NY businessman gets 34-month prison term for 'Rebecca' Broadway scam

Reuters News
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Posted: Oct 10, 2014 12:41 PM

By Samantha Sunne

NEW YORK (Reuters) - A former New York businessman was sentenced to nearly three years in prison Friday after admitting to defrauding the producers of Broadway production "Rebecca - The Musical" through an elaborate scheme involving nonexistent foreign investors.

Mark Hotton, 49, was sentenced to 34 months in prison and ordered by U.S. District Judge John Koeltl in Manhattan to pay $68,000 in restitution to the play's producers and forfeit an additional $500,000.

"The offense is plainly serious," Koeltl said. "The frauds were extremely elaborate and required explicit planning."

Hotton pleaded guilty last year to two counts of wire fraud in connection with schemes to defraud a Connecticut real estate company as well as the Broadway musical.

A gothic thriller based on the 1938 Daphne du Maurier novel, "Rebecca" was slated to debut onstage in 2012 but was canceled because of the financing shortfall and scandal.

The proposed budget for the show was between $12 million and $14 million. By January 2012, producers realized they were $4 million short of their goal.

Prosecutors said Hotton had promised producers he could secure millions of dollars in funding in return for a $7,500 fee and 8 percent return on any funds raised over $250,000, plus reimbursement of expenses.

Hotton later told the producers he had found four foreign investors willing to provide $4.5 million, court records showed. But prosecutors said the men, with names given as “Paul Abrams,” “Roger Thomas,” “Julian Spencer” and “Walter Timmons,” were fictitious.

Meanwhile, Hotton sought reimbursement for thousands of dollars in expenses, including more than $18,000 for a safari, supposedly incurred while soliciting investors, prosecutors said.

During the same period, authorities said Hotton also defrauded a Connecticut real estate firm by falsely claiming he could help it obtain financing for a variety of ventures.

No financing manifested, yet the company paid Hotton hundreds of thousands of dollars, prosecutors said.

Hotton, wearing blue prison scrubs, did not speak during the sentencing. His lawyer, Ira London, had urged Koeltl to impose a sentence of time-served after 23 months already spent in prison.

"Rebecca" producer Ben Sprecher, who attended the hearing, afterwards said while he had no opinion on Hotton's prison sentence, the $68,000 restitution was "nothing" given its impact on a show that would have employed more than 100 people.

"He collapsed an entire Broadway show," he said.

Sprecher said he still hopes to debut the production in late 2015.

Hotton, who has been incarcerated, faces sentencing next month on additional charges of wire fraud and money laundering, pending in federal court in Central Islip, New York.

In that case, Hotton, a former stockbroker, pleaded guilty in July 2013 to conspiring to launder illegal proceeds obtained from various frauds over nearly two decades.

Authorities say the schemes resulted in losses in excess of $15 million over nearly 20 years. Hotton faces up to 20 years in prison when he is sentenced Nov. 14.

(Reporting by Samantha Sunne in New York; additional reporting by Nate Raymond; editing by Gunna Dickson)