Cinergi Pictures CEO Target of Probe

Cinergi Pictures Entertainment said late Friday that it was told by U.S. prosecutors that its chairman and chief executive, top Hollywood producer Andy Vajna, is under investigation by a federal grand jury.

Cinergi said it believes the investigation is related to “a long-standing federal audit of Mr. Vajna’s personal tax returns.” The company said it is responding to two subpoenas to produce documents for the grand jury and was told it is not a target of the investigation.

Vajna produced the controversial film “Nixon” and is best known for producing the “Die Hard” series of action films.

Sources have said Carolco Pictures, which Vajna co-founded but left in 1989, is also a focus of a grand jury investigation. Times sources said subpoenas were served on Carolco last month seeking information on family trusts of Vajna and co-founder Mario Kassar.

Carolco has declined to comment, and attorneys for the two men have not commented. It was not clear what connection there might be between the subpoenas on Carolco and Cinergi.

However, public documents filed by Carolco with the Securities and Exchange Commission show that federal tax officials have looked into transactions arranged by Carolco executives, including a web of companies set up in offshore tax havens, some involving Vajna and Kassar.

Vajna and Kassar pioneered the use of foreign financing to fund such big action films as the “Rambo” series. Kassar, who produced such box-office hits as “Terminator 2: Judgment Day” and “Basic Instinct,” resigned as Carolco’s chairman in November, the day the company entered bankruptcy proceedings.

In a brief statement, Santa Monica-based Cinergi said it has not been told exactly what matters are under investigation. It also said it is unable to predict the effect, if any, the investigation might have on the publicly held company.