Three men were arrested today and a fourth has agreed to surrender for their roles in an alleged scheme involving a company that prosecutors contend defrauded hundreds of victims by promising large returns on movie investments and a production company's imminent public offering.
Gregory Pusateri, 49, of Woodland Hills; David Pritchard, 66, of Malibu; Christopher Blauvelt, 58, of Woodland Hills; and Cheri Brown, 65, of Studio City were charged in a 36-count indictment returned by a Los Angeles federal grand jury on May 15 and unsealed today, according to the U.S. Attorney's Office.
Brown has agreed to surrender to authorities, prosecutors said.
The indictment accuses the defendants of mail fraud, wire fraud, attempted wire fraud and offering unregistered securities for sale.
The case centers on a company called Gigapix founded by Blauvelt in 2002.
The indictment alleges that between 2006 and 2012, Blauvelt and Pritchard hired telemarketers to solicit potential investors, who were told that Gigapix was an animation company similar to Pixar Animation Studios, and that Gigapix was developing projects expected to generate large profits when the company went public.
Brown and Pusateri were among the top salespeople for Gigapix, according to the indictment.
Prosecutors allege that telemarketers -- known as "fronters" -- used lead lists purchased by the defendants to find potential investors and then used scripts touting the supposed merits of Gigapix.
About 750 victims lost a total of almost $22.6 million as a result of the alleged fraud, prosecutors said.
If convicted, the defendants would face decades in federal prison.
--City News Service