Fired Iowa Film Office director now faces felony charges

DES MOINES - State prosecutors have filed felony charges against the former head of the Iowa Film Office and three filmmakers accused of defrauding the state's film tax credit program.

The Iowa Attorney General's Office filed seven felony charges Monday against former film office director Tom Wheeler, 42, of Indianola. According to documents filed by prosecutors in Polk County District Court, he's accused of:

• creating and substituting an inflated application for a movie called “The Scientist”;
• approving multiple fictitious or inflated applications to beat a July 1, 2009, deadline;
• switching two projects to evade a cap on tax credits;
• engaging in deception and making false statements to procure state economic development assistance to benefit Polynation Pictures;
• improperly approving tax credits for Changing Horses Productions, knowing that the claims were unsupported;
• improperly preparing contracts for Iowa Film Production Services that were “valued at 500 percent of fair market value,” and later approving expenditure claims for tax credits “equaling approximately $5 in value for every $2 that the filmmaker expended.”

The felony counts filed against Wheeler - who was to stand trial Jan. 31 on a misdemeanor charge that was dropped Monday - include three Class C felonies carrying maximum sentences of up to 10 years in prison each, and four Class D felonies with maximum five-year prison terms.

Also charged with various similar felony counts were filmmaker Bruce Heppner-Elgin, 41, of Washington, Iowa, who runs Iowa Film Production Services; Chad Witter, 37, a tax-credit broker from Bettendorf; and Dennis Brouse, 60, of Plattsmouth, Neb., who runs the Changing Horses production company.

All four defendants are scheduled for arraignment Jan. 18.

A state audit released in October detailed $25.6 million in tax credits allegedly issued improperly to film projects. Nearly $32 million worth of tax credits were granted to 22 film companies, and State Auditor David Vaudt said he was surprised to find that about 80 percent of the claims involved payments for expenditures where there was no proof or inadequate documentation.

The program - which is suspended through June 2013 - provided a 25 percent tax credit for production expenditures made in Iowa and a 25 percent tax credit for investors for projects that spent at least $100,000 in Iowa.

Gov. Chet Culver suspended the program in September 2009 after Department of Economic Development employees raised concerns that credits were being issued for the purchase of luxury vehicles that were later taken to California for personal use.

After the scandal broke, six people lost their jobs within the economic development agency, including Wheeler.

Trial for a separate filmmaker, Wendy Reiner Runge, who faces criminal charges in the tax credit scandal, is slated to begin Feb. 7. Matthias Saunders and Zachary LeBeau, former partners of Runge, have agreed to cooperate with prosecutors in the other criminal cases.