New York businessman accused of elaborate scam to defraud Broadway musical production

New York businessman is accused of staging faked lives, firms and even a phoney death in an elaborate scam to defraud a production

PUBLISHED : Wednesday, 17 October, 2012, 12:00am
UPDATED : Wednesday, 17 October, 2012, 4:55am

In a shadowy plot worthy of Mrs Danvers, the sinister housekeeper in Rebecca, a New York businessman has been charged with defrauding the drama's Broadway musical production by creating a fictional cast of characters in an elaborate financial ruse.

Mark Hotton "faked lives, faked companies and even staged a fake death, pretending that one imaginary investor had suddenly died of malaria," said Manhattan US Attorney Preet Bharara.

Hotton, 46, a stockbroker and businessman, was charged with two counts of wire fraud in a financing scheme for the US$12 million Rebecca: The Musical. He faces up to 20 years in prison for each count if convicted.

Bharara called the fraud "stranger than fiction" in bringing a case against Hotton that involves the sort of deceit and mysterious characters that helped make Rebecca a popular novel and Oscar-winning film.

A dark, gothic thriller based on a 1938 Daphne du Maurier novel, Rebecca was scheduled to make its Broadway debut this autumn but has now been postponed because of the financing shortfall and scandal.

The latest development in the troubled production throws into question the future of a show that debuted in 2006 in Vienna, Austria, but never made the transition to London's West End or Broadway.

Its bizarre collapse could undercut any chance at financing - or may fuel even greater interest in it.

Earlier this year, after the play had fallen nearly US$5 million short of funding, Hotton portrayed himself as an 11th-hour hero. He told the show's producers he could raise the cash - and appeared to deliver with new investors from England who, Bharara said, actually were a quartet of "deep-pocketed phantoms".

Hotton allegedly fabricated e-mail addresses and investor websites to convince the play's producers that he had raised the cash and in return received more than US$60,000 in commission and fees.

But the "investors" were never available to meet the producers or speak by phone, and when producers began pressing Hotton for the promised cash over the summer, Hotton "orchestrated the false illness, hospitalisation and untimely 'death' of one of the phoney investors", Bharara said.

That was just the first act of multiple deceptions, Bharara said. Hotton then claimed to have flown to London in August to meet a mysterious executor known as "Wexler" representing the dead man's estate to ensure the financing would still come through. Prosecutors say Hotton never left the United States.

By last month, Hotton had promised to broker a US$1.1 million loan from a real estate company and put up his own property as collateral to ensure the show would go on. The real estate company and its principals were also fictional, Bharara said.

FBI acting assistant director-in-charge Mary Galligan said: "In his alleged scheme to defraud investors, Mark Hotton wrote, directed and starred in the work of fiction he took to Broadway."

"A convincing portrayal on stage can earn you a Tony [award]. A convincing act that fleeces a production's backers can earn you a prison term."

Hotton's lawyer, Gerald Shargel, was not immediately available for comment.

A 1940 Alfred Hitchcock film adaptation of Rebecca, starring Laurence Olivier and Joan Fontaine, won an Academy Award for best picture.

It is remembered for its opening line, "Last night I dreamt I went to Manderley again", referring to the English country estate where the noir thriller takes place, and the menacing Mrs Danvers, who ultimately sets Manderley ablaze.