Inquiry Finds That Four \'Rebecca\' Investors Did Not Exist

By WILLIAM K. RASHBAUM and PATRICK HEALY

The lawyer for the lead producer of the Broadway musical “Rebecca,” which collapsed after the reported death from malaria of a mysterious investor, said on Sunday that he had confirmed that the investor and three others brought in by a middleman with a history of civil fraud complaints never existed.

The lawyer, Ronald G. Russo, said that an exhaustive inquiry in New York and London by private investigators had established that the four investors puportedly brought into the production by the middleman, Mark C. Hotton, a financially troubled Long Island stockbroker, were all fictitious.

“Following an extensive search over the last week, I can now confirm that there is no evidence whatever that ‘Paul Abrams,' or any of the other three investors brought to this production by Mr. Hotton, ever existed,” Mr. Russo, said in a news release on Sunday night.

The collapse of th e show is the subject of a criminal investigation by the Federal Bureau of Investigation and federal prosecutors in Manhattan. Mr. Russo, who represents the ill-fated show's lead producer, Ben Sprecher, said his investigators had found that the names and addresses and business associations of the so-called investors were “clever fabrications.”

Mr. Abrams, described as a wealthy South African businessman with offices in London and Johannesburg, was supposed to put up $2 million for the production and had purportedly brought in the three other men who together were going to invest an additional $2.5 million.

Mr. Hotton, 46, of West Islip, on Long Island, has not been charged with a crime, and the reasons for his foray into Broadway financing remain unclear. In recent years, he has been accused of fraud in several civil suits and has filed for bankruptcy, declaring $15 million in debts. He is the subject of an unrelated federal fraud investigation by prosecuto rs in Brooklyn.

Mr. Hotton's lawyer, Gerald L. Shargel, called the results of Mr. Russo's investigation “absurd” and “self-serving.”

“There is no benefit to my client unless and until there was an investment of actual dollars and there wasn't a dollar to be made by my client,” Mr. Shargel said. “My client met these people and tried to raise money in good faith and the bottom line is that he was completely duped. If they were fictious, what was in it for Hotton?”

As for the lawsuits against his client, Mr. Shargel said, “All these claims of fraudulent conduct are grossly and absurdly exaggerated and there has never been any adverse verdict returned against him.”

Mr. Hotton introduced Mr. Sprecher to one of the fictitious investors via e-mail.

It was the reported death of the main investor, Mr. Abrams, that last month led to the unraveling of the $12 million musical, which is based on the Daphne du Maurier novel of the same n ame.

Mr. Hotton was to receive a commission on the money that he was said to be raising for the show, an unusual arrangement in modern theater financing, a person with knowledge of the matter said last week.

Mr. Sprecher had been under pressure to raise money for the musical in order to open as planned this fall, and associates of his said that he had become desperate for Mr. Hotton's apparent investors - so desperate that Mr. Hotton was able to all but dictate terms of the commission deals.

“Having seen the fraud of which Mr. Hotton has been accused, I am not surprised that he was able to defraud the production of ‘Rebecca,'” Mr Russo said in his release on Sunday. “Hopefully, through the efforts of my client and the proper authorities, Mr. Hotton will be brought to justice.”

Mr. Russo said his focus would now shift to establishing the identity of the person who sent an anonymous e-mail last month to another investor, saying that the invest ment would be a waste of money. That investor, he said, had committed to and provided funds so the show could proceed to rehearsal.

“That e-mail was directly responsible for his withdrawal and the subsequent postponement of the production,” Mr. Russo said.