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Arrest Made in $5M Fraud Case

Tuesday, November 11, 2014

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A California woman is facing two decades in prison in an alleged 17-year, $5 million fraud involving a bogus project to build a movie studio.

Carissa Carpenter, 51, the CEO of Declaration Studios Inc., was arrested and charged Thursday (Nov. 6) with mail fraud, wire fraud and three counts of making a false statement to a government agent, according to a release by U.S. Attorney Benjamin B. Wagner.

The former resident of Malibu is accused of swindling investors out of millions of dollars to “fund her personal expenses and extravagant lifestyle,” according to the indictment.

Mare Island
© / gbautista87

One location for the purported studio was a former naval base on Mare Island in Vallejo, CA.

Carpenter faces up to 20 years in prison and a fine of $250,000, or twice the gross loss or gain from the fraud scheme, prosecutors said.

Studio Complex

Prosecutors and court documents allege that from 1997 until October 24, 2014, Carpenter told investors and others that she was working on a project to build a movie studio in Northern California.

The location of the project varied and included El Dorado Hills; north of Sacramento International Airport in Sutter County; Lathrop; the former naval base on Mare Island in Vallejo; and Dixon.

At one point, the project supposedly included a studio complex, office park, 800 hotel rooms, stores, an amusement park, an 18-hole golf course, and conference/convention center, according to a local news report.

The Appeal Democrat reported that architectural firms Gensler, Bastien Architects and Borges Architectural Group were contributing to the designs for the complex when it was planned in Sutter County.

As a result of the scheme, investors, municipalities and firms that did work for Carpenter lost over $5 million.

Fraud Scheme

According to the indictment, Carpenter boasted that the project would be profitable, environmentally friendly and supported by well-connected people in the entertainment industry.

Sacramento Airport
© / DigitalFilmWorks

The project was also said to be located north of the Sacramento International Airport.

She told investors and others that she had invested hundreds of millions of dollars of her own money in the project. She also claimed that she had arranged financing for the project, but needed investment or bridge loans until the loans came through, according to the U.S. Attorney’s office.

She also said that reputable architecture, construction, design, and public relations firms were involved in the project; and that she had finalized, or was finalizing, the purchase of the studio site, prosecutors report.

As a result, investors gave Carpenter millions of dollars to invest in the project.

The indictment alleges that contrary to her claims, the Hollywood personalities were not involved in the project at all or had little involvement. Similarly, the architecture, construction, design, and public relations firms were not involved or had done only preliminary work on the project.

She also did not own or purchase property for the studio, the U.S. Attorney said.

False Statements

In July 2013, Carpenter told an FBI agent that she had told investors that she was going to use their money for personal expenses; that she had used 50 to 75 percent of investor money for the project; and that two well-known Hollywood producers had committed to her Lathrop project.

All of the statements were lies, authorities said.

This case was investigated by the FBI and the Internal Revenue Service-Criminal Investigation.


Tagged categories: Architecture; Criminal acts; Design; Developers; Enforcement; Ethics; Good Technical Practice; Laws and litigation; North America

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