Federal authorities on Tuesday arrested a Los Angeles film and television actor accused of running a $227 million Ponzi scheme that promised non-existent film rights to investors.
Zachary Joseph Horwitz, 34, who acts under the name Zach Avery, was taken into custody by FBI special agents on a wire fraud charge, the U.S. Attorney’s Office in the Central District of California said in a statement. The charge carries a statutory maximum penalty of 20 years in prison
According to a criminal complaint, Horwitz solicited investments for his company, 1inMM Capital LLC, which he claimed would use the funds “to purchase regional distribution rights to films and then license the rights to online platforms such as Netflix and HBO.” He is accused of telling investors that the rights were for films the streaming companies had agreed to distribute abroad, particularly in Latin America.
Prosecutors allege the scheme began in 2015.
The actor provided promotional materials to investors that claimed “1inMM Capital offered ‘safe’ investments because “we receive 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,” according to an affidavit.
He also “provided investors with fake license agreements, as well as fake distribution agreements with Netflix and HBO, all of which contained forged or fictional signatures,” prosecutors said.
The funds instead were used to repay previous investors and to bankroll Horwitz’s lifestyle, including the purchase of a $6 million Beverlywood residence, according to the statement from the U.S. Attorney’s Office.
Investors started to complain when 1inMM Capital began defaulting on notes in 2019, according to the criminal complaint.
Horwitz did not halt the scheme, officials said. Instead, he forwarded fake correspondence from Netflix and HBO that gave excuses as to why the funds weren’t available, again using forged signatures from HBO and Netflix employees, the affidavit said.
Netflix and HBO have denied that their companies engaged in any business with Horwitz or 1inMM Capital, according to the affidavit.
Horwitz told a United States Magistrate judge that he understood the charge he faces during an initial video hearing from Los Angeles jail, according to the Los Angeles Times. The judge set bond at $1 million. His attorney, Anthony Pacheco, could not be reached for comment early Wednesday.
Horwitz’s next court date is set for May 13.
According to his IMDb profile, he has 15 acting credits to his name.
Source: | This article originally belongs to Nbcnews.com
