Zurik: Did state fumble on tax credits for John Curtis football documentary?

Updated: Aug. 14, 2015 at 2:14 PM CDT
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NEW ORLEANS (WVUE) - A reality TV show on one of the country's top prep football programs started production in 2008, shortly after Jason Sciavicco moved Horizon Entertainment from Atlanta to New Orleans. The show, "Varsity, Inc.," was a behind-the-scenes look at the John Curtis Christian high school football program.

Horizon claims the 10-month production cost $4.7 million. Horizon told the state that "Varsity, Inc." would be "distributed nationally by the NFL Network… 6 to 8 episodes," premiering in the "1st quarter of 2009."

📷But the show never aired. An official from the NFL Network tells us they're not even familiar with the production.

Part of that $4 million cost was purportedly for cameras that Horizon rented for the show. Records show they rented four Panasonic HDX 900 cameras for five months each. For those five months, Horizon reports the rental for each camera cost $66,000.

But an online search shows they could have bought the same camera back in 2008 for $22,500. The claimed rental inflated the price, costing taxpayers more money.

Horizon reported it also rented three HVX 200 cameras. All totaled, they rented seven cameras, each for five months. Yet Horizon insiders tell us only three cameras were actually used on the show.

Horizon claimed it needed five HD edit suites to produce the John Curtis show. They rented those suites for 25 weeks each - the reported cost was $843,750.

One Horizon insider told us that cost is "beyond comprehension." Horizon insiders tell us only two edit suites were used most of the time, with possible one more in occasional use.

Horizon claims it spent $58,523 on HD tape purchase. Insiders tell us no tapes were purchased for the show.

Horizon says it spent $106,000 on hotel rooms at the Hilton, Comfort Suites, Doubletree, Extended Stay and Southern Comfort. And they claim nearly $13,000 was spent on production meals at Sweet Fire and Ice, Outback, Drago's, Houston's, Superior Grill, Bravo, Five Happiness, Luke - the list goes on and on.

In 2008, the state gave a 25-percent tax credit on all Louisiana spending for this production. So think of it this way: Taxpayers essentially paid for 25 percent of each one of these meals.

One insider told us, "Nobody I know had their meals paid for." Horizon handled this project like every other - they formed a shell company, and the shell company rented equipment and employees from Horizon. That allowed Horizon to receive tax credits for the equipment it owned. It's legal, if the expenses themselves are legitimate.

But Horizon's paperwork raises some serious questions. Horizon invoiced the shell company, and four invoices were included in the records we received on "Varsity, Inc." They show the point of contact, Melissa Dembrun, who works for Horizon and is the wife of Horizon's owner, Jason Sciavicco.

The invoices are vague. They list a description, a price and an amount owed.

But take a look at one particular invoice. It lists a series of positions: two assistant editors, two editors, audio operator, camera operator, production manager and others, costing $17,480 in labor charges "for the week ending 6-14-09."

📷But Horizon employees tell us work on the John Curtis show had ended months earlier, in January of 2009. So Horizon received tax credits for work in mid-June – work that insiders say was never done.

"If you are putting forth that you did something that you didn't do [and] you need to get paid for it, that can be looked at as a theft or a fraud," says FOX 8 legal analyst Joe Raspanti.

Horizon received $1,199,225.75 in tax credits for "Varsity, Inc." The show never aired and insiders tell us, instead of the six to eight episodes promised, they only ended up editing one.

Horizon received the tax credits for this show in 2009, five and a half years ago. Under state and federal laws, any violation would be prescribed, meaning too much time has passed to bring any charges. But if investigators find violations with other Horizon projects that are still open to prosecution, and also find a crime with "Varsity, Inc.," it could open the door to possible charges linked to "Varsity, Inc." being included as part of a conspiracy to defraud the government.

"If it's deemed a conspiracy, that gives prosecutors the leeway to reach back prior to a prescriptive date because it shows some [things] happened before the prescription, some of them happened after," Raspanti says. "Then the whole conspiracy could be taken in under the law as one big conspiracy act."

"Varsity, Inc." is one of at least four Horizon projects that received tax credits, even though the shows never aired. All totaled, those four projects received $2.6 million in Louisiana film tax credits. The state allows productions to receive credits even if they don't air.

Our "Easy Money" investigation has raised serious questions about millions of dollars of state money that may have gone to cover costs that never were really incurred. It's on the radar of state investigators, and our legal analyst says other law enforcement agencies may have an interest as well.

"It's enough money that I would think the federal government would also take a look at it," Raspanti tells us. "They don't usually do nickel-and-dime stuff, they usually try to look at the bigger things. This one, if it is in the million-dollar range, would certainly fall into the bigger thing range."

We already know the state's inspector general is looking into Horizon. The day after we interviewed the head of the state film office, he emailed the IG's office about the company. 📷FOX 8 News received those emails, which show Chris Stelly of the film office reaching out to investigator Tom Boulton to set up a meeting about Horizon Entertainment.

Horizon insiders had been critical of the expenses reported for other projects, including "Saintsational" and "The Sean Payton Show." When you compare the John Curtis production to "Saintsational," it raises even more questions.

The numbers for editing stick out. Remember, Horizon employees said the editing figures for "Saintsational" were high. They only edited three episodes, and none aired.

Still, Horizon reported spending $225,000 on HD edit suites for "Saintsational." For "Varsity, Inc," where only one episode was edited and none of them aired, Horizon claimed it spent $843,750 on HD edit suites. For the first season of "The Sean Payton Show," Horizon claimed it spent $283,500 on editing. Again, insiders thought that number was high.

Horizon actually put together 20 shows that season. Again, compare that to the figures for the John Curtis show.

So Horizon claimed it spent $283,5000 on edit suites for 20 episodes of the Payton show, and $843,750 for one episode of John Curtis.

Again, the NFL Network told us Wednesday that their officials have no recollection of "Varsity, Inc." or any show that Horizon pitched. Horizon claimed it was a show that would air in the first quarter of 2009.

Horizon's attorney, Walter Becker has told us Horizon has done nothing improper.

We should also point out that John Curtis received nothing from this production - no tax credits - and we're not questioning anything with that school's role on this production.

Louisiana Media Company, which owns WVUE/FOX 8, had a working relationship with Horizon. Louisiana Media severed ties in March of 2011. A spokesperson told us, "After a short time, we decided that the speculative nature of the film industry and creating content was not in our best business interest and decided to end our relationship with Horizon and reallocate our investment in WVUE directly."

This TV station, WVUE. shared video with Horizon. Horizon was one of a couple of tenants operating out of this building. We worked on several projects together, including the Saints' Super Bowl parade.

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