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August 06, 2010

Filmmaker Mac Parker to Face Trial in Fundraising Scheme

MacParkerFilmmaker Malcolm "Mac" Parker has lost his bid to have a series of charges, including securities fraud, dismissed. Instead, he'll face trial in early November in Vermont Superior Court, a judge ruled this week.

Parker is under scrutiny from state regulators for allegedly failing to register investments in his film Birth of Innocence as securities. He also faces charges of failing to register as an agent to sell securities and to provide investment advice, as well as securities fraud.

In the past 10 years, Parker has raised at least $12.8 million, of which more than three and a half million was paid to a "silent partner" who has since disappeared. Another $1.2 million was spent on the film, according to court records. However, that is the amount raised and spent as of mid-February 2007, and there were reportedly more significant deposits made between then and late 2009, when the state told Parker to stop fundraising and later froze his assets.

A complete accounting of Parker's fundraising efforts, and expenses, has not been completed.

The judge ordered that to be done by September 3.

"We are very pleased with the court's order," said Peter Young, BISHCA's general counsel. "We know there are a number of investors who are facing real hardship, and we hope we can bring them some relief. We will continue to proceed and move forward on this case and prepare for trial."

Neither Parker nor his attorney, were available to comment on the court ruling as of this posting. Parker has maintained that he did nothing illegal, albeit he has confessed to writing poorly worded investment agreements. And, several investors have remained loyal to him despite the scrutiny.

Superior Court Judge Geoffrey W. Crawford set aside two weeks in early November for the trial. It will be held in Washington Superior Court in Montpelier.

Parker's attorneys had asked the court to dismiss the charges based on the fact that the money he raised from nearly 800 people — from a low contribution of $100 to more than $500,000 from one individual — was in the form of promissory notes, or loans, and not securities.

Judge Crawford disagreed and said the state Department of Banking, Insurance, Securities and Health Care Administration made a plausible argument that the so-called "investor agreements" are the equivalent of securities and should have been regulated by the state. In addition, Parker would have needed a license to sell securities.

The court agreed to allow those charges to be addressed during the trial.

In all, about $3.6 million was paid to Dr. James Louis Soteriou, a person described by Parker at times as a silent partner, cocreator of the film and spiritual adviser. Soteriou disappeared earlier this year, just as the state investigation began to unfold.

In a new plot twist, about 30 people, who represent at least $3 million of the principal amount loaned to Parker in the past decade, are asking the court to allow them to ensure the film's completion.

The petition alleges a number of investors are "currently experiencing dire shortages of funds to live on, and many also risk losing what amounts to their entire life's savings, saved college funds and their credit because of his mishandling of funds."

According to the petition, and emails obtained by Seven Days between Parker and investors, as well as some of Parker's supporters, the original film editor — Horace Williams of Little Castle Studio — was fired pushed aside from the production* in early May. Since then, Parker has turned to Bill Kinzie of 2muchMedia to complete the film.

However, Kinzie is not interested in finishing the film before any litigation is complete, according to emails and court records. As part of the film, however, Parker has expressed an interest in adding documentary footage about the state investigation into the film.

That worries these investors, who would like to be able to complete the film as it was originally intended, in order to recoup some of the money. And, they want Williams to complete the film.

"If the present course of action continues for any length of time, and the legal case does take years to resolve, it will be years before any revenue stream even begins to appear," the petition alleges. "This would be disastrous for many of us. Many elderly investor/lenders could literally die before funds begin to appear if this present course of action is allowed to prevail."

Judge Crawford scheduled a hearing for August 13 on the investors' petition.

Today, only a five-minute trailer of the film is available online, but Parker said a much longer version has been screened to financiers. The trailer consists of a New Age-style monologue delivered by Parker as images of idyllic natural scenes slowly fade into smiling, peaceful faces.

According to the intervening investors, the film was promoting a "science" called "Neuro Cosmo Theosis," a fact not disclosed to them originally.

"It was represented that this film was meant to be free of all belief systems and to be theologically neutral," the petition alleges.

Photo of Mac Parker by Caleb Kenna.

* Parker did not fire Williams, but simply refused to have him work on the film.

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