(LOS ANGELES, CA) – The Justice Department announced the indictment of six people in connection with widespread scams that prosecutors claim defrauded dozens of individual investors of over $5 million. One of those indicted is Delta Groove Music owner Rand Chortkoff.
Selling investment opportunities in movies, Chortkoff and associates promised huge returns for early shareholders in films set to star Joaquin Phoenix, Ray Liotta, and John Cusack — but according to charges filed by the FBI, the movies didn’t exist. “Straight up fraud,” FBI Special Agent Timothy Delaney said in an interview with CBS This Morning.
“He was the one in charge of finding the investors and getting their money,” Delaney continued. “The people thought they were investing in the making of a movie. In reality they were funding the criminals’ lifestyle.”
A request to Chortkoff for comment was unanswered.
According to a recent Securities and Exchange Commission filing, in 2008, Chortkoff was the subject of a cease-and-desist order issued by the California Department of Corporations for his role in the unregistered offer and sale of securities, or ownership shares, of Big Sky Motion Pictures, LLC and Spring Break ’83 Production, LLC. Chortkoff owned both.
The filing continues, “In offering and selling these securities to investors, Defendants Braslau and Chortkoff, acting with scienter [a legal term that refers to intent or knowledge of wrongdoing], engaged in a scheme to defraud and did defraud their investors.”
“I would like to thank the friends who know me and know that I am and have been an honest guy with integrity for their kind words of support,” Chortkoff retorted on Facebook. “The labels will continue to function normally and the music will continue to be of the highest quality and released as scheduled.”
“I’m shocked and feel terrible for the investors that were mislead,” says the manager for a blues artist formerly on the Delta Groove label, who asked to remain anonymous. “I’m concerned about the artists that are currently on the label, and I’m afraid that those artists who were on the roster will find it a challenging uphill battle claiming their mechanicals and royalties — something many of them need to survive.”
The FBI says that if convicted, those indicted, including Chortkoff, face up to twenty years in prison.
