Subsidiaries of Horizon Entertainment and Productions received at least $1 million in Louisiana Motion Picture Investor Tax Credits that it should not have been awarded, a new report from the Louisiana Office of the Inspector General says.
The finding is the result of an OIG probe that began after a WVUE-TV investigation into claims that Horizon submitted false expenses to the state for two separate productions—The Sean Payton Show and Saintsational.
According to the OIG report released today, Horizon reported expenses that were either inflated, never incurred or lacked sufficient documentation.
In a lengthy response, Horizon says state tax credits issued by Louisiana Economic Development were proper and that that it followed the rules set forth by the state’s motion picture statute. The company also says it consulted with LED about both productions and fully disclosed transactions related to the productions.
“The OIG report contains a charge of alleged inflated or unsupported expenses. Horizon maintains that the expenses listed are not inflated or unsupported, and the conclusions drawn by OIG are incorrect,” the company says.
LED says to the best of its knowledge, no one has been prosecuted in this instance.
According to the OIG, Horizon and its subsidiaries received $2.6 million in tax credits from the state after reporting total expenditures of $8.2 million on the two separate productions to LED.
The OIG investigation found that at least $1.4 million of the expenses the company reported on the productions had been inflated or never incurred. Those expenses correlate to tax credits issued in the amount of $420,948, the report says. Another $2.1 million in additional expenses lacked sufficient documentation to justify the awarding of $612,994 in tax credits, the office says.
Saintsational, a reality TV show based on the lives of New Orleans Saints cheerleaders, never aired, the OIG says. TSS Productions LLC, a Horizon subsidiary, submitted an audited cost report to LED to obtain the tax credits for the production and on Feb. 2, 2011, received roughly $1.1 million in credits from the state.
In March of the same year, TCPS Productions LLC, another Horizon subsidiary, submitted a report to LED to obtain tax credits for The Sean Payton Show. It received roughly $1.5 million in credits on June 22, 2011.
OIG says its investigation also found that Horizon repeatedly engaged in the circular bank transfer of funds with its subsidiaries to create the impression that it spent much larger sums of money on both projects.
Read the full report, which also includes a response from LED to OIG.
