SEC v. ROCKWELL ENERGY OF TEXAS, No. 4:09-cv-4080, Central District of California (Feb. 20, 2014)

 
 
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JOHN W. BERRY, Cal. Bar No. 295760 
Email: [email protected] 
PETER F. DEL GRECO, Cal. Bar. No. 164925 
Email: [email protected]  
 
Attorneys for Plaintiff 
Securities and Exchange Commission 
Michele Wein Layne, Regional Director 
Lorraine B. Echavarria, Associate Regional Director 
John W. Berry, Regional Trial Counsel  
5670 Wilshire Boulevard, 11th Floor 
Los Angeles, California 90036 
Telephone: (323) 965-3998 
Facsimile: (323) 965-3908 
 
 
 
 
UNITED STATES DISTRICT COURT 
 
CENTRAL DISTRICT OF CALIFORNIA 
 
 
SECURITIES AND EXCHANGE
COMMISSION, 
 
Plaintiff, 
 
          vs.          
 
SAMUEL BRASLAU, RAND J. 
CHORTKOFF, and STUART E. 
RAWITT,  
 
Defendants. 
 
Case No.: 
 
COMPLAINT 
 
 
 
 
 
 
 
 
Plaintiff Securities and Exchange Commission (“SEC”) alleges: 
JURISDICTION AND VENUE 
1. This Court has jurisdiction over this action pursuant to Sections 20(b), 
20(d)(1) and 22(a) of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. §§ 77t(b), 
77t(d)(1) & 77v(a), and Sections 21(d)(1), 21(d)(3)(A), 21(e) and 27(a) of the Securities 
Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. §§ 78(u)(d)(1), 78u(d)(3)(A), 78u(e) 
& 78aa(a).  Defendants have, directly or indirectly, made use of the means or 
instrumentalities of interstate commerce, of the mails, or of the facilities of a national

 
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securities exchange in connection with the transactions, acts, practices and courses of 
business alleged in this complaint.  
2. Venue is proper in this district pursuant to Section 22(a) of the Securities 
Act, 15 U.S.C. § 77v(a), and Section 27 of the Exchange Act, 15 U.S.C. § 78aa(a), 
because certain of the transactions, acts, practices and courses of conduct constituting 
violations of the federal securities laws occurred within this district. 
SUMMARY 
3. This matter concerns a fraudulent offering of securities for a movie that was 
not made and, given the extent to which investor proceeds were earmarked for 
undisclosed purposes unrelated to the actual making of a movie, probably never could 
have been made. 
4. The fraudulent scheme was overseen by defendant Samuel Braslau, who 
controlled two companies – Mutual Entertainment, LLC and its successor through 
merger, Film Shoot, LLC – which offered and sold securities in the form of membership 
units for the purported purpose of financing a movie to be called Marcel, later re-named 
The Smuggler. 
5. From April 2011 through August 2013, Braslau, through Mutual 
Entertainment and Film Shoot, raised more than $1.8 million from more than 60 investors 
nationwide through a boiler room operated by Defendant Rand Chortkoff. 
6. The unregistered salespeople hired and supervised by Chortkoff – most 
notably, recidivist defendant Stuart Rawitt – sold investors the dream of a glamorous, 
multi-million dollar movie production starring A-list celebrities sure to generate 
exorbitant returns through numerous revenue streams. 
7. In reality, almost every investor dollar was diverted to the Defendants and 
their cohorts, either as sales commissions or purported “consulting” fees, or otherwise 
spent on the facilitation of the offering. 
8. As a result of the Defendants’ actionable conduct, what remains of investor 
funds constitutes less money than it would take to produce a public service 

 
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announcement, let alone a full-length motion picture capable of securing a theatrical 
release. 
9. In offering and selling these securities to investors, Defendants Braslau and 
Chortkoff, acting with scienter, engaged in a scheme to defraud and did defraud their 
investors.  In connection with the purchase or sale of these securities, Defendants Braslau 
and Rawitt, acting with scienter, made material misrepresentations as to the intended uses 
of investors’ funds and the commercial prospects for and profitability of their investment.  
By this conduct, the Defendants violated the antifraud provisions of Section 17(a) of the 
Securities Act, 15 U.S.C. § 77q, and Section 10(b) of the Exchange Act, 15 U.S.C. § 
78j(b), and Rule 10b-5 thereunder.   
10. By selling these securities through a network of sales agents and receiving 
and paying compensation therefrom, Defendants Chortkoff and Rawitt acted as brokers 
and dealers.  However, neither is registered with the SEC as either a broker or a dealer 
and thus each has violated the broker-dealer registration requirements of Section 15(a) of 
the Exchange Act, 15 U.S.C. § 78(o). 
11. Rawitt is subject to an October 27, 2010 Order instituted by the SEC which 
bars him from association with any broker or dealer.  By his actions, Rawitt violated 
Section 15(b)(6)(B)(i) of the Exchange Act, which prohibits any person for whom a bar 
order is in effect from associating with a broker or dealer in contravention of said order 
without the consent of the SEC.  
12. The SEC seeks permanent injunctions prohibiting each of the Defendants 
from future such violations, disgorgement of Defendants’ ill-gotten gains with 
prejudgment interest thereon, and the imposition of civil penalties. 
THE DEFENDANTS 
13. Samuel Braslau resides in Los Angeles, California.  Braslau is and at all 
relevant times herein was a member of the State Bar of California (Bar No. 200843).   
Braslau served as counsel and registered agent for both Mutual Entertainment and Film 
Shoot and exercised de facto control of both entities and their finances.  He is the sole 

 
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managing member of The Smuggler The Movie, LLC.   
14. Rand J. Chortkoff resides in Encino, California.  Chortkoff is the sole 
owner of Fine Melody, Inc. and Delta Groove Music, Inc.  In 2008, Chortkoff was the 
subject of a cease-and-desist order issued by the California Department of Corporations 
for his role in the unregistered offer and sale of securities of Big Sky Motion Pictures, 
LLC and Spring Break ’83 Production, LLC.  Chortkoff is not registered with the SEC in 
any capacity. 
15. Stuart E. Rawitt resides in Marina del Rey, California.  Rawitt does 
business as Half A Cake Entertainment, Inc., which received commissions of up to 27% 
of the proceeds invested by those whom Rawitt solicited.  On July 15, 2010, Rawitt 
entered into a consent judgment permanently barring him from violating Sections 5(a) 
and 5(c) of the Securities Act and Section 15(a) of the Exchange Act.  See SEC v. 
Rockwell Energy of Texas, LLC, et al., Case No. 4:09-cv-4080 (S.D. Texas).  On October 
27, 2010, the SEC instituted public administrative proceedings against Rawitt and 
accepted his settlement offer whereby he agreed to a bar from future association with any 
broker or dealer.  See In the Matter of Stuart E. Rawitt, Admin. Proc. 3-14099 (Oct. 27, 
2010).  Rawitt is not registered with the SEC in any capacity. 
AFFILIATED ENTITIES 
16. Mutual Entertainment, LLC was a California limited liability company 
formed on December 16, 2010 and headquartered in Beverly Hills, California.  A third 
party is identified as its managing member on its public filings but actual control was 
exercised by Braslau.  Mutual Entertainment filed a Form D with the SEC on June 23, 
2011, claiming an exemption from the securities registration requirements under Rule 
506.  Mutual Entertainment merged with Film Shoot, LLC in March 2012 and ceased 
operations shortly thereafter. 
17. Film Shoot, LLC is a California limited liability company formed on 
February 22, 2012 and headquartered in Beverly Hills, California.  A third party is 
identified as its managing member on its public filings but actual control was exercised 

 
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by Braslau.  Film Shoot filed a Form D with the SEC on May 7, 2012 and an amendment 
thereto on September 24, 2012, claiming an exemption from the securities registration 
requirements under Rule 506 in each instance.  Film Shoot merged with Mutual 
Entertainment in March 2012.  It no longer appears to be active. 
18. The Smuggler The Movie, LLC is a California limited liability company 
formed on July 9, 2012 and headquartered in Beverly Hills, California.   
THE FRAUDULENT SCHEME 
A. The Defendants Sold Securities for the Purported Purpose of Making a Movie 
19. In late 2010, Braslau and Chortkoff held a series of meetings in which they 
discussed how to go about raising several million dollars with which to finance the 
making of a motion picture. 
20. In December 2010, Braslau formed Mutual Entertainment, LLC, a limited 
liability company that would offer and sell membership units to investors, and purport to 
use the proceeds therefrom to make a motion picture. 
21. Although an unemployed actor was named the ostensible managing member 
of Mutual Entertainment, Braslau exercised de facto control over Mutual Entertainment, 
its finances, and its operations. 
22. Braslau either instructed that the agreements entered into by Mutual 
Entertainment be signed, or reproduced its ostensible managing member’s signature on 
them in order to effectuate those agreements on behalf of Mutual Entertainment.  
Although Braslau shared signature authority on Mutual Entertainment’s bank accounts 
with its registered managing member, the unemployed actor, Braslau transacted all of the 
activity in Mutual Entertainment’s bank accounts and did not provide its putative 
managing member with records thereof.   
23. In January 2011, Mutual Entertainment entered into a written agreement 
with a film director to purchase the rights to an unpublished story titled Marcel for “a 
payment of Twenty Five Thousand Dollars ($25,000) or one percent (1%) of the final 
going in budget whichever amount is greater.”  In May 2012, Film Shoot paid $25,000 to 

 
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Jasmine Pictures pursuant to this agreement.   
24. That same month, Mutual Entertainment entered into a term letter agreement 
with the same film director to direct “a proposed martial arts action motion picture 
project, budgeted at $3.5 million, to be produced by [film producer] and financed by 
Mutual Entertainment” – i.e., the film version of Marcel.  To date, the film director’s  
directorial services have not been required and he has not been paid pursuant to this 
agreement.   
25. In February 2011, Mutual Entertainment entered into a written agreement 
with Film Vergnuegen, Inc. for the services of a named film producer of “a martial arts 
motion picture drama presently entitled Marcel to be directed by [film director].”  This 
putative producer  has been paid a total of $75,000 by Mutual Entertainment, Film Shoot 
and The Smuggler The Movie LLC pursuant to this and successor agreements.  To date, 
his services as a producer have not been required. 
26. Both the film director and film producer are movie industry professionals 
with a number of credits on their resumes.  But the only apparent purpose they served 
was to add a veneer of commercial legitimacy to the Defendants’ fundraising endeavors.    
27. In April 2011, Mutual Entertainment commenced to offer and sell up to $7.5 
million of its securities in the form of membership units, at a cost of $1 per unit, with a 
minimum investment amount of $25,000.  However, Mutual Entertainment reserved, and 
exercised, the right to accept investments of less than $25,000. 
28. Mutual Entertainment’s fundraising efforts were undertaken by Mutual 
Entertainment Ventures, Inc. (“MEV”) and by Chortkoff, the sole owner of Fine Melody, 
Inc.  MEV and Chortkoff hired “surveyors,” or “fronters,” to cold call prospective 
investors from lead lists that MEV and Chortkoff purchased from lead list brokers.   
29. Braslau and Chortkoff prepared a script that the fronters used in their 
telephone solicitation of potential investors.  Per the script, the fronters said that they 
were “conducting marketing surveys for film and entertainment companies that are 
looking at current investor trends.”  The script directed the fronters to ask the person 

 
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called whether he or she was a qualified and accredited investor and, if so, whether he or 
she wanted to “opt in” to hearing more about an “opportunity available to get in with a 
production company seeking qualified investors.”   
30. Those who “opted in” to hearing more were told that Mutual Entertainment 
was looking for people to invest in “the kind of project that only comes around once in a 
great while” that was to be directed by the film director referred to above and produced 
by the producer referred to above.   
31. The fronters emphasized the commercial successes of previous movies 
directed by the film director or produced by the producer.  The fronters provided a 
website address which featured the movie’s “proposed” A-list cast of actors and 
actresses, and concluded by asking whether the person called was interested in hearing 
more about the investment opportunity from a “Production Executive.” 
32. If a self-accredited potential investor was interested in hearing more, the 
fronter provided his or her information to Chortkoff, and Chortkoff provided the 
information to a “production executive,” or a “closer.”     
33. Initially, the fronters’ calls were made from an office that MEV maintained 
in northern California, while the closers worked from an office run by Chortkoff in Van 
Nuys, California that was leased by Mutual Entertainment.  By about August 2011, both 
the fronters and the closers worked together in the Van Nuys office.  Fronters continued 
to route the information for self-accredited and interested potential investors to closers 
through the medium of Chortkoff.   
34. Chortkoff oversaw the mailing of written offering materials to prospective 
investors.  In addition to a private placement memorandum (“PPM”), a subscription 
agreement and an operating agreement, he provided prospective investors with a glossy 
brochure for Marcel that he and Braslau created and that featured, among other things, 
biographical sketches of the producer and film director, a “proposed A-list cast” featuring 
a dozen well-known actors and actresses and the box office receipts for several of their 
more successful movies, budget and revenue figures for other movies made by the 

 
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producer and the film director, and budget and revenue figures for other “blockbuster” 
films deemed “comparable” to Marcel. 
35. The express and implicit comparisons between the budget and revenue 
figures for the movies cited in the brochure and the prospects for Marcel are tenuous at 
best.  They concern movies that were actually made and released.  Marcel was neither 
made nor released, and never stood a real chance of being so. 
36. Similarly, none of the “proposed” cast members for Marcel were even 
contacted about being in the movie. 
37. MEV ceased its affiliation with Mutual Entertainment at the end of February 
2012. 
38. MEV was replaced by American Marketing & Survey Co. (“AMSC”), 
another entity with a powerless managing member, the operations and finances of which 
were in fact controlled by Braslau. 
39. AMSC employed fronters, hired and supervised by Chortkoff, who cold-
called prospective investors from the Van Nuys office, using lead lists purchased by 
Chortkoff and the sales script created by Braslau and Chortkoff 
40. In March 2012, Mutual Entertainment entered into a merger agreement with 
Film Shoot, which assumed “any and all liabilities, obligations and assets of Mutual 
Entertainment” pursuant thereto.  At roughly the same time, the working title of the 
movie was changed from Marcel to The Smuggler.  
41. Film Shoot’s offering of securities for the production of The Smuggler was a 
seamless continuation of Mutual Entertainment’s offering for Marcel: the units held by 
investors in Mutual Entertainment were converted into units in Film Shoot, the Mutual 
Entertainment PPM was simply retitled wholesale the Film Shoot PPM, the glossy 
Marcel brochure was recast as the glossy The Smuggler brochure, and the story the movie 
purportedly would tell (a down-on-his-heels French martial arts master who obtains 
redemption through his protection of an orphan and his cracking of heads in Nazi-
occupied Paris) remained the same.   

 
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42. Although an unemployed musician was appointed the ostensible managing 
member of Film Shoot, Braslau exercised de facto control over Film Shoot, its finances, 
and its operations. 
43. Braslau either instructed  that the agreements be entered into by Film Shoot, 
or reproduced the ostensible managing member’s signature on them in order to effectuate 
the desired agreements.  Although Braslau shared signature authority on Film Shoot’s 
bank accounts with the ostensible managing member, Braslau transacted all of the 
activity in Film Shoot’s bank accounts and did not provide the managing member with 
records thereof. 
B. The Private Placement Memorandum Contained Fraudulent 
Misrepresentations and Omissions 
44. The PPM, drafted by Braslau and disseminated by Chortkoff, either 
affirmatively misrepresents or fails to disclose material facts concerning the offerings, 
including the rates of commissions paid to salespeople, the extent of the legal fees paid to 
Braslau, the nature or existence of other fee agreements, and the fatal impact that these 
financial obligations would have on their ability to make a movie with offering proceeds.  
Braslau and Chortkoff knew, or were reckless in not knowing, that the PPM made these 
misrepresentations or omitted material facts concerning the offerings. 
45. According to the PPMs, 5% of the offering proceeds would be used for 
”Organizational Expenses” and 20% of the offering proceeds would be used for 
“Marketing and Consultation.” 
46. According to the PPMs, depending on how many units were sold in the 
offering, 1.5%-1.33% of the offering proceeds would be used for “Legal Expenses 
(Securities and Production Legal),” 63.5%-64.3% of the offering proceeds would be used 
for “Production Expenses,” and 9.33%-10% of the offering proceeds would be paid as a 
distribution fee called a “Distribution Minimum Guarantee.” 
 
 

 
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47.   The only express reference to sales commissions contained in the PPM 
states: 
In the event the Company enters into selling agreements with selected 
Broker/Dealers, the Company may pay to the Broker/Dealers a commission 
of up to ten percent (10%) and a non-accountable expense allowance of three 
percent (3%) of the gross subscription proceeds made from the sale of   Units 
by the Broker/Dealers. 
48. The Defendants raised at least $1,817,958 from at least 60 investors 
nationwide using the PPMs referenced above. 
49. The Defendants used the offering proceeds in a manner wholly inconsistent 
to what was disclosed to investors in the PPM.  The $1,817,958 raised during the offering 
was used as follows: 
 
Recipient UsageAmount Percentage
MEV                                       Fundraising $337,825
1
   18.58%
AMSC                                     Fundraising$112,628    6.19%
Chortkoff                                Fundraising$141,225
2
   7.76%
Rawitt                                     Fundraising$152,918
3
   8.41%
Closers other than Rawitt       Fundraising$38,599      2.12%
Braslau                                    Legal expenses$337,956
4
   18.59%
Mark Holdom, Inc. Distribution/consulting 
costs
$206,000    11.33%
Producer/Film Director          Production costs$143,000    7.86%
Other  Misc.$347,807    19.13%
50. Braslau knew, or was reckless in not knowing, that the offering proceeds 
were used as set forth in the chart above, and not as had been disclosed to investors in the 
PPM that he drafted.  For example, Braslau entered into various agreements obligating 
these expenditures without disclosing those agreements or the resulting financial 
obligations to investors.  He also created internal spreadsheets detailing the distribution 
of the offering proceeds, which were consistent with the actual use of the proceeds 
outlined above and which clearly showed that these proceeds were not being used in the 
                                           
1
 Includes payments made to salesepeople, including Chortkoff and Rawitt. 
2
 Chortkoff received an additional $19,029 from MEV. 
3
 Rawitt received an additional $101,081 from MEV, and $6,062 from AMSC. 
4
 Braslau received an additional $2,500 from ASMC. 

 
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manner represented to investors and that there would be insufficient funds to make a 
movie. 
51. Chortkoff knew, or was reckless in not knowing, that the offering proceeds 
were used as set forth in the chart above, and not as had been disclosed to investors in the 
PPM that he circulated to investors.  For example, Chortkoff hired the sales agents 
responsible for obtaining additional investments, and knew what they were being 
compensated in amounts that were not disclosed to investors. 
52. Investor proceeds were spent as detailed above pursuant to a number of 
agreements that Braslau, the de facto head of Mutual Entertainment and Film Shoot, 
entered into with various entities in the course of the securities offerings. 
53. In January 2011, Braslau drafted a written Service Agreement with MEV, 
entitling MEV to “a fee of Twenty Five Percent (25%) allocation of the monies raised 
through the PPO as consideration for its services,” as well as a written agreement with 
MEV’s principal, entitling him to “Five Percent (5%) of all funds raised through the 
equity placement.”  Both agreements were either signed by the managing member of 
Mutual Entertainment at Braslau’s instruction or the managing member’s signature was 
reproduced by Braslau. 
54. Notwithstanding the terms of the written agreements with MEV and its 
principal, Mutual Entertainment routinely paid MEV a sales commission equal to 40% of 
investor proceeds, or 10% more than was called for by the two agreements combined. 
55. MEV paid its fronters an hourly wage but paid its closers a sales commission 
based on the amount invested. 
56. Chortkoff hired the closers and negotiated the sales commissions they were 
entitled to from MEV.   
57. Chortkoff hired Rawitt and negotiated the terms of Rawitt’s employment by 
MEV:  a commission of 27% of the amount invested by any person that Rawitt closed by 
himself, and 10 to 15% of the amount invested by any person that Rawitt closed with the 
assistance of others.  MEV paid Rawitt his sales commission from the 40% sales 

 
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commission that Mutual Entertainment paid to MEV. 
58. AMSC was less costly than MEV, receiving a sales commission of only 
about 25% of the offering proceeds.  But whereas closers, including Rawitt, had 
previously been compensated by MEV from the 40% sales commission it received from 
Mutual Entertainment, Film Shoot directly compensated its closers. 
59. In January 2011, Mutual Entertainment entered into a written agreement 
with Fine Melody, Inc. (“Fine Melody”) “for the services of Rand Chortkoff as an 
Executive Producer in the development, financing and production” of Marcel, and a 
written agreement with Delta Groove Music, Inc. (“Delta Groove”) “for the services of 
Rand Chortkoff as music supervisor” of Marcel.  The agreements entitle Fine Melody 
and Delta Groove to “5% of all funds raised through the equity placement”, respectively. 
60. The agreements were drafted by Braslau and signed by the managing 
member of Mutual Entertainment at Braslau’s instruction or the managing member’s 
signature was reproduced by Braslau. 
61. Chortkoff did not render any of the services enumerated in the agreement 
with Delta Groove because there is no movie requiring such services.  The only services 
Chortkoff rendered pursuant to these agreements were in connection with the raising of 
funds through the private placement – primarily, his supervision of the fronters and 
closers operating from Van Nuys. 
62. Notwithstanding the terms of the agreements, Mutual Entertainment (and 
later Film Shoot) routinely paid Fine Melody a sales commission of 8% of the amount 
invested by persons solicited by the fronters and closers whom Chortkoff hired and 
supervised. 
63. In January 2011, Mutual Entertainment entered into a Legal Services 
Agreement with Braslau that entitled him to “an initial retainer fee of One Hundred 
Thousand Dollars ($100,000) . . . from the funds raised through the PPM, plus Three 
Percent (3%) of the funds raised through the PPM.” 
 

 
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64. The Legal Services Agreement was drafted by Braslau and either signed by 
the managing member of Mutual Entertainment at Braslau’s instruction or the managing 
member’s signature was replicated by Braslau. 
65. Per the stated terms of the Legal Services Agreement, Braslau was entitled 
to $154,000, or $127,000 more than was disclosed in the PPM. 
66. In December 2010, Mutual Entertainment had entered into a Loan and 
Security Agreement with Braslau whereby Braslau agreed to advance up to $50,000 to 
Mutual Entertainment “for working capital.”  
67. The Loan and Security Agreement was drafted by Braslau and either signed 
by the managing member of Mutual Entertainment at Braslau’s instruction or the 
managing member’ssignature was replicated by Braslau. 
68. The Loan and Security Agreement entitles Braslau to repayment of the 
amount advanced from offering proceeds, as well as payment of a Fee equal to 50% of 
the amount advanced from offering proceeds. 
69. Per the stated terms of the Loan and Security Agreement, Braslau was 
entitled to repayment of $75,000 if he advanced the full $50,000 contemplated by the 
Loan and Security agreement. 
70. The PPM does not disclose the existence of the Loan and Security 
Agreement or its terms of repayment. 
71. Notwithstanding the express terms of the undisclosed Legal Services 
Agreement and the undisclosed Loan and Security Agreement – pursuant to which 
Braslau would be entitled to a total of $229,000, assuming he had advanced Mutual 
Entertainment $50,000 and was repaid in full – Braslau personally received more than 
$340,000 in investor funds. 
72. In January 2011, Mutual Entertainment entered into an Exclusive Sales 
Agency Agreement with Mark Holdom Inc. as “sole and exclusive sales agent for the 
distribution and exploitation of any and all distribution rights of every nature and kind.” 
  

 
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73. Pursuant to the Sales Agency Agreement, Mark Holdom Inc. is entitled to a 
minimum guarantee of $750,000 (10% of the full offering amount), as well as a 
percentage of the film’s gross receipts.  This is at least $50,000 more than is disclosed in 
the PPM (which states, at one point, that Mark Holdom Inc. is entitled to $700,000) and 
perhaps as much as $570,000 more than is disclosed in the PPM (which states, at another 
point, and as noted in paragraph 46, infra, that the “Distribution Minimum Guarantee” is 
10% of the offering proceeds). 
74. The Sales Agency Agreement was drafted by Braslau and either signed by 
the managing member of Mutual Entertainment  at Braslau’s instruction or Braslau 
replicated the managing member’s signature. 
75. Because there is not even a final screenplay with actors and actresses 
attached – let alone a finished film – there is nothing for Mark Holdom Inc. to distribute. 
76. At all relevant times herein, Braslau was a minority owner of Mark Holdom 
Inc. and controlled its bank account, a fact which is not disclosed to investors in the PPM. 
77. Most of the monies paid to Mark Holdom Inc. were in increments equal to 
10% of a particular investor’s investment principal. 
78. The Smuggler The Movie appears to have taken over for Film Shoot.  Over 
the course of several months in mid-2013, Film Shoot transferred $76,050 to The 
Smuggler The Movie. 
79. As of August 31, 2013, Film Shoot’s bank account contained $253. 
80. As of September 30, 2013, The Smuggler The Movie’s bank account 
contained $1,988. 
81. The total – $2,241 – is all that remains from the offering proceeds raised 
from investors.  This paltry amount is not near sufficient to make the movie that 
Defendants represented to investors would be made. 
82. The Defendants knew that their purported objective of making a motion 
picture with monies raised from their securities offering was doomed to failure.  The 
outcome was made inevitable by the various agreements described herein which left the 

 
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Defendants without the means to do so. 
83. As a result of these agreements, Braslau and Chortkoff knew, or were 
reckless in not knowing, that Mutual Entertainment could not and would not be able to 
finance the movie it had promised to investors.   
84. Braslau and Chortkoff also knew, or were reckless in not knowing, that these 
agreements, their terms, and the financial position created by these agreements had not 
been disclosed to investors. 
C. Rawitt Made Material Misrepresentations to Investors 
85. In the course of soliciting investors, both via telephone and in person, Rawitt 
made a number of material misrepresentations, including the following:   
86. On one or more occasions, Rawitt told an investor that the actors Donald 
Sutherland and Sean Bean were going to be in the movie.  They were not. 
87. On one or more occasions, Rawitt told an investor that Film Shoot was just 
$1.5 million short of reaching its $7.5 million goal. 
88. On one or more occasions, Rawitt told an investor that the film would begin 
shooting in the Summer of 2013.  It did not. 
89. On one or more occasions, Rawitt told an investor that overseas distribution 
rights to Marcel had been sold.  Such rights had not been sold. 
90. On one or more occasions, Rawitt told an investor that he would realize 
revenues from action figures and other products tied to the movie.  No such licensing 
rights have been sold. 
91. On one or more occasions, Rawitt gave an investor the belief that Mutual 
Entertainment was a successful film company whose track record encompassed the 
Harold and Kumar movies produced by Carsten Lorenz. 
92. On one or more occasions, Rawitt told an investor that in the “worst case 
scenario” he would have his principal returned, but would more likely see a return on 
investment of about 300%.  Such a projection was basesless. 
93. On one or more occasions, Rawitt told an investor that the actors Jean-

 
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Claude Van Damme and Tim Roth had committed to doing the movie. They had not. 
94. On one or more occasions, Rawitt told an investor that he might see a return 
of 8 to 10 times the amount he invested.  This projection was baseless. 
95. On one or more occasions, Rawitt made similar representations that adhered 
to one or more of the following themes: 
 the casting of well-known actors and actresses, none of whom were actually 
approached, let alone hired; 
 the likelihood of seeing an exponential return on one’s investment; 
 the existence of distribution deals with major studios; 
 the insinuation that Mutual Entertainment or Film Shoot was a party to the 
prior successes of the film director and producer; 
 the imminence of a production date, a theatrical release date, and a revenue-
generation date -- dates that came and went without any such action taken; 
 the existence of revenue-generating product placement deals and product 
spin-offs; 
 the scarcity of remaining available investment slots and the need to purchase 
them before they were gone (in an offering that had raised less than $2 
million of its $7.5 million objective); and 
 the tax advantages of investing (a full write-off of the amount invested in the 
year the investment was made or in the year in which production began). 
96. All of these representations made by Rawitt were false and misleading. 
97. Rawitt knew that no movie had been made. 
98. Rawitt knew, or was reckless in not knowing, that the other representations 
he made, as set forth above, were false. 
99. Rawitt did not disclose to investors that he received a commission of 27% 
from investor funds.  He knew, or was reckless in not knowing, that his commission 
amount exceeded the amounts disclosed to investors for sales agents in the PPM. 

 
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D. Chortkoff and Rawitt Were Not Associated with a Registered Broker or 
Dealer 
100. In the course of the offer and sale of the Mutual Entertainment and Film 
Shoot securities offerings, both Chortkoff and Rawitt received transaction based 
compensation in the form of commissions. 
101. Neither Chortkoff nor Rawitt are registered brokers or dealers, nor are either 
associated with a registered broker or dealer. 
102. At the time he sold securities, Rawitt was subject to an October 27, 2010 
SEC Order prohibiting him from associating with a broker or dealer. 
103. The SEC has not given its consent to allow Rawitt to associate with a broker 
dealer. 
FIRST CLAIM FOR RELIEF 
Fraud in the Offer or Sale of Securities 
Violations of Section 17(a) of the Securities Act 
(against all Defendants) 
104. The SEC realleges and incorporates by reference paragraphs 1 through 103 
above. 
105. Defendants, by engaging in the conduct described above, directly or 
indirectly, in the offer or sale of securities by the use of means or instruments of 
transportation or communication in interstate commerce or by use of the mails  
(a) with scienter, employed devices, schemes, or artifices to defraud; 
(b) obtained money or property by means of untrue statements of a 
material fact or by omitting to state a material fact necessary in order to make the 
statements made, in light of the circumstances under which they were made, not 
misleading; or 
(c) engaged in transactions, practices, or courses of business which 
operated or would operate as a fraud or deceit upon the purchaser. 
106.   By engaging in the conduct described above, Defendants have violated, and 

 
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unless restrained and enjoined will continue to violate, Section 17(a) of the Securities 
Act, 15 U.S.C. § 77q(a). 
SECOND CLAIM FOR RELIEF 
Fraud in Connection with the Purchase or Sale of Securities 
Violations of Section 10(b) of the Exchange Act and Rule 10b-5 Thereunder 
(against all Defendants) 
107. The SEC realleges and incorporates by reference paragraphs 1 through 103 
above. 
108. Defendants, by engaging in the conduct described above, directly or 
indirectly, in connection with the purchase or sale of a security, by the use of means or 
instrumentalities or interstate commerce, of the mails, or of the facilities of a national 
securities exchange, with scienter: 
(a) employed devices, schemes, or artifices to defraud; 
(b) made untrue statements of a material fact or omitted to state a material 
fact necessary in order to make the statements made, in the light of the circumstances 
under which they were made, not misleading; or 
(c) engaged in acts, practices or courses of business which operated or 
would operate as a fraud or deceit upon other persons. 
109. By engaging in the conduct described above, Defendants have violated, and 
unless restrained and enjoined will continue to violate, Section 10(b) of the Exchange 
Act. 
THIRD CLAIM FOR RELIEF 
Unregistered Broker-Dealer 
Violations of Section 15(a) of the Exchange Act 
(against Defendants Chortkoff and Rawitt) 
110. The SEC realleges and incorporates by reference paragraphs 1 through 103 
above.   
111. Defendants Chortkoff and Rawitt have, by engaging in the conduct set forth 

 
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above, made use of the mails and means or instrumentalities of interstate commerce to 
effect transactions in, and induced and attempted to induce the purchase or sale of, 
securities (other than exempted securities or commercial paper, bankers’ acceptances, or 
commercial bills) without being registered with the SEC in accordance with Section 15 of 
the Exchange Act, § 78o, and without complying with any exemptions promulgated 
pursuant to Section 15(a)(2), 15 U.S.C. § 78o(a)(2). 
112. By reason of the foregoing, Defendants Chortkoff and Rawitt, directly and 
indirectly, violated, and unless enjoined will continue to violate, Section 15(a)(1) of the 
Exchange Act, 15 U.S.C.§ 78o(a)(1). 
FOURTH CLAIM FOR RELIEF 
Association With Broker-Dealer in Contravention of an SEC Bar Order 
Violation of Section 15(b)(6)(B)(i) of the Exchange Act 
(against Defendant Rawitt) 
113. The SEC realleges and incorporates by reference paragraphs 1 through 103 
above. 
114. Defendant Rawitt has, by engaging in the conduct set forth above, without 
the consent of the SEC willfully become associated with a broker or dealer in 
contravention of a prior order entered by the SEC against him pursuant to Section 
15(b)(6)(A) of the Exchange Act, 15 U.S.C.§ 78o(b)(6)(A), which specifically prohibits 
him from doing so. 
115. By reason of the foregoing, Defendant Rawitt, directly and indirectly, 
violated, and unless enjoined will continue to violate, Section 15(b)(6)(B)(i) of the 
Exchange Act, 15 U.S.C.§ 78o(b)(6)(B)(i). 
PRAYER FOR RELIEF 
WHEREFORE, the SEC respectfully requests that the Court: 
I. 
Issue findings of fact and conclusions of law that Defendants committed the 
alleged violations. 

 
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II. 
Issue orders, in a form consistent with Fed. R. Civ. P. 65(d), temporarily, 
preliminarily and permanently enjoining Defendants Samuel Braslau, Rand Chortkoff 
and Stuart Rawitt, and their officers, agents, servants, employees, and attorneys, and 
those persons in active concert or participation with any of them, who receive actual 
notice of the order by personal service or otherwise, and each of them, from violating 
Section 17(a) of the Securities Act, 15 U.S.C. § 77q(a), and Section 10(b) of the 
Exchange Act, 15 U.S.C. § 78j(b) and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5; and 
additionally enjoining Defendants Chortkoff and Rawitt and their officers, agents, 
servants, employees, and attorneys, and those persons in active concert or participation 
with any of them, who receive actual notice of the order by personal service or otherwise, 
and each of them, from violating Section 15(a)(1) of the Exchange Act, 15 U.S.C. § 
78o(a)(1); and further enjoining Defendant Rawitt and his officers, agents, servants, 
employees, attorneys, and those persons in active concert or participation with any of 
them, who receive actual notice of the order by personal service or otherwise, and each of 
them, from violating Section 15(b)(6)(B)(i) of the Exchange Act, 15 U.S.C. § 
78o(b)(6)(B)(i). 
III. 
Order Defendants Braslau, Chortkoff and Rawitt to disgorge all ill-gotten gains 
from their illegal conduct, together with prejudgment interest thereon. 
IV. 
Order Defendants Braslau, Chortkoff and Rawitt to pay civil penalties under 
Section 20(d) of the Securities Act, 15 U.S.C. § 77t(d) and Section 21(d)(3) of the 
Exchange Act, 15 U.S.C. § 78u(d)(3). 
V. 
Retain jurisdiction of this action in accordance with the principles of equity and the 
Federal Rules of Civil Procedure in order to implement and carry out the terms of all 

 
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orders and decrees that may be entered, or to entertain any suitable application or motion 
for additional relief within the jurisdiction of this Court. 
VI. 
Grant such other and further relief as this Court may determine to be just and 
necessary. 
 
DATED:  February 20, 2014 Respectfully submitted, 
 
       
      /s/ Peter F. Del Greco 
      PETER F. DEL GRECO 
Attorney for Plaintiff 
Securities and Exchange Commission 
 

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JOHN W. BERRY, Cal. Bar No. 295760 
Email: [email protected] 
PETER F. DEL GRECO, Cal. Bar. No. 164925 
Email: [email protected]  
 
Attorneys for Plaintiff 
Securities and Exchange Commission 
Michele Wein Layne, Regional Director 
Lorraine B. Echavarria, Associate Regional Director 
John W. Berry, Regional Trial Counsel  
5670 Wilshire Boulevard, 11th Floor 
Los Angeles, California 90036 
Telephone: (323) 965-3998 
Facsimile: (323) 965-3908 
 
 
 
 

UNITED STATES DISTRICT COURT 
 

CENTRAL DISTRICT OF CALIFORNIA 
 
 

SECURITIES AND EXCHANGE
COMMISSION, 
 

Plaintiff, 
 
 vs. 
 
SAMUEL BRASLAU, RAND J. 
CHORTKOFF, and STUART E. 
RAWITT,  

 
Defendants. 

 

Case No.: 
 
COMPLAINT 
 
 
 
 
 
 

 

 

Plaintiff Securities and Exchange Commission (“SEC”) alleges: 

JURISDICTION AND VENUE 

1. This Court has jurisdiction over this action pursuant to Sections 20(b), 

20(d)(1) and 22(a) of the Securities Act of 1933 (“Securities Act”), 15 U.S.C. §§ 77t(b), 

77t(d)(1) & 77v(a), and Sections 21(d)(1), 21(d)(3)(A), 21(e) and 27(a) of the Securities 

Exchange Act of 1934 (“Exchange Act”), 15 U.S.C. §§ 78(u)(d)(1), 78u(d)(3)(A), 78u(e) 

& 78aa(a).  Defendants have, directly or indirectly, made use of the means or 

instrumentalities of interstate commerce, of the mails, or of the facilities of a national



 

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securities exchange in connection with the transactions, acts, practices and courses of 

business alleged in this complaint.  

2. Venue is proper in this district pursuant to Section 22(a) of the Securities 

Act, 15 U.S.C. § 77v(a), and Section 27 of the Exchange Act, 15 U.S.C. § 78aa(a), 

because certain of the transactions, acts, practices and courses of conduct constituting 

violations of the federal securities laws occurred within this district. 

SUMMARY 

3. This matter concerns a fraudulent offering of securities for a movie that was 

not made and, given the extent to which investor proceeds were earmarked for 

undisclosed purposes unrelated to the actual making of a movie, probably never could 

have been made. 

4. The fraudulent scheme was overseen by defendant Samuel Braslau, who 

controlled two companies – Mutual Entertainment, LLC and its successor through 

merger, Film Shoot, LLC – which offered and sold securities in the form of membership 

units for the purported purpose of financing a movie to be called Marcel, later re-named 

The Smuggler. 

5. From April 2011 through August 2013, Braslau, through Mutual 

Entertainment and Film Shoot, raised more than $1.8 million from more than 60 investors 

nationwide through a boiler room operated by Defendant Rand Chortkoff. 

6. The unregistered salespeople hired and supervised by Chortkoff – most 

notably, recidivist defendant Stuart Rawitt – sold investors the dream of a glamorous, 

multi-million dollar movie production starring A-list celebrities sure to generate 

exorbitant returns through numerous revenue streams. 

7. In reality, almost every investor dollar was diverted to the Defendants and 

their cohorts, either as sales commissions or purported “consulting” fees, or otherwise 

spent on the facilitation of the offering. 

8. As a result of the Defendants’ actionable conduct, what remains of investor 

funds constitutes less money than it would take to produce a public service 



 

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announcement, let alone a full-length motion picture capable of securing a theatrical 

release. 

9. In offering and selling these securities to investors, Defendants Braslau and 

Chortkoff, acting with scienter, engaged in a scheme to defraud and did defraud their 

investors.  In connection with the purchase or sale of these securities, Defendants Braslau 

and Rawitt, acting with scienter, made material misrepresentations as to the intended uses 

of investors’ funds and the commercial prospects for and profitability of their investment.  

By this conduct, the Defendants violated the antifraud provisions of Section 17(a) of the 

Securities Act, 15 U.S.C. § 77q, and Section 10(b) of the Exchange Act, 15 U.S.C. § 

78j(b), and Rule 10b-5 thereunder.   

10. By selling these securities through a network of sales agents and receiving 

and paying compensation therefrom, Defendants Chortkoff and Rawitt acted as brokers 

and dealers.  However, neither is registered with the SEC as either a broker or a dealer 

and thus each has violated the broker-dealer registration requirements of Section 15(a) of 

the Exchange Act, 15 U.S.C. § 78(o). 

11. Rawitt is subject to an October 27, 2010 Order instituted by the SEC which 

bars him from association with any broker or dealer.  By his actions, Rawitt violated 

Section 15(b)(6)(B)(i) of the Exchange Act, which prohibits any person for whom a bar 

order is in effect from associating with a broker or dealer in contravention of said order 

without the consent of the SEC.  

12. The SEC seeks permanent injunctions prohibiting each of the Defendants 

from future such violations, disgorgement of Defendants’ ill-gotten gains with 

prejudgment interest thereon, and the imposition of civil penalties. 

THE DEFENDANTS 

13. Samuel Braslau resides in Los Angeles, California.  Braslau is and at all 

relevant times herein was a member of the State Bar of California (Bar No. 200843).   

Braslau served as counsel and registered agent for both Mutual Entertainment and Film 

Shoot and exercised de facto control of both entities and their finances.  He is the sole 



 

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managing member of The Smuggler The Movie, LLC.   

14. Rand J. Chortkoff resides in Encino, California.  Chortkoff is the sole 

owner of Fine Melody, Inc. and Delta Groove Music, Inc.  In 2008, Chortkoff was the 

subject of a cease-and-desist order issued by the California Department of Corporations 

for his role in the unregistered offer and sale of securities of Big Sky Motion Pictures, 

LLC and Spring Break ’83 Production, LLC.  Chortkoff is not registered with the SEC in 

any capacity. 

15. Stuart E. Rawitt resides in Marina del Rey, California.  Rawitt does 

business as Half A Cake Entertainment, Inc., which received commissions of up to 27% 

of the proceeds invested by those whom Rawitt solicited.  On July 15, 2010, Rawitt 

entered into a consent judgment permanently barring him from violating Sections 5(a) 

and 5(c) of the Securities Act and Section 15(a) of the Exchange Act.  See SEC v. 

Rockwell Energy of Texas, LLC, et al., Case No. 4:09-cv-4080 (S.D. Texas).  On October 

27, 2010, the SEC instituted public administrative proceedings against Rawitt and 

accepted his settlement offer whereby he agreed to a bar from future association with any 

broker or dealer.  See In the Matter of Stuart E. Rawitt, Admin. Proc. 3-14099 (Oct. 27, 

2010).  Rawitt is not registered with the SEC in any capacity. 

AFFILIATED ENTITIES 

16. Mutual Entertainment, LLC was a California limited liability company 

formed on December 16, 2010 and headquartered in Beverly Hills, California.  A third 

party is identified as its managing member on its public filings but actual control was 

exercised by Braslau.  Mutual Entertainment filed a Form D with the SEC on June 23, 

2011, claiming an exemption from the securities registration requirements under Rule 

506.  Mutual Entertainment merged with Film Shoot, LLC in March 2012 and ceased 

operations shortly thereafter. 

17. Film Shoot, LLC is a California limited liability company formed on 

February 22, 2012 and headquartered in Beverly Hills, California.  A third party is 

identified as its managing member on its public filings but actual control was exercised 



 

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by Braslau.  Film Shoot filed a Form D with the SEC on May 7, 2012 and an amendment 

thereto on September 24, 2012, claiming an exemption from the securities registration 

requirements under Rule 506 in each instance.  Film Shoot merged with Mutual 

Entertainment in March 2012.  It no longer appears to be active. 

18. The Smuggler The Movie, LLC is a California limited liability company 

formed on July 9, 2012 and headquartered in Beverly Hills, California.   

THE FRAUDULENT SCHEME 

A. The Defendants Sold Securities for the Purported Purpose of Making a Movie 

19. In late 2010, Braslau and Chortkoff held a series of meetings in which they 

discussed how to go about raising several million dollars with which to finance the 

making of a motion picture. 

20. In December 2010, Braslau formed Mutual Entertainment, LLC, a limited 

liability company that would offer and sell membership units to investors, and purport to 

use the proceeds therefrom to make a motion picture. 

21. Although an unemployed actor was named the ostensible managing member 

of Mutual Entertainment, Braslau exercised de facto control over Mutual Entertainment, 

its finances, and its operations. 

22. Braslau either instructed that the agreements entered into by Mutual 

Entertainment be signed, or reproduced its ostensible managing member’s signature on 

them in order to effectuate those agreements on behalf of Mutual Entertainment.  

Although Braslau shared signature authority on Mutual Entertainment’s bank accounts 

with its registered managing member, the unemployed actor, Braslau transacted all of the 

activity in Mutual Entertainment’s bank accounts and did not provide its putative 

managing member with records thereof.   

23. In January 2011, Mutual Entertainment entered into a written agreement 

with a film director to purchase the rights to an unpublished story titled Marcel for “a 

payment of Twenty Five Thousand Dollars ($25,000) or one percent (1%) of the final 

going in budget whichever amount is greater.”  In May 2012, Film Shoot paid $25,000 to 



 

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Jasmine Pictures pursuant to this agreement.   

24. That same month, Mutual Entertainment entered into a term letter agreement 

with the same film director to direct “a proposed martial arts action motion picture 

project, budgeted at $3.5 million, to be produced by [film producer] and financed by 

Mutual Entertainment” – i.e., the film version of Marcel.  To date, the film director’s  

directorial services have not been required and he has not been paid pursuant to this 

agreement.   

25. In February 2011, Mutual Entertainment entered into a written agreement 

with Film Vergnuegen, Inc. for the services of a named film producer of “a martial arts 

motion picture drama presently entitled Marcel to be directed by [film director].”  This 

putative producer  has been paid a total of $75,000 by Mutual Entertainment, Film Shoot 

and The Smuggler The Movie LLC pursuant to this and successor agreements.  To date, 

his services as a producer have not been required. 

26. Both the film director and film producer are movie industry professionals 

with a number of credits on their resumes.  But the only apparent purpose they served 

was to add a veneer of commercial legitimacy to the Defendants’ fundraising endeavors.    

27. In April 2011, Mutual Entertainment commenced to offer and sell up to $7.5 

million of its securities in the form of membership units, at a cost of $1 per unit, with a 

minimum investment amount of $25,000.  However, Mutual Entertainment reserved, and 

exercised, the right to accept investments of less than $25,000. 

28. Mutual Entertainment’s fundraising efforts were undertaken by Mutual 

Entertainment Ventures, Inc. (“MEV”) and by Chortkoff, the sole owner of Fine Melody, 

Inc.  MEV and Chortkoff hired “surveyors,” or “fronters,” to cold call prospective 

investors from lead lists that MEV and Chortkoff purchased from lead list brokers.   

29. Braslau and Chortkoff prepared a script that the fronters used in their 

telephone solicitation of potential investors.  Per the script, the fronters said that they 

were “conducting marketing surveys for film and entertainment companies that are 

looking at current investor trends.”  The script directed the fronters to ask the person 



 

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called whether he or she was a qualified and accredited investor and, if so, whether he or 

she wanted to “opt in” to hearing more about an “opportunity available to get in with a 

production company seeking qualified investors.”   

30. Those who “opted in” to hearing more were told that Mutual Entertainment 

was looking for people to invest in “the kind of project that only comes around once in a 

great while” that was to be directed by the film director referred to above and produced 

by the producer referred to above.   

31. The fronters emphasized the commercial successes of previous movies 

directed by the film director or produced by the producer.  The fronters provided a 

website address which featured the movie’s “proposed” A-list cast of actors and 

actresses, and concluded by asking whether the person called was interested in hearing 

more about the investment opportunity from a “Production Executive.” 

32. If a self-accredited potential investor was interested in hearing more, the 

fronter provided his or her information to Chortkoff, and Chortkoff provided the 

information to a “production executive,” or a “closer.”     

33. Initially, the fronters’ calls were made from an office that MEV maintained 

in northern California, while the closers worked from an office run by Chortkoff in Van 

Nuys, California that was leased by Mutual Entertainment.  By about August 2011, both 

the fronters and the closers worked together in the Van Nuys office.  Fronters continued 

to route the information for self-accredited and interested potential investors to closers 

through the medium of Chortkoff.   

34. Chortkoff oversaw the mailing of written offering materials to prospective 

investors.  In addition to a private placement memorandum (“PPM”), a subscription 

agreement and an operating agreement, he provided prospective investors with a glossy 

brochure for Marcel that he and Braslau created and that featured, among other things, 

biographical sketches of the producer and film director, a “proposed A-list cast” featuring 

a dozen well-known actors and actresses and the box office receipts for several of their 

more successful movies, budget and revenue figures for other movies made by the 



 

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producer and the film director, and budget and revenue figures for other “blockbuster” 

films deemed “comparable” to Marcel. 

35. The express and implicit comparisons between the budget and revenue 

figures for the movies cited in the brochure and the prospects for Marcel are tenuous at 

best.  They concern movies that were actually made and released.  Marcel was neither 

made nor released, and never stood a real chance of being so. 

36. Similarly, none of the “proposed” cast members for Marcel were even 

contacted about being in the movie. 

37. MEV ceased its affiliation with Mutual Entertainment at the end of February 

2012. 

38. MEV was replaced by American Marketing & Survey Co. (“AMSC”), 

another entity with a powerless managing member, the operations and finances of which 

were in fact controlled by Braslau. 

39. AMSC employed fronters, hired and supervised by Chortkoff, who cold-

called prospective investors from the Van Nuys office, using lead lists purchased by 

Chortkoff and the sales script created by Braslau and Chortkoff 

40. In March 2012, Mutual Entertainment entered into a merger agreement with 

Film Shoot, which assumed “any and all liabilities, obligations and assets of Mutual 

Entertainment” pursuant thereto.  At roughly the same time, the working title of the 

movie was changed from Marcel to The Smuggler.  

41. Film Shoot’s offering of securities for the production of The Smuggler was a 

seamless continuation of Mutual Entertainment’s offering for Marcel: the units held by 

investors in Mutual Entertainment were converted into units in Film Shoot, the Mutual 

Entertainment PPM was simply retitled wholesale the Film Shoot PPM, the glossy 

Marcel brochure was recast as the glossy The Smuggler brochure, and the story the movie 

purportedly would tell (a down-on-his-heels French martial arts master who obtains 

redemption through his protection of an orphan and his cracking of heads in Nazi-

occupied Paris) remained the same.   



 

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42. Although an unemployed musician was appointed the ostensible managing 

member of Film Shoot, Braslau exercised de facto control over Film Shoot, its finances, 

and its operations. 

43. Braslau either instructed  that the agreements be entered into by Film Shoot, 

or reproduced the ostensible managing member’s signature on them in order to effectuate 

the desired agreements.  Although Braslau shared signature authority on Film Shoot’s 

bank accounts with the ostensible managing member, Braslau transacted all of the 

activity in Film Shoot’s bank accounts and did not provide the managing member with 

records thereof. 

B. The Private Placement Memorandum Contained Fraudulent 

Misrepresentations and Omissions 

44. The PPM, drafted by Braslau and disseminated by Chortkoff, either 

affirmatively misrepresents or fails to disclose material facts concerning the offerings, 

including the rates of commissions paid to salespeople, the extent of the legal fees paid to 

Braslau, the nature or existence of other fee agreements, and the fatal impact that these 

financial obligations would have on their ability to make a movie with offering proceeds.  

Braslau and Chortkoff knew, or were reckless in not knowing, that the PPM made these 

misrepresentations or omitted material facts concerning the offerings. 

45. According to the PPMs, 5% of the offering proceeds would be used for 

”Organizational Expenses” and 20% of the offering proceeds would be used for 

“Marketing and Consultation.” 

46. According to the PPMs, depending on how many units were sold in the 

offering, 1.5%-1.33% of the offering proceeds would be used for “Legal Expenses 

(Securities and Production Legal),” 63.5%-64.3% of the offering proceeds would be used 

for “Production Expenses,” and 9.33%-10% of the offering proceeds would be paid as a 

distribution fee called a “Distribution Minimum Guarantee.” 

 

 



 

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47.   The only express reference to sales commissions contained in the PPM 

states: 
In the event the Company enters into selling agreements with selected 
Broker/Dealers, the Company may pay to the Broker/Dealers a commission 
of up to ten percent (10%) and a non-accountable expense allowance of three 
percent (3%) of the gross subscription proceeds made from the sale of  Units 
by the Broker/Dealers. 

48. The Defendants raised at least $1,817,958 from at least 60 investors 

nationwide using the PPMs referenced above. 

49. The Defendants used the offering proceeds in a manner wholly inconsistent 

to what was disclosed to investors in the PPM.  The $1,817,958 raised during the offering 

was used as follows: 

 
Recipient Usage Amount Percentage
MEV Fundraising $337,8251 18.58%
AMSC Fundraising $112,628 6.19%
Chortkoff Fundraising $141,2252 7.76%
Rawitt Fundraising $152,9183 8.41%
Closers other than Rawitt Fundraising $38,599 2.12%
Braslau Legal expenses $337,9564 18.59%
Mark Holdom, Inc. Distribution/consulting 

costs
$206,000 11.33%

Producer/Film Director Production costs $143,000 7.86%
Other  Misc. $347,807 19.13%

50. Braslau knew, or was reckless in not knowing, that the offering proceeds 

were used as set forth in the chart above, and not as had been disclosed to investors in the 

PPM that he drafted.  For example, Braslau entered into various agreements obligating 

these expenditures without disclosing those agreements or the resulting financial 

obligations to investors.  He also created internal spreadsheets detailing the distribution 

of the offering proceeds, which were consistent with the actual use of the proceeds 

outlined above and which clearly showed that these proceeds were not being used in the 

                                           
1 Includes payments made to salesepeople, including Chortkoff and Rawitt. 
2 Chortkoff received an additional $19,029 from MEV. 
3 Rawitt received an additional $101,081 from MEV, and $6,062 from AMSC. 
4 Braslau received an additional $2,500 from ASMC. 



 

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manner represented to investors and that there would be insufficient funds to make a 

movie. 

51. Chortkoff knew, or was reckless in not knowing, that the offering proceeds 

were used as set forth in the chart above, and not as had been disclosed to investors in the 

PPM that he circulated to investors.  For example, Chortkoff hired the sales agents 

responsible for obtaining additional investments, and knew what they were being 

compensated in amounts that were not disclosed to investors. 

52. Investor proceeds were spent as detailed above pursuant to a number of 

agreements that Braslau, the de facto head of Mutual Entertainment and Film Shoot, 

entered into with various entities in the course of the securities offerings. 

53. In January 2011, Braslau drafted a written Service Agreement with MEV, 

entitling MEV to “a fee of Twenty Five Percent (25%) allocation of the monies raised 

through the PPO as consideration for its services,” as well as a written agreement with 

MEV’s principal, entitling him to “Five Percent (5%) of all funds raised through the 

equity placement.”  Both agreements were either signed by the managing member of 

Mutual Entertainment at Braslau’s instruction or the managing member’s signature was 

reproduced by Braslau. 

54. Notwithstanding the terms of the written agreements with MEV and its 

principal, Mutual Entertainment routinely paid MEV a sales commission equal to 40% of 

investor proceeds, or 10% more than was called for by the two agreements combined. 

55. MEV paid its fronters an hourly wage but paid its closers a sales commission 

based on the amount invested. 

56. Chortkoff hired the closers and negotiated the sales commissions they were 

entitled to from MEV.   

57. Chortkoff hired Rawitt and negotiated the terms of Rawitt’s employment by 

MEV:  a commission of 27% of the amount invested by any person that Rawitt closed by 

himself, and 10 to 15% of the amount invested by any person that Rawitt closed with the 

assistance of others.  MEV paid Rawitt his sales commission from the 40% sales 



 

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commission that Mutual Entertainment paid to MEV. 

58. AMSC was less costly than MEV, receiving a sales commission of only 

about 25% of the offering proceeds.  But whereas closers, including Rawitt, had 

previously been compensated by MEV from the 40% sales commission it received from 

Mutual Entertainment, Film Shoot directly compensated its closers. 

59. In January 2011, Mutual Entertainment entered into a written agreement 

with Fine Melody, Inc. (“Fine Melody”) “for the services of Rand Chortkoff as an 

Executive Producer in the development, financing and production” of Marcel, and a 

written agreement with Delta Groove Music, Inc. (“Delta Groove”) “for the services of 

Rand Chortkoff as music supervisor” of Marcel.  The agreements entitle Fine Melody 

and Delta Groove to “5% of all funds raised through the equity placement”, respectively. 

60. The agreements were drafted by Braslau and signed by the managing 

member of Mutual Entertainment at Braslau’s instruction or the managing member’s 

signature was reproduced by Braslau. 

61. Chortkoff did not render any of the services enumerated in the agreement 

with Delta Groove because there is no movie requiring such services.  The only services 

Chortkoff rendered pursuant to these agreements were in connection with the raising of 

funds through the private placement – primarily, his supervision of the fronters and 

closers operating from Van Nuys. 

62. Notwithstanding the terms of the agreements, Mutual Entertainment (and 

later Film Shoot) routinely paid Fine Melody a sales commission of 8% of the amount 

invested by persons solicited by the fronters and closers whom Chortkoff hired and 

supervised. 

63. In January 2011, Mutual Entertainment entered into a Legal Services 

Agreement with Braslau that entitled him to “an initial retainer fee of One Hundred 

Thousand Dollars ($100,000) . . . from the funds raised through the PPM, plus Three 

Percent (3%) of the funds raised through the PPM.” 

 



 

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64. The Legal Services Agreement was drafted by Braslau and either signed by 

the managing member of Mutual Entertainment at Braslau’s instruction or the managing 

member’s signature was replicated by Braslau. 

65. Per the stated terms of the Legal Services Agreement, Braslau was entitled 

to $154,000, or $127,000 more than was disclosed in the PPM. 

66. In December 2010, Mutual Entertainment had entered into a Loan and 

Security Agreement with Braslau whereby Braslau agreed to advance up to $50,000 to 

Mutual Entertainment “for working capital.”  

67. The Loan and Security Agreement was drafted by Braslau and either signed 

by the managing member of Mutual Entertainment at Braslau’s instruction or the 

managing member’ssignature was replicated by Braslau. 

68. The Loan and Security Agreement entitles Braslau to repayment of the 

amount advanced from offering proceeds, as well as payment of a Fee equal to 50% of 

the amount advanced from offering proceeds. 

69. Per the stated terms of the Loan and Security Agreement, Braslau was 

entitled to repayment of $75,000 if he advanced the full $50,000 contemplated by the 

Loan and Security agreement. 

70. The PPM does not disclose the existence of the Loan and Security 

Agreement or its terms of repayment. 

71. Notwithstanding the express terms of the undisclosed Legal Services 

Agreement and the undisclosed Loan and Security Agreement – pursuant to which 

Braslau would be entitled to a total of $229,000, assuming he had advanced Mutual 

Entertainment $50,000 and was repaid in full – Braslau personally received more than 

$340,000 in investor funds. 

72. In January 2011, Mutual Entertainment entered into an Exclusive Sales 

Agency Agreement with Mark Holdom Inc. as “sole and exclusive sales agent for the 

distribution and exploitation of any and all distribution rights of every nature and kind.” 

  



 

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73. Pursuant to the Sales Agency Agreement, Mark Holdom Inc. is entitled to a 

minimum guarantee of $750,000 (10% of the full offering amount), as well as a 

percentage of the film’s gross receipts.  This is at least $50,000 more than is disclosed in 

the PPM (which states, at one point, that Mark Holdom Inc. is entitled to $700,000) and 

perhaps as much as $570,000 more than is disclosed in the PPM (which states, at another 

point, and as noted in paragraph 46, infra, that the “Distribution Minimum Guarantee” is 

10% of the offering proceeds). 

74. The Sales Agency Agreement was drafted by Braslau and either signed by 

the managing member of Mutual Entertainment  at Braslau’s instruction or Braslau 

replicated the managing member’s signature. 

75. Because there is not even a final screenplay with actors and actresses 

attached – let alone a finished film – there is nothing for Mark Holdom Inc. to distribute. 

76. At all relevant times herein, Braslau was a minority owner of Mark Holdom 

Inc. and controlled its bank account, a fact which is not disclosed to investors in the PPM. 

77. Most of the monies paid to Mark Holdom Inc. were in increments equal to 

10% of a particular investor’s investment principal. 

78. The Smuggler The Movie appears to have taken over for Film Shoot.  Over 

the course of several months in mid-2013, Film Shoot transferred $76,050 to The 

Smuggler The Movie. 

79. As of August 31, 2013, Film Shoot’s bank account contained $253. 

80. As of September 30, 2013, The Smuggler The Movie’s bank account 

contained $1,988. 

81. The total – $2,241 – is all that remains from the offering proceeds raised 

from investors.  This paltry amount is not near sufficient to make the movie that 

Defendants represented to investors would be made. 

82. The Defendants knew that their purported objective of making a motion 

picture with monies raised from their securities offering was doomed to failure.  The 

outcome was made inevitable by the various agreements described herein which left the 



 

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Defendants without the means to do so. 

83. As a result of these agreements, Braslau and Chortkoff knew, or were 

reckless in not knowing, that Mutual Entertainment could not and would not be able to 

finance the movie it had promised to investors.   

84. Braslau and Chortkoff also knew, or were reckless in not knowing, that these 

agreements, their terms, and the financial position created by these agreements had not 

been disclosed to investors. 

C. Rawitt Made Material Misrepresentations to Investors 

85. In the course of soliciting investors, both via telephone and in person, Rawitt 

made a number of material misrepresentations, including the following:   

86. On one or more occasions, Rawitt told an investor that the actors Donald 

Sutherland and Sean Bean were going to be in the movie.  They were not. 

87. On one or more occasions, Rawitt told an investor that Film Shoot was just 

$1.5 million short of reaching its $7.5 million goal. 

88. On one or more occasions, Rawitt told an investor that the film would begin 

shooting in the Summer of 2013.  It did not. 

89. On one or more occasions, Rawitt told an investor that overseas distribution 

rights to Marcel had been sold.  Such rights had not been sold. 

90. On one or more occasions, Rawitt told an investor that he would realize 

revenues from action figures and other products tied to the movie.  No such licensing 

rights have been sold. 

91. On one or more occasions, Rawitt gave an investor the belief that Mutual 

Entertainment was a successful film company whose track record encompassed the 

Harold and Kumar movies produced by Carsten Lorenz. 

92. On one or more occasions, Rawitt told an investor that in the “worst case 

scenario” he would have his principal returned, but would more likely see a return on 

investment of about 300%.  Such a projection was basesless. 

93. On one or more occasions, Rawitt told an investor that the actors Jean-



 

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Claude Van Damme and Tim Roth had committed to doing the movie. They had not. 

94. On one or more occasions, Rawitt told an investor that he might see a return 

of 8 to 10 times the amount he invested.  This projection was baseless. 

95. On one or more occasions, Rawitt made similar representations that adhered 

to one or more of the following themes: 

 the casting of well-known actors and actresses, none of whom were actually 

approached, let alone hired; 

 the likelihood of seeing an exponential return on one’s investment; 

 the existence of distribution deals with major studios; 

 the insinuation that Mutual Entertainment or Film Shoot was a party to the 

prior successes of the film director and producer; 

 the imminence of a production date, a theatrical release date, and a revenue-

generation date -- dates that came and went without any such action taken; 

 the existence of revenue-generating product placement deals and product 

spin-offs; 

 the scarcity of remaining available investment slots and the need to purchase 

them before they were gone (in an offering that had raised less than $2 

million of its $7.5 million objective); and 

 the tax advantages of investing (a full write-off of the amount invested in the 

year the investment was made or in the year in which production began). 

96. All of these representations made by Rawitt were false and misleading. 

97. Rawitt knew that no movie had been made. 

98. Rawitt knew, or was reckless in not knowing, that the other representations 

he made, as set forth above, were false. 

99. Rawitt did not disclose to investors that he received a commission of 27% 

from investor funds.  He knew, or was reckless in not knowing, that his commission 

amount exceeded the amounts disclosed to investors for sales agents in the PPM. 



 

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D. Chortkoff and Rawitt Were Not Associated with a Registered Broker or 

Dealer 

100. In the course of the offer and sale of the Mutual Entertainment and Film 

Shoot securities offerings, both Chortkoff and Rawitt received transaction based 

compensation in the form of commissions. 

101. Neither Chortkoff nor Rawitt are registered brokers or dealers, nor are either 

associated with a registered broker or dealer. 

102. At the time he sold securities, Rawitt was subject to an October 27, 2010 

SEC Order prohibiting him from associating with a broker or dealer. 

103. The SEC has not given its consent to allow Rawitt to associate with a broker 

dealer. 

FIRST CLAIM FOR RELIEF 

Fraud in the Offer or Sale of Securities 

Violations of Section 17(a) of the Securities Act 

(against all Defendants) 

104. The SEC realleges and incorporates by reference paragraphs 1 through 103 

above. 

105. Defendants, by engaging in the conduct described above, directly or 

indirectly, in the offer or sale of securities by the use of means or instruments of 

transportation or communication in interstate commerce or by use of the mails  

(a) with scienter, employed devices, schemes, or artifices to defraud; 

(b) obtained money or property by means of untrue statements of a 

material fact or by omitting to state a material fact necessary in order to make the 

statements made, in light of the circumstances under which they were made, not 

misleading; or 

(c) engaged in transactions, practices, or courses of business which 

operated or would operate as a fraud or deceit upon the purchaser. 

106.   By engaging in the conduct described above, Defendants have violated, and 



 

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unless restrained and enjoined will continue to violate, Section 17(a) of the Securities 

Act, 15 U.S.C. § 77q(a). 

SECOND CLAIM FOR RELIEF 

Fraud in Connection with the Purchase or Sale of Securities 

Violations of Section 10(b) of the Exchange Act and Rule 10b-5 Thereunder 

(against all Defendants) 

107. The SEC realleges and incorporates by reference paragraphs 1 through 103 

above. 

108. Defendants, by engaging in the conduct described above, directly or 

indirectly, in connection with the purchase or sale of a security, by the use of means or 

instrumentalities or interstate commerce, of the mails, or of the facilities of a national 

securities exchange, with scienter: 

(a) employed devices, schemes, or artifices to defraud; 

(b) made untrue statements of a material fact or omitted to state a material 

fact necessary in order to make the statements made, in the light of the circumstances 

under which they were made, not misleading; or 

(c) engaged in acts, practices or courses of business which operated or 

would operate as a fraud or deceit upon other persons. 

109. By engaging in the conduct described above, Defendants have violated, and 

unless restrained and enjoined will continue to violate, Section 10(b) of the Exchange 

Act. 

THIRD CLAIM FOR RELIEF 

Unregistered Broker-Dealer 

Violations of Section 15(a) of the Exchange Act 

(against Defendants Chortkoff and Rawitt) 

110. The SEC realleges and incorporates by reference paragraphs 1 through 103 

above.   

111. Defendants Chortkoff and Rawitt have, by engaging in the conduct set forth 



 

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above, made use of the mails and means or instrumentalities of interstate commerce to 

effect transactions in, and induced and attempted to induce the purchase or sale of, 

securities (other than exempted securities or commercial paper, bankers’ acceptances, or 

commercial bills) without being registered with the SEC in accordance with Section 15 of 

the Exchange Act, § 78o, and without complying with any exemptions promulgated 

pursuant to Section 15(a)(2), 15 U.S.C. § 78o(a)(2). 

112. By reason of the foregoing, Defendants Chortkoff and Rawitt, directly and 

indirectly, violated, and unless enjoined will continue to violate, Section 15(a)(1) of the 

Exchange Act, 15 U.S.C.§ 78o(a)(1). 

FOURTH CLAIM FOR RELIEF 

Association With Broker-Dealer in Contravention of an SEC Bar Order 

Violation of Section 15(b)(6)(B)(i) of the Exchange Act 

(against Defendant Rawitt) 

113. The SEC realleges and incorporates by reference paragraphs 1 through 103 

above. 

114. Defendant Rawitt has, by engaging in the conduct set forth above, without 

the consent of the SEC willfully become associated with a broker or dealer in 

contravention of a prior order entered by the SEC against him pursuant to Section 

15(b)(6)(A) of the Exchange Act, 15 U.S.C.§ 78o(b)(6)(A), which specifically prohibits 

him from doing so. 

115. By reason of the foregoing, Defendant Rawitt, directly and indirectly, 

violated, and unless enjoined will continue to violate, Section 15(b)(6)(B)(i) of the 

Exchange Act, 15 U.S.C.§ 78o(b)(6)(B)(i). 

PRAYER FOR RELIEF 

WHEREFORE, the SEC respectfully requests that the Court: 

I. 

Issue findings of fact and conclusions of law that Defendants committed the 

alleged violations. 



 

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II. 

Issue orders, in a form consistent with Fed. R. Civ. P. 65(d), temporarily, 

preliminarily and permanently enjoining Defendants Samuel Braslau, Rand Chortkoff 

and Stuart Rawitt, and their officers, agents, servants, employees, and attorneys, and 

those persons in active concert or participation with any of them, who receive actual 

notice of the order by personal service or otherwise, and each of them, from violating 

Section 17(a) of the Securities Act, 15 U.S.C. § 77q(a), and Section 10(b) of the 

Exchange Act, 15 U.S.C. § 78j(b) and Rule 10b-5 thereunder, 17 C.F.R. § 240.10b-5; and 

additionally enjoining Defendants Chortkoff and Rawitt and their officers, agents, 

servants, employees, and attorneys, and those persons in active concert or participation 

with any of them, who receive actual notice of the order by personal service or otherwise, 

and each of them, from violating Section 15(a)(1) of the Exchange Act, 15 U.S.C. § 

78o(a)(1); and further enjoining Defendant Rawitt and his officers, agents, servants, 

employees, attorneys, and those persons in active concert or participation with any of 

them, who receive actual notice of the order by personal service or otherwise, and each of 

them, from violating Section 15(b)(6)(B)(i) of the Exchange Act, 15 U.S.C. § 

78o(b)(6)(B)(i). 

III. 

Order Defendants Braslau, Chortkoff and Rawitt to disgorge all ill-gotten gains 

from their illegal conduct, together with prejudgment interest thereon. 

IV. 

Order Defendants Braslau, Chortkoff and Rawitt to pay civil penalties under 

Section 20(d) of the Securities Act, 15 U.S.C. § 77t(d) and Section 21(d)(3) of the 

Exchange Act, 15 U.S.C. § 78u(d)(3). 

V. 

Retain jurisdiction of this action in accordance with the principles of equity and the 

Federal Rules of Civil Procedure in order to implement and carry out the terms of all20 

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orders and decrees that may be entered, or to entertain any suitable application or motion 

for additional relief within the jurisdiction of this Court. 

VI. 

Grant such other and further relief as this Court may determine to be just and 

necessary. 
 
DATED:  February 20, 2014 Respectfully submitted, 
 
       
      /s/ Peter F. Del Greco 
      PETER F. DEL GRECO 

Attorney for Plaintiff 
Securities and Exchange Commission