FILE– In this photo from Tuesday, April 13, 2004, Broadway producer Ben Sprecher speaks during a press conference in New York. Sprecher latest production, the psychological thriller “Rebecca” collapsed this week and launched a FBI fraud investigation into the circumstances. (AP Photo/Mary Altaffer, File)
CENTRAL ISLIP, N.Y. (AP) [auth] — Mark Hotton appeared on the high-stakes Broadway theater scene out of nowhere this year, offering to come to the financial rescue of a fledgling Broadway adaptation of the psychological thriller “Rebecca.”
Although the musical’s producers had never heard of Hotton, he successfully sold himself as a globe-trotting moneyman with connections to a wealthy Australian named Paul Abrams. That was before Hotton raised suspicions by claiming that Abrams had suddenly dropped dead.
Federal prosecutors charged Hotton on Monday with concocting a tale of phantom investors and an untimely death as imaginative as the classic Alfred Hitchcock film about a man haunted by the memory of his dead first wife.
Hotton, 46, also was charged in two other swindles — one targeting a Connecticut-based real estate company and another that investigators say involved his wife and sister on Long Island.
A judge in federal court in Long Island ordered Hotton held without bail on Monday after prosecutors argued he was a flight risk.
In court papers, the government accused Hotton of creating a web of shell companies they likened to a Ponzi scheme that victimized people across the country to the tune of $15 million.
Hotton, a former stockbroker who lost his license last year, managed to “lull some investors into a temporary sense of security by allowing them to realize small returns on investments, while the remainder funded the Hottons’ lifestyle, which included pleasure boats registered to others and waterfront property,” the papers say.
He was to appear at another proceeding later in the week to face other charges he “perpetrated stranger-than-fiction frauds both on and off Broadway,” Manhattan U.S. Attorney Preet Bharara said in a statement.
In the “Rebecca” case, he “faked lives, faked companies and even staged a fake death,” the prosecutor said.
Hotton’s attorney declined to comment.
The planned $12 million production of the 1938 novel by Daphne du Maurier collapsed earlier this month amid questions about its financial backing.
Lead producer Ben Sprecher “is extremely gratified that Mr. Hotton has been taken into custody,” said his attorney, Ronald Russo, adding that Sprecher has “cooperated completely with the investigation.”
“Mr. Hotton’s fraudulent conduct did enormous damage to Broadway and to ‘Rebecca,'” Russo said. “Mr. Sprecher is totally committed to bringing ‘Rebecca’ to New York.”
According to a criminal complaint, a “third party” suggested this year that the producers contact Hotton to see if he could help them with a $4 million shortfall for the musical’s budget. Even though they “had never met Hotton or heard of him,” they started an email correspondence that convinced them he had secured the money from four overseas investors, including Paul Abrams, the complaint says.
The producers agreed to pay Hotton $15,000 in fees and commissions from March to June, the complaint says. He was also paid an additional $18,000 “advance” against his 8 percent commission, it says.
While pressing for Abrams to wire the funds in July, Hotton wrote that the investor had been hospitalized with malaria following a trip to Africa, the complaint says. An email later forwarded to the producers — purportedly written by Abrams’ secretary — read: “Mr. Hotton, I’m so sorry to relay such terrible news — Mr. Abrams passed away this evening and the family has asked for your attendance at the services … as you were so close to him.”
In the separate Long Island case, federal prosecutors in Brooklyn accused Hotton and his wife of cheating business clients out of $3.7 million.
An indictment alleges that the couple, while operating three electrical contracting companies, created fake invoices showing money owed by third parties. They then sold the purported debts to other companies, the indictment said.