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Helmer charged with fraud in Mass.

Officials allege that Daniel Adams inflated production costs for tax credits

Daniel Adams, director of low-budget pics “The Golden Boys” and “The Lightkeepers,” has been charged with bilking the state of Massachusetts out of more than $4.7 million through inflated and fraudulent film credit applications.

The 50-year-old Harvard grad, who shot the films on Cape Cod beginning in 2006, was arraigned Friday in Boston Municipal Court on two counts of making a false claim and two counts of larceny of over $250. He was arrested by state police the night before without incident.

“We allege that this defendant knowingly defrauded taxpayers by lying about his production costs with the purpose of generating funding for his films and his own personal profit,” Attorney General Martha Coakley said in a statement.

Authorities began investigating Adams, a former political campaign-worker, in March 2010, when a Department of Revenue employee spotted suspicious tax returns connected to “Lightkeepers. The romantic comedy starring Richard Dreyfuss and Blythe Danner earned $32,307 on a single screen over two weeks in December 2009.

Authorites say Adams scam began in 2006, when he submitted greatly inflated expenses in applying for the states 25% tax credit on the two films.

Following his arraignment, Adams was being held on $100,000 cash bail that his attorney told the Boston Herald he could not immediately post. A grand jury indictment was expected Monday, and a probable-cause hearing is scheduled for was scheduled for Wednesday.

Adams got his start directing commercials in the Boston area, later partnering with producer Michael Mailer. His first feature, which he co-wrote and directed, was the Sandra Bullock-starrer “A Fool and His Money.”

Adams had claimed $17 million over the course of the two films shot in Massachusetts, many of which the attorney general’s office said were fraudulent or fictitious altogether; he reportedly claimed he paid Dreyfuss $2.5 million, when the fee was really $400,000.

Massachusetts film tax credit program allows production companies to be reimbursed up to 25 percent of eligible expenses. Reimbursements are paid in the form of tax credits that can be converted into cash or sold to other companies. In the face of declining tax revenues, film production incentive programs have been under fire amid multiple scandals and skepticism that they are a good return on investment.

In Iowa, the state’s former film chief, Tom Wheeler, was found guilty in September of one count of misconduct for his involvement in a film production credit scandal. Prosecutors claimed that Wheeler essentially turned the other way as filmmakers submitted inflated expenses to collect higher credits. At the time, the state’s incentive program was among the most lucrative in the country, offering a 25 percent credit for expenditures. Most famously, credits were issued to a production to buy luxury vehicles for personal use. A state audit found that $25.6 million in tax credits were improperly rewarded and the program was suspended in 2009.