Prairieville businessman pleads guilty in film tax credit scheme

A Prairieville businessman who operated a film production company admitted to a Baton Rouge federal judge Wednesday that he helped a business associate illegally obtain $1.2 million in state film tax credits.

J. Matthew Keith, 36, pleaded guilty to a federal charge of conspiracy to commit wire fraud.

Court records show the associate Keith assisted in the scheme from February 2009 through March 2010 is Mandeville resident Daniel Garcia, 36.

In Keith’s case, Garcia is listed in the charge only as “D.G.” In both cases, however, “D.G.” is referred to by federal prosecutors as owner and operator of DMG Holdings LLC and Louisiana Film Finishers LLC. Records of the Louisiana secretary of state list Garcia as owner of both companies.

Garcia pleaded guilty May 14 to conspiracy to commit wire fraud and admitted that he illegally filed for and received $900,000 in Louisiana film tax credits in 2009.

Dirty District Entertainment LLC is Keith’s film production company, according to his conspiracy charge. That company is listed in state business records at a Prairieville address.

Keith admitted Wednesday that he signed checks that Garcia used as phony evidence of movie-production expenses.

Assistant U.S. Attorney Frederick A. Menner Jr. stated in court records that honest Louisiana taxpayers are victims of the conspiracy in which Keith, Garcia and unnamed others defrauded the Louisiana Economic Development Office.

Menner explained that the office operates Louisiana’s Motion Picture Industry Development Tax Credit Program.

“The tax credit program provided a 30 percent state income tax credit on qualified expenditures for the production of films in Louisiana,” Menner wrote in the charges filed against Keith and Garcia.

Menner told Chief U.S. District Judge Brian A. Jackson that the checks signed by Keith and unnamed others were wired to several banks to make them appear to be movie-making expenses that qualified Garcia for state tax credits.

Glen R. Petersen, attorney for Keith, quickly told Jackson that his client’s checks were sufficiently funded, but were not used to cover movie-production expenses.

Jackson asked Keith whether Menner’s and Petersen’s descriptions of the scheme were accurate.

“I knew we were defrauding the state,” Keith said. “I just didn’t know the amount.”

In return for Keith’s guilty plea, Menner and U.S. Attorney Donald J. Cazayoux Jr. agreed not to pursue any additional charges against him in the tax-credit case.

Jackson advised Keith that his conspiracy charge carries a possible five-year prison term and possible fine of $250,000. The judge also noted that Keith could be ordered to pay restitution to the state. A sentencing date was not immediately scheduled.

The FBI and Louisiana Office of Inspector General conducted the investigation that led to the conviction of Keith and Garcia. Cazayoux said last month that the investigation is continuing.