Los Angeles Business Journal

Indictments in Movie Finance Scheme

By Business Journal Staff Thursday, February 20, 2014

Editor's Note: This story has been updated from the original version.

Three Valley residents were indicted on Thursday for running fraudulent telemarketing schemes that solicited investments in movies with false promises of high returns and little risk, according to the U.S. Attorney’s Office in Los Angeles.

A total of six defendants were charged for running two separate fundraising schemes for the films. The first indictment involves the companies Mutual Entertainment LLC and Film Shoot LLC, both of Beverly Hills.

Rand Jay Chortkoff, 64, of Encino, co-founder of the companies, was arrested on Thursday. Robert Matias, 50, of Granada Hills, a salesperson, remains a fugitive. Other alleged co-conspirators live in West Hollywood and Mar Vista.

These companies allegedly bilked money from investors for the movie “Marcel,” later renamed “The Smuggler.” While a movie script was written, no movie was produced. The indictment alleges the defendants persuaded more than 60 people to invest $1.8 million in the project.

In the second indictment, two individuals were charged for their involvement in a company named C22 Capital Inc. in Van Nuys and a related entity called C22 LLC. They allegedly induced investors to fund a movie titled “Beyond the Mat.” About 80 victims lost more than $3 million, according to the indictment.

Mack Machen, 70, of Sunland, the president of C22, surrendered to authorities Thursday. His accomplice was arrested in Chula Vista in San Diego County.

The indictment alleges the defendants ran “boiler room” telemarketing operations. In the case of “Marcel,” the telemarketers told potential investors that 64 percent of the money would go to produce the film, and that well-known actors had signed contracts to appear in film.

With C22, the defendants told victims their money would provide short-term “bridge loans.” Later, they issued promissory notes and promised returns of up to 13 percent a year.

The defendants are charged for wire fraud and mail fraud. Each charge carries a maximum penalty of 20 years in federal prison. The investigation was conducted by the FBI.