David Bergstein, the high-flying producer, financier and philanthropist, has been arrested by the FBI and charged with defrauding investors out of more than $26 million. His executive producer credits include Accidental Love, Father Of Invention, and last year’s box office dud In The Heart Of The Sea, but none of the investors he’s charged with swindling appear to have been involved in the movie business.
According to an indictment unsealed in Manhattan federal court, Bergstein and co-defendant Keith Wellner, the former general counsel and COO of Weston Capital Asset Management, engaged in a scheme to defraud by concealing material information from investors about financial transactions involving their money; transferring funds from one pool of investors to make payments to another pool of investors without the required disclosures to investors concerning conflicts of interest; and misappropriating a portion of funds transferred from investor accounts for their own benefit. Bergstein was arrested on Wednesday in Hidden Hills, CA, and Wellner was arrested in Manhattan.
“Bergstein and Wellner allegedly tricked their victims into thinking their money would be invested responsibly, but they essentially used these investments to fund their own lifestyle to the tune of several million dollars,” said FBI assistant director-in-charge William F. Sweeney Jr. “People have the right to trade in an uncorrupted market, and today’s charges are proof of the FBI’s continued determination to root out those who unlawfully interfere with this process.”
Manhattan U.S. Attorney Preet Bharara said that the accused “defrauded investors out of more than $26 million. They allegedly withheld material information, transferred funds without disclosing conflicts of interest, and misappropriated funds for their own use. For their web of alleged deception and self-dealing, Bergstein and Wellner now face federal criminal charges.”
Added Bharara said: “They allegedly withheld material information, transferred funds without disclosing conflicts of interest, and misappropriated funds for their own use. For their web of alleged deception and self-dealing, Bergstein and Wellner now face federal criminal charges.”
If convicted, they could be sentenced to 20 years in prison.
In 2014, Weston Capital and several current and former executives – including Wellner – settled a similar SEC claim that they’d fraudulently shifted more than $17 million from one investment to another without informing investors and pocketed some of the proceeds.
Deadline reached out to Bergstein through the Cyrano Group, a merchant banking firm he founded, but a spokesperson declined comment. An attorney for Wellner also declined comment.
Subscribe to Deadline Breaking News Alerts and keep your inbox happy.