LOS ANGELES—A Hollywood producer who founded and ran various television production and distribution companies pleaded guilty today to federal charges in two cases—one involving stock fraud and another stemming from a scam that bilked an investor in one of the companies.
Drew Savitch Levin, 57, of Pacific Palisades, pleaded guilty this afternoon in the first case to conspiring to inflate the revenue and stock price of Team Communications Group, Inc., a West Los Angeles-based company that Levin founded and for which he served as CEO until early 2001.
After being forced out of Team, Levin went on to run other TV production companies. In the second case, Levin pleaded guilty this afternoon to wire fraud and admitted he bilked a French investor who put 80,000 Euros into a Levin-run company in 2008. When Levin failed to repay the money, the investor commenced legal proceedings, which prompted Levin to e-mail the victim bogus bank documentation that falsely suggested Levin had repaid the money.
Levin entered into a plea agreement with the government to resolve the two cases against him. United States District Judge Dean D. Pregerson allowed Levin to plead guilty today, but Judge Pregerson has discretion to accept or reject the plea agreement that mandates a seven-year prison term. The plea agreement also calls for Levin to pay more than $2 million in restitution that will go to Levin’s victims in the United States, France, Austria, England, and Switzerland.
Judge Pregerson scheduled a sentencing hearing for November 18.
Levin was charged in the Team case in 2008 (see:http://www.justice.gov/usao/cac/pressroom/pr2008/029.html). Levin was free on bond until September 2010, when he was arrested for violating the terms of his release and committing the new fraud against the French investor. Levin was re-released on bond in October 2010, but he was arrested again in March 2011 for again violating the conditions of his bond. He has been in custody since that time.
According to court documents, Team, whose shares were traded on the NASDAQ stock exchange, was in the business of producing and distributing television programming, including made-for-television movies. As part of its distribution business, Team licensed its programming to other companies for distribution fees. Levin perpetrated a scheme to falsely overstate Team’s revenues to make the company appear to be profitable, when in fact it was operating at a substantial loss. By pleading guilty, Levin admitted that he was part of a conspiracy that caused Team to book revenue in violation of the accounting rules applicable to television producers and distributors. For example, when Team licensed television programming for inflated distribution fees and the customers were unable to pay the fees, Levin had Team send them millions of dollars of Team’s own money, which the customers then used to make payments to Team. These “circular payments” were disguised by routing them through third parties and by ostensibly using them to buy television programming.
Levin personally profited from the revenue-inflation scheme in several ways, including by taking a $335,000 bonus based on Team’s reportedly profitable 1999 performance, and by pledging more than 500,000 shares of Team as collateral for a loan to buy a $1.5 million ranch in Big Sky, Montana.
In 2001, Team restated its 1999 fiscal results, going from a profit of nearly $1.8 million to a loss of $4.25 million. For 2000, Team reported a loss of more than $42 million. Team filed for bankruptcy protection in 2002.
A former managing director of Team’s subsidiary in the United Kingdom previously pleaded guilty to one count of conspiracy for assisting Levin in the fraud scheme. Noel Desmond Cronin, 63, of Herts, England, has cooperated with the government’s investigation and is scheduled to be sentenced by Judge Pregerson on December 5.
In the second case, according to the plea agreement, Levin solicited money from the French investor in November 2008, when he was on bond in the Team case. The investor sent 80,000 Euros, and Levin promised that he would repay 100,000 Euros by June 2009. When the deadline arrived and Levin did not repay the money, the investor filed a lawsuit in Ireland, where Levin’s company was incorporated, to liquidate the company and try to recover his money. To stall the liquidation proceeding, Levin sent the investor bogus bank documents to make him believe that the money was on its way. The investor temporarily adjourned the liquidation proceeding, but the money never arrived.
************************************************************************
Report Securities Fraud by Calling 1-888-482-6825 or by visiting
www.reportsecuritiesfraud.net
No comments:
Post a Comment