May 13, 2016
By Bob Coleman
Editor, Fraud Friday
Fraud Friday — Banker, Movie Producer Charged in PhotoShopping $13 Million of Fake Financing Docs to Secure $2.5 Million Loan
“Rodney Dunn is charged with using his employment at a TARP bank to defraud lenders in a movie production financing scheme,” says Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program (SIGTARP).
“Co-conspirator Darryl Clements allegedly created fake documents showing that $13 million in financing had been secured for the movie. Dunn then allegedly confirmed to the lenders that the non-existent funding was held in escrow accounts at the TARP bank; on that same day the lenders wired $2.5 million for the movie.”
According to the five count indictment, CityScope Productions, LLC had contractual rights to buy the script for a movie to be produced called “Season Tickets.” Clements created documents falsely stating that CityScope had permanent financing of $13 million for the movie from Bridge Capital and The Shah Group, and that the funds were held in escrow at a bank in Baltimore. Dunn was employed at such bank, which received funds through the Troubled Asset Relief Program (TARP).
In fact, there was no such financing, and there were no escrow funds held at the bank. The false documents further stated that CityScope needed a $2.5 million bridge loan to complete the financing for the movie. The indictment alleges that in order to carry out the fraud scheme, Clements created email accounts which appeared to belong to Dunn and The Shah Group, but which Clements actually controlled.
In February 2011, Clements caused Dunn to purchase five cashiers’ checks from his employer bank, made payable to Clements, each for $20, which Clements then altered by amount and payee and furnished to CityScope.
Clements fraudulently placed Dunn’s forged signature on escrow agreements and proof of funds statements which Clements wired to CityScope, in order to cause CityScope to furnish those fraudulent documents to prospective lenders.
According to the indictment, Dunn communicated by telephone with Clements when a prospective lender called Dunn at the bank to verify the funds in the escrow accounts, so that Clements could return the telephone call, pose as Dunn, and verify the existence of the escrow accounts and their balances.
In April 2011, Clements caused a corporation owned by a friend to change its name to The Shah Group and attempted to have Dunn open a bank account at his employer’s bank for The Shah Group.
The indictment alleges that in a telephone call on May 9, 2011, Dunn fraudulently verified the account numbers and balances of the phony escrow accounts to an official of a California company which specialized in providing bridge financing for movies (California finance company); and that Dunn later provided such verification to the California finance company and to an official of its bank in a conference call.
On the same day, the California finance company loaned $2.5 million to CityScope and transmitted the funds by wire.
Both defendants face the obligatory 20 years in prison.