BATON ROUGE, Louisiana — A Mandeville moviemaker who cheated Louisiana's film tax credit program has been sentenced to six months in federal prison and the same stretch of time in a halfway house.
The sentence was handed down in a Baton Rouge federal court Wednesday to 38-year-old Daniel Garcia. It's the latest indication of problems with an economic development program that's raised Louisiana's profile as a so-called "Hollywood of the South" but has sparked questions about whether it rips off taxpayers.
U.S. Attorney Walt Green said in a news release that Garcia also must pay $900,000 to the state of Louisiana as restitution for his scheme to unfairly accrue tax credits.
Garcia, owner of DMG Holdings LLC and Louisiana Film Finishers LLC, pleaded guilty in 2013 to a charge of conspiracy to commit wire fraud after authorities said he used canceled checks to create phony records showing he spent $3 million on a filmmaking venture. That documentation was used to obtain $900,000 in film tax credits between Feb. 10, 2009, and March 31, 2010, authorities said.
The incentive program allows filmmakers to be given tax credits equaling 30 percent — at taxpayers' expense — of the money they spend on making movies if their payments top $300,000. The state will pay cash for 85 percent of the tax credit's value, or the credits can be sold to a third party.
Two other men — George M. Kostuch, founder of K2 Pictures, of Baton Rouge, and J. Matthew Keith, of Prairieville — were tied up in Garcia's plot, agents said. Keith admitted in 2013 to contributing to Garcia's false paper trail by signing the checks, for which he pleaded guilty to conspiracy to commit wire fraud. Kostuch confessed in May to falsifying invoices in the scheme and pleaded guilty to wire fraud.
Keith is scheduled to be sentenced Oct. 13, and Kostuch is to appear for sentencing Oct. 29, Green said.