A movie director has been charged with inflating expenses in his application for Massachusetts film tax credits, resulting in about $4.7 million in overpayments.
The state attorney general’s office said Daniel Adams was arrested Thursday in Boston. He pleaded not guilty at his arraignment Friday on charges of larceny and making a false claim against the commonwealth.
Adams is accused of inflating expenses for two films shot on Cape Cod, “The Golden Boys” and “The Lightkeepers.” In one instance, prosecutors allege Adams reported paying Richard Dreyfuss $2.5 million, when the actor actually was paid $400,000.
Adams, 50, was being held on $100,000 cash bail. His lawyer, Steven Topazio, says there was a rush to judgment to arrest Adams before a grand jury finished its work. Topazio said Adams had told investigators he was planning to fly to Los Angeles on a business trip.
“What’s happened here is while that (grand jury) process is going on and before it is concluded, the attorney general did not want him to fly back to LA and so they arrested him,” Topazio said. “That is an abuse of power.”
Massachusetts Attorney General Martha Coakley said the arrest would help “ensure that the film tax credit is awarded appropriately while encouraging legitimate productions to be filmed here.”
Under the Massachusetts film tax-credit program, a film production company is eligible to receive a 25 percent credit for various payroll and production expenses.
At the end of production on “The Golden Boys,” which was begun in 2006, Adams reported that its eligible costs totaled more than $6.7 million and received a tax credit payment of more than $1.6 million.
Investigators say the true eligible costs to produce the film tallied only $2.3 million, meaning Adams received an overpayment of $1.1 million.
In January 2009, Adams began work on “The Lightkeepers.” When the film was done, he reported that he had spent $17 million eligible for the tax credit and ultimately received $4.2 million in tax credits.
Investigators say that many of the expenditures were fictitious or inflated, including the Dreyfuss salary.
As a result, prosecutors allege Adams received an overpayment in tax credits of more than $3.6 million.
Adams was able to take advantage of the tax-credit program to solicit investors based on the credits the films would generate, investigators said.
Coakley’s offices said tax credit financers will often advance money to projects under an agreement to later purchase the tax credits at a discounted rate after they are issued. The credits are issued at the conclusion of a film, after expenses are submitted to the state revenue department.
A New York Times review called “The Golden Boys,” set in 1905 on Cape Cod and starring David Carradine, Rip Torn and Bruce Dern, “an object lesson in how to squander a seasoned cast, a charming premise and a breathtaking location” while the Los Angeles Times described “The Lightkeepers,” set in 1912, as “static, poorly staged and buried in thickets of flowery language.”
Massachusetts’ tax-credit program has been contentious.
Critics portray it as a tax break for a deep-pocketed industry, while supporters say tax breaks are the only way Massachusetts can lure Hollywood productions.
Supporters also say the films shot here as a result of the tax credits have created jobs and helped boost the image of the state nationally, resulting in more tourism.
An Associated Press review of the tax-credit program earlier this year found that $82 million of the $330 million in credit-eligible spending in 2009 helped filmmakers cover the paychecks of nonresident actors earning more than $1 million.
Applications for the tax credits tumbled in 2010.
According to a report released by the state revenue department last month, films produced last year in Massachusetts have applied for $14.6 million in tax credits – a significant decline from the $83.3 million of credits in 2009.
The decline is a result of fewer feature films being made in Massachusetts in 2010, according to the report.
Apple and Google Face UK Investigation Into Mobile Browser Dominance
Apple and Google aren't giving consumers a genuine choice of mobile web browsers, a British watchdog said Friday in a report that recommends they face an investigation under new U.K. digital rules taking effect next year.
The Competition and Markets Authority took aim at Apple, saying the iPhone maker's tactics hold back innovation by stopping rivals from giving users new features like faster webpage loading. Apple does this by restricting progressive web apps, which don't need to be downloaded from an app store and aren't subject to app store commissions, the report said.
"This technology is not able to fully take off on iOS devices," the watchdog said in a provisional report on its investigation into mobile browsers that it opened after an initial study concluded that Apple and Google effectively have a chokehold on "mobile ecosystems."
The CMA's report also found that Apple and Google manipulate the choices given to mobile phone users to make their own browsers "the clearest or easiest option."
And it said that the a revenue-sharing deal between the two U.S. Big Tech companies "significantly reduces their financial incentives" to compete in mobile browsers on Apple's iOS operating system for iPhones.
Both companies said they will "engage constructively" with the CMA.
Apple said it disagreed with the findings and said it was concerned that the recommendations would undermine user privacy and security.
Google said the openness of its Android mobile operating system "has helped to expand choice, reduce prices and democratize access to smartphones and apps" and that it's "committed to open platforms that empower consumers."
It's the latest move by regulators on both sides of the Atlantic to crack down on the... Read More