Producer David Bergstein Arrested in $26 Million Fraud Sept 3, 2017 10:50:42 GMT -6
Post by The Ultimate Nullifier on Sept 3, 2017 10:50:42 GMT -6
Producer David Bergstein Arrested in $26 Million Fraud
Movie producer David Bergstein was arrested on Wednesday for allegedly defrauding investors out of $26 million.
Bergstein, 54, was arrested at his home in Hidden Hills, Calif. His movie credits include producing the Pierce Brosnan-Julianne Moore 2004 comedy “The Laws of Attraction,” and executive producing Ron Howard’s “In the Heart of the Sea,” 2004’s “The Whole Ten Yards,” and 2007’s “Before the Devil Knows You’re Dead.”
Federal prosecutors and the Internal Revenue Service said Bergstein and Keith Wellner, 49, of Manhattan, cheated investors at the advisory firm Weston Capital Asset Management. Wellner, the former chief counsel and chief operating officer of Weston, was arrested Wednesday in Manhattan.
“As alleged, David Bergstein and Keith Wellner defrauded investors out of more than $26 million,” Preet Bharara, the U.S. attorney in Manhattan, said. “They allegedly withheld material information, transferred funds without disclosing conflicts of interest, and misappropriated funds for their own use. For their web of alleged deception and self-dealing, Bergstein and Wellner now face federal criminal charges.”
The indictment, unsealed in Manhattan federal court, said that in 2011 through 2012, Bergstein and Wellner engaged in a scheme to defraud by concealing material information from Weston investors about financial transactions involving their money.
The indictment said the pair allegedly transferred funds from one pool of Weston’s investors to make payments to, provide a security interest for, or otherwise benefit another pool of Weston’s investors, without the required disclosures to investors concerning conflicts of interest. It also said that they misappropriated a portion of funds transferred from investor accounts for their own and others’ benefit.
The Securities and Exchange Commission brought civil charges against Bergstein on Wednesday, accusing him of never having been registered with the commission, and seeking all of his “ill-gotten gains” plus penalties.
The commission said in papers filed in Manhattan federal court that Bergstein used investor money in a pair of schemes involving two Weston-advised hedge funds, the Weston Capital Partners Master Fund II Ltd. and the Wimbledon Financing Master Fund Ltd., which involved a third Weston-advised hedge fund, the Wimbledon Fund SPC Class TT Segregated Portfolio.
“The schemes were highly profitable for Bergstein, who absconded with millions of dollars in investor money that he used to support his extravagant lifestyle,” the SEC said in the filing.
Bergstein formerly headed production companies ThinkFilm and Capitol Films Development.