Producers Get Probation After Louisiana Film Tax-Credit Fraud Conviction

Producer and film company-tax break liaison Peter Hoffman isn't headed to prison over his conviction in an alleged scheme to defraud the state of Louisiana.

U.S. District judge Martin Feldman on Wednesday sentenced Hoffman to five years' probation, a $40,000 fine and 300 hours of community service, according to a statement issued by the office of U.S. Attorney for the Eastern District of Louisiana Kenneth A. Polite.

Hoffman and his partner, actor-attorney Michael Arata, were convicted of fraud after convincing authorities they were going to transform a dilapidated mansion at the edge of the French Quarter into a film postproduction facility and submitting false expense reports in order to receive Louisiana film tax credits.

Hoffman, his wife Susan and Arata were convicted of conspiracy to commit wire fraud by a jury last April.

Feldman on Wednesday sentenced Susan to three years' probation, a $10,000 fine and 150 hours of community service, according to the same statement.

Hoffman’s attorney Lance Unglesby said he appreciates Feldman’s attention and fairness and believes this prosecution is a great example of governmental misuse and abuse of the fraud statutes.

“Peter, Susan and Michael did not commit tax fraud and the State has acknowledged that all tax credits issued to them were validly due,” said Unglesby. “Mr. Hoffman set out to create a beautiful film production facility in New Orleans amidst a completely uncertain tax credit program, and completed the project as planned.”

Unglesby says they are appealing the conviction.

Hoffman was facing up to 405 years in prison for more than 20 related counts of wire and mail fraud. Susan was convicted of one count of mail fraud, which holds a maximum of 45 years.

In addition to the conspiracy charge, Arata was convicted on several counts of wire fraud and giving false statements and was facing up to 185 years in prison. According to the Associated Press, Arata was sentenced to probation in January and ordered to pay a $15,000 fine.

Prosecutors may appeal all three sentences, according to the statement from Polite's office.

“As a result of their collective efforts, a jury convicted Peter Hoffman, Susan Hoffman and Michael Arata of fraud and conspiracy for their roles in a scheme that utilized bogus invoices, fake expenditures and varied misrepresentations to defraud the State of Louisiana and its citizens out of millions of dollars,” said Polite in the statement. “This criminality was compounded by the fact that, as the Court found during sentencing, Peter Hoffman and Michael Arata used sophisticated means and abused positions of trust in committing these felonies, and Hoffman committed perjury during the trial. We will review this matter and consider seeking appeal of the sentences of all three defendants.”

The statement said, according to evidence presented at trial, Hoffman and Arata submitted more than $13 million in expenditures to the state for the house, which was valued at about $5 million after the renovation.