Ex-broker gets nearly 3 years in Broadway scam
NEW YORK (AP) — A once high-flying stockbroker who admitted conning the producers of Broadway's "Rebecca" was sentenced Friday to nearly three years in prison as one of the show's top producers looked on.
"I wanted to look him in the eye. He did a terrible thing," producer Ben Sprecher said outside court after watching Mark Hotton's sentencing.
Hotton, 48, had pleaded guilty to charges that he made false promises that he could raise $4 million from phantom investors to save the adaptation of the psychological thriller. He was paid about $75,000 in fees and commissions in return.
U.S. District Judge John G. Koeltl announced the sentence of two years and 10 months in prison for Hotton, who declined to speak on his own behalf as he sat at the defense table in his prison uniform. He has spent nearly two years in prison after violating his bail conditions. Hotton must also forfeit $500,000 and pay $68,000 in fines.
In a handwritten submission to the court, Hotton apologized.
"My need for quick advance fees outweighed my intention to work completely honest," said Hotton, who wrote that he had been paid about $600,000 annually during 20 years on Wall Street.
Prosecutors said Hotton carried out his ruse by promising "Rebecca" producers that he could close a $4 million gap in their budget by securing $4.5 million from four foreign investors. They said he asked for a $7,500 initial fee, a percentage of the funds he raised and expenses along the way.
"None of these 'investors' actually existed," Assistant U.S. Attorney Edward B. Diskant wrote in a pre-sentence document. "Each was a fictional character created by the defendant."
Diskant told the judge the "elaborate schemes derailed an entire Broadway production."
To further the scheme, Hotton introduced one producer to the supposed niece of a London investor named Paul Abrams and then demanded reimbursement of more than $18,000 spent taking Abrams on a safari, the prosecutor said.
As the opening date of "Rebecca" approached in the fall of 2012, producers anxious to collect some of the money were told by Hotton that Abrams had died of malaria while traveling with his family in August 2012 and the other investors did not want to contribute in his absence, Diskant said.
Prosecutors said Hotton then took advantage of the producers' desperation, getting them to pay $20,000 to secure a seven-figure line of credit from a company he fabricated.
When the money didn't come through, the producers were forced to cancel the production in early October 2012, leaving 130 people out of work.
Next month, Hotton faces sentencing in Brooklyn federal court in a separate fraud in which he is accused of causing a loss of $15 million from 1995 to October 2012 through a series of fraudulent schemes. Prosecutors said both sides agreed in that case that federal sentencing guidelines will call for a prison sentence of more than a decade.
Meanwhile, "Rebecca" is expected to finally open on a Broadway stage a year from now, Sprecher said.