Producers charged with running a Ponzi scheme

Producers charged with running a Ponzi scheme
Max (Zero Mostel) and one of his investors in The Producers

Max (Zero Mostel) and one of his investors in The Producers

Mel Brooks struck comedy gold when he made the film “The Producers” starring Zero Mostel and Gene Wilder in 1967. The idea behind the film was that Mostel’s character, Max Bialystock would produce a Broadway show so bad that it would lose tons of money. Prior to that, he would charm his investors – scores of little old ladies who had money and wanted to please him – into giving him far more money than was needed. With the help of his accountant, played by Gene Wilder, they could claim a loss in the show, be off the hook for paying any profits to the investors, and take the overage for themselves. But when the show, “Springtime For Hitler” becomes a surprise hit, their scheme collapses.

Perhaps inspired by that story, but with plans to avoid the pitfalls, Michelle Kenen Seward and Dror Soref hatched a plan to make a movie called “Not Forgotten”. Soref, from Israel, is an award winning filmmaker who began his career working with “Weird Al” Yankovic making his musical parody videos. He went on to work with Paramount Studios to make “The Seventh Coin” starring Peter O’Toole, and co-founded Orbit Productions, making TV commercials and other films.

According to a news release from the California Department of Insurance Fraud Division, Michelle Seward, a 42-year-old resident of Flintridge, in the hills above Pasadena in northern LA County, worked with Soref on producing the Not Forgotten film. Seward is a former licensed insurance agent and CEO of Protege Financial and Insurance Services, Inc., and Saxe-Coburg Insurance Solutions, LLC. She reportedly convinced many of her clients to invest their life savings in Not Forgotten, an unsecured investment.

In some cases, Seward advised her clients to surrender annuities early, paying penalties with the promise of big returns on the film of ten to eighteen percent. It was later found that the investors lost a total of more than $600,000 in early withdrawal penalties when they pulled their money to invest with Seward and Soref.

Not Forgotten (IMDb)

Not Forgotten (IMDb)

The film Not Forgotten was made and released in 2009, with Soref directing and co-writing, and starring Simon Baker, Paz Vega, and Chloe Moretz. It got good reviews from the Hollywood Reporter and Variety, and was nominated for a Saturn Award by the Academy of Science Fiction, Fantasy and Horror in 2010. The film was a psychological thriller about a couple in a Texas-Mexico border town who “must come to terms with their tortured pasts in order to save their kidnapped daughter. It is a tale taut with intrigue and steeped in Latino mysticism, where the line between what’s real and what’s imagined becomes hopelessly blurred.” (IMDb). Michelle Seward is listed as one of the film’s executive producers, and IMDb listed the opening gross in limited release at $53,723 in the US.

With the film done, and investors to pay, Seward and Soref formed a new company called Windsor Pictures LLC, and gathered more investors, mostly from Los Angeles and Kern Counties. Those who put in money were given promissory notes and again promised ten to eighteen percent returns once the company began to release movies. Investigators found that $21 million was collected from more than 100 investors for the production company, which was established on June 22, 2009, with a business address of 5555 Melrose Avenue in Los Angeles, which is on the Paramount Pictures lot.

But beyond setting up the business name, none of the money was actually used to create a production company. And Soref is credited with directing only one more film, a 12 minute short film called “Morning” in 2011. The Not Forgotten investors were eventually paid off, and the rest of the invested money was allegedly profit for Seward and Soref in what the investigators called a Ponzi Scheme. The two were arrested on September 11 and charged with unqualified sale of securities. Neither were licensed to sell securities or give investment advice. Bail was set at $2,700,00.00, and the case is set to be prosecuted by the Los Angeles County District Attorney’s office, and was filed under the “Life & Annuity Consumer Protection Program”.

Michelle Seward, however, tells a different story. In her website, Michelle Seward Truth, she states “Michelle Seward, CEO and owner of Protege Financial & Ins Services and Saxe Coburg Insurance did something that is unheard of in Hollywood and in the financial world, she has committed to pay for her clients’ losses because she feels it it the right thing to do.” She states she has created an $8.75 million trust to distribute funds to her creditors.

She has stated that as a Scientologist, she was targeted by Soref as someone of the same faith, and that led to her involvement with him and the film production, and the investments in Not Forgotten and Windsor Pictures. In her statement she also claims that Soref was in control and used her in the schemes, with many things going on she was not aware of. She left Scientology in 2009, and regrets placing her trust in Soref. She goes on to state “To date, Soref claims no responsibility for the investors. He claims he was unaware of anything financial and has handpicked a small amount of specific emails that he has provided to government agencies to try and prove Seward’s control. He has contacted “other Scientoogists”, such as people who made commissions off of Seward donations to help him go against Seward.”

So it is clear that the one-time allies and business partners will be handling their own defenses, each likely trying to place the blame on the other. Soref, in fact had already gone on to become Chief Executive Officer of a company called Nova Filmhouse, in effect moving on from his former business ventures. So now the tale becomes a courtroom drama to unfold worthy of a film treatment, now in need of a producer, director, and investors…

 

 

 

Producers charged with running a Ponzi scheme was last modified: November 30th, 2018 by admin

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