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This is very similar to a strategy used with deliberate forethought by a relatively small number of VFX Studios but when it happens it can be financially devastating to the artists involved. This happens more often than people think.

The technique is straightforward : Fabricate the idea that an Employer does not have to pay workers when the Employer claims they have not been paid by the client.

Then the Employer simply states that they have not been paid. Mind you being paid could actually mean, they have been paid, and they simply choose to lie.

In Prague there is a company called UPP (Universal Production Partners) and they have been known for doing this to their artists, along with an array of very similar tricks all with the same result. I can say this because I have experienced it first hand.

It's unfortunate because often those Companies have many good people on staff, but it is usually the hand of 1 or 2 individuals who pull the strings, and that is all it takes to poison the reputation of a company

Viktor Muller is a person often described as The Worst Person In The World. And he is someone who has been pulling tricks like this for years at UPP.

I know I've seen it with my own eyes

I was working on Piranha3d at RedFX from day 1, so I just want to put in my 2 cents, because everything I've read about the episode in Variety and on Facebook sounds distorted and a bit like a witch-hunt.

The work was awarded to Redfx, run by Peter Skovsbo. I was hired by Redfx. Fake Studio is another company in the Camera-e-motion group. Redfx was started when Camera-e-motion rescued the Redcliff project from DamnFX, which was run (into the ground, some might say) by the person who now runs New Breed. Montreal has a bad reputation because of her and Lumiere (formerly known as Meteor) so I guess it wasn't hard to tar Redfx with the same brush for failing to pay an amount that's an order of magnitude less. There were 4 of us on Piranha - 3 artists and 1 producer.

Redfx failed to pay our last wage cheque because the client refused to pay and Camera-e-motion couldn't get any more credit from the bank. I was kept informed of all this. Fake sent a letter detailing why they didn't have the money, how much I was owed, what the company was trying to do to get the money together and when I could expect it. I've been paid some since - I'm fine with that and I know I'll get the last bit.

I'd love to go into the nitty gritty details of the dispute that caused the project to melt-down - maybe later. What I will say is that the other vendor, Mr X in Toronto, bailed out as soon as they realized they were being jerked off by the client, about a month after they started. Marc Cote on the other hand, bet on the production coming to their senses at some point and at that time, Redfx would be there to help. Unfortunately they never did.

Great. Another VFX company tarnishes the good will, talent and reputation of Montreal VFX artists. I'm getting royally pissed-off at these so-called producers who greedily start VFX companies without an ounce of credibility, who delude themselves into thinking that they'll make millions in this business, and treat artists like serfs.
Marc Coté has a long-standing reputation of running companies into the red, but hides it well. There are two other local producers who have done similar; close down a failed company and open a new one, pretending the other never existed. This trend has to stop, and I'm glad the word is out about Fake studios. Another studio, Damn FX (another unfortunate name) was also run into the ground by an owner who had zero experience in VFX, and somehow got away with highly illegal business practices and blatant money scandals, yet somehow is running another VFX studio.
Boggles my mind.

No wonder we are considered "Starving Artists".

Yea, I think I would have to visit Fake and remove some of the hardware and computers in lieu of payment. Just saying... Ebay.

I feel for the artists who have families to support.
This is insidious.

I was part of the crew for a 5 day shoot they did for Subway. Many of us ( maybe all? ) are still waiting to see the money of it while the commercial is already on air. Shitty. The poor freelance producer who hired us on Fake Studio's behalf said we would be paid within 2 weeks... poor him! It's been 3 months now and we learn that they are even behind with previous productions. Jezz...

BTW Turp: it did happen again.

I worked on another projects with Fake, TV spots for Subway and they are not paying me. Im waiting for the payment for more then 3 months.

That's the risk of owning a business. But if the company does well, there is a big payoff. Artists don't get that payoff. Just a flat rate... or not.

Just watch your jobs go to China (where they proudly steal software) and India.

I would trust a name like Fake Studios, of course!