A Beverlywood resident was arrested on April 6 on a federal criminal complaint alleging that he embezzled $227 million from investors in film projects.
Zachary Joseph Horwitz, 34, who has used the screen name “Zach Avery,” was taken into custody by the FBI and the criminal complaint was unsealed during Horwitz’s initial appearance on April 6 in United States District Court. Horwitz is charged with wire fraud and faces a potential maximum sentence of 20 years in prison.
The criminal complaint alleges victims invested $227 million in a scheme based on false claims by Horowitz that their money would be used to acquire licensing rights to films that HBO and Netflix had agreed to distribute abroad, particularly in Latin America.
According to an affidavit in support of the complaint, Horwitz solicited people to invest in 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 Netflix and HBO. Horwitz 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,” the affidavit read.
Instead of using the funds to acquire films and make distribution deals, Horwitz allegedly operated 1inMM Capital as a Ponzi scheme, using victims’ money to repay earlier investors and fund his lifestyle, including the purchase of a $6-million Beverlywood residence, prosecutors said.
The scheme allegedly began in 2015 and occurred over five years. Investment firms entered into a series of six- or 12-month promissory notes with 1inMM Capital based on Horwitz’s statements. The funds supplied under each note were supposed to provide money for 1inMM Capital to acquire the rights to a specific film. Despite Horwitz’s claims, representatives for Netflix and HBO have denied the companies engaged in any business with Horwitz or 1inMM Capital, the affidavit read. Investors grew suspicious after 1inMM Capital began defaulting on notes in 2019, according to the affidavit.
Private investment firms have transferred approximately $227 million to 1inMM Capital, prosecutors allege. Horwitz, through 1inMM Capital, has allegedly defaulted on all the promissory notes.
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