Federal agents search producer’s home, office

Federal agents have raided the home and business of a longtime Hollywood producer in connection with Italy’s ongoing tax fraud, embezzlement and false accounting investigation of its former Prime Minister Silvio Berlusconi.

While authorities would not discuss the ongoing investigation, court documents in Los Angeles show the recent search by FBI agents centered on Italian allegations that the producer, Frank Agrama, Berlusconi and others fraudulently inflated the price of television rights originally purchased by Agrama so that millions of dollars in kickbacks could be paid to executives of Berlusconi’s media empire.

Last week, prosecutors in Milan opened the trial of Berlusconi, Italy’s richest man, and 11 others, including Agrama, on various criminal charges. All have denied wrongdoing.

Only days before that trial began, records and interviews show, the FBI searched Agrama’s Bel-Air home and Sunset Boulevard offices at the request of Italian authorities.

In a sworn affidavit used to obtain the search warrants, FBI agent John Verrastro said Italian authorities had made their first request for U.S. help in the case as far back as May 2003. Among the documents requested by the Italian prosecutor, the affidavit said, were records from Paramount Studios about a company called Mediaset, a subsidiary of Berlusconi’s media conglomerate, Finivest, which operates in television, advertising, publishing and insurance.

In reviewing the documents, the affidavit says, the Italian prosecutor discovered evidence that several companies controlled by Agrama “all appeared to be involved in fraudulent purchase and sale transactions.”

Specifically, according to the affidavit, the Italian prosecutor found it “suspicious” that Berlusconi and his media companies exerted “significant control” over Agrama’s companies, and that the price of television rights increased dramatically from the time they were purchased by Agrama’s companies to the time they were sold to Berlusconi’s companies.

For example, Verrastro noted, from 1988 to 2002, Agrama’s companies purchased TV and film rights -- most often from Paramount -- for about $130 million. During that same period, the affidavit adds, Agrama’s companies sold essentially the same rights to Finivest companies -- most often Mediaset -- for about $315 million.

“This scheme appears to have continued past 2002 into at least 2005” through another Agrama company called Olympus Trading, the affidavit alleges.

It also claims that Agrama sent certain executives from Berlusconi’s Mediaset “kickback” payments of nearly $6.5 million.

Agrama founded Harmony Gold USA Inc., a television production, acquisition and distribution company, in 1983. His credits include producing the miniseries “Heidi,” which aired on the Disney Channel, and the horror film “Dawn of the Mummy.”

Agrama was unavailable for comment. But his attorneys, including Alejandro Mayorkas, the former U.S. attorney in Los Angeles, said their client is a respected businessman who will prove his innocence in Italy’s courts.

“There is no smoking gun here,” said Leonard B. Rosman, a Paris-based international entertainment attorney. “Our client did nothing wrong and that is why they have no proof” of wrongdoing.

In buying and selling television rights at a substantial markup, Agrama was merely practicing good business, Rosman said. “He was a successful entrepreneur buying television rights at his own risk,” he said. “In carrying out his business, he has to try to maximize profit.”

Rosman said Agrama acted as an independent businessman, not an agent of Berlusconi. He also said prosecutors had no evidence to support allegations that he funneled “kickbacks” to the former Italian prime minister or other executives at Mediaset.

Agrama did make some payments to low-level Mediaset employees who performed consulting services for him, he said.

He also said Agrama had cooperated fully with investigators and was “quite startled” by the FBI raid of his offices. “He’s provided everything they asked for,” he said.

While most of the allegedly fraudulent transactions involved the buying and reselling of television rights from Paramount Television, there was no indication that the company or its executives are the target of authorities. Records suggest some former executives have helped provide key evidence for Italian investigators.

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greg.krikorian@latimes.com

richard.verrier@latimes.com