Movie-related Ponzi scheme alleged

Mahmoud Karkehabadi, also known as Mike Karkeh, has been charged on 89 felony counts for orchestrating what state authorities call a "cold and calculated" $9-million scheme. The Attorney General's office says investors were promised up to 35 percent returns for making loans to a B-movie production company. From press release:

More than 150 individuals from across the country made "movie production loans" to Alliance Group Entertainment, which has produced four B-movie flops since 2005, including "Confessions of a Pit Fighter" (2005) starring rapper Flavor Flav and "Hotel California" (2008). Karkehabadi and his agents told investors they would get their money back within a year, regardless of a project's success, with returns of 18 to 35%. When the year was up, Karkehabadi convinced investors to roll their "loans" over into the latest movie project or agree to extensions on the date for repayment.

Most of the money deposited into the company's accounts were from investors, according to the state Attorney General's office, and their money was the source of most of the principal and interest payments made to earlier investors. Here's the complaint.