A San Clemente man who sold investor lead lists to telemarketing operations that conned investors in independent film projects through cold calls was sentenced today to five years in federal prison and ordered to pay $22 million in restitution.
Joel Lee Craft Jr. pleaded guilty in 2012 to two counts of conspiracy and single counts of mail fraud, wire fraud and tax evasion in connection with two indictments linked to boiler room operations that got people to invest in indie films with false promises of 1,000 percent returns.
Craft, 43, was the CEO of San Clemente-based American Information Strategies Inc., which sold investor lead lists to the telemarketing companies.
While some of the movies were actually produced, defendants lied, gave half-truths and concealed material facts from investors around the nation, prosecutors said.
One indictment concerned Cinamour Entertainment LLC, which bilked investors who put money into indie films titled "From Mexico with Love" and "Red Water: 2012."
Little more than one-third of the $15 million siphoned from about 450 victims was used to actually produce and promote "From Mexico With Love," authorities said.
The movie cost about $5 million to produce and generated roughly $550,000 in its theatrical release in October 2009, according to the U.S. Attorney's Office.
Prosecutors said about $2.7 million was raised for the making of "Red Water" from about 100 victim-investors, but the film was never produced.
The second indictment focused on Q Media Assets LLC, alleging that telemarketers fraudulently raised funds for a film called "Eye of the Dolphin" and its sequel, "Way of the Dolphin" -- later called "Beneath the Blue."
Telemarketers with Q Media bought lead lists from Craft that also sold lists to the Cinamour telemarketers.
As in the Cinamour case, telemarketers seeking investments in the "Dolphin" movies hid information about commissions while promising returns of up to 1,000 percent, prosecutors said.
About $9 million was raised from about 250 investors for the two films, federal prosecutors said.
"Eye of the Dolphin" made about $70,000 at the box office, while the sequel went straight to video, according to the U.S. Attorney's Office.
James Lloyd, 47, of Lake Arrowhead, who was a so-called closer for Cinamour and later operated his own boiler room which raised money for Cinamour and Q Media, was sentenced to 13 years in federal prison in 2012.
--City News Service