It may shock people in Miami to learn that a stockbroker has taken advantage of the producers of a Broadway production, causing them to spend money that they never had in the first place. Now, the man stands accused of stockbroker fraud and could face up to 40 years in prison. For the producers of the show, however, a criminal conviction will do little to help them pay off their creditors. Rather, working with an investment attorney to determine whether there is any way of recouping investment losses may be a better option.
It appears that the stockbroker told producers that he would be able to secure $4.5 million from overseas investors if they paid him $60,000. At first, it appeared that the show had the backers the stockbroker promised. Producers were able to email and talk on the phone with the four investors and, at one point, producers met a woman who claimed to be a niece of one of the foreign investors.
When the Broadway producers tried to get the $4.5 million from the stockbroker to cover the nearly $6 million they had already spent, the stockbroker informed them that one of the backers had died of malaria. Sparking the producers’ suspicion, federal officials started to investigate the stockbroker in September. It was quickly discovered that he had fabricated the investors, created their email addresses and impersonated them in all communications with the producers. Now, the theater is out the $60,000 it originally paid for the broker’s services and the millions of dollars it had been promised.
This fraudulent scheme has had a devastating effect on the show. Currently, it has been stalled and producers are looking for money in order to keep the production going.
Source: CNN, “Stockbroker ran Broadway scam, authorities allege,” Brittany Brady, Oct. 17, 2012