A Cape Cod movie producer and director pled guilty Thursday to 10 counts of larceny and filing false tax returns and was ordered to repay $4.4 million in fraudulently obtained film tax credits and serve two to three years in prison.
Daniel Adams had been held on $100,000 cash bail since his arrest in the Attorney General’s office in December, but Suffolk Superior Court Judge Carol Ball released the 50-year-old filmmaker on $10,000 bail so he could get his affairs in order with his wife and 10-year-old daughter, according to Adams’s attorney, James Greenberg. He’s also required to wear a GPS bracelet until he reports back to begin his sentence on May 10.
“I think he’s accepted responsibility from the inception of this,” said Greenberg, who thought the prison sentence was fair but the restitution amount, which has to be repaid over the decade following his release, too high. “I thought that restitution order was setting him up to fail. I thought it was a subjective figure,” he said. “He told me he wants to make restitution [but] he’s pretty much destitute.”
Adams is the first person to be charged with trying to con the state out of film tax credit monies. The attorney general’s office took over the investigation of Adams after officials at the Department of Revenue became suspicious while reviewing his tax returns in connection with the 2009 Cape-based movie The Lightkeepers, which starred Richard Dreyfuss and Blythe Danner.
The state’s film tax credit offers a 25 percent tax credit for most payroll and production expenses incurred while shooting films in Massachusetts. The credit is extremely attractive to film producers because it can be converted into cash by selling it back to the state or a third party. Adams sold his tax credits to Wal-Mart and Bank of America. The firms used the tax credits to reduce their own tax liability with Massachusetts.
DOR found that Adams made claims for $3.6 million in bogus film tax credits for The Lightkeepers and another $1.1 million in fraudulent credits in connection with a 2006 film called Chatham, which was later retitled The Golden Boys.
According to Assistant Attorney General Molly Parks, Adams reported $17 million in expenses for The Lightkeepers, which he said included a $2.5 million payment to Dreyfuss to star in the film. But prosecutors determined that Dreyfuss actually received a salary of just $400,000. By inflating expenses, Parks said Adams received $4.2 million in credits when he should have received no more than $600,000.
In 2006, after filming The Golden Boys starring Mariel Hemingway, Rip Torn, and Bruce Dern, Adams claimed expenses of $6.7 million while prosecutors contended his actual expenses were only $2.3 million. The difference netted Adams $1.1 million in fraudulent credits, prosecutors say.
Greenberg said Adams admitted to “his bad acts,” but said the numbers were subjective. He also said that while Adams may have made fraudulent claims, the money he did receive came back to the state.
“All the monies were spent in the Commonwealth so his contention is they did recoup money through other tax systems,” Greenberg said in arguing that Adams should repay back only a little more than $2 million.
Greenberg said Adams hopes to resume his film career upon release, in part to earn the kind of money he needs to pay the state back. Greenberg said part of Adams’s problem was the type of movies he made did not have wide commercial appeal. “The movies had no violence or sex in them and they were meant for an elderly population,” said Greenberg. “He made movies that were nice and they didn’t do too well at the box office.”