Techdirt Threatened With Defamation Suit Over Story On Feds Getting Royalty In Movie From Mexican Drug Cartel Money Launderer

Techdirt

from the the-sequel dept

We recently wrote about a very strange case, in which the US government apparently ended up with a 10% royalty in a soon to be produced Hollywood movie that is being billed as the “prequel” to Passion of the Christ — the famous Mel Gibson movie that made over $600 million. The details were convoluted, but apparently our reporting on the subject upset someone, as we were sent an email, claiming that our post was defamatory and could cause damages in “the hundreds of millions of dollars,” threatening that legal action would be taken if we did not change the post immediately.

In case you missed the original story, it involved a guy by the name of Jorge Vazquez Sanchez, who everyone seems to admit was somehow connected to a Mexican drug cartel. The government specifically charged him with money laundering and extortion. Reporters covering the story, including Guillermo Contreras and Jason Buch at the San Antonio Express-News, refer to Vazquez as a “drug trafficker.”

Either way, the extortion claim came from the way he took ownership of a screenplay for Mary, Mother of Christ, which was written by Benedict Fitzgerald, who also wrote the screenplay for Passion…. Fitzgerald, at some point, took out and then defaulted on a business loan for $340,000 with Macri Inc. Because of this, the owner of Macri Inc., Arturo Madrigal, took possession of the screenplay. Some time after this, apparently Vazquez had Madrigal’s brother kidnapped in Mexico, and demanded the rights to the screenplay in exchange for his release. Madrigal signed over the rights to the screenplay to Vazquez. Vazquez apparently then was able to sell the screenplay to Proud Mary Entertainment, which was later renamed Aloe Entertainment, in exchange for $1 million (less some fees) and a 10% royalty rate on any profits from the movie. After Vazquez did a plea deal in which he plead guilty and handed over that 10% royalty to the US government, Madrigal hit Vazquez with a separate lawsuit, seeking to regain control of the screenplay that Vazquez had obtained through these questionable means.

As far as we can tell all of the above are undisputed facts. It’s what has been reported by others. It’s what’s in the legal documents. And it’s what we reported. Our report focused almost entirely on the oddity of the US government ending up with a 10% royalty interest in a Hollywood movie.

And yet… we received a very threatening email claiming that our post was defamatory. The full email (complete with a series of typos, though minus the odd line breaks) is posted below. The lawyer who sent it claims to represent the producers of the film who purchased the screenplay from Vazquez. This may mean Aloe Entertainment, though the email never names the client. Oddly, the email, while insisting that our post was defamatory, more or less repeats the identical facts as we described them in the original post, and which we are reiterating here. The email does appear to raise two issues:

• Our original post referred to Vazquez as a “drug smuggler.” This was based on the San Antonio Express-News report that refers to him as a “drug trafficker.” Perhaps there is a difference between one and the other, but it does not seem to be one of significance. Either way, the threat email was quite upset that we did not specify that he was merely “acting as a money launderer for a Mexican drug cartel.” I will admit that I do not see how this makes a major difference one way or another, but in the interest of accuracy in reporting, we have changed our original reference from “Mexican drug smuggler” to now say “money launderer for a Mexican drug cartel” — which is how both the federal prosecutors and the lawyer sending the email appear to describe him. Considering that the lawyer claims to represent the production company, however, I still am at a loss as to how this matters. I do not believe our original statement in any way defamed the production company. It was a mere use of a synonym for the original report. But that should only concern Vazquez. It makes no mention of Aloe Entertainment nor any statement about that company.
• The threat email says that the headline of our post “implies that the film has drug money in it” and suggests that “the film or its production has drug ties.” Except we never said that. We did not state it. We did not imply it. We said nothing of the sort. We explained the same chain of events that we explained above, which noted that the production house bought the screenplay from Vazquez. Nowhere did we suggest that drug money went the other way. So, we were left somewhat baffled by the threat.

Either way, as we often do, we feel that it is reasonable and important to publicize legal threats against us. We sent an email reply to the lawyer in question, noting our general confusion about what he was complaining about, while also noting the small editing change we made for factual accuracy entirely unrelated to his client. I still do not know why the original threat email was sent, as the facts about the client that were stated in the threat email are no different than what we reported. I do wonder how much the producers of the film pay their lawyers to send out such threat emails, but I imagine that is a separate issue for them to deal with on their own.

May 15, 2012

EDITOR

techdirt

Re: Mary. Mother of Christ

Dear Editor:

I represent the producers of the motion picture, ?Mary, Mother of Christ? This is in response to the article which you published today which suggested that a drug smuggler was involved wth the "Mary, Mother of Christ" Movie Project.The title of the article is demonstrably false, misleading and libelous. Unless this article is taken down immediately and a retraction is published immediately then it is the intention of my client.to sue and your reporter. The true facts are set forth below and the damages to my client if this is not corrected immediately could run into the hundreds of millions of dollars.This is because these falsehoods and malicious misrepresentations could cause the film to lose its finacinmg and therefore its profits

If you look at the unsealed affidavit in the government prosecution they do not allege that Sanchez was a drug smuggles. Rather they say he was not smuggliong drugs but rather waqs acting as a money launderer for a Mexican drug cartel. Nowhere in the government prosecution, nor anywhere else, has it been alleged that there was drug money in the film project.

The true facts are as follows: of the two men that sold the screenplay to us, Mauricio Sanchez Garcia and Jorge Vazquez Sanchez, from Macri, which had acquired it by foreclosing on a lien with its original author, Benedict Fitzgerald, (the author of the Passion of the Christ), one of them, Jorge Vazquez Sanchez, had acquired his interest through extortionate acts.

This allegedly took place sometime after a company known as Macri lent money to Mr. Fitzgerald and his partner in 2006, and Macri had foreclosed on their lien on the screenplay in 2008, when Sanchez and Vazquez forced a third man, Arturo Madrigal, to give them his partial interest in the screenplay rights, which was collateral for the loan. They therefore owned the project for a very short period of time in 2008, perhaps a few months, before selling it to our company. They do not have and they never had any role whatsoever in producing the film.

Obviously, we had no knowledge at the time that these men were involved in illegal activities or that they had acquired their interest through extortion. And there is no allegation that the money which was originally lent to Fitzgerald and his partner, was money obtained from illegal activities or narcotics. In fact, if it was Madrigal who had lent the money to Fitzgerald, as is alleged by the government, and then had his interest in Macri extorted from him, then the money in question would be wholly unrelated to any allegations of money laundering in the Federal prosecution.

The article and the headline are therefore false and libelous in many respects. The headline itself is false, libelous and needs to be retracted immediately. The headline implies that the film has drug mopney in it and that he was a drug smuggler. This is outrageous and false and is an allegation that the government has not ever made.

This too is false and libelous. The film has not been produced yet, and the allegation is that the men who extorted an owner of the company that lent money to the screenwriter and secured their debt with the rights to the screenplay had ties to narcotics activity. If the money lent in 2006 was drug money, then how would it be possible for Mr, Madrigal to claim that he was extorted?

The U.S. Attorney has assured me that they are unaware on any criminal activity by Mr. Madrigal and there is no evidence which suggests that drug money was invested in the film project.

The screenplay is not the film, these men have nothing to do with the film or its production and the suggestion of the headline, i.e. that the film or its production has drug ties is simply false and outrageous and will cause my client to be damaged in an amount in the hundreds of millions of dollars. The truth is that the screenwriter for the film borrowed money from someone who was extorted in order to obtain control of the screenplay. It is more than a stretch, rather it is an outright lie,to say that this chain of events means that the as yet unproduced film has drug ties.

If this is not done within 24 hours then we will take appropriate legal action against you. Please contact me immediately to discuss this. The foregoing is not meant to be a complete recitation of all of my clients rights and remedies all of which are expressly reserved

Very Truly Yours,

Richard M. Rosenthal

Filed Under: arturo madrigal, benedict fitzgerald, defamation, jorge vazquez sanchez, passion of the christ, seizure
Companies: aloe entertainment, proud mary entertainment, techdirt