Another Baton Rouge Businessman Convicted Of Motion Picture Tax Credit Fraud

BATON ROUGE, LA - United States Attorney Walt Green announced that GEORGE M. KOSTUCH, age 43, has pled guilty to one count of wire fraud in violation of Title 18, United States Code, Section 1343, in connection with a scheme to defraud the State of Louisiana’s Motion Picture Industry Development Tax Credit Program (“Tax Credit Program”).  KOSTUCH faces the potential of a significant term of imprisonment, supervised release, and a substantial fine.

As described in the Bill of Information filed this past March, KOSTUCH owned and operated K2 Pictures, LLC, which provided technical services for the production of motion pictures.  As KOSTUCH admitted in connection with his guilty plea in Court today, however, between June 1, 2010 and March 24, 2011, KOSTUCH, through his company, issued and delivered checks totaling approximately $539,500 for production expenditures that had not been incurred.  These fraudulent checks were later used in support of fraudulent applications for film tax credits, which were submitted to the Louisiana Economic Development Office (“LED”), which issued tax credits totaling $161,850.

U.S. Attorney Walt Green stated, “This is yet another example of our commitment to prosecute abuses of the Tax Credit Program.  Particularly in today’s budget climate, fraud and deceit involving the Tax Credit Program – and other fraudulent schemes that allow criminals to enrich themselves at the State’s expense – will be investigated and prosecuted to the fullest extent of the law.  We appreciate the work of the FBI and the Louisiana State Inspector General’s Office in this case and the cooperation of the LED.”

Louisiana Inspector General Stephen Street commented: “Louisiana's film tax credit program cannot function as intended when people are constantly defrauding it.  We are continuing to do everything we can to make sure there are criminal consequences when that happens, and today's guilty plea is the latest example of that.”  Inspector General Street added: “I want to thank our partners at the FBI and United States Attorney for their usual outstanding work.”

This investigation was conducted by the FBI and the Louisiana State Inspector General’s Office and is being prosecuted by Assistant United States Attorneys Frederick A. Menner, Jr. and Paul L. Pugliese.