West Islip man charged with bilking 'Rebecca'

A West Islip man has been charged by federal prosecutors with three alleged frauds worth close to $5 million, including bilking the producers of a Broadway show out of $60,000 by inventing imaginary backers, prosecutors said.

Mark Hotton, 46, a financier, who lives in the Babylon Cove section of West Islip, was charged by federal prosecutors in Manhattan Monday with wire fraud for falsely claiming he could get the producers $4.5 million to help underwrite the show "Rebecca," based on the Gothic romance novel.

"Mark Hotton perpetrated stanger-than-fiction frauds both on and Off-Broadway," Southern District U.S. Attorney Preet Bharara said in a news release.

Hotton is also being charged with two other frauds -- variations of what prosecutors say is a common confidence scam known as an advance-fee scheme, in which victims are promised a large sum of money after paying an upfront fee, but never receive the funds.

In the alleged scheme involving the play, Hotton is accused of inventing a large cast of characters who were the supposed potential backers, including a man from Hawthorne, East Victoria, Australia, "Paul Abrams," who apparently died of malaria after traveling in Africa before he could invest.

Earlier Monday, Hotton's lawyer Gerald Shargel said his client "tried his hardest to raise" money for the show. "He certainly wasn't doing this with any fraudulent purpose."

Ron Russo, lawyer for "Rebecca" producer Ben Sprecher, said "Ben Sprecher is most gratified that the government has moved quickly to bring this man to justice. Unfortunately, he has done incalculable damage to Broadway, and to 'Rebecca' the musical. Ben is totally committed to proceeding to bring "Rebecca" to Broadway."

In a second alleged scheme, federal prosecutors in Manhattan charged Hotton with cheating the president of an unnamed Connecticut real estate company out of $750,000 by promising he could obtain a $20 million loan for unspecified businesses, prosecutors said. One supposed investor in Connecticut was also named "Paul Abrams" and used the same email address as the so-called investor in "Rebecca," prosecutors said.

On Long Island, Eastern District U.S. Attorney Loretta Lynch charged Hotton, along with his wife, sister, and three others, with a third wire fraud count, as well as money laundering, to defraud a Michigan company, Sterling Commercial Credit, of Brighton, out of $3.7 million. Hotton and his associates claimed that in exchange for the $3.7 million, they could obtain $9.8 million in accounts receivable from various businesses. Sterling operated as a factor, meaning it obtained at a discount unpaid business debts and collected on the bills.

Hotton pleaded not guilty at his arraignment in federal court in Central Islip on the Long Island federal charges, as did his wife, Sherri Hotton, 43, his sister, Denise Hotton Labriola, 50, of West Islip, and two of his employees, Marianne Mextorf, 51, of Farmingdale, and Michael Scibelli, 54, of West Babylon.

A sixth person indicted in the Long Island scheme, David Blass, 60, identified as the former assistant director of facilities engineering for Maimonides Medical Center in Brooklyn, has not yet been apprehended, officials said. He provided some false bills used in the scheme, prosecutors said

U.S. Magistrate Arlene Lindsay ordered Hotton and other defendants held without bail, pending future hearings.

Assistant United States Attorney Burton Ryan, in arguing in court papers that Hotton be held without bail, said that he may have large sums of cash hidden abroad.

Ryan said federal agents are investigating other schemes that they believe Hotton is involved in and his total frauds might amount to $15 million.

He said that Hotton is a danger to the community because on several recent occasions he allegedly "swerved" his car toward a neighbor's wife, and on Saturday threatened her, according to the neighbor's husband.

With Linda Winer, Anthony M. DeStefano and John Valenti

Allegations against Mark Hotton

In early 2012, producers of "Rebecca -- The Musical" approached Hotton for an additional $4.5 million investment. Hotton agreed to raise the money and received a fee of $7,500 and a guarantee of 8 percent of any funds he raised in excess of $250,000, as well as a percentage of the musical's net profits.

Producers believe Hotton had lined up the $4.5 million from four overseas investors.

Between March and June 2012, producers paid Hotton $15,000 in fees and commissions, as well as an $18,000 advance to allegedly cover a safari with one of the investors.

In late July 2012, Hotton told producers that Abrams was ill and in August that he had died.

Hotton tried to broker a $1.1 million loan for the producers. He allegedly got $10,000 as a fee with $23,000 more wired to a bank account he controlled.

Investigation reveals that none of the four investors existed.

Source: U.S. Attorneys Offices in Manhattan and Brooklyn, federal court records