Federal agents have arrested the principals of Los Angeles production company Gigapix Studios on charges that they defrauded investors in a CG-animated version of The Wizard of Oz, according to a report by the Los Angeles Times.
In an indictment unsealed in U.S. District Court on Thursday, prosecutors said Gigapix Studios chief executive Christopher Blauvelt and company president David Pritchard “spent investor money on salaries for themselves and to pay their personal expenses, employee salaries and commissions.”
Pritchard is the former President and CEO of Film Roman and executive producer of animated television series such as The Simpsons, King of the Hill, and Family Guy.
Gigapix raised $8 million between 2008 and 2012 for the film OZ3D, but less than 5 percent was put toward making the movie, which was never completed, federal prosecutors said. The company collected an additional $14 million beginning in 2006 for what investors were reportedly told was a pre-initial public offering opportunity "like getting in on the ground floor of a company like Pixar," according to the indictment. Gigapix never had an IPO.
About 750 investors lost "virtually all the money they had invested," the indictment says.
Blauvelt, 58, of Woodland Hills, and Pritchard, 66, of Malibu and a company salesman, Gregory Pusateri, 49, of Woodland Hills, were arrested Thursday by FBI agents. A fourth defendant, Cheri Brown, 65, of Studio City, is to turn herself in at a later date. The 36-count indictment charged them with mail fraud, wire fraud and other charges. Pusateri and Pritchard pleaded not guilty Thursday afternoon. Blauvelt was to be arraigned Friday morning.
The fraud charges each carry maximum sentences of 20 years in prison.