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In court today: Flop filmmakers who met in Scientology face 75 years for Ponzi scheme

sewardsoref

[Michelle Seward and Dror Soref]

In Los Angeles Superior Court today, a preliminary hearing is scheduled in the criminal prosecution of two defendants with ties to Scientology who face 75 years in prison each for a bizarre illegal scheme to fund a failed 2009 Simon Baker film, Not Forgotten.

Director Dror Soref and his insurer, Michelle Seward, face 72 criminal counts for running a Ponzi scheme by convincing investors to put up money for the movie that raised about $21.5 million, some of which was used to pay earlier investors. As the Los Angeles Times described it last year…

They were charged with 56 counts of securities fraud, 15 counts of sale of unregistered securities and one count of using a device to defraud a securities transaction. Authorities accuse the pair of operating the scam for three years from 2007 to 2010 and luring in nearly 140 investors, many of them elderly. One victim lost nearly $400,000, prosecutors allege.

What the Times didn’t mention, however, is that Seward and Soref had gotten to know each other through Scientology. Both were longtime church members; Seward had not only raised money for Soref’s film but had also invested in her friend Kirstie Alley’s short lived diet supplement business, Organic Liaison. (Alley was a defendant in at least one of the lawsuits filed against Seward and Soref after the movie flopped.) Another longtime Scientologist, actor Jim Meskimen, plays a role in the film.

Despite a few good reviews and the participation of Simon Baker, Chloë Grace Moretz, and Paz Vega, Not Forgotten ran in only four U.S. theaters and took in only about $54,000. It made another $88,000 internationally. And this was after investors had been told to expect amazing returns of 10 to 18 percent.

 

[Scenes from the movie’s opening night in Los Angeles in 2009]

 
Seward reached out to us a few years ago, wanting to tell her side of the story about how she’d gotten mixed up with Soref, about what happened with the movie, and about the resulting lawsuits and bankruptcies after the film flopped. She blamed Soref for the film’s failure, claimed to have had her clients’ best interests at heart, and said she was trying to make them whole with a special trust she’d set up. But then, in 2015, she and Soref were arrested, and by then she’d stopped answering our phone calls.

Until she stopped talking to us, she had wanted us to write that the real story was that she was doing her best to help her investors get their money back, but it was the Church of Scientology that was encouraging California’s Department of Insurance to pursue an investigation of her. And the reason Scientology wanted to see her sued by the state and prosecuted criminally, she told us, was for retaliation after Michelle came out publicly as a lesbian in 2009 and the church then excommunicated her.

She provides some of these details in a website she put up in January 2015 after a lawsuit filed against her and Soref by the Department of Insurance was settled. In that telling, she says that it was her volunteer work with a Scientology front group, Youth for Human Rights, that first introduced her to Soref.

She claims that Soref convinced her that his film project was a sure thing because it already had basic financing and an international distribution deal. Seward agreed to begin introducing her insurance clients to Soref and the film project, but she admitted that Hollywood was new to her and she was “out of her depth.”

Meanwhile, Seward says she was becoming disillusioned with Scientology because it kept asking members to pay for updated “technology” that they’d already paid for, and also because of the organization’s homophobia. Seward’s marriage had ended while she was raising young twins and her two other children. She then began dating a woman who is a successful performer in the entertainment industry (Seward asked us not to reveal the woman’s identity). Seward writes at her website that her mother, also a Scientologist, first tipped her off that the church was beginning to investigate her because she was breaking away and had come out publicly as gay.

Speaking of herself in the third person, Seward’s website makes the suggestion that Scientology’s involvement led to her being sued (and now facing prison)…

Coincident? Seward speaks out against the Church and an internal investigation is launched in 2010. Seward leaves the church and finds herself and her companies being investigated by the CA Department of Corporations by early 2011 and Soref then walks away from the companies and files bankruptcy. At this time, the CA Department of Insurance starts an investigation on Seward and uses Soref’s statements as “evidence” against Seward.

Seward hasn’t updated the website since her arrest. According to the Los Angeles Times story on the case last year, prosecutors are trying to prove that Seward and Soref both knew that they were defrauding investors.

After the film’s completion, Seward and Soref solicited more funds from investors to produce several films through a company called Windsor Pictures LLC. However, money used to form Windsor Pictures was instead used to pay back investors in the movie flop. The alleged scheme is thought to be among the most elaborate film investment frauds the department has investigated.

And there’s one more twist in this bizarre story. We learned recently that a Pulitzer Prize-winning author is scheduled to come out with a book on Seward this spring. We have a feeling the ending on that book won’t be finished, however, until Seward’s fate in court is revealed. And with a preliminary hearing happening today, that may still be quite a ways off.

 
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3D-UnbreakablePosted by Tony Ortega on November 15, 2016 at 07:00

E-mail tips and story ideas to tonyo94 AT gmail DOT com or follow us on Twitter. We post behind-the-scenes updates at our Facebook author page. After every new story we send out an alert to our e-mail list and our FB page.

Our book, The Unbreakable Miss Lovely: How the Church of Scientology tried to destroy Paulette Cooper, is on sale at Amazon in paperback, Kindle, and audiobook versions. We’ve posted photographs of Paulette and scenes from her life at a separate location. Reader Sookie put together a complete index. More information about the book, and our 2015 book tour, can also be found at the book’s dedicated page.

Learn about Scientology with our numerous series with experts…

BLOGGING DIANETICS: We read Scientology’s founding text cover to cover with the help of L.A. attorney and former church member Vance Woodward
UP THE BRIDGE: Claire Headley and Bruce Hines train us as Scientologists
GETTING OUR ETHICS IN: Jefferson Hawkins explains Scientology’s system of justice
SCIENTOLOGY MYTHBUSTING: Historian Jon Atack discusses key Scientology concepts

Other links: Shelly Miscavige, ten years gone | The Lisa McPherson story told in real time | The Cathriona White stories | The Leah Remini ‘Knowledge Reports’ | Hear audio of a Scientology excommunication | Scientology’s little day care of horrors | Whatever happened to Steve Fishman? | Felony charges for Scientology’s drug rehab scam | Why Scientology digs bomb-proof vaults in the desert | PZ Myers reads L. Ron Hubbard’s “A History of Man” | Scientology’s Master Spies | Scientology’s Private Dancer | The mystery of the richest Scientologist and his wayward sons | Scientology’s shocking mistreatment of the mentally ill | Scientology boasts about assistance from Google | The Underground Bunker’s Official Theme Song | The Underground Bunker FAQ

Our Guide to Alex Gibney’s film ‘Going Clear,’ and our pages about its principal figures…
Jason Beghe | Tom DeVocht | Sara Goldberg | Paul Haggis | Mark “Marty” Rathbun | Mike Rinder | Spanky Taylor | Hana Whitfield

 

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