“With its colorful history and rich cultural stew, Louisiana has long been a popular setting for works of fiction, including movies,” according to the U.S. Court of Appeals for the 5th Circuit in United States v. Hoffman, No. 16-30104, 2018 BL 285176 (5th Cir. Aug. 9, 2018). One such work of fiction resulted in three taxpayers being convicted of conspiracy, mail fraud, and wire fraud in connection with a scheme to defraud the state of Louisiana.
Defendants Peter Hoffman, Susan Hoffman, and Michael Arata, owners of Seven Arts Pictures Louisiana, LLC (Seven Arts), were convicted on charges of conspiracy, mail fraud, and wire fraud in connection with their application for Louisiana film credits. Seven Arts was responsible for the development of a film production and postproduction facility in New Orleans. Seven Arts submitted their initial film credit application in October 2007 and estimated total costs for the project to be $9 million.
Over the course of the next five years, Seven Arts continued work on the project and submitted three cost reports with expenses totaling nearly $12 million dollars. After going through a slew of auditors, their scheme finally caught up with them.
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