Two Los Angeles men were sentenced to federal prison for orchestrating a scheme that defrauded hundreds of investors by promising large returns on investments in an animated, 3-D movie based on the Wizard of Oz.
Christopher Blauvelt and David Pritchard were convicted at trial on federal charges, including mail fraud, wire fraud and offering unregistered securities for sale. Blauvelt was the CEO and Pritchard was the president of Gigapix. Investors were told that Gigapix was an animation company similar to Pixar.
While soliciting investments in Gigapix, Blauvelt and Pritchard made numerous misrepresentations to potential investors and withheld material facts, including stating that the company was financially successful and that there would be high returns on investments in less than 18 months with little to no risk. Investors also were told that the there was only a short time frame to invest because there were only a limited number of shares available for investors.
Age-old lessons can be learned from this investment fraud. Aside from the to-good-to-be true risk/reward representation, investors should be skeptical when they are rushed into an investment through representations of a limited investment window and only limited availability of shares. Too often, investors don’t want to be left out of a supposed great deal and ignore these types of red flags.
Investors were told that no less than 65 percent of their money would be used to produce and distribute the 3-D movie, but most of the money actually was spent on salaries, commissions and overhead. About 730 people were the victims of Blauvelt’s and Pritchard’s investment fraud, with those investors losing virtually all the money they invested in Gigapix.
If you or anyone you know lost money in Gigapix or believe you are the victim of investment fraud of any kind in the Greater Los Angeles area, contact our Los Angeles attorneys at Dimond Kaplan & Rothstein, P.A. for a free consultation.