Federal authorities have charged 18 people in a boiler room scam, accusing them of bilking investors in indie films out of millions of dollars, the U.S. Attorney's Office said Friday.
This week, FBI and IRS agents arrested 11 people in Florida and Southern California. Others are scheduled to turn themselves in over the next two weeks.
Among those charged is Daniel Toll, identified in documents as the president of Cinamour Entertainment LLC.
According to the United State's Attorney's office, the defendants "lied, gave half-truths and concealed material facts from investors around the nation."
Prosecutors say that the scam was, essentially, a telemarketing fraud. The defendants called people and asked them to invest money -- but lied in their pitches. Prosecutors say the telemarketers said that 93 percent of investor money would be used to produe and promote films and that investors would get returns of up to 1,000 percent.
According to the indictment, much of the money raised went to the telemarketers.
Officials issued two indictments. The first centers around Cinamour Entertainment LLC, which prosecutors claim scammed investors in two movies -- "From Mexico with Love" and "Red Water: 2012." The second focused on Q Media Assets LLC, which federal authorities say fraudulently raised money for "Eye of the Dolphin" and its sequel, "Way of the Dolphin."
From early 2004 to May 2009, the defendants collected about $15 million from about 450 investors to make "From Mexico With Love." They made the movie for about $5 million. It grossed about $550,000.
The telemarketers raised an another $2.7 million from about 100 people to make "Red Water." That movie never was made.
In the Q Media case, defendants raised about $5 million for "Eye of the Dolphin" and about $4 million for its sequel.
"Eye" grossed about $70,000. "Way" was released direct to video.
Q Media was run by a former CIA agent who already has pleaded guilty to conspiracy, mail fraud and tax charges.
Most of the people charged are "closers" who raised money for the movies.