Movie Producer Peter Hoffman Demands End to Government's Fraud Case
Prosecutors accuse him of abusing Louisiana's tax credit system by not making expenditures on a film post-production facility.
On Monday, Seven Arts Entertainment CEO Peter Hoffman filed a motion to dismiss the U.S. government's criminal allegations that he committing wire fraud in connection to $1.13 million given to him by Louisiana.
Hoffman was given a tax credit to transform an old mansion at the edge of the French Quarter into a film postproduction facility. Prosecutors say he and partner Michael Arata filed a "materially false and misleading" film infrastructure tax credit application "when, in truth and in fact, the expenditures had not been made as claimed."
The indictment was notable given Hoffman's stature as an important middleman between Louisiana tax breaks and film companies.
Now, Hoffman has hit back at the government.
According to his dismissal motion, "Defendants Peter Hoffman and Susan Hoffman, through Seven Arts Pictures Louisiana LLC fulfilled the quid pro quo for seeking infrastructure tax credits under Louisiana law by making substantial investments to restore a rundown property in Louisiana and creating a production and postproduction facility -- the French Quarter Film House ("Film House") -- that has been operating since July, 2012."
A brochure for the "Film House" is attached to the motion and indicates that it was used for, among other things, HBO's True Detectives, Planet of the Apes and CBS' 2013 broadcast of the Super Bowl.
Louisiana's Department of Economic Development conducted an audit of infrastructure expenditures and recertified the tax credits, according to Hoffman's motion, which continues: "Yet the federal government has chosen to ignore the State of Louisiana's judgment regarding its own tax credit program by attempting to criminally prosecute the Hoffmans under federal wire fraud, mail fraud, and conspiracy statutes, in part for seeking state tax credits that the State of Louisiana has expressly allowed, and that no Louisiana agency has taken steps to disallow under any of the avenues prescribed by state law after confirming those credits were properly granted.
The motion (read here in full) goes beyond the argument that prosecutors are attempting to usurp the state's authority. Hoffman is also making an interesting argument concerning whether tax credits constitute "money or property" for the purposes of determining wire fraud. The defendants say that statements in tax credit applications "fall outside the scope of the wire and mail fraud statutes" because such credits aren't "money or property" in the hands of the a state agency.
The motion adds: "Indeed, the government fails to allege how seeking tax credits for expenditures that SAPLA was contractually obligated to pay, and that a Louisiana state agency expressly certified were made, could conceivably amount to fraud. The law does not permit the government to impose criminal liability on the Hoffmans by relying on its own, after-the-fact interpretation of Louisiana tax statutes or the form of the underlying transactions."