Photo by John Schreiber.
Photo by John Schreiber.

A Studio City woman was ordered Monday to perform 3,000 hours of community service, but was spared prison time, for a scheme that promised victims large returns on investments in a movie production company and in a proposed 3-D animated movie based on the “Wizard of Oz.”

Cherie Brown, 65, was convicted last year in Los Angeles of mail and wire fraud.

U.S. District Judge Manuel Real sentenced Brown to five years probation, but he did not specify what type of community service she must complete.

The case centers on a company called Gigapix founded by Christopher Blauvelt in 2002.

Over the course of seven years, Blauvelt, who was the CEO of Gigapix, and David Pritchard, the company president, hired telemarketers to solicit potential investors.

Potential investors were told that Gigapix was an animation company similar to Pixar Animation Studios, and that Gigapix was developing projects expected to generate large profits when the company went public, prosecutors said.

As part of the scheme, telemarketers — known as “fronters” — used lead lists purchased by the defendants to find potential investors and then used scripts touting the supposed merits of Gigapix. When investors expressed an interest, materials about the investment were mailed to them. At that time, the potential investors were turned over to “closers,” who collected their money, according to prosecutors.

Brown and co-defendant Gregory Pusateri, 50, of Woodland Hills, were Gigapix telemarketers who acted as closers. Pusateri, who was also convicted last year, is expected to be sentenced next month.

In addition to raising money for Gigapix, the defendants also raised funds to produce a movie titled “OZ3D.”

While soliciting money for Gigapix and “OZ3D,” investors were told that Gigapix was a financially successful company, generated high returns on investments in less than 18 months, and investments carried little or no risk, according to authorities.

Investors were also told there was an urgency to invest in Gigapix and “OZ3D” because the window of opportunity to invest and the number of shares available were limited, prosecutors said.

About 730 victims lost virtually all of the money — roughly $21 million — that they invested in Gigapix and “OZ3D,” authorities said.

On Feb. 9, Real sentenced Blauvelt to eight years in prison, and Pritchard to five years. A restitution hearing is scheduled for April 20.

City News Service

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