I’m taking a break today from derivatives and insider trading, I bring to you: “Rebecca—The Musical.” It is based on the Daphne du Maurier novel. (The musical, not the blog post.) Unfortunately, “Rebecca” is not ready for prime time, thanks in part to a gentleman named Mark Hotton.
Mr. Hotton is former stockbroker who also worked for an investment bank. According to one news article, he has been called a “predatory financial sociopath” by a law enforcement source. Hotton defrauded the producers of the Broadway show “Rebecca—The Musical” and recently pleaded guilty to two counts of wire fraud for his role in the scheme.
Hotton is no newbie to fraud. He’s been accused of it many times before, according to this article, including while he worked at Oppenheimer. What is with it with Oppenheimer?
Like most Broadway shows, “Rebecca” needed more money. In early 2012, its producers were trying to raise an additional $4 million so they could open the show in November 2012. In February 2012, the producers signed an agreement with a company controlled by Hotton, called TM Consulting, Inc. In return for raising money for the show, TM Consulting would receive a $7500 fee, 8% of any funds raised over $250,000 and a certain portion of the show’s net profits.
You can’t accuse this guy of not being creative. Hotton told the producers that he had four overseas investors ready to invest $4.5 million in the production. He even gave them nice, vaguely British-sounding names: Paul Abrams, Roger Thomas, Julian Spencer and Walter Timmons. Hotton provided the producers with the email addresses of the four investors and they engaged in some correspondence. The producers in turn provided Hotton with an advance on his fees for finding the investors.
Well, the investors were complete fabrications. The government’s investigation showed that the email addresses that Hotton provided used domain names registered to Hotton shortly before the scheme began. When the producers emailed any of the fictional investors, Hotton would respond.
Hotton is probably lucky that these investors were not real because then he “killed” one of them. When the producers pressed him to wire the promised money, Hotton told the producers that “Paul Abrams” had suffered from a serious illness and died. Needless to say, the “investors” never sent any money to fund “Rebecca.”
Hotton also tried to convince the producers that he could help them broker a loan to finance the musical and offered to use his own real estate as collateral. But to make this supposed deal go through, Hotton again created people and companies out of whole cloth—a title company named SPS Equity and employees named “Gus” and “Robert Phillips.”
In the end, Hotton defrauded the producers of over $35,000. While I’m sure this was a lot of money to the producers, it’s a surprisingly low pay off for all that work—setting up domain names, coming up with fake names and even “killing” someone.
(Hotton was also charged and pleaded guilty to a similar scheme involving a Connecticut real estate company. But since that scheme does not involve something fun like a Broadway musical, I’ll stop here.)
Each count of wire fraud has a hefty maximum sentence, and Hotton will be sentenced in November 2013. His plea agreement calls for about 3 1/2 years in prison so it’s highly unlikely he’ll face anywhere near the maximum sentence allowed by statute. After the guilty plea, Hotton’s lawyer was quoted as saying “Mr. Hotton has asked me to say there is a chapter yet to be written in this saga.”
This guy knows a good story when he sees one.
I’m happy to report that the producers are forging ahead with the show. They are aiming for its Broadway debut by the end of the year. Tickets available here, just in case you are a fan of Gothic romances and think these producers can get their act together by then (pun intended).
What a mess. Sounds like a real-life version of The Producers. http://en.wikipedia.org/wiki/The_Producers_(musical). Just not nearly as funny.
I tried to find a great quote from that musical to use in the post–nothing was quite right. But I agree–this scheme is not nearly as funny as that play.
Pretty funny this one on “Rebecca the Musical”! Can’t wait to buy tickets whenever the show really appears, however I am NOT holding my breath. gk
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