DES MOINES, Iowa (AP) — A Minnesota filmmaker who pleaded guilty to defrauding Iowa in a scheme to misuse tax credits aimed at bringing moviemakers to the state was sentenced Tuesday to 10 years in prison.
Wendy Weiner Runge, 46, of St. Louis Park, Minn., pleaded guilty to first-degree fraudulent practices in February.
Prosecutors accused Runge, a co-owner of Minneapolis-based Polynation Pictures, of inflating expenses on applications for film tax credits offered by the state. The company received $1.8 million in incentives for a film.
Her partners, Matthias Saunders, 39, and Chase Brandau, 26, also pleaded guilty and were sentenced Tuesday to probation. The men, both from Minnesota, agreed to cooperate in the investigation.
Polk County District Court Judge Douglas Staskal said the case “calls out for the court to send a message to you and others that it’s not acceptable,” the Des Moines Register reported.
Staskal called Runge “arrogant and defiant,” and pointed out that Saunders and Brandau have taken responsibility for their actions.
Charges against a fourth owner of Polynation Pictures were dropped in exchange for his cooperation in the case.
Items on invoices that the attorney general’s office described as inflated include a push broom and hand broom for $225 each; six road cones for $1,350; a metal rake for $225; a pick ax for $225; six step ladders for $900 each; another step ladder for $1,125; an extension ladder for $1,350; a $225 sledgehammer; and two shovels for $450.
The affidavit also says duplicate items appearing on multiple invoices created double-billing.
Under the program, a moviemaker could receive a 25 percent credit on payments made to an Iowa individual or business for movie production costs. There was also a 25 percent credit for expenses incurred outside of Iowa, but that credit was determined after the amount spent in Iowa was subtracted from the total cost of the movie.
Runge and her partners were charged after an investigation into a tax incentive program that potentially exposed the state to the loss of hundreds of millions of dollars in tax revenue.
The investigation uncovered sloppy bookkeeping in the Iowa Film Office and questionable spending by some moviemakers who sought tax credits.
Then Gov. Chet Culver suspended the film tax credit program in September 2009. He later allowed existing applications to be processed but halted any new applications from being filed.
The scandal also led to the removal of six people from the Iowa Department of Economic Development, including its director and his deputy.
Charges also were filed against the former Iowa Film Office manager, another filmmaker, a tax credit broker and the owner of another production company. Those cases are awaiting trial.
Runge also filed a lawsuit last month against the state of Iowa, claiming her name, reputation and business have been defamed. She claimed state employees made damaging statements to reporters, colleagues and the general public. She also is seeking to dismiss a lawsuit filed by the state seeking to recover money from her and her partners.
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