HOLLYWOOD, Sept. 18 (UPI) -- Two film producers have been jailed and charged for operating a multi-million dollar Ponzi scheme which left 140 victims in its wake.
Michelle Seward and director Dror Soref were both arrested on Sept. 11 for persuading people to invest their savings in a 2009 independent film called Not Forgotten and others without proper clearance. The California Department of Insurance is calling the scheme among its most elaborate film investment frauds it has investigated.
"It's certainly one of the largest Ponzi schemes that I can recall," says department spokeswoman Nancy Kincaid, according to the Los Angeles Times.
The alleged scheme involved Seward, a former licensed insurance agent and CEO of Protoge Financial Insurance Services Inc., persuading her clients to invest money into Soref's film between 2007 and 2010. Neither of the charged were licensed to provide investment advice, sources say.
"Defendants specifically targeted unsophisticated senior investors when offering and selling the above-described securities," a case document obtained by Fox News reads. "In many instances investors entrusted their entire life savings to the Defendants with the hopes of earning substantial returns to protect them during their golden years, and to cover necessary expenses such as food, housing and medical care."
The two misrepresented to their investors saying interest payments and returns would be paid from the film's revenue. Instead, the fees were paid using other investors' money.
The case is being further investigated by the Los Angeles District Attorney.
