Criminal Fraud in Hollywood Beware of Rackets, Cheats and Scams!

Criminal Fraud in Hollywood Beware of Rackets, Cheats and Scams!

By Lawrence Wolf, Esquire

The entertainment industry is a fertile field for fraud. Between the psychological attraction of fame and fortune and the undeniable opportunities for talented people to make large sums of money, which they may have difficulty keeping track of, Hollywood abounds with crimes of fraud. Unfortunately, much of it goes unreported.

Since avoiding these situations is often preferable to reporting them, here are some of the rackets, cheats and scams to warn your clients about and hopefully some ways to prevent them:

  • Embezzlement.

    Unfortunately, creative types tend to disengage themselves from the details of their financial affairs, placing equal amounts of trust and temptation at the feet of one person. That person is often called a Business Manager. Robert Youngdahl, Los Angeles Deputy District Attorney for the Major Fraud in the Entertainment and Motion Picture Division, reports that fraud is more often brought to light during recessionary times.When the Business Manager tends to forget whose money he has, warns Mr. Youngdahl,he invests it without authorization, and assumes that the profit will allow him to pay it back. However, in tough times, the investment doesnt pay off what he anticipated and his embezzlement comes to light more quickly. This individual may start out with no intention of stealing. However, when they are dealing with some one who making enormous amounts of money, and no one else is looking into the finances, they rationalize that their client will never notice the temporarily missing funds. Since Business Managers are not legally required to be licensed, its important to advise a celebrity to choose one who is licensed as a CPA or an attorney so that there can be a background check made for complaints. It is also vital to install a double check system with a qualified second party, and accurately maintain copies of all documents.

  • Investments.

    Business Managers often recommend an investment to a celebrity but rarely disclose the kickback they receive as a result. They take greater risks with their clients money, than with their own, and if the deals works out, are in a position to skim the profit. Thus, any investments should be closely monitored by a third party, such as an attorney or CPA. Investing in the entertainment industry is even riskier. Most industry investments are either in the production or the distribution end, however, in both instances, one will often loose money thanks to what is called creative accounting something not illegal and difficult to prove. A good example is of a major studio that recently offered ten limited partnerships for the distribution of a grouping of movies. This was legal, federally-qualified investment for people who wanted to distribute movies from a major company. The 30-page, four-color prospectus talked about the quality of the movies, profit projections, number of theaters, etc. Comments Mr. Youngdahl, I think the offerings were about $30 million each. Of all ten, only one made any profit and that was a fluke!

  • Forging a Letter of Intent.

    It is not uncommon for a promoter with a script to forge a letter of intent from a bankable star to use it to bring commitments from other stars. He will also use it to raise investors or a line of credit at a bank. If there is suspicion that the letter is not legitimate, the star will be contacted. Although the star does not want the phony letter to continue circulating, often the last thing he or she wants is to testify in court. Consequently, the celebrity is often unwilling to assist law enforcement. However, if funds are advanced based upon reliance of the forged signature, your unsuspecting, innocent client will probably become the target of a criminal investigation.

  • Failure to Report Crimes.

    Similar to rape victims, fraud victims may feel victimized by the system and the perpetrator. The celebrity not only fears that disclosure will bring humiliation but also blacklisting. Reports Mr. Youngdahl, We still have a town where you dont tattle. If somebody steals from you, you probably work it out or write it off. People are afraid to get a reputation for taking things to law enforcement. After all, how can you be in a major production and not see someone skimming somewhere? It can take courage to report an act of fraud; however, it only takes wisdom to avoid it. If you can help your clients act prudently, youll see them stay out of frauds way.

Keep This on Hand for the Midnight Phone Call

If your client ends up in jail, you may get a frantic midnight phone call. If that person is a celebrity, that situation could be even more delicate. Here is a helpful list to keep at your home and office to make sure that everything is covered:

  • Urge your client to stay calm. Assure them that you or an experienced associate will help them.
  • Advise them to maintain a polite, well-mannered demeanor with the police. It wont help to antagonize anyone.
  • Advise them to resist asking for special treatment.
  • Get your clients location and booking number.
  • Get the name and phone number of a family member.
  • Advise your client not to make any statements before consulting further with you or with an attorney who is experienced in dealing with the matter at hand.
  • Assure your client that if you are not the appropriate attorney, you will contact someone who is.
  • Advise your client of the name and number of a good bailbondsman. (Feel free to call us for a reliable referral.)

Did You Know? that there are new ways to get a drivers license reinstated?

Not everybody who is convicted of drink driving is a hopeless case. Sometimes there are special circumstances, as well as successful rehabilitation. Normally, a person who receives a second conviction for drunk driving will lose their drivers license for one year. However, there is a procedure, often unknown and unused, that can result in reinstating their drivers license after only six months. Please feel free to call us for specifics.

Contesting Radar Traffic Tickets Temporarily Foolproof in Los Angeles

Since precedent has shown that traffic court will favor radar over an alleged violators testimony, it is no wonder that few people even attempt to contest a radar traffic ticket.

However, there is now a new strategy for fighting these tickets a strategy that is guaranteed, especially in some Los Angles courts. According to vehicle code section 40802, a speed trap which is illegal is defined asas any section of highway where a radar device is used when there is no engineering and traffic survey conducted within five years prior to the date of the alleged violator.

In other words, in order for a radar device to be legally used, an engineering survey of the roadway must have been conducted within the last five years. If not, then the court can not receive any testimony regarding the violation.

The last speed survey for some Los Angeles areas was done June 1, 1986, therefore, at the present time, no testimony can be taken regarding those tickets.

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