Film Fund-amentals: A Whole Lotta Scamming Goin’ On

Every year I have to take a moment to remind folks of some very basic rules. Real simple rules that are easy to forget.
Unfortunately, there are legions of people out there hoping that you do forget. That’s why the rules are always worth repeating. Especially since the scam operators seem to be multiplying. Heck, in the past year I have gone through at least four direct and indirect incidents of outright scams or, at the very least, extremely questionable business operations.
Except for some bruised egos and deflated hopes, we have been pretty lucky. No cash, no dash. But many others have not been so fortunate. They have gotten fleeced. It is not because they are unusually dumb nor even particularly greedy. It’s because they were just gullible enough to believe that someone was really sincere about investing in their movie. They trusted a stranger in hope of achieving a dream.
First tip about real investors. They don’t hang around social media sites advertising themselves as investors. Really, they don’t. Anyone at a social media site claiming to be seeking indie movies that they can invest in must be viewed with extraordinary suspicion. Oh sure, I suppose it is always possible that some kind of half-nutty Warren Buffett type has nothing better to do with his or her time than troll these sites in hopes of giving away free money, but…. You are much more likely to be hit by a bolt of lightening six times while standing in the same spot.
Some of the people claiming to be film investors are really just fronting for various types of high-risk loan services. Others are seeking people they can hook with so-called “production fees.” You pay them to “produce” your movie. Mostly, they are hoping to take you to the cleaners before you catch on. It is mean and nasty and it is happening all the time.
One tell-tale sign is how fast they will try to force the issue. Most scammers have to get you baited, hooked, and gutted before you have time to really think the deal through. That’s why they first pump you up with the exciting news that they want to help your project. Then explain how everybody will make lots of money from this film. Once you are floating on air, they make their move. If possible, they will try to make the score within a week.
I am aware of a few exceptions to this time-line. Some will drag it out for months before making their play. I don’t know if this is supposed to be some type of reverse psychology or if they are simply not very good at their own racket. But it does happen.
When any would-be investors approach you must check out their credentials. What types of investments have they previously been involved in? Who exactly are they and what is their background? For crying out-loud, do they even actually have any money?
For example, do they or their company actually have a web site? They do. Great! Is it a “real” web site or more of a Potemkin village operation? What I mean by this is: Does the web site actually say anything about what they do or does it drift around in a lot of generalizations with non-working links and bogus material? Heck, I know of one company that claims to invest into advance digital development and then tries to pawn off links to various freeware systems (none of which they had any involvement with) as “support” material to their claim.
Yes, there are such things as bogus web sites. Pieces of eye candy for the scam. Even better are the (equally) bogus offices and mailing addresses often used in these operations. Most American cities now have virtual offices where a person can rent or lease (by the day or the hour) a well equipped and very nice looking space for use. In theory, the virtual office provides the occasional needed meeting place for someone who is working their online business from their home. But it also provides scammers with oodles of legitimacy. Hey, they must be real since they have an office with really nice furniture. Even better, they can clear out within minutes, which is a plus when pesky investigators show up.
Always check out the address they use. Twice in the past year I have encountered the virtual office operator. At least one of these outfits worked out of a combination office and casino in Vegas. It would be a hoot if it were not for all the people getting stung.
Many scammers will not pass this type of simple test. But some will. That is not good because it shows that they are better organized. Oh boy! This is why you need to keep a few basic things in mind. Nobody is likely to get rich off of your movie. When they keep spinning stories about all of the money you can make, dump ’em. Yes, occasionally a small indie movie hits it big. These are the exceptions, not the rule. Any one who says otherwise is either a crook or an idiot. Doesn’t matter. You don’t need them.
Investors make investments. They do not charge fees. It is that simple. I don’t care what their story is, the minute they want you to pay them, dump ’em.
They represent investors who wish to remind anonymous but who are looking to back your movie. Most people who invest in films do so, in part, because they want to be associated with the filmmaking process. As a general rule, movie investors do not seek anonymity. Many of them want to see their names on the big screen. Some are hoping to date the leading lady. If they want to be anonymous, they can just go to any major crowd funding site and donate there.
And always keep in mind one of the key signs of any con artist. They are all extreme narcissists. It is a standard part of their pathology. OK, it is true that this is a tough call in the film business. But trust me, con artists are the worse. They can’t stop talking about themselves. Good grief! I once had to call one of these bozos regarding the mysterious death of one of their “clients.” The official verdict was “suicide” (it was one of the state investigators who kept putting quotes around the word). Either way, I called the guy to inform him that we had found the body. All I got back was a long-winded description of his recent vacation trip to Las Vegas (most likely paid for by the deceased).
They can’t help themselves. But you don’t need to enable them. You just need to dump ’em.

Dennis Toth (C) Copyright 2014 All Rights Reserved