Jerry Seppala, CEO of Minnesota-based Ironbound Studios, and two other men have been arrested by the FBI and charged with running an “advance fee” scheme that swindled movie investors out of more than $12 million. The indictments don’t name the movies involved in the alleged schemes.


Seppala and co-defendants Steven Brown and James David Williams are accused of conspiracy, money laundering and wire fraud for sending falsified financial records to investors and then using their money to pay off earlier investors, much like a Ponzi scheme.

According to the U.S. Attorney’s office, the money received from these investors actually was used to fund other projects, to pay back previously defrauded investors and to pay the defendants’ personal expenses, including the purchase of a car and a house for Williams, who was arrested Tuesday in Los Angeles.

“With lies about making feature-length films and documentaries, the defendants allegedly defrauded victims into investing over $12 million with them,” said Manhattan U.S. Attorney Preet Bharara. “Rather than making movies, the defendants perpetrated an advance-fee scheme, allegedly using the investors’ money to pay themselves and pay other investors back.”

Said FBI assistant director-in-charge Diego Rodriguez: “Williams, Brown, and Seppala didn’t provide marketing expertise to feature films or invest their own millions into film projects as they promised investors. Rather, they defrauded and deceived to acquire more than $12 million of investor funds to pay back previous duped investors or fund personal expenses. Any level of fraud to honest investors is wrong, whether it’s a fraud in the hundreds of dollars or millions of dollars.”

According to the indictment, the defendants frequently sent their victims falsified financial records that reflected investments that had not been made. For example, in an effort to secure a $2 million investment in one of the movies, Williams assured one investor that he had contributed $2 million of his own money to the project. As proof, Williams sent him a bank statement purporting to show a balance of just under $1.9 million in the account maintained for the movie.

“True and accurate records for that account, however, show that on the date Williams sent that statement to the victim, there was actually no money in the account and, indeed, there was never any money in that account until the victim provided the solicited $2 million investment,” the U.S. Attorney’s office said in a statement.

Although the indictments don’t identify the films involved, a movie investor filed a civil suit two years ago accusing the same three defendants of defrauding him out of more than $10.9 million on investments he made with them on three films that got made: Angels Sing, the 2013 Christmas movie starring Harry Connick Jr.; Left Behind, the 2014 apocalypse film starring Nicolas Cage; and The Letters, the 2014 film about the life of Mother Teresa.

Conspiring to commit wire fraud and wire fraud each carries a maximum term of 20 years in prison. Conspiring to commit money laundering carries a 10-year maximum sentence.