By Gene Maddaus, Variety
David Glasser has been Harvey Weinstein’s right-hand man for the better part of a decade. Now, after Weinstein’s spectacular downfall in a sex harassment scandal this week, Glasser has been put in charge of the mogul’s imploding entertainment company alongside Weinstein’s brother, Bob.
But Glasser, who serves as president and chief operating officer of the Weinstein Co., has long been dogged by legal issues that date back more than two decades. In the most serious case, Glasser’s former company was used to launder the proceeds of a massive stock manipulation scheme which, according to federal prosecutors, was connected to the Genovese crime family. The mastermind of the scheme, Roy Ageloff, pleaded guilty to securities fraud and was sentenced to eight years in prison. Ageloff also helped launch Glasser’s career as a producer, and even tried to produce a film with Glasser about his own life, to be titled “Sold Short.” Glasser was never charged with a crime.
Glasser’s legal problems have hindered his Hollywood career in the past. Two years ago, Glasser announced he would be leaving the Weinstein Co. to seek a “new opportunity.” A few weeks later, he reversed course and announced that he would stay on. According to sources familiar with the matter, Glasser was offered a top executive role at DreamWorks Animation. But after digging into his past, DreamWorks rescinded the offer. The sources say the board felt that Glasser’s legal troubles made it impossible for him to hold an executive job at a publicly traded company.
In a statement to Variety, Glasser says he was 24 when he met Ageloff and was unaware of his misconduct. He also denies that DreamWorks had rescinded the offer due to his legal issues. “This is simply not true, a rumor and you have no one on the record,” he says.
The revelations come as the Weinstein Co.’s future is teetering on the brink of collapse. Industry insiders are speculating about the company’s ability to produce projects, a possible sale or bankruptcy filing, and whether Glasser and Bob Weinstein may be the next to depart. Glasser tells Variety that he has not yet accepted the board’s offer to run the company, and is still weighing whether to stay.
By 1997, Ageloff was already infamous on Wall Street for running high-pressure boiler rooms that touted obscure stock offerings. Ageloff and his partner, Robert Catoggio, ran the brokerage firm of Hanover Sterling, which employed more than 100 brokers in offices in Manhattan and Boca Raton, Florida. In July 1996, Fortune called Hanover a “lowlife brokerage firm,” and noted that the FBI was looking into questionable IPOs. Ageloff and his associates were indicted in June 1999, and accused of swindling investors out of $150 million in a series of “pump and dump” schemes. Prosecutors alleged that Catoggio funneled millions of dollars in proceeds to a captain in the Genovese crime family, whose stepson was one of the brokers who pleaded guilty. Ageloff pleaded guilty in 2000 and was sent to a medium-security prison in Florida in 2001.
At some point, Ageloff came up with an idea for a movie called “Sold Short,” about his career in the brokerage business. He turned to Glasser to produce it. According to a deal memo dated January 2002 — that is, a few months after Ageloff entered prison — Glasser agreed to make the film with a budget between $10 to $25 million. Glasser would pay Ageloff a producer fee of $500,000 upon commencement of principal photography. The film was never made.
According to Glasser, he produced only two films with Ageloff — “Fait Accompli” and “In the Shadows” — and did not become aware of Ageloff’s criminal conduct until much later.
“Years later we found out that he was being indicted for stock fraud on a old business that he had,” Glasser says. “Years later I was contacted by the team who prosecuted him, interviewed and they went through all my emails, correspondence and contracts. It was concluded that I had done nothing wrong other than got in business with the wrong guy and next time I should make sure I know where these investments are coming from. I was young and did nothing wrong here and in hindsight (I) learned a valuable lesson on vetting your investors.”
In September 2002, Glasser signed a note agreeing to pay $1.5 million by 2004 to the Ageloff Education Irrevocable Trust, which Ageloff set up to benefit his children. According to court records, Glasser put up 20% of his new company, Splendid Pictures, as collateral in the deal. A few months later, Glasser took a 20% equity stake in another company, a distributor named Syndicate Films International. Under a confidential agreement, he pledged to give Ageloff half of his proceeds from his stake in the company. The Ageloff trust later filed a federal suit against Glasser, alleging that he failed to pay the debt when it came due. Glasser did not contest the lawsuit, and a default judgment was entered in the amount of $1,622,821.
In 2008, shortly before Ageloff was to be released, federal prosecutors in Florida brought another case against him, alleging that he had hidden assets from the government and laundered money. The indictment does not name Glasser, but it does reference the $3.5 million investment of tainted money into “various movie productions” in 1997 and 1998.
Ageloff pleaded guilty to money laundering and was sentenced to an additional five years behind bars. According to the plea agreement, his brother, Michael, received $160,000 in “movie money” in August 2002 from “an unindicted co-conspirator,” who is not named. The plea also states that Michael Ageloff received a $500,000 payout in 2003 from the sale of Cutting Edge Entertainment. He received two checks, in the amounts of $300,000 and $200,000, which the government alleged was part of the money laundering scheme.
Ageloff’s attorney, Daniel Brodersen, addressed the $3.5 million in movie investments in a pre-sentencing memorandum, arguing that New York prosecutors were aware of it when Ageloff entered his original plea in 2000. “Not all of the monies that the Defendant invested constituted illegal proceeds,” Brodersen wrote. “Furthermore, this investment and the Defendant’s corresponding interest in Cutting Edge Entertainment was fully disclosed to the court, the probation office, and the prosecution in the Eastern District of New York.”
“There has never been any attempt on the part of the Defendant to conceal these monies, his interest in Cutting Edge Entertainment, and the fact that he was defrauded by David C. Glasser, with whom he invested those funds in 1997,” Brodersen wrote.
Under the plea deal, Ageloff forfeited the $1.6 million judgment to the U.S. government.
“The United States was able to identify funds that flowed from that Ageloff trust account to Glasser,” says Dan Eckhart, the former federal prosecutor who handled the case. “Ageloff admitted the trust contained proceeds from his criminal activity in his plea agreement, and we were able to forfeit those assets.”
Glasser was not prosecuted, nor were others who allegedly received tainted money from Ageloff in the laundering case.
“If these weren’t proceeds involved in money laundering, the government wouldn’t have been able to seize them and obtain a forfeiture judgment,” says Eckhart, who is now a criminal defense attorney in Orlando.
Since then, Glasser has been paying down the debt to the government.
Glasser has been sued many other times over the years. Alec Baldwin sued him in 2001, alleging that he and other talent on “The Devil and Daniel Webster” had not been paid. The suit was later withdrawn, and the film was released several years later under a different title. In a 2002 interview with Variety, Glasser said he had always paid up eventually. His motto, he said, was “Be guilty of being late. Don’t be guilty of screwing someone.”
Glasser’s career moved ahead in spite of these issues. He took a job at Yari Film Group, which would later produce the movie “Crash.”
In 2005, Glasser met an investor named Jeff Cooper. In a meeting at Yari Film Group, he urged Cooper to invest in a new film venture, called Hi-Def Entertainment, which would be run by Glasser’s younger brother Phillip, who lived in Tennessee.
“He put on a dog and pony show,” Cooper recalls. “It was one lie after the other.”
Cooper says that he put faith in Glasser’s connections in the industry, and says that Glasser said he could divert promising material from Yari to Hi-Def.
“David was the key man,” Cooper says. “I wouldn’t have done it if it wasn’t for David.”
The only thing that ever came out of the company was a forgettable Jamie Kennedy film, “Kickin’ It Old School.” In 2008, Glasser left Yari Film Group for the Weinstein Co.
“When the opportunity with Harvey came along, Hi-Def Entertainment and I were left sucking pond water,” Cooper says.
Cooper says the recent revelations about Weinstein helped him understand why Glasser fit in there. When the two were at the Cannes Film Festival in 2005, he remembers Glasser making numerous vulgar remarks to women.
“We’d be in a car going down the street, and he’d be shouting obscenities to every girl we passed,” Cooper says. “It was totally unprofessional,” he says, adding that he felt pressured not to raise objections. “I turned the other cheek to it — business is business.”
Cooper lost his entire $500,000 investment, and sued for fraud. The case ultimately settled for a confidential amount.
Glasser disputes Cooper’s account, saying he only met him once and never promised anything.
“[T]his was thrown out of court three times,” Glasser says. “I finally settled with him for a tiny amount as this was a nuisance.”
He also adamantly denies Cooper’s claim about harassing women at Cannes.
Bob Yari, the president of Yari Film Group, had fonder memories of Glasser, who ran foreign sales for him for several years.
“He’s a real go-getter,” Yari says. “He was made for this business, in my opinion.”
Yari says he was well aware of Glasser’s reputation for lawsuits when he hired him.
“I spent a lot of time analyzing it and actually working with him to change those past ways,” Yari says. “I don’t think he was a wrongdoer. He was a wheeler-dealer and got himself into a lot of trouble.”