Vermont producer sentenced to 7 years in film fraud

• Movie about higher consciousness is unfinished
• Partner Mac Parker says Soteriou controlled him
• Both accused of using film donations to fund lifestyles

RUTLAND, Vt. — Louis Soteriou, the "silent partner" in a $28 million film project that defrauded hundreds of Vermont investors by an estimated $9 million over 10 years, apologized for his role in the crime Monday but said he still believes the film someday can make back the money the investors lost.

"No matter what I say, words cannot take away the financial loss that everyone encountered," Soteriou said shortly before being sentenced to seven years in prison by U.S. District Court Judge Christina Reiss. "For that I am truly sorry."

As for the film, Soteriou said he will "stick true to that line," referring the movie's New Age message of people seeking higher consciousness by reconnecting with the innocence of their youth. If people want their money back, he said, the "only thing to do is the film."

The movie, Birth of Innocence, cost $1 million to make but remains unfinished and is the subject of a legal tug-of-war in U.S. bankruptcy court.

Reiss, in sentencing Soteriou, said the case was perhaps the biggest fraud in Vermont history and that both Soteriou and Malcolm "Mac" Parker of Addison, Vt., who raised all the money and oversaw the film project, made a "predatory calculation" to pocket some of money the investors provided.

"If you follow the money, the money tells the story," Reiss said. "This was not about alms for the poor or helping people in third-world nations ... This was about capitalizing on the goodness of people."

Parker, who spent three hours Monday testifying against Soteriou in fulfilling terms of a plea agreement he worked out with the government, is scheduled to be sentenced Wednesday.

Reiss told Soteriou, who wore a black parka and appeared subdued through the six-hour hearing, that while Parker was the one who misled investors about what was going on with their money, Soteriou was the one who financially benefited the most.

Soteriou spent more than $4 million of the money on luxury hotels and cars as he pursued a spiritual quest he believed would allow him to transcend earthly life and travel through space and time. That accomplishment, Parker told the court, would allow Soteriou to go ahead in time and see winning lottery numbers, then return to the present and win the money by purchasing lottery tickets and marking down the correct numbers.

Parker, who used an estimated $1 million of the investor money to pay household and other expenses over 10 years, testified that he believed that once Soteriou learned how to transport himself to other realms, he would teach Parker how to follow him.

"He was the advance scout," Parker said. "I was in the rear guard, doing the ongoing work."

Parker said Soteriou became his spiritual mentor in the 1990s and used a "mixture of inspiration and fear" to control Parker. He said Soteriou made him believe he and his wife would die if they did not comply with his demands. Among those demands was a requirement that Parker keep Soteriou's involvement in the film a secret from the investors.

Steven Barth, Soteriou's lawyer, challenged Parker's claim that Soteriou had control over him. Under questioning from Barth, Parker acknowledged he made the decision to have investors backdate checks in 2009 in order to hide the fact he was continuing to raise money after state regulators told him to stop.

Parker also chose to mislead investors in other ways, Barth said, including the creation of a legal fund after the state launched an investigation into the funding of the film project.

Later, Barth asked Reiss to impose a 2 1/2-year prison term. saying Soteriou has ongoing mental and physical problems, no prior criminal record and was no more guilty than Parker. Government lawyers have said they wanted Parker to receive a three-year sentence.

Robert Hoffman, a California accountant and former chief financial officer at the Ramtha School of Enlightenment in Yelm, Wash., told the court Parker seemed to be the one in charge when Hoffman was asked by Soteriou to help reorganize the film's financial structure in 2009.

"Lou had a desire to get the message out to the world and Mac hired Lou to create the message for the script," Hoffman said. Hoffman, testifying on Soteriou's behalf, said he met Soteriou when Soteriou was a student at Ramtha in the 1990s.

Barth said after the hearing he was disappointed by the seven-year sentence but "I understand the court's considerations."

Assistant U.S. Attorney Michael Drescher said he was pleased with Reiss' decision.

"We think the sentence sends a message that the U.S. Attorney's Office treats financial crimes seriously and will prosecute them aggressively," he said.