An actor named Zachary Horwitz, who works under the screen name Zach Avery, was arrested on Tuesday for allegedly defrauding investors of over $690 million. It’s not the first Ponzi scheme to have been identified in Hollywood, but it may be one of the biggest.
An affidavit by FBI agent John Verrastro, quoted by The Hollywood Reporter, details the crimes Horwitz has been accused of. With his company 1inMM Capital, Horwitz allegedly went to investors using fraudulent distribution agreements with large companies such as HBO and Netflix. Not only were the distribution deals non-existent, but the movie rights 1inMM Capital claimed to hold were also fraudulent.
When the company started defaulting on promissory notes, Horwitz allegedly passed the buck on to his supposed partners, manufacturing emails from HBO and Netflix that gave excuses such as an audit and a company restructuring.
Horwitz allegedly put some of the money towards a house that included a home theatre, gym, wine cellar, and grand piano. Pictures of the mansion are included as part of the FBI’s affidavit. Part of the funds were used to repay previous investors, which Verrastro says is consistent with how a Ponzi scheme is operated.
Netflix and HBO apparently played a role in unravelling the scheme. Horwitz faces up to 20 years in prison.
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