Actor Zachary Joseph Horwitz has agreed to plead guilty to running a massive Hollywood Ponzi scheme that promised non-existent film rights to investors.
Horwitz will plead guilty to one count of securities fraud, according to a plea agreement filed in the United States District Court for the Central District of California earlier this month.
His hearing is scheduled for Oct. 4, Thom Mrozek, the director of media relations for the United States Attorney’s Office for the Central District of California, told NBC News on Thursday.
Horwitz, who has acted under the name Zach Avery in low budget films, faces up to 20 years in prison, followed by three years of supervised release.
He is accused of selling hundreds of promissory notes through his company 1inMM Capital LLC, and “fraudulently obtained at least $650 million from at least five major groups of private investors,” according to prosecutors, who say the scheme started in 2015.
The funds were used to repay previous investors and to bankroll Horwitz’s “lavish” lifestyle, including the purchase of a $6 million Beverlywood residence, according to an earlier statement from the U.S. Attorney’s Office.
But at the end of 2019, 1inMM Capital began defaulting on outstanding payments, and Horwitz currently owes investors approximately $230.36 million.
“Defendant’s scheme has caused substantial financial hardship to at least five investors,” said the plea agreement.
Horwitz would tell investors that he would use the funds “to purchase regional distribution rights to films and then license the rights to online platforms such as Netflix and HBO,” said a criminal complaint filed in April.
He is accused of telling investors that the rights were for films the streaming companies had agreed to distribute abroad, particularly in Latin America.
The actor even 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.
When investors started to complain that they weren’t seeing returns, 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.
According to his IMDb profile, he has 15 acting credits to his name, including an uncredited role in the 2014 Brad Pitt film, “Fury.”
Source: | This article originally belongs to Nbcnews.com
