A Woodland Hills man was sentenced Monday to three months of detention and five years probation for a scheme that promised victims large returns on investments in a movie production company and a proposed 3-D animated movie based on the “Wizard of Oz.”
Gregory Pusateri, 50, was convicted last year in Los Angeles of mail fraud, wire fraud, and offering for sale unregistered securities.
The case centers on a company called Gigapix founded in 2002 by Christopher Blauvelt, who was sentenced last month to eight years in prison.
Over the course of seven years, Blauvelt, who was the CEO, and David Pritchard, the company’s president, hired telemarketers to solicit potential investors, who were told that Gigapix was an animation company similar to Pixar Animation Studios. They were also told that Gigapix was developing projects expected to generate large profits when the company went public, prosecutors said.
The 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.
Pusateri was a Gigapix closer, according to the U.S. Attorney’s Office.
In addition to raising money for Gigapix, the defendants also raised funds to produce a movie titled “OZ3D.”
Investors were told that Gigapix was a financially successful company, generated high returns on investments in less than 18 months, and that the investments carried little or no risk. They were also told there was an urgency to invest in Gigapix and “OZ3D” because the number of shares available were limited.
About 730 victims lost virtually all of the money — roughly $21 million — that they invested in Gigapix and “OZ3D,” according to the U.S. Attorney’s Office.
Pritchard was sentenced last month to five years behind bars.
A restitution hearing is scheduled for April 20.
— City News Service