West Islip broker admits bilking Broadway investors
Mark Hotton, an investment adviser who at one time had more than $200 million under his management, according to his clients, admitted his guilt Monday before Judge John G. Koeltl. Credit: Handout
A West Islip stockbroker pleaded guilty Monday in Manhattan to federal charges he bilked the producers of a planned Broadway musical and a real estate company out of nearly $500,000.
Mark Hotton, an investment adviser who at one time had more than $200 million under his management, according to his clients, admitted his guilt before Judge John G. Koeltl.
Hotton could face 33 months to 41 months in prison, fines of $75,000 and be forced to pay $500,000 in restitution. Koeltl set sentencing for Nov. 1.
The charges stem from fees and expenses racked up while helping producer Ben Sprecher find investors to pump $4.5 million into the show, "Rebecca, the Musical." Hotton brought in four possible investors, including a man identified as "Paul Abrams," sources told Newsday last fall.
Sprecher was told that Abrams became sick on safari in Africa and died of malaria before investing in the show, said the source.
According to the original indictment in the case, none of the investors existed.
Hotton, 47, had been living in a waterfront home in Babylon Cove before he was arrested and held without bail last October. He admitted using false pretenses and communicating by telephone and emails to cheat an unidentified Connecticut real estate company out of hundreds of thousands of dollars in advances paid in a search for financing.
According to the plea agreement, the loss in both cases amounted to $500,000. The indictment alleged the real estate firm lost $750,000 while the Rebecca production company paid him more than $37,500, including an advance against an 8 percent commission.
Hotton is expected to plead guilty Tuesday in federal court in Central Islip to separate charges of cheating two businesses out of a total of $3.7 million, according to the court calendar of proceedings. Defense attorney Marianne Rantala declined to comment, as did Robert Nardoza, a spokesman for the Eastern District.
Hotton's actions in the "Rebecca" case, and the loss of expected financing, forced the production's delay. Sprecher on Monday said he has rights to the story, based on Daphne du Maurier's Gothic romantic mystery novel, through the end of 2014.
"We are obviously gratified that Mr. Hotton has admitted to the fraud that he perpetrated," said Ronald G. Russo, a lawyer for Sprecher. "Unfortunately, the damage that he did was enormous."
Russo said Sprecher and co-producer Louise Forlenza are "optimistic that the ability to overcome this terrible setback and do look forward to bringing 'Rebecca' to the Broadway theater."
"Mr. Hotton asked me to say there is a chapter yet to be written in this saga," defense attorney Ira London said outside court. He wouldn't elaborate.
Staff writers Robert Kessler and Linda Winer contributed to this story.
