Film producer convicted in U.S. of investment fraud
02/03/2018 20:20
March 2 (Reuters) - A California movie producer who headed a
boutique merchant bank has been convicted on charges he
defrauded investors in hedge funds overseen by a New York-based
investment adviser out of $26 million, prosecutors said on
Friday.
David Bergstein, who served as executive producer of the
2015 film "In the Heart of the Sea," was found guilty by a
federal jury in Manhattan on Thursday of charges including
investment adviser fraud and securities fraud.
Bergstein, a resident of Hidden Hills, California, who at
the time of his arrest in 2016 was the chief executive of
merchant banking firm Cyrano Group Inc, is scheduled to be
sentenced on June 8.
A lawyer for Bergstein, 55, did not respond to a request for
comment on Friday.
Bergstein was indicted in November 2016 along with Keith
Wellner, the former general counsel of Weston Capital Asset
Management, whose hedge fund investors were defrauded by the
defendants, according to prosecutors.
Wellner later pleaded guilty and cooperated with
prosecutors.
Prosecutors said Bergstein and Wellner from 2011 to 2012
engaged in a scheme to conceal information from Weston investors
about transactions involving their money, and transferred funds
from one pool of Weston investors to make payments to another.
The indictment said they also misappropriated some investor
funds for their own and others' benefit. Manhattan U.S. Attorney
Geoffrey Berman in a statement said the fraud cost investors
more than $26 million.
According to court papers, the case related to a probe of
individuals including investment banker Jason Galanis involved
in market manipulation for reinsurer Gerova Financial Group Ltd
GVFG.PK .
Weston had done a deal with Gerova in 2010 that prosecutors
said prompted the first of two schemes involving Bergstein and
Wellner. Galanis in 2016 pleaded guilty to securities fraud in
connection with the Gerova fraud.
Albert Hallac, Weston's founder, pleaded guilty in 2016 to
charges that he schemed to defraud Weston investors.
Bergstein previously controlled several movie production
companies including ThinkFilm and Capitol Films Development. He
took an advisory role in Walt Disney Co's DIS.N 2010 sale of
Miramax to an investor group that included a business partner.
His movie credits include serving as an executive producer
of 2004's "The Whole Ten Yards" and 2007's "Before the Devil
Knows You're Dead."
In 2010, five of Bergstein's film companies including
Capitol Films and ThinkFilm were forced into bankruptcy at the
urging of a group of creditors, court records showed.
(Reporting by Nate Raymond in Boston
Editing by Tom Brown)
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