May 20th 2013
By Teresa Ambord
The goal was a good one: investors wanted to reduce their overall state income tax liabilities by investing in film production tax credits. The tax credits were to come directly off the investors' net incomes tax due, according to a story published by the Associated Press. The yield would be $1.33 for every dollar invested. This is what attracted New Orleans Saints coach Sean Payton; current and former players, including quarterback Drew Brees; and other coaches and administrative personnel. The only problem is, the film studio was defunct, and the state movie tax credits didn't exist.
Here's what happened. In 2008, a group of twenty-seven investors pulled their money to invest $1.9 million in the Louisiana Film Studios, LLC. But the head of the studio, Wayne Read, failed to carry out one devilish detail. He never applied for the credits and didn't bother to return the investment.
Also involved was Kevin Houser, former Saints long snapper, who is now in the securities business. Houser put the deal together and purchased $125,000 in film credits himself.
- Coach Payton with a $144,000 stake
- Saints quarterback Brees invested $100,000
- Former Saints tight end Jeremy Shockey invested $80,000
- Former Saints quarterback Archie Manning invested $80,000
- Former defensive end Charles Grant had the biggest stake, at $425,000
Payton has now settled his case, though the amount is confidential. His attorney Daniel Becnel Jr. called the settlement substantial. "We were ready to go to trial," he said. "We weren't out there with a tin cup in our hand. We got exactly what we wanted and demanded and they paid it."
While Payton's lawsuit is now a done deal, the other plaintiffs remain. If no settlement is reached, the case will go to trial on June 24. Read is the only one facing criminal charges in the matter.