Federal prosecutors on Tuesday announced that agents with the FBI arrested a 34-year-old Los Angeles actor on charges that he oversaw a Ponzi scheme that swindled investors out of approximately $227 million.
Zachary Joseph Horwitz, who also uses the stage name “Zach Avery,” allegedly bilked investors out of their funds by promising the money would be used to purchase the licensing rights to movies that already had distribution agreements with streaming platforms such as Netflix and HBO, particularly in Latin American countries.
According to documents filed in the U.S. District Court for California’s Central District, Horwitz began soliciting funds from potential investors for his company, 1inMM Capital LLC, in 2015. In describing the business model, Horwitz allegedly claimed the company would put the money towards purchasing regional distribution rights to films and then license the rights to online platforms. Promotional materials for 1inMM created by Horwitz and distributed to potential investors proclaimed that the investment would be “safe” because the company said it received “confirmation from each of our outputs indicating their desire to acquire the rights to any title we purchase PRIOR to us releasing funds for the film,” the feds said.
But prosecutors claimed that Horwitz didn’t actually use the money to purchase rights and secure distribution deals, and instead paid out his initial investors with funds from later investors while using the bulk of the money to fund his lavish lifestyle, which included buying a home in Beverlywood for $6 million.
“The scheme allegedly began in 2015, when investment firms began entering into a series of 6-month or 12-month promissory notes with 1inMM Capital based on Horwitz’s statements,” the U.S. Attorney’s Office for the Central District of California said in a statement. “The funds supplied under each note were supposed to provide money for 1inMM Capital to acquire the rights to a specific film. To convince investors he was legitimate, the affidavit states, Horwitz provided investors with fake license agreements, as well as fake distribution agreements with Netflix and HBO, all of which contained forged or fictional signatures. Despite Horwitz’s claim of “solid relationships” with online platforms, representatives for Netflix and HBO have denied that their companies engaged in any business with Horwitz or 1inMM Capital, the affidavit states.”
1inMM began defaulting on the notes in 2019, which sparked complaints from investors. In response, Horwitz allegedly assuaged investors’ concerns by sending them falsified correspondence between the company and the streaming platforms in which he “fraudulently used the identities” of HBO and Netflix employees.
The affidavit further claimed that Horwitz has defaulted on about $227 million invested in the company by private firms since 2018.
Horwitz is facing felony wire fraud charges that carry a maximum sentence of up to 20 years in prison (typically, a potential sentence for a white collar offense like this would be significantly lesser than the maximum). A magistrate judge on Wednesday set Horwitz’s bond at $1 million and scheduled his arraignment for May 13.
An IMDB page for Zach Avery, which notes that his birth name is Zachary Horwitz, shows that Avery has appeared in more than dozen films in minor roles.
[image via AfterBuzz TV/YouTube screengrab]
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