NEW ORLEANS (AP) — Two people convicted last year in a fraud case stemming from a state tax credit program often touted for turning Louisiana into "Hollywood South" were spared jail time Wednesday by a federal judge who was highly critical of prosecutors in the case.
In sentencing husband-and-wife producers Peter and Susan Hoffman to probation, U.S. District Judge Martin Feldman also noted that disputes remain over whether — and to what extent — the state was victimized in the case.
Peter Hoffman was given six years of probation and fined $40,000; Susan Hoffman, three years of probation and a $10,000 fine.
Prosecutors formally objected to the light sentences but offered no arguments.
"Today is vindication for Mr. Hoffman," Lance Unglesby, Peter Hoffman's lawyer, said after the hearing.
Feldman's decision means all three people convicted in the case last year will avoid jail time. Attorney Michael Arata was sentenced to probation in January. Prosecutors said all three were involved in a scheme involving renovation of a dilapidated New Orleans mansion into a film production facility. It included the use of fraudulent documents to obtain more than $1 million in film industry tax credits for work that was not actually done.
Yet, as Feldman has acknowledged and defense lawyers repeatedly noted, the facility near New Orleans' French Quarter is an up-and-running operation.
"There is no question that Peter Hoffman delivered on his promise to the state," Unglesby told Feldman.
"They asked for a post-production facility and he gave it to them," he added.
Arata and Hoffman were convicted on multiple counts last April. In December, Feldman threw out some of the convictions against Arata and Peter Hoffman. In the end, Arata remained convicted on two counts, including conspiracy and fraud; Peter Hoffman on 16. Susan Hoffman, said by Feldman to be the least involved in the case, was convicted on two counts: conspiracy and mail fraud.
In his December order, Feldman criticized prosecutors for suggesting at one point that defense lawyers should have done more to prove that an email said to have illegally been sent in interstate commerce never actually left the state. Feldman said the suggestion that Feldman flies in the face of the fact that the burden of proof in a criminal case is on the prosecution.
Feldman's dissatisfaction with prosecutors was again on display Wednesday. As he explained his sentencing decision, he said prosecutors had offered an "immature and quite juvenile" argument that Hoffman's involvement in a large number of civil suits should be a factor in sentencing.
"Peter Hoffman might be a lawyer's retirement dream come true but he has every constitutional right to be just that," Feldman said.
The case is far from over. Federal prosecutors are appealing Feldman's December ruling throwing out some of the charges. And a March 30 hearing is set on the government's motion to have the defendants forfeit more than $1 million in allegedly ill-gotten tax credits.
– by AP Reporter Kevin McGill
