Two men who orchestrated a $21 million movie investment scheme have been sentenced, receiving terms of up to eight years in federal prison, the United States Attorney’s Office said Monday.
Christopher Blauvelt, 59, and David Pritchard, 67, were convicted last year on a series of federal charges including mail fraud, wire fraud and offering for sale unregistered securities. Blauvelt received eight years in prison, while Pritchard was sentenced to five years.
According to the U.S. attorney’s office, the case stemmed from a company called Gigapix, which Blauvelt founded in 2002 and Pritchard joined as a partner in 2006. The pair hired telemarketers to solicit prospective investors, the pitch being that Gigapix was an animation company along the lines of Pixar. In addition to Gigapix, Blauvelt and Pritchard also raised funds for a movie titled “OZ3D.”
However, the U.S. attorney’s office said the defendants “made numerous misrepresentations to potential investors and withheld material facts. For example, according to court documents, investors were told that Gigapix was a financially successful company, they would receive high returns on their investments in less than 18 months, the investments carried little or no risk, and investors would see returns within a year or 18 months of investing. Investors were also told there was an urgency to invest in Gigapix and ‘OZ3D’ because the window of opportunity to invest and the number of shares available were limited.”
The U.S. attorney’s office said that investors were told that no less than 65 percent of their money would be used to produce and distribute the movie, while in reality most of the money was spent on salaries, commissions and overhead. About 730 victims lost almost all of their money, according to the U.S. attorney’s office.
“This case involves an egregious fraud of massive proportions that targeted non-wealthy victims who the defendants heartlessly misled,” prosecutors wrote in sentencing documents. “The effects of this crime on the victims are truly devastating in every way.”
A restitution hearing is scheduled for Apr. 20.
Pamela Chelin contributed to this report.