Baton Rouge movie maker admits he falsified invoices to receive Louisiana's film tax credits

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BATON ROUGE, Louisiana — A Baton Rouge movie maker has admitted in a federal courtroom that he falsified invoices to receive Louisiana's film tax credits.

U.S. Attorney Walt Green said in a news release that 46-year-old George Kostuch pleaded guilty Tuesday to one count of wire fraud that accused him of penning checks for nearly $540,000 in false expenses, which led to his company — K2 Pictures — receiving more than $161,000 in tax credits from the state in 2010 and 2011.

U.S. District Judge Shelly Dick did not set a sentencing date for Kostuch. She ordered a presentence investigation and report.

The film tax credit program has come under increasing scrutiny in recent years, both for the ballooning cost and a smattering of criminal cases accusing participants of defrauding the state.

The Advocate reports (http://bit.ly/1AWd61p) Kostuch, who is free on his own recognizance, told the judge he underwent drug treatment in 1997 and remained sober for eight years before relapsing and going back to Alcoholics Anonymous in 2010.

"These events all happened at a bad time in George's life," Kostuch's attorney, Jim Boren, said outside Dick's courtroom. "He knows he did wrong. He regrets it."

Kostuch's former business partner, fellow filmmaker Matthew Keith, pleaded guilty in June 2013 to wire fraud conspiracy and is awaiting sentencing. Daniel Garcia, another filmmaker, pleaded guilty to the same charge a month earlier.

It was Keith and Garcia who told federal authorities they and Kostuch executed a complex scheme while working together on three productions: "Xtinction: Predator X," ''Sports Trivia Clash" and "Mysterious Island," according to the FBI. Keith and Garcia told federal agents that Kostuch hired a contractor for $7,000 of work on "Sports Trivia Clash" and then helped produce false invoices and move money through multiple accounts to make it appear the contractor's work actually cost $89,000, according to the FBI.

An independent auditor must certify expenses from a film production company before that firm gets reimbursed.

Taxpayers foot 30 percent of a film production's cost in the state once the amount spent exceeds $300,000.


Information from: The Advocate, http://theadvocate.com

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