Video: Hollywood producers raising funds through telemarketing fraud?

posted at 12:41 pm on February 18, 2014 by Ed Morrissey

How does Hollywood raise the money for its blockbuster films? Better yet, how do they raise the money for their schlockbuster films? CBS News did an undercover investigation into one method of raising funds in Hollywood, at least by smaller producers — telemarketing:

Making movies in Hollywood costs a lot of money, so film producers are often looking for investors to bankroll what they hope will be a blockbuster.

CBS News has learned some Hollywood producers are using telemarketers to cold call Americans, convincing them to make risky investments.

Law enforcement tells CBS News it’s a widespread fraud worth hundreds of millions of dollars over more than a decade, and CBS News has now spoken to more than a hundred investors who never saw their money again after sending a check to a voice on the phone.

First, if you’re making investments based on cold calls over the phone, I’d direct you to the film Boiler Room, or even better yet Glengarry Glen Ross. That investment in Hollywood would cost at most $10 and perhaps put you on guard against pie-in-the-sky profit claims, especially in Hollywood, where the creative department is usually Accounting. James Garner once sued over the distribution of profits from The Rockford Files, which exposed some pretty shady practices at the time regarding the definition of “profit” by the studios.

These days, the studios themselves are publicly held and have to keep their books open, so the main players have less opportunity to operate on the margins of the law. Their investors have a lot more protection, and probably start off with a lot more sophistication. The proliferation of small production companies means that the opportunity for fraud remains, though, and the use of telemarketing for cold-call investment pitches practically guarantees it. And while CBS makes sure to headline “Hollywood” here, it’s worth noting that none of these stings involved significant production firms, even among the independents.

CBS offers this advice to those tempted by such “opportunities”:

So what should you do if you get a call from a telemarketer? Tracy said on “CBS This Morning,” “You have to ask lots of questions. You got to ask these people about their past projects. Ask to see the financials from those projects. And then, get an accountant or a financial adviser involved and bottom-line, if it sounds too good to be true, it probably is.”

Better yet, hang up. You probably won’t see the movie, and it’s a near certainty that you’ll never see the money again.


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Hell, obama’care’ paid 160 million to the OR exchange, all fraud.

The CIO created a fake site, to get more federal funds. She might now go to prison.

obama should join her, for the billions wasted on obama’care’ alone.

The USA is now Zimbabwe, easily.

Schadenfreude on February 18, 2014 at 12:43 PM

This is Goebellian fraud in the USSA.

Schadenfreude on February 18, 2014 at 12:44 PM

Pravda has more credibility than any US or global news house.

Schadenfreude on February 18, 2014 at 12:44 PM

Speaking of, is anyone else getting the “I’m calling from Microsoft because your computer is sending us error messages” scam yet?

rogerb on February 18, 2014 at 12:50 PM

Oh so obligatory

Shy Guy on February 18, 2014 at 12:52 PM

I have an older relative who got suckered into putting $50,000 into a “can’t miss” independent feature. Played well at all the art house shows, etc. Of course, the check was already gone before any of her relatives knew what she had been conned into.

And of course, not a penny of it ever came back.

and for those who would advise legal action – it’s going to cost you more than your original “investment” just to find out who’s legally responsible for the mess, and of course they will be in bankruptcy, and their address will turn out to be a dropbox in a strip mall in Las Vegas. And that is when the hapless “investor” finds out just how thoroughly they have been played.

Tom Servo on February 18, 2014 at 12:53 PM

Better yet, hang up. You probably won’t see the movie, and it’s a near certainty that you’ll never see the money again.

Absolutely solid advice.

Now that Kickstarter and IndieGoGo have shown that crowdfunding for legit feature films is not only doable, but almost ludicrously simple, any “producer” who feels the need to cold call ordinary Americans to get his project into production is neither a producer, nor even remotely interested in making a picture.

And thanks, Ed, for mentioning that the overwhelming majority of producers (be they studio or indie) don’t have to resort to crime to get their pictures made.

Eric in Hollywood on February 18, 2014 at 12:53 PM

Anybody that would give money to a cold-caller on any investment probably deserves to lose their money.

Bitter Clinger on February 18, 2014 at 12:54 PM

How does Hollywood raise the money for its blockbuster films? Better yet, how do they raise the money for their schlockbuster films?

Ed Morrissey on February 18, 2014 at 12:41 PM

.

CBS News has learned some Hollywood producers are using telemarketers to cold call Americans, convincing them to make risky investments.

Law enforcement tells CBS News it’s a widespread fraud worth hundreds of millions of dollars over more than a decade, and CBS News has now spoken to more than a hundred investors who never saw their money again after sending a check to a voice on the phone.

cbsnews.com

.
Wow . . . . . well, this story made it to cbsnews.com.

Will it make it to CBS TV ? … Or ABC, or NBC, or CNN, or FOX News . . . . . ?

listens2glenn on February 18, 2014 at 12:55 PM

Oh so obligatory

Shy Guy on February 18, 2014 at 12:52 PM

Exactly. Zero Mostel is a prophet, yet again.

Mr. D on February 18, 2014 at 1:00 PM

If you have an elderly relative talk to them. Make sure they understand about criminals on the phone. Make them promise never to give information or money to anyone who calls on the phone. Don’t assume they know that. There is an exception. Sometimes locals you know have been suckered into collecting money for a charity and you don’t want to say no. Don’t give them much and verify they are who they say they are. I was born suspicious.

crankyoldlady on February 18, 2014 at 1:08 PM

Oh and I forgot about the scam where they call and claim to be someone you know who needs money. VERIFY

crankyoldlady on February 18, 2014 at 1:11 PM

First, if you’re making investments based on cold calls over the phone, I’d direct you to the film Boiler Room, or even better yet Glengarry Glen Ross.

Or for that matter, The Wolf of Wall Street.

J.S.K. on February 18, 2014 at 1:12 PM

Heads Up: The Hopey Titanic is Sailing!!

Another Bites Ye Dust:

New Jersey, US
5m
New Jersey Rep. Rush Holt, an 8-term Democrat, will not seek reelection in 2014 – @politico
end of alert
=============

Casualty List: 113th Congress (2013-2014)

Rush D. Holt, D-N.J., 65, 8 terms

http://www.rollcall.com/politics/casualtylist.html/

canopfor on February 18, 2014 at 1:21 PM

Eric in Hollywood on February 18, 2014 at 12:53 PM

+1

jaydee_007 on February 18, 2014 at 1:38 PM

convincing them to make risky investments.

Every other commercial on Fox News and talk radio is about making a risky investment.

So, it’s hardly a partisan thing.

Moesart on February 18, 2014 at 1:41 PM

This fraud has been going for as long as…ever.

Just watch The Producers again!

BTW does something happen to you when you get older that you lose the ability to make money decisions or were they naive to begin with? My parents taught me that every telemarketer in existence is a fraud. It’s ingrained.

PattyJ on February 18, 2014 at 1:48 PM

Well, they just haven’t heard my idea for a film.

It’s sort of unbelievable, but still a cliff-hanger.

First, we have a first term senator who has absolutely no accomplishment in life, other than filling his diaper full of crap as a baby.

Then, through behind-the-scenes political machinations, he becomes president of the USA. He then proceeds to use his total lack of intelligence and complete love of communism to destroy the greatest country on Earth.

Wait… What??? That’s already in production?

Okay, never mind. If your Caller ID shows “Junior Samples Productions BR-549″, just ignore it.

ZeusGoose on February 18, 2014 at 1:53 PM

LIVE NOW:

3m
Live video shows protest camp in Kiev, Ukraine, in flames – Espreso TV via @NBCNews
see original on youtube.com

Espreso TV – LIVE
http://www.youtube.com/watch?v=Y_LFrMcoEm4

canopfor on February 18, 2014 at 1:52 PM

canopfor on February 18, 2014 at 1:53 PM

Bialystock and Bloom.
Bialystock and Bloom.
Bialystock and Bloo-om.

No Truce With Kings on February 18, 2014 at 2:01 PM

Now that Kickstarter and IndieGoGo have shown that crowdfunding for legit feature films is not only doable, but almost ludicrously simple, any “producer” who feels the need to cold call ordinary Americans to get his project into production is neither a producer, nor even remotely interested in making a picture.

Eric in Hollywood on February 18, 2014 at 12:53 PM

Kickstarter is also being used by a lot of musicians these days to fund their albums-to date they have attracted over a million backers.

Del Dolemonte on February 18, 2014 at 2:22 PM

Law enforcement tells CBS News it’s a widespread fraud worth hundreds of millions of dollars over more than a decade, and CBS News has now spoken to more than a hundred investors who never saw their money again after sending a check to a voice on the phone.

…and has anybody ever been arrested?

KOOLAID2 on February 18, 2014 at 2:27 PM

So much for the National DO NOT CALL List!

GarandFan on February 18, 2014 at 2:28 PM

Hollywood is stale.

I prefer Canadian produced shows, they are refreshing and more creative.

MichaelGabriel on February 18, 2014 at 3:12 PM

The USA is now Zimbabwe, easily.

Schadenfreude on February 18, 2014 at 12:43 PM

Just desserts. We along with Great Britain turned a prosperous Rhodesia into a cesspool Zimbabwe.

We Americans always think we’re immune from the fate of other peoples and that we’re insulated from our overseas meddling.

Dr. ZhivBlago on February 18, 2014 at 4:59 PM

A sucker is born every minute

Dollayo on February 18, 2014 at 5:25 PM

This might explain how “The Day the Earth Stood Still” and “The Day After Tomorrow” got made.

flataffect on February 18, 2014 at 6:45 PM

Better yet, hang up.

If you hang up, they will be free to take another call. Try asking them to hold for a minute and put the phone down. Some of these people will hold for minutes before giving up.

Laurence on February 18, 2014 at 7:39 PM

There are also well known actors begging for money on Kickstarter. Katherine Heigl is the latest one. Shame on them!

Blake on February 19, 2014 at 8:29 AM