Hollywood filmmaker charged with filing fraudulent movie tax credit claims
A Hollywood director who made several movies on Cape Cod was arrested and charged with defrauding the state by filing bogus expenses for film tax credits of nearly $5 million, including a claim that he paid actor Richard Dreyfuss $2.5 million when he actually paid him less than one-sixth that amount.
Daniel R. Adams, 50, is the first person charged with trying to con the state through misusing the film tax credit. He was arrested following a meeting at the attorney general’s office Thursday evening after prosecutors became concerned that he was about to leave the state and would not return if indicted. He was unable to post the $100,000 cash bail set against him in Boston Municipal Court this morning.
“Today’s action is an important step to ensure that the film tax credit is awarded appropriately while encouraging legitimate productions to be filmed here in Massachusetts,” Attorney General Martha Coakley said in a statement.
DOR officials forwarded the case to the attorney general’s office, which found that Adams not only made claims for $3.6 million in bogus credits for The Lightkeepers, but also for 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 Margaret Parks, Adams reported $17 million in expenses for The Lightkeepers, which included a $2.5 million payment to Dreyfuss to star in the film, which was panned after its release. But prosecutors determined, in fact, Dreyfuss received a salary of just $400,000. Parks also said there were numerous other false expenses claimed, though she did not detail them and the attorney general’s office did not provide further information. 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 he had expenses of $6.7 million. Prosecutors contend his expenses were only $2.3 million.
While Parks did not detail what happened to the credits in court, sources said an investor who supplied Adams with financial backing but was unaware of the alleged bogus expense claims received the credits as repayment and cashed them in with the state, which is allowed by law. Under the law, anyone who uses the credits to reduce their liability or sell back to the state cannot be held liable if they were not aware of criminal actions and did not participate in the fraud themselves. Thus, the state’s taxpayers are out $4.7 million.
The state’s 25 percent film tax credit has been controversial since its inception, with proponents claiming it draws movies to the state that would not otherwise come while opponents say it subsidizes already rich Hollywood moguls who can either cash in the credits or sell them to other businesses that can use them to reduce their tax liabilities.
Since the credit was passed into law, $276.1 million in film tax credits have been claimed on $1.13 billion in spending on 556 individual productions, according to DOR records. Of that amount, $254 million worth of the credits were sold to other businesses. Adams is the first person ever charged with fraud in the use of the credits.
“We’ll make sure the productions took place,” said DOR spokesman Robert Bliss, who declined to comment specifically about the Adams case. “We’ll kick the tires. But we do not conduct the audit here at DOR that looks at every scrap of paper of every filing.”
According to Adams’s biography on the Internet Movie Database, he attended Harvard University and after college was involved in Massachusetts politics, working on two gubernatorial campaigns, one for attorney general, and two presidential campaigns. It could not be determined who the candidates were. The only campaign contribution that could be connected to him was $250 to then-state Sen. Robert O’Leary in 2004.