Four executives with a Chatsworth production company have been indicted on federal charges of defrauding investors of $22.6 million to make a 3-D version of “The Wizard of Oz.”
Christopher Blauvelt, 58, the founder and chief executive of Gigapix Studios Inc., was expected to be arraigned Friday in U.S. District Court in Los Angeles. Two other defendants, Gregory Pusateri, 49, and David Pritchard, 66, were arraigned on Thursday, when the indictment was handed down.
Cheri Brown, 65, the fourth defendant, has agreed to surrender to authorities, according to the U.S. Attorney’s office in Los Angeles.
Blauvelt, of Woodland Hills, and Pritchard, of Malibu, are alleged to have hired telemarketers to contact potential investors in their production company and to raise funds to produce a movie titled “OZ3D.” Pusateri, of Woodland Hills, and Brown, of Studio City, were the top two salespeople collecting money from the investors, according to the indictment.
About 750 investors from throughout the U.S. were victimized in the scheme and lost virtually all the money they put into Gigapix and “OZ3D.” They were told that 65 percent of their investment would be used to produce and distribute the film but most of the money went toward salaries, commissions, office rent, phone bills, and printing of sales literature, the indictment said.
The investors received information from Gigapix that the four defendants knew “contained material misrepresentations, half-truths, and concealed material facts,” about the riskiness of the investment, the amounts and timing of returns to the investors, and success of prior Gigapix projects, the indictment added.
The mail fraud and wire fraud counts the four have been charged with carry a maximum penalty of 20 years in prison.