While more than two dozen Saints football players and coaches fear they may have lost nearly $2 million they entrusted to Louisiana Film Studios owner Wayne Read, they are not the only people in the New Orleans area who say the motion picture executive owes them money.
The financial dealings of the Elmwood film studio that have come to light in the past week show that Read accepted cash payments from the Saints members without returning the tax credit investments or explaining what happened to their money.
After signing a contract for construction work on the studio that he later canceled, he is also being sued by the contractor for $681,000 in unpaid invoices. And St. John the Baptist Parish is still waiting for Read to pay $100,000 that local officials say he owes for bills related to his use of the parish's civic center for a movie production in 2007.
Louisiana's "Hollywood South" film industry sprang up virtually overnight when the state instituted its tax credit finance scheme in the early 2000s (Jesus that's sort of a long time ago now). The state grants tax credits to film production companies who raise cash by selling them at a discount to brokers or directly to investors who can apply them against their income tax liability.
While the tax credit scheme may have helped attract Hollywood star power to Louisiana, it's the back-end trading in taxpayer-financed investment vehicles that has attracted so much local talent to the game. Opportunistic lawyers like Read and former LIFT Productions CEO Malcolm Petal suddenly became studio executives with the power to distribute lucrative tax shelter opportunities to the well-off. According to the T-P, Ron Forman's son was President of Read's firm for a time proving once again that the Formans know a thing or two about making a buck off of government financed entertainment amenities.
But apparently that business model with regard to the film industry is still in need of some tweaking. Petal pleaded guilty last year to bribing a state official for inflating the value of tax credits allotted to LIFT. Read, meanwhile, seems to have been accepting "investments" in tax credits he hasn't been able to deliver.
Kevin Houser, who was dismissed Monday as the long snapper for the Saints, became a point man for Read's effort to raise money among the team's current and former players and coaches. In November, 27 men with ties to the Saints -- including coach Sean Payton, quarterback Drew Brees and former quarterback Archie Manning -- paid large sums of money with the expectation that by the end of March they would get back about $1.33 in tax credits for every dollar of their investment.So it seems that Wayne Read and not Kevin Houser is running the (somewhat sloppy) Madoff-like enterprise of misleading investors until more investors can cover their investment. Which means that Houser, as the sales stooge, is more like Uncle Rico from Napoleon Dynamite.
In correspondence to Houser in December, Read said he planned to spend $12 million to buy the property and $13 million on reconstruction, and that the credits would be delivered by the end of March.
"No risk to you all," Read wrote.
By the deadline, Read had not even applied for the tax credits from the state film office and had not met at least two important requirements to qualify for them.
Kevin Houser (T-P photo)
Uncle Rico imagining tiny little seahorses
Think about it. Rico is an ex-(sort of) football player who sells crappy Tupperware and herbal breast-enlargement products door-to-door. Houser is an ex-(sort of) football player who sold products of a similar value to his teammates in the locker room. Rico liked to make home movies of himself throwing a football in an unusual fashion to nobody in a corn field. Houser wanted to make movies and was often seen throwing a football in an unusual fashion (between his legs) to nobody (Saints' punters) on the football field. Both men thought they had a quick way to make some "sweet moola". Both really really wish they could go back in time now.