Businessman Charged in Motion Picture Tax Credit Scam
BATON ROUGE, LA—United States Attorney Walt Green announced today that GEORGE M. KOSTUCH, age 43, of Baton Rouge, Louisiana, has been charged in a Bill of Information with engaging in a wire fraud scheme to defraud the State of Louisiana’s Motion Picture Industry Development Tax Credit Program, in violation of Title 18, United States Code, Section 1343. If convicted, KOSTUCH faces a significant term of imprisonment, a term of supervised release following imprisonment, a fine, and forfeiture of the proceeds from his offense.
The Bill of Information alleges that KOSTUCH owned and operated K 2 Pictures, LLC, which provided technical services for the production of motion pictures. KOSTUCH allegedly caused the issuance and delivery of checks totaling approximately $539,500 for production expenditures that were, in fact, not incurred. According to the Bill of Information, these checks were later used as false documentation for motion picture productions and submitted to the Louisiana Economic Development Office (“LED”).
The Bill of Information alleges further that, between June 1, 2010 and March 24, 2011, the cancelled checks were used in the application and receipt of film tax credits from the LED. The tax credits issued by LED based upon the false expenditures allegedly totaled $161,850.
The LED is a state entity whose mission is to lead economic development for the State of Louisiana. LED operates the Tax Credit Program which is designed to entice production companies to shoot films and video productions in Louisiana. The Tax Credit Program provides a 30% tax credit on qualified expenditures for the production of films in Louisiana. Once issued by LED, the tax credits are fully transferable.
U.S. Attorney Green stated: “This most recent case illustrates our continued commitment to prosecute all abuses of the Tax Credit Program. As I have stated in the past, those who misuse this program, through fraud and deceit, undermine the purpose of the Tax Credit Program and will be investigated and prosecuted to the fullest extent of the law. We appreciate the work of the FBI and the Louisiana Inspector General’s Office in this case, as well as the cooperation of the LED.”
This investigation was conducted by the FBI and the Louisiana Inspector General’s Office and is being prosecuted by Assistant United States Attorneys Frederick A. Menner, Jr. and Paul L. Pugliese.
NOTE: A Bill of Information is an accusation by the United States. The defendant is presumed innocent until and unless adjudicated guilty at trial or through a guilty plea.