Clear. 59.9   F New York
AI-Powered News Summarizer
Top Stories

Hollywood actor charged with fraud in alleged multimillion dollar Ponzi scheme, court documents show

April 7, 2021. Summarized by summa-bot.

Compression ratio: 58.5%. 2 min read.

August 26, 2018 - London, Great Britain, United Kingdom - Zach Avery attends the Frightfest screening of Hell Is Where The Home Is Screening at Cineworld Leicester Square in London...AUGUST 26th 2018. (Credit Image: ?? Matrix via ZUMA Press)

It reads a bit like the plot of a bizarre Hollywood-centric screenplay: Small-time actor Zachary Horwitz was arrested Tuesday for allegedly running a multi-million dollar Ponzi scheme that involved raising funds from investors who thought their money was being used to buy and license film rights, according to a statement from the Justice Department.

New York (CNN Business)It reads a bit like the plot of a bizarre Hollywood-centric screenplay: Small-time actor Zachary Horwitz was arrested Tuesday for allegedly running a multi-million dollar Ponzi scheme that involved raising funds from investors who thought their money was being used to buy and license film rights, according to a statement from the Justice Department.

Horwitz allegedly misappropriated funds raised from investors for movie licensing deals, putting some of the money in his personal accounts and using the money instead for items like a luxury watch subscription and a nearly $700,000 payment to a celebrity interior designer, according to a complaint filed by the Securities and Exchange Commission.

He has been charged with wire fraud after allegedly boasting about important Hollywood relationships and promising investors that his company, 1inMM Capital LLC, would acquire and license film rights through agreements with Netflix and HBO (CNN and HBO share parent company WarnerMedia), when in fact no such agreements existed, according to the Department of Justice.

A criminal complaint filed by the DOJ Monday alleges that Horwitz, through 1inMM, is in default on promissory notes issued to private investors in exchange for $227 million raised since late 2018.

And a separate complaint filed by the SEC alleges that Horwitz and 1inMM capital also raised more than $690 million from investors as part of the scheme from 2014 through 2019.

The SEC on Tuesday obtained an emergency asset freeze against Horwitz "to secure for the benefit of investors what remains of the money raised by Horwitz," Michele Wein Layne, director of the SEC's Los Angeles Regional Office, said in a statement, adding that "we allege that Horwitz promised extremely high returns and made them seem plausible by invoking the names of two well-known entertainment companies and fabricating documents. "

The SEC's complaint states that the scheme began around March 2014, when Horwitz allegedly began raising investor funds for 1inMM using promissory notes that typically promised investors between 35% to 45% in profits.

Horwitz allegedly told investors he would use the funds to acquire distribution rights to specific films (with names including "Run with the Hunted" and "Blood Quantum") and license those rights to Netflix or HBO, using the profits to repay investors, according to the complaint.

Throughout the duration of the scheme, the SEC alleges that Horwitz funneled some of the $690 million paid by investors to other investors, representing those returns as "profits supposedly generated by his deals with Netflix and HBO. "

In late 2019, Horwitz allegedly stopped making payments to investors with outstanding promissory notes and provided false explanations as to why they had stopped, such as that Netflix and HBO had failed to make promised payments, according to the SEC complaint.

Summarizer is on Google News. Now you can get the latest AI summarized news on your favorite news platform.

Don't like Google News? We have an RSS Feed for you.

Suggestions