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Film producer Howsam accused of fraud

A film producer has been arrested on suspicion of using bogus contracts with foreign distributors to help secure more than $35 million in loans to finance movies, federal authorities said Thursday.

Gary Howsam, 56, was taken into custody Monday at Los Angeles International Airport on a criminal complaint accusing him of bank fraud, FBI spokeswoman Laura Eimiller said.

He was released on $500,000 bond and placed under house arrest with an electric monitoring at a friend’s residence in Los Angeles. If convicted, he could face as many as 30 years in federal prison.

The former chief executive of Greenlight Film and Television, Howsam has helped produce dozens of films such as 2002’s "Global Heresy" starring Peter O’Toole and 2001’s "Ignition" with Bill Pullman. More recently, he was a producer on Showtime’s "The Tudors."

Since his arrest, Howsam has been placed on administrative leave from his post as chief executive of Toronto-based production house Peace Arch Motion Pictures.

Howsam lawyer Donald Randolph said his client "looks forward to an opportunity to clear his name in these matters."

According to an FBI affidavit, the case stems from loans Howsam secured from Comerica Bank in 1999 and 2000 to finance the production of six films.

Among those films was "Going Back," which Greenlight was making along with another production house, Hilltop Entertainment.

Howsam, Hilltop co-owner Harel Goldstein and another man are accused of doctoring foreign distribution contracts to give the impression that companies in Italy, France, Germany, Spain and Japan had already paid for rights to distribute "Going Back."

Howsam then used those bogus contracts as collateral for Greenlight’s loans from Comerica, authorities said.

Comerica eventually discovered that 10 contracts from the five countries were fake and that it wouldn’t be able collect any money promised in the agreements.

"Comerica determined that some of the false contracts had been created by whiting out and/or cutting and pasting information from genuine distribution contracts," the FBI said in an affidavit.

In 2007, Goldstein signed a plea deal with the government in which he agreed to provide information about his cooperation with Howsam in the suspected scam, authorities said.

He told authorities that Howsam said some "art department work" – the bogus deal memos – would be necessary to get financing for "Going Back," according to the affidavit.

Goldstein later wore a wire to a meeting with Howsam in which they discussed the memos.

Howsam was scheduled to appear in court for a preliminary hearing on Nov. 26, and his arraignment was scheduled for Dec. 3.

The contracts also are the subject of a lawsuit filed by Comerica against Howsam, which was in arbitration, Randolph said.

<font size=1>Source: Associated Press</font>