NEW YORK (CBSNewYork/AP) — A former stock broker was arrested early Monday on charges of defrauding the producers of the Broadway musical adaptation of Alfred Hitchcock’s psychological thriller “Rebecca.”
Mark Hotton, 46, led the producers to believe he had $4.5 million in financing commitments and the possibility of a $1.1 million loan, said Manhattan U.S. Attorney Preet Bharara.
He was arrested at his West Islip home and was awaiting a court appearance later Monday in Central Islip.
EXTRA: Read The Indictment (pdf)
The planned Broadway production of the 1938 novel collapsed earlier this month amid questions about its financial backing, and a growing suspicion that one of its primary investors — a secretive businessman named Paul Abrams who had supposedly pledged $4.5 million, then suddenly died of malaria — never existed.
WCBS 880’s Mike Xirinachs reports
“Mark Hotton perpetrated stranger-than-fiction frauds both on and off Broadway,” Bharara said. “Hotton concocted a cast of characters to invest in a major musical — investors who turned out to be deep-pocketed phantoms. To carry out the alleged fraud, Hotton faked lives, faked companies and even staged a fake death, pretending that one imaginary investor had suddenly died from malaria.”
Officials said Hotton was able to use the Internet to trick producers into thinking he had investors in Europe and other parts of the world.
“These were fictional characters that he created e-mail addresses for and in most cases created even full-blown websites that someone would go to and it would look like these were all people with significant money to invest but in fact they didn’t exist at all,” said Doug Leff, assistant special agent in charge of the FBI’s New York field office.
Lead producer Ben Sprecher “is extremely gratified that Mr. Hotton has been taken into custody,” said his attorney, Ronald Russo, adding that Sprecher has “cooperated completely with the investigation.”
“Mr. Hotton’s fraudulent conduct did enormous damage to Broadway and to ‘Rebecca,”’ Russo said. “Mr. Sprecher is totally committed to bringing ‘Rebecca’ to New York.”
Hotton was charged with two counts of wire fraud, each punishable by up to 20 years in prison. His attorney, Heath Berger, did not immediately return a call for comment.
Hotton also was accused of using a similar scheme to trick a Connecticut-based real estate company into paying $750,000 to him and entities he controlled, Bharara said.
According to the criminal complaint unsealed Monday, Hotton misled the producers into believing he had secured the money from four overseas investors, who in fact did not exist. The producers agreed to pay Hotton $15,000 in fees and commissions between March and June 2012, prosecutors said. He was also paid an additional $18,000 “advance” against his 8 percent commission, they said.
The investigation, which began in September, found that when it became obvious that investors’ commitments would fall through, Hotton allegedly tried to broker a $1.1 million loan for the producers.
The musical was influenced by the classic Hitchcock film, based on the Daphne du Maurier novel about a wealthy Englishman, his new wife and a manipulative housekeeper — all haunted by the hero’s dead first wife, Rebecca.
The prosecutors say Hotton “enlisted his same cast of invisible men to carry out a real estate scam.” They did not name the Connecticut real estate company.
“In his alleged scheme to defraud investors, Mark Hotton wrote, directed and starred in the work of fiction he took to Broadway.” FBI Acting Assistant Director-in-Charge Galligan said. “He even allegedly played the supporting characters — phantom investors who existed only in fictitious emails and Hotton’s bogus assertions about them.”
Hotton’s wife and four other people are also facing conspiracy to commit wire fraud and money laundering charges.
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