12:08pm PT by Eriq Gardner
Purported Film Financier Pleads Guilty to Fraud Charges
As the saying goes, don't believe everything you read.
Less than three years after a company called Preston Waters hit the film scene with word that it would be fully financing 10 to 15 projects a year in the $20 million to $60 million budget range, its former CEO Nicholas Mussolini is facing up to 20 years in prison.
Mussolini committed an unfortunately common con. He promised various folks access to tens of millions of dollars in loans if they could provide up-front advance fees to close the loans. When Preston Waters put out press releases claiming to be the new big film financier in town, many producers and journalists bit.
The Hollywood Reporter first detailed in October, 2012 how Preston Waters and affiliates allegedly used the loan advance gambit to trick producers of Lucidity, a planned $22 million sci-fi thriller. That same month, the FBI was contacted by an individual claiming to be another victim of Mussolini.
Mussolini was then charged by federal prosecutors the following January with committing wire fraud. One FBI agent described Mussolini's activities as a "Ponzi" type fraud.
Last month, Mussolini pled guilty.
According to a plea agreement obtained by THR, Mussolini admits to obtaining money from one winery by means of false and fraudulent pretenses. He also tricked five entertainment companies too, according to the court document. In total, more than $1 million in victim losses was reported.
He now has to pay restitution including $150,000 to ICU Films, $425,782 to Applecreek Productions and $145,000 to Up the Creek Productions.
As a result of pleading guilty to wire fraud, he faces a maximum possible sentence of 20 years in prison, a $250,000 fine and then 3 years of supervised release. However, after making a plea agreement with prosecutors, it'll be recommended that he serve about 4 years in prison if he cooperates fully.
A judge will consider sentencing at a hearing scheduled for April 7.