December 12, 2011 1:34pm PT by Alex Ben Block
Movie Director Indicted in $4.7 Million Tax Rebate Fraud Case
Movie director Daniel Adams faces up to 32 years in prison after he was indicted Monday by a grand jury in Boston on charges brought by the Massachusetts Attorney General related to claims for $4.7 million in state tax rebates on two movies, The Lightkeepers and The Golden Boys (aka Chatham).
Adams, 50, was taken into custody on Friday while at the office of Attorney General Martha Coakley where he had been called to provide information on the allegations. He was held on $100,000 bail and as of early Monday was unable to make the bail and was still in custody.
On Monday the Suffolk County Grand Jury returned indictments against Adams on the charges of making a false claim against the Commonwealth (2 counts), larceny over $250 (2 counts), procuring the presentation of a false claim to the Department of Revenue (2 counts), filing a false document with the Department of Revenue (1 count) and procuring the preparation of a false tax return (3 counts).
The first four charges could carry prison sentences of up to five years. The three tax related charges could lead to prison terms of three years for each. Adams would also likely be forced to make restitution of at least $3.6 million of the $4.7 million in tax credits he has already received, which represents the amount the authorities believe was false.
If he is found guilty, a judge could decide that Adams can serve some of the sentences concurrently or he could reduce them, so what he might ultimately face is unclear.
Among the items they allege was false was a claim that actor Richard Dreyfuss was paid $2.5 million for Lightkeepers, when in fact (per their investigation) he was paid only $400.000.
At this time there is no other person or company implicated in this alleged fraud. Adams was writer, producer and director, and created special purpose corporations for each movie. The distributors were just picking up the movies, so are not liable.
A number of others who worked on the movie or helped arrange distribution have also gone unpaid, The Hollywood Reporter has learned. They include executive producers and a designer. There are also claims for unpaid bills by vendors in Massachusetts who provided goods and services for the movies which have been filed in courts there.
At least some of those who remain unpaid were told by Adams that they would receive money when he got the state tax credit rebate. He got that but did not pay them it appears. It is unknown if he actually sold the tax credits, which he could have done legally.
His arrest came after an investigation by the Massachusetts State Police and the Attorney General's Fraud and Financial Crimes Division. They had taken on the case after the state Department of Revenue alleged they had found fraud while reviewing documents that Adams had filed in connection with his request for tax credits.
A Grand Jury in Boston had been working on the case when Adams was called in on Friday. Adams had missed two earlier appointments and told the authorities he was about to leave for Los Angeles for his work.
At that point Assistant Attorney General Molly Parks, who is handling the case, decided there was a risk Adams would not return for future hearings and had state police assigned to her office arrest him. Adams was arraigned in district court because there was no actual indictment yet.
An attorney present in the courtroom for another hearing, Steven Topazio, was drafted to act on Adam's behalf as a public defender. Topazio, who is a Boston criminal defense attorney, says he only handled that hearing and is not representing Adams any longer
It is unclear if Adams has legal representation at present, or who that might be. Attempts to reach Adams for comment were not successful.
Now that the grand jury has returned indictments, the case moves to Superior Court in Boston. A hearing is scheduled for Tuesday on the case where Adams will be given an opportunity to answer the charges if he chooses to do so.
Adams in 2010 wrote and was to direct a movie version of the TV series The Big Valley. It was set up at Twentieth Century Fox, but apparently did not go forward.
Lisa Trout, head of the Massachusetts state film office, said as far as she knows this is the first such case involving an alleged fraud in the program. She said the program has been successful for the state and is funded to continue through 2022.