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An aspiring actor has pleaded guilty to running a Ponzi scheme that bilked Hollywood film investors out of hundreds of millions of dollars.
Zachary Joseph Horwitz, known as Zack Avery, was accused of falsely claiming to purchase movie rights and then reselling them to Netflix and HBO, as previously reported. Prosecutors stated that there were no existing business relationships between the 34-year-old actor and the blockbuster platforms.
He was arrested on April 6, 2021, at his Beverlywood mansion, according to the Department of Justice.
“Horwitz, a Los Angeles based actor, and his company 1inMM conducted an offering fraud and Ponzi scheme in violation of the federal securities law,” according to the Central District of California’s US District Court. “Since March 2014, until at least December 2019, Defendants raised over $690 million from investors by selling promissory notes issued by 1inMM, using fabricated agreements and fake emails with prominent third-party companies with whom Defendants had no actual business relationship.”
On Monday, Horwitz admitted that his fraudulent scheme caused more than $230 million in losses, according to the Department of Justice.
Prosecutors claimed Horwitz misappropriated and misused the proceeds to support his extravagant lifestyle and to “pay putative returns on earlier investments,” according to court records.
Personal purchases included a $100,000 trip to Las Vegas, more than $1 million in American Express purchases, a mansion worth nearly $6 million, and the hiring of a celebrity interior designer to the tune of $700,000. He also made payments for chartered jet flights, high-end automobiles, and a luxury watch subscription.
Beginning in 2019, investors came forward when 1inMM started defaulting on the promissory notes, according to the DOJ. As part of his plea deal, Horwitz admitted he “falsely reassured investors that any missed payments on promissory notes were caused by the actions of the online streaming platforms, and that payment on the notes would resume.”
Horwitz engineered phony texts and emails, claiming they were sent to him by Netflix and HBO.
With the help of the US Securities and Exchange Commission, the FBI found that Horwitz fleeced five major groups of private investors but that those entities derived funds from more than 250 sub-investors, said the DOJ.
According to the US District Court, investors believed Netflix and HBO were willing to pay top-dollar, citing a need for new content.
“I believed that if HBO was involved, my investment was safe,” said one investor.
Included in the forged distribution agreements were nonexistent films with titles such as “Run With The Hunted,” “Active Measures,” and “Lucia’s Grace,” according to court records.
Horwitz, appeared in films including “Last Moment of Clarity” and “The White Crow” under the name Zack Avery, according to his IMDB page.
He is expected to appear before US District Judge Mark C. Scarsi for his sentencing hearing on Jan. 3, 2022. He faces a maximum of 22 years in federal prison.