Locals accused of misusing state film tax credits

BATON ROUGE, LA (WAFB) - Louisiana's booming film industry has been dealt a bad blow.

Two locals have been charged with conspiracy in an alleged scheme that cost tax payers more than a million dollars, but state leaders said they are doing everything possible to protect the tax payer's money.

From inside the production studios of New Orleans and Shreveport to the scenes centered in the Capital City, the film industry has really taken off.

"You got G.I. Joe II which is number one at the box office, the Tom Cruise picture Oblivion getting ready to come out," LED Entertainment Director Chris Stelly said.

It's all thanks in part to the state's Motion Picture Investor Tax Credit Program set up to help lure film giants and amateurs alike to the Bayou State. Stelly said applicants go through strict background checks.

"The law requires that we receive a full audit verifying the full expenditures that were made by any production. We will go through that full audit, ask a host of detailed questions to the applicant and to the production, make sure we are satisfied before we issue any tax credits."

But a recent federal investigation revealed a couple of film executives may have taken advantage of the program.

According to court documents from the Middle District of Louisiana, Daniel Garcia, Owner and Operator of DMG holdings and Louisiana Film Finishers and Matthew Keith of Dirty District Entertainment allegedly conspired "to use interstate wire communications for the purpose of executing a scheme to defraud LED and to obtain property tax credits."

Garcia reportedly received approximately $1.2 million of tax credits to which he was not entitled.

"These are isolated incidents and of course we only have so much authority in our tool chest and then we will certainly approach the inspector general when needed."

Stelly said the investigation into the alleged conspiracy by Garcia and Keith shows the LED will shine the light on fraud and take whatever action necessary to protect public funds.

U.S. Attorney Don Cazayou would not comment beyond stating the matter is under investigation.

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