IRS exposes elaborate movie production scamPosted: Updated:
PHOENIX -- They are some of the biggest names in Hollywood. Kevin Costner, Ron Howard and famed producer James Brooks. All were supposedly on board to make a movie based on a book by an Arizona author, that is, until the IRS got involved.
When Don Kirchner of Sedona wanted to get his book, "A Matter of Time," made into a movie, "She right away picked up the story and was very convincing about big, big producers and directors and seemed to have first-name affiliation with a lot of them."
"She" is Christine Thompson.
"To be dropping names like Kevin Costner, Ron Howard, she was very brave to do that," said IRS Special Agent Brian Watson.
According to court records, Thompson convinced Kirchner to pay $12,000 of a $50,000 fee for her connections in the film industry and under the direction of certain Hollywood producers, she would be able to produce a large return on the investment.
To Kirchner, Thompson seemed legitimate.
"She even came up with this contract proposal where I was going to have script rights and co-producer status," he said.
A few weeks later, Thompson's elaborate scheme started to unravel.
"They kept saying James Brooks was going to come into town and we're going to have dinner with him," Kirchner said. "It never happened, never happened."
Nervous the $12,000 was gone, Kirchner contacted the IRS.
Kirchner admits, "The only way I could come out of this at all was to call the authorities and say this is what's happening and they immediately miked me and had me record all conversations."
Part of the IRS investigation involved contacting Hollywood celebrities.
"These people are hard to get a hold of," Watson said. "They have agents, they have press people and they have a bunch of intermediaries."
Costner, Howard and Brooks verified they knew nothing of Kirchner's movie deal. But IRS agents needed more evidence against Thompson. The next thing Kirchner knew, he was in the middle of an undercover sting.
Kirchner remembers, "There was 25 people there and there were more outside and the radios were, I mean it was a big thing."
IRS Special Agent Watson told us, "We were able to introduce an IRS special agent, go in there and pose as an investor."
Recently, Thompson pleaded guilty to conspiracy to commit wire fraud. As a result of the IRS investigation, Hollywood now knows about Kirchner's book. "They may have unwittingly opened doors for us that they didn't really have access to."
Thompson is currently serving 19 months in prison for the crime. Once she's released, she will be placed on a three-year probation.
Kirchner is the founder of Return to Honor.