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Iowa Bad Boys

October 7th, 2009

The investigations into possible abuses of the Iowa Tax Incentive program has now become a criminal investigation by the Iowa Attorney General’s office.

IowaIn early September, the Tax Incentives Program was suspended when it was discovered that many potentially fraudulent documents had been created for 20 out of 22 film projects that received tax credits, which would ultimately benefit film makers directly.

The manager of Iowa’s Film Office was fired and two other executives resigned after a review by independent accountants revealed, contracts were changed to increase budgets, signatures were copied and moved to the new contracts, film makers expenses up to $650k were wrongly approved, along with numerous other falsifications.  Approximately $32m in tax credits had already been issued when the problems were discovered and the state will seek to recover those obtained fraudulently.

It was also discovered that an actor in one movie claimed the full price of a brand new Range Rover at $61k and the director of another claimed over $67k for a brand new Mercedes, even family members of some film makers benefited from the massaged incentives claims.

The suspension of the Iowa Tax Incentives program, means film makers will now be taking their projects to other states including Louisiana and Texas, creating a loss to Iowa’s economy in the region of $300m.

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