- Associated Press - Friday, November 13, 2015

BATON ROUGE, La. (AP) - A Baton Rouge man has received probation for three years and ordered to reimburse the state nearly $162,000 for bilking Louisiana’s film tax credit program.

The Advocate reports (http://bit.ly/1RTruRf) George Kostuch, who pleaded guilty in May to wire fraud, faced a sentence of 12 months to 18 months behind bars. But U.S. District Judge Shelly Dick Thursday departed downward from that guideline range and cited a favorable presentence investigation report and letters supporting him.

Assistant U.S. Attorney Fred Menner also told the judge that the federal government was not arguing for prison time for the 46-year-old Kostuch.

“This act is not a definition of who you are,” Dick told Kostuch as he stood before her flanked by his attorney, Jim Boren, and the prosecutor. “It is an aberrant act.”

But it was a serious act, added the judge, who determined Kostuch was more than a minimal participant who used sophisticated means to defraud the state of $161,850 - “not an insignificant amount.”

Kostuch admitted six months ago that he wrote checks for nearly $540,000 in false production expenses, which resulted in his company - K2 Pictures - receiving the $161,000-plus in tax credits from the state in 2010 and 2011.

Two fellow filmmakers, Matthew Keith and Daniel Garcia, told authorities they and Kostuch used a complex scheme while working together on three productions - “Xtinction: Predator X,” ”Sports Trivia Cash” and “Mysterious Island,” according to the FBI. The two men told federal agents, for example, that Kostuch hired a contractor for $7,000 of work on “Sports Trivia Cash” and then helped produce false invoices and move money through several accounts to give the appearance that the contractor’s work actually cost $89,000.

“He issued and delivered checks,” Dick said of Kostuch in rejecting his contention that Garcia and Keith created the scheme.

Keith, a 38-year-old Prairieville businessman, was sentenced last month to six months in federal prison and ordered to pay $1.2 million in restitution to the state.

Garcia, 38, of Mandeville, was sentenced in September to six months in prison, as well as another six months in a halfway house, and ordered to pay restitution of $900,000 to the state.

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Information from: The Advocate, http://theadvocate.com

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