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Actor Sentenced to 20 Years in Prison Over $650M Ponzi Scheme

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What You Need to Know

  • Actor Zach Avery was sentenced to 240 months in prison and ordered to pay $230.4 million in restitution.
  • He was convicted of falsely telling investors their money would be used to buy rights to films HBO and Netflix had agreed to distribute abroad.
  • He pleaded guilty in October to one count of securities fraud.

Actor Zach Avery, whose real name is Zachary Joseph Horwitz, was sentenced to 20 years in federal prison on Monday for operating a Ponzi scheme that raised at least $650 million with bogus claims that investor money would be used to acquire licensing rights to films HBO and Netflix purportedly agreed to distribute abroad, according to the Justice Department.

In addition to sentencing Horwitz, 35, of the Beverlywood neighborhood of Los Angeles, to 240 months in prison, U.S. District Judge Mark C. Scarsi, also ordered Horwitz to pay $230.4 million in restitution to his victims.

Attorney Ryan S. Hedges of Vedder Price’s Chicago office, and Anthony Pacheco, of the law firm’s Los Angeles office, who represented Horwitz, did not immediately respond to a request for comment on Tuesday.

Horwitz was arrested in April and a criminal complaint charged him with wire fraud, a crime that carries a statutory maximum penalty of 20 years in prison.

‘Fabricated Agreements and Fake Emails’

The Securities and Exchange Commission also said in April that it obtained an asset freeze and other emergency relief in an emergency enforcement action against Horwitz and his company, 1inMM (one in a million) Capital LLC, for conducting the alleged Ponzi scheme.

The actor and 1inMM allegedly told investors they were buying film rights, purportedly to resell them to Netflix and HBO, according to the SEC’s complaint. In fact, 1inMM actually had no business relationship with either company.

From March 2014 until at least December 2019, Horwitz raised over $690 million from investors by selling promissory notes issued by 1inMM, “using fabricated agreements and fake emails” with Netflix and HBO, according to the SEC complaint.

In late 2019, Horwitz started defaulting on outstanding notes issued by 1inMM, leaving investors with more than $234 million in unreturned principal, the SEC complaint stated.

Horwitz, the SEC complaint stated, “falsely blamed his default on refusals by HBO and Netflix to pay for distribution rights they had licensed from 1inMM and claimed he was engaged in promising negotiations with them to obtain past-due payments.”

Horwitz, who has appeared in films including The Devil Below, The White Crow and Farming, pleaded guilty in October to one count of securities fraud.

Hollywood ‘Success Story’

“Horwitz portrayed himself as a Hollywood success story,” prosecutors argued in a sentencing memorandum.

“He branded himself as an industry player, who, through his company … leveraged his relationships with online streaming platforms like HBO and Netflix to sell them foreign film distribution rights at a steady premium…. But, as his victims came to learn, [Horwitz] was not a successful businessman or Hollywood insider. He just played one in real life,” according to the government’s sentencing memorandum.

Instead of using the funds to acquire films and arrange distribution deals, Horwitz operated 1inMM Capital as a Ponzi scheme, using victims’ money to repay earlier investors and to fund his own lavish lifestyle, including the purchase of his $6 million Beverlywood residence, luxury cars and travel by private jet, according to the memorandum.

Horwitz defrauded five major groups of private investors and, throughout the scheme, Horwitz raised at least $650 million from more than 250 individuals who invested directly or indirectly in 1inMM Capital, according to the Justice Department.


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