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Stockbroker May Have Scammed 'Rebecca' Producers

MELISSA BLOCK, HOST:

(Reading) Last night I dreamt I went to Manderley again.

The famous opening line of Daphne du Maurier novel "Rebecca," which is full of lies and mysteries and deaths. Well, now a story is emerging full of lies and mysteries and a supposed death, all wrapped around a troubled plan to bring a musical version of "Rebecca" to Broadway. Federal prosecutors have now charged a Long Island stockbroker, Mark Hotton, with fraud for allegedly creating sham investors in the production, and bilking the show's producers out of $60,000.

William Rashbaum is helping unravel the twisted story for The New York Times. William, welcome to the program.

WILLIAM RASHBAUM: Thank you, Melissa.

BLOCK: Let's unpack this a little bit. The producers of "Rebecca" needed millions of dollars to get the show up and running. They were hooked up with the defendant, Mark Hotton, and he told them he had come through with these four big overseas investors. Prosecutors now are saying that was all a fiction, those investors didn't exist. What's the evidence?

RASHBAUM: One of the things that is interesting about this case is how quickly the U.S. Attorney's Office and the FBI put Mr. Hotton together as a perpetrator of what they say is a fraud. And they did that essentially by tracing back the email addresses of the allegedly phantom investors, and some of the websites associated with businesses that the producers were told these investors operated. And they all linked back to either IP addresses associated with Mr. Hotton or computers in Mr. Hotton's office or home.

BLOCK: So he had created these investors, basically. They were all him, according to the government?

RASHBAUM: According to the government, they were all him. And one could argue that the fraud was bold or brazen and also complicated in a way. But I think that in the newspaper, we described it as clumsy because it was not that hard to trace it back to Mr. Hotton.

BLOCK: And it all came tumbling down when one of the so-called investors supposedly died this summer, after going on a safari in Africa and getting malaria. What happened?

RASHBAUM: By the government's account, it would appear that Mr. Hotton killed off the phantom investor Paul Abrams. Why Mr. Hotton did that at that time isn't clear. May have one possibility is that the producers were clamoring for the money. The deadline was approaching and if the investor was indeed a phantom, there would not be any money and that would be one way of solving a problem, if you're the creator of the phantom investor.

BLOCK: I can't figure out if this was, indeed, all a sham, how it was theoretically supposed to have worked. How would the scheme never have been exposed?

RASHBAUM: Well, that's what I meant when I, in part, when I said that it was clumsy. It not only was easy to trace back to Mr. Hotton but, sooner or later, these phantom investors would be called upon to come up with their money. If one assumes that Mr. Hotton has not gone to all this trouble for just $60,000, then one has to see another goal on the horizon. Again, what that is, we don't know.

BLOCK: What can you tell us about the defendant, about Mark Hotton?

RASHBAUM: Mr. Hotton has a history of complaints brought against him, both civil lawsuits charging him - accusing him of fraud and complaints regarding his work as a stockbroker. In the spring, he surrendered his license and he filed for bankruptcy last year. So he has had his problems.

BLOCK: William Rashbaum with The New York Times. William, thanks so much.

RASHBAUM: Thank you, Melissa. Thanks for having me here.

BLOCK: We reached out to Mark Hotton's legal team and got the statement: The allegations in this case were just unsealed yesterday, we look forward to conducting our investigation and to defending Mr. Hotton in the courtroom. Transcript provided by NPR, Copyright NPR.

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