Producer David Bergstein Arrested in $26M Fraud
He was arrested Wednesday on charges that he and an executive in an investment advisory firm siphoned millions of dollars from investors to fund their lifestyles.
A California movie producer was arrested Wednesday on charges that he and an executive in an investment advisory firm siphoned millions of dollars from investors to fund their lifestyles as part of a $26 million fraud.
David Bergstein, 54, was arrested in Hidden Hills, Calif., and faced an initial court hearing in Los Angeles. Bergstein produced the 2004 romantic comedy Laws of Attraction, with Pierce Brosnan and Julianne Moore. His attorneys haven't returned a message seeking comment.
Prosecutors said Bergstein and co-defendant Keith Wellner, 49, of Manhattan, cheated investors at advisory firm Weston Capital Asset Management in 2011 and 2012 by misappropriating investor money and then lying about it.
Wellner, the former chief counsel and chief operating officer of Weston, was arrested Wednesday in Manhattan. His attorney declined to comment.
New York FBI office head William F. Sweeney Jr. said the men used several million dollars in investor money to fund their lifestyles.
Anthony J. Orlando, a top official in the Los Angeles office of the Internal Revenue Service, said in a release that the case demonstrated that investors need to be careful before turning their money over to others.
"Many investors feel comfortable entrusting their hard-earned dollars with well-known movie financiers and attorneys," he said.
Prosecutors said the men repeatedly made false representations to investors, including by giving a false and misleading investor presentation and by making false investor disclosures.
The Securities and Exchange Commission brought civil charges against Bergstein as well, saying Bergstein has never been registered with the commission and holds no securities licenses. The SEC said Bergstein has produced movies and holds himself out as the chief executive officer of a private equity company that performs a range of services.
The commission said in papers filed in Manhattan federal court that Bergstein used investor money to fund his "elaborate lifestyle."
The SEC asked that he give up all ill-gotten gains and pay civil penalties.