Man Pleads Guilty in Motion Picture Tax Credit Scam

BATON ROUGE, LA—United States Attorney Donald J. Cazayoux, Jr., announced that Matthew Keith, age 36, pled guilty yesterday before Chief United States District Court Judge Brian Jackson to one count of conspiracy to commit wire fraud in connection with a scheme to defraud the State of Louisiana’s Motion Picture Industry Development Tax Credit Program (“tax credit program.”) Keith faces a sentence of up to five years’ imprisonment, three years of supervised release following imprisonment, and a fine of $250,000. The sentencing date has yet to be scheduled.

At today’s hearing, Keith admitted that he owned and operated DMG Holdings LLC and Louisiana Film Finishers LLC, companies that provided technical services for the production of motion pictures. Keith admitted that, within a nine-day period beginning on June 10, 2009, he conspired with others, including an individual identified only as D.G., to transfer $1,000,000 D.G. received from an investor through four separate film production companies. These transfers created cancelled checks that D.G. later used as false documentation for $4,000,000 of motion picture productions.

The Louisiana Economic Development (LED) Office is a state entity whose mission is to lead economic development for the state of Louisiana. LED operated the Motion Picture Industry Development Tax Credit Program, which was designed to entice production companies to shoot films and video productions in Louisiana. The tax credit program provided a 30 percent tax credit on qualified expenditures for the production of films in Louisiana. Once issued by LED, the tax credits were fully transferable.

Between June 10, 2009 and March 31, 2010, D.G. applied for and received tax credits from the LED for various movies. In total, $4,000,000 of the purported expenditures related to films was based upon the false expenditures created in the scheme described above. The tax credits issued by LED, based upon the false expenditures, totaled $1,200,000. Keith’s role in the conspiracy resulted in the receipt of improperly obtained tax credits totaling $300,000.

This investigation was conducted by the FBI and the Louisiana State Inspector General’s Office and is being prosecuted by Assistant United States Attorney Frederick A. Menner, Jr.