LANCER'S MOVIE MAGIC
By CHRISTOPHER BYRON Rider Strong in "Cabin Fever"
July 21, 2003 -- IF you're looking for an instructive way to spend an evening this summer, check out a movie bearing the name "The Secret Lives of Dentists." Or how about a forgettable little celluloid event entitled "Cabin Fever"? And toward the end of the year, try to catch something called "Blizzard."
Just pay attention to the credits.
If you do, you'll begin to see why I've been pounding the table over the activities of a collapsed Park Avenue hedge fund family known as the Lancer Group. The Group - or at least, let us say, certain people who work for it - made those movies using money that came, in a distinctly roundabout way, from Lancer's own portfolio.
For years now, the ghastly Lancer Group operation - hiding in plain view in an elegant Park Avenue high-rise in mid-town - has been separating the well-heeled and gullible from their money by murmuring comforting phrases like "small cap growth opportunity" in their ears.
Too bad that what they were really describing, in a startling number of cases, were worthless penny stocks controlled by professional swindlers and fraudsters.
Add to that the sheer brazenness of the Lancer bunch - strutting around Hollywood drenched in the aromas of fast money - and you have what the Lancer Group was really all about from Day 1: The out-of-control ego trip of a one-time Wall Street analyst named Michael Lauer, who thought he could hold his own in the penny stock market, only to wind up in the crosshairs of the Feds for financing many of its worst excesses.
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NOW, with the SEC's seizure of Lancer's books and records, is it possible to begin unraveling the Group's mysterious Hollywood connection, in which a defunct Tinseltown penny-stock company named Total Film Group Inc. devoured at least $15 million during the film company's short and lurid life, and may have been used to hide the theft of up to $18 million more.
It isn't yet possible to say for sure just how much Lancer money was ultimately pounded down the Total Film Group rat hole, because the books of both entities look to be wildly in conflict with each other.
Between March and December 2002, for example, the monthly portfolio statements of the Lancer Group's various hedge funds show roughly $18 million of loan transactions between the funds and Total Film Group.
But Jeffrey Hoffman, who served as Total Film's chief executive officer during the period in question - until officially resigning on June 30 of this year - insisted to me last week that he knew absolutely nothing about the transactions and that, from January of last year onward, Total Film Group was a defunct shell company that conducted no business activities.
Hoffman sounded genuinely baffled as to why the Lancer portfolios seem to show Total Film Group having received $500,000 in a loan from Lancer during June 2002 - creating a total loan outstanding of $4.325 million, which is abruptly reduced in July by 88 percent, to a balance of just $500,000. Hoffman insisted categorically that no such transactions occurred.
The Securities and Exchange Commission has finally done the right thing and pronounced the Lancer Group a top-to-bottom swindle machine, and a receiver has been appointed to recover what it can of the Group's assets.
But as the fog enveloping the accounts of Total Film Group shows, the salvage effort may not yield very much. Cash from the Group's fat-cat investors was really the only asset of genuine value the Group ever had - and nearly all of that has now disappeared into penny-stock trash like Total Film Group.
TOTAL Film came into being in 1997, when an organized-crime thug and ex-con securities fraudster named Abraham Salaman bolted together a dormant penny-stock company in the hair care business with a privately held Nevada company he controlled called Total Media Inc. - then brought in Lauer to pump the thing full of money.
Salaman has been a key investment partner of Lauer from almost the founding of the Lancer Group in 1994, pushing flaky and doomed penny-stock promotions ranging from walk-in centers for schizophrenics to a plan to launch a TV network on the Internet.
With each of his deals, the script has been the same: Lauer brings in the money, the stock price soars, then the business collapses, the stock crashes, and millions of dollars simply vanish.
And that is what happened in the case of Total Media. The merged entity was renamed Total Film Group Inc., and Lauer quickly began pouring in Lancer cash in return for Total Film shares. And, predictably enough, by the spring of 2001 the company's revenues were tumbling, its overhead was soaring, and its losses were exploding.
So Lauer replaced Total Film's CEO, a South African stock promoter named Gerald Green, with the aforementioned Jeffrey Hoffman, who immediately fired 75 percent of the company's employees and began looking for what to do next.
What Hoffman wanted to do was make movies. And even though he was still the CEO of Total Film Group, he decided to get in the game by setting up his own private movie production company, called Black Sky Entertainment, which he did in October 2001 - a move that in effect made him a competitor with himself.
But that didn't stop Lauer - who was still carrying the defunct Total Film Group on his hedge fund's books as an asset worth more than $50 million - from pushing Lancer cash in Hoffman's direction to get in on the new Tinseltown action.
Though Hoffman's partner at Black Sky, Glenn Weisberger, said to me last week that Black Sky has so far borrowed only about $1.25 million from Lancer, the most recent portfolios for the hedge funds themselves, from April 2003, show loans to Black Sky of nearly $2.9 million - yet another case of Lancer's books showing multimillion-dollar loans that the Hoffman folks say they've never received.
In any case, the money they did receive was apparently enough that Hoffman and Black Sky have been able to help make at least one movie - the aforementioned "Cabin Fever" (about teenagers who fight some sort of flesh-eating virus). For the moment, Lauer is listed as "co-producer" on the film, but Hoffman says the Lancer man has asked to have his name removed.
MEANWHILE, Lauer and his crew have been busy using Lancer bucks to elevate themselves in La-La Land in yet another way. Since spring 2002, Lancer has been lending money, which now appears to total nearly $4 million, to a Canadian movie company called Knightscove Entertainment.
Those loans have coincided with the release of a movie called "Virginia's Run" and with the filming of a second film, "Blizzard," set for release this December. Both films were co-produced by Knightscove in cooperation with a New York outfit called Holedigger Films, which is owned by two of Lauer's underlings at Lancer: David Newman and Martin Garvey.
Finally, if you want to see the names of virtually the entire employment roster of the Lancer bunch scroll down the screen, check out the "executive producer" screen credits for yet another Holedigger release, "The Secret Lives of Dentists." Garvey and Newman are there, as is Lauer himself. And there's even an "executive producer" screen credit for a Lauer flunky named Bruce Cowen, now awaiting trial in Miami for allegedly attempting to bribe an undercover FBI agent with penny-stock shares in the Lancer portfolio.
How much more of this sort of thing may have gone on behind the drawn curtains of the Lancer Group is hard to say, at least for now. But investigators are likely to keep pressing for answers as to what really happened to $1 billion worth of hedge-fund money that was here one minute then gone the next. In time, I suspect we'll all know.
* Please send e-mail to: cbyron@nypost.com |
