” the complaint says.
“What remains of investor funds constitutes less money than it would take to produce a public service announcement, let alone a full-length motion picture capable of securing a theatrical release,” it says.
About $2,000 is left, according to the suit filed in the U.S. District Court for the Central District of California.
Braslau and Chortkoff hatched the scheme late 2010, planning to raise $7.5 million by selling units in Braslau’s company, Mutual Entertainment LLC, the complaint says.