Stockbroker financier of doomed Broadway show arrested
The criminal complaint against Mark C. Hotton outlines a scheme that included phantom investors around the globe as well as an African safari where Hotton said he had entertained one of the mysterious backers whose later “death” led to the show’s collapse last month.
The New York Times
NEW YORK — The hubris of Mark C. Hotton knew no bounds, at least when it came to defrauding the lead producers of the Broadway musical “Rebecca,” federal authorities indicated in a criminal complaint Monday.
Even as Hotton was shutting down one $4.5 million fraud scheme in August, by killing off a phantom investor he had invented to purportedly rescue the musical, he began a second scheme to earn fees from the producers for help in securing a $1.1 million loan for the show, according to the complaint.
That loan was also fictitious, and the production ultimately collapsed Sept. 30, one day before rehearsals were to begin, but not before Hotton had collected $60,000 from the producers, the authorities said.
They arrested Hotton, a stockbroker, before dawn at his waterfront Long Island home and charged him with two counts of wire fraud, which each carry a maximum prison term of 20 years.
“Mark Hotton perpetrated stranger-than-fiction frauds both on and off Broadway,” Preet Bharara, the U.S. attorney in Manhattan, said in a news release. “Hotton concocted a cast of characters to invest in a major musical, investors who turned out to be deep-pocketed phantoms. To carry out the alleged fraud, Hotton faked lives, faked companies and even staged a fake death, pretending that one imaginary investor had suddenly died from malaria.”
One of Hotton’s lawyers, Evan Lipton, entered a plea of not guilty to the indictment on Hotton’s behalf at the arraignment in federal court in Central Islip, N.Y.
Magistrate Judge Arlene Lindsay ordered Hotton held without bail after an assistant U.S. attorney, Burton Ryan Jr., charged that he was a flight risk, had lied in a personal bankruptcy filing last year and had been the subject of many complaints from people who said they had lost as much as $15 million to him in other types of frauds.
The lead producers of “Rebecca,” Ben Sprecher and Louise Forlenza, now face significant financial challenges.
They have already spent at least $6 million on the production from funds raised from real investors and incurred an additional $8 million in debts, according to authorities. They will be liable for the money if the production does not eventually open.
Ronald Russo, a lawyer for Sprecher, the producer, said his client was “extremely gratified’’ that Hotton had been taken into custody and charged.
“This fraud did enormous damage to Broadway, and Ben Sprecher remains totally committed to bring `Rebecca’ to New York,” Russo said.