The founder and CEO of an Iron Range movie studio is one of three men charged with defrauding film investors of more than $12 million.
Gerald "Jerry" Seppala, 47, of Wayzata, was indicted on Tuesday by the Southern District of New York U.S. Attorney's Office on charges of wire fraud and wire fraud conspiracy, along with James Williams and Steven Brown of California.
The trio are accused of taking more than $12 million of investment in film projects over a period of four years between 2012-2016. They used the money for their personal expenses and to pay back other investors.
TC Business Magazine reports they convinced investors they would use the money to make feature-length movies and documentaries, with Nicolas Cage, Willie Nelson and Harry Connick Jr. among those lined up to star.
The U.S. Attorney's Office release does not reveal if any of the fraudulent movie projects were to be shot in Minnesota.
BringMeTheNews previously reported on Seppala's involvement in the creation of Ironbound Studios Minnesota in Chisholm, which was set up last year in Chisholm Town Hall after the company reached a $2.5 million "lease-purchase agreement" with the city.
The company, Ironbound said, was created to "establish a base infrastructure for the burgeoning film industry” in the region.
The Business Journal reports that Seppala, also a political fundraiser, is a principal at Wayzata-based Griffin Productions along with Steven Brown.
Seppala faces up to 20 years in prison
"With lies about making feature-length films and documentaries, the defendants allegedly defrauded victims into investing over $12 million with them," Manhattan U.S. Attorney Preet Bharara said.
"Rather than making movies, the defendants perpetrated an advance fee scheme, allegedly using the investors’ money to pay themselves and pay other investors back."
The indictment reveals that some of the money they received was used by Williams to buy a home in California, a new car and pay for his children's tuition.
Seppala was arrested in Wayzata on Tuesday and faces a maximum of 20 years in prison.
FBI Assistant Director-in-Charge Diego Rodriguez added: "As alleged, Williams, Brown, and Seppala didn’t provide marketing expertise to feature films or invest their own millions into film projects as they promised investors.
"Rather, they defrauded and deceived to acquire more than $12 million of investor funds to pay back previous duped investors or fund personal expenses. Any level of fraud to honest investors is wrong, whether it’s a fraud in the hundreds of dollars or millions dollars."