Small-time actor sentenced to 20 years in $650 million Ponzi scheme

Small-time actor sentenced to 20 years in $650 million Ponzi scheme

The sci-fi actor, who scammed 250 investors out of $650 million in a Hollywood pyramid scheme of “staggering proportions” to fund a luxurious lifestyle of yachts, private jets and fast cars, was sentenced Monday to 20 years in prison. years in prison.

Zachary Horwitz created bogus contracts he told investors were with HBO and Netflix to trick them into handing over huge sums of money he spent on private flights, nightclubs, millions in credit card payments and a palatial Los Angeles mansion. Angeles with wine. basement.

“Horwitz has portrayed himself as a Hollywood success story,” prosecutors said, according to the Justice Department.

Struggling actor-turned-swindler Zachary Horwitz, 35 (right), arrives in U.S. District Court in Los Angeles on Monday to be sentenced to 20 years in prison after pleading guilty to a $650 million securities fraud charge in a Ponzi scheme .

Struggling actor-turned-swindler Zachary Horwitz, 35 (right), arrives in U.S. District Court in Los Angeles on Monday to be sentenced to 20 years in prison after pleading guilty to a $650 million securities fraud charge in a Ponzi scheme .

“He has established himself as an industry player who … used his relationships with online streaming platforms such as HBO and Netflix to sell foreign film distribution rights to them at a constant markup.

But, as his victims found out, [Horwitz] was not a successful businessman or Hollywood insider. He just played one of them in real life.”

Speaking to Judge Mark Scarcito on Monday, Horwitz tearfully apologized for his “misguided, terrible decisions” that had caused “tremendous pain and hardship.” He begged for mercy, saying he wanted to be close to his young sons.

“I hope you consider the whole person, not just the cruel decisions that brought me here,” he pleaded, according to the Los Angeles Times.

But prosecutors argued that Horwitz’s scheme was “staggering” and caused his investors “immeasurable pain,” depriving some older people of their retirement savings and leaving others on the brink of suicide.

Horvitz, who has appeared in low-budget horror films under the pseudonym Zach Avery, told investors he is buying overseas distribution rights for Hollywood films and then selling them to streaming platforms.

The 35-year-old man gave his victims a note promising a handsome profit in six or 12 months.

Horvitz told investors that they are buying the rights to movies that will be resold by Netflix and HBO, but his company has nothing to do with either streaming service.

Horvitz told investors that they are buying the rights to movies that will be resold by Netflix and HBO, but his company has nothing to do with either streaming service.

He allegedly falsely told investors that he had a successful track record of selling film rights and that they were providing funds to acquire the rights to certain films.  Pictured above is an example of a promissory note Horwitz allegedly gave to investors.

He allegedly falsely told investors that he had a successful track record of selling film rights and that they were providing funds to acquire the rights to certain films. Pictured above is an example of a promissory note Horwitz allegedly gave to investors.

According to the authorities, Horvitz provided investors with promotional materials claiming that 1inMM Capital offered

According to the authorities, Horvitz provided investors with promotional materials claiming that 1inMM Capital offered “safe” investments. Promotional material included 1inMM Capital’s annual report detailing strategic partnerships with HBO and Netflix (see above).

“But it was all a lie,” the Justice Department said. “In fact, Horwitz’s company did not acquire the film rights and did not enter into any distribution agreements with HBO or Netflix. Alleged copies of licensing and film distribution agreements were counterfeit.”

Instead of using the money to buy films and secure distribution deals, prosecutors said, Horwitz ran his company 1inMM Capital in a Ponzi scheme, using the victims’ money to pay off former investors and fund his lavish lifestyle, including film purchases. his $6 million Beverlywood mansion with a wine cellar, swimming pool, gym and movie theater, Mercedes Benz and Audi cars worth over $600,000, private jet and yacht travel, according to a government sentencing memorandum.

Horvitz also allegedly used the misappropriated funds to make almost $7 million in American Express credit card payments, spent another $706,000 on interior decorating, and spent another $136,000 in Las Vegas nightclubs and casinos.

The scheme began in 2014 and continued until the FBI arrested Horwitz in April 2021. By then, more than $230 million of investor money had disappeared.

Investors began to complain after 1inMM Capital defaulted on the bonds in 2019. In response, Horwitz assured investors that any missed payments were due to streaming platforms and that bond payments would resume.

Horvitz has used investments to fund his lavish lifestyle, including buying a $6 million home in Los Angeles (above).

Horvitz has used investments to fund his lavish lifestyle, including buying a $6 million home in Los Angeles (above).

A residence with a gym and wine cellar is up for sale for $6.5 million.

A residence with a gym and wine cellar is up for sale for $6.5 million.

The lower level includes a large entertainment area with a custom home theater system (pictured).

The lower level includes a large entertainment area with a custom home theater system (pictured).

“To support these false excuses, Horwitz sent fake emails and text messages to investors using the identities of real HBO and Netflix employees,” the Justice Department said in a statement.

In October, he pleaded guilty to security fraud and admitted that he never bought film rights or entered into any distribution contracts.

It would be “hard to imagine a more egregious white-collar crime,” prosecutors said in a memo to the judge, noting that he began his life of crime by defrauding three of his close university friends, according to the Los Angeles Times.

“He began by betraying the trust of his friends, people who let their guard down because they could not imagine that someone they had known for many years would mercilessly swindle them and their families of all their savings,” they wrote. .

In 2018, Horwitz, professionally known as Zach Avery, appeared in the sci-fi thriller Curvature.  He also appeared in the 2020 film Last Moment of Clarity.

In 2018, Horwitz, professionally known as Zach Avery, appeared in the sci-fi thriller Curvature. He also appeared in the 2020 film Last Moment of Clarity.

Horvitz, who starred in The Devil Below, You’re Not Alone and Last Moment of Clarity, was jailed for 20 years and ordered by Judge Scarcito to pay his victims $230 million, but prosecutors admitted that ” chances are close to zero. zero” that the failed actor-turned-fraudster would ever be able to pay that amount.

One of Horvitz’s victims, Scott Cohen, told the court that he had filed for bankruptcy and was surviving on food stamps and unemployment benefits, having lost all his money in the scheme.

“The devastation is simply beyond words,” said the father of two.

HOW HOROWITZ SCAM INVESTORS BY GIVING THEM $650 MILLION FOR MOVIE RIGHTS IN A MASSIVE PONZI SCHEME

Horwitz allegedly falsely told private investors that his company, 1inMM Capital, had acquired the regional distribution rights for the films, usually in post-production.

His company will then license online platforms like HBO and Netflix for distribution in certain regions outside of the US, including Latin America.

He promised that 1inMM Capital would be able to provide investors with profitable returns on the notes, often in excess of 35 percent.

Horvitz provided promotional materials, including annual reports, and fabricated agreements and emails regarding alleged deals with HBO and Netflix.

Horwitz was able to secure a series of promissory notes for 6 or 12 months from investment firms based on film distribution.

According to authorities, Horvitz usually paid out profits until the end of 2019. He allegedly did this with early investments using funds from newer investments.

Investors complained after 1inMM defaulted on yields at the end of 2019.

Over the course of five years, he managed to raise $690 million from investors, which authorities say he mainly used for his luxurious lifestyle.

The federal authorities say the $227 million that was invested by the victims has not yet been returned.

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