Entertainment Industry Con Faces 20 Years for Defrauding Investors in $650 Million-Dollar Scheme
On October 4th, 2021, Zachary Joseph Horwitz, a Los Angeles actor, pled guilty to one count of securities fraud in the United States District Court for the Central District of California. Horwitz, also known by his stage name, Zach Avery, admitted to raising $650 million from investors by leading them to believe that he had licensing deals with major companies such as Netflix and HBO, when he, did not actually.
As part of the scheme, Horwitz and his company, 1inMM Capital LLC, “borrowed money” from investors in return for “promissory notes,” and falsely represented that he would use the money to acquire certain film distribution rights, with the intention of licensing them to online streaming platforms, such as Netflix and HBO. Promissory notes may be considered a “security,” like stocks. In reality, Horwitz had no such arrangement with Netflix or HBO. In furtherance of his plan, Horwitz created fake and forged distribution agreements and licensing agreements to mislead investors into believing the companies had already committed to deals with his company. When payments on the promissory notes were missed, Horwitz reassured investors that their money was safe. In fact, Horwitz had never actually done business with HBO or Netflix.
Defendant used the $650 million to maintain his lavish lifestyle, payback prior investors, and create a façade that his business was legitimate and successful. In December 2019, Defendant began to default on the loans; when the dust settled, his investors lost $230 million dollars. The defendant was arrested by the FBI in April 2021 and is facing up to 20 years in prison.
The government is represented by David H. Chao of the U.S. Attorney’s Office for the Central District of California’s Major Frauds Section.
Horwitz is represented by Anthony Pacheco and Ryan Hedges of Vedder Price PC.
The case is USA v. Zachary Joseph Horwitz et al., case number 2:21-cr-00214, in the U.S. District Court for the Central District of California.
Read more at: https://www.law360.com/articles/1428485/actor-pleads-guilty-in-690m-netflix-hbo-ponzi-scheme* Lowe & Associates (“The Firm”) is an entertainment and business law firm located in Beverly Hills, California. The Firm has extensive experience handling cases involving entertainment law, including those involving fraud, providing top-quality legal services to its clients since 1991. The Firm is recognized for its many achievements, including successfully litigating many high-profile cases.
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