Photo: Zachary J. Horwitz, second from right
Originally published as a Los Angeles Times article –
Zachary J. Horwitz, a small-time actor, was arrested Tuesday in Los Angeles on a federal charge that he ran a massive Ponzi scheme that defrauded investors out of $227 million by touting fictitious film licensing deals with HBO, Netflix and other platforms.
Horwitz, 34, who has appeared in minor films under the stage name Zach Avery, was accused of fabricating emails from HBO and Netflix executives about nonexistent film distribution agreements in an attempt to stave off demands for payment from investors.
In a sworn statement filed in Los Angeles federal court, FBI agent John Verrastro laid out a brazen scheme by Horwitz to persuade investors to pour huge sums of money into his film distribution company, 1inMM Capital LLC.
Horwitz sent investors bottles of Johnnie Walker Blue Label Scotch with the company’s 2015 annual report that highlighted a “library” of 52 films his company was supposedly distributing in Africa, Australia, New Zealand and South America, according to Verrastro. The roster of films included the 2012 horror movie “The Lords of Salem” and the 1989 action film “Kickboxer” with martial arts action star Jean-Claude Van Damme.
Horwitz told investors falsely that he had “strategic partnerships” with HBO, Netflix and other platforms to license the foreign distribution rights. The investors were promised returns as high as 40% within a year.
In reality, the FBI said, Horwitz had no licensing deals and diverted much of the money for personal benefit. He used some of the money for the 2018 purchase of his Beverlywood home, now listed for sale for $6.5 million. The six-bedroom home features a pool, wine cellar and gym.
Since December 2019, Horwitz’s company has defaulted on more than 160 payments due to his investors, according to the FBI. Its largest investor, JJMT Capital, LLC, of Chicago, is owed more than $160 million in principal and about $59 million in investment profits, Verrastro said.
All told, Horwitz owes investors about $227 million in principal alone, according to the FBI.
Horwitz’s attorney, Anthony Pacheco, did not respond to a request for comment.
Horwitz has been acting professionally for more than a decade but has struggled to find success. . As Zach Avery, he appeared in the 2018 sci-fi thriller “Curvature.” A Times review of the film was headlined: “Stylish sci-fi thriller ‘Curvature’ trapped in first dimension.” A Variety critic said the film “wants to get the heart racing and the mind bending simultaneously, but flatlines in both departments.”
He also starred last year in a widely panned suspense film, “Last Moment of Clarity.”
Horwitz appeared in court by video Tuesday from the federal jail in downtown Los Angeles.
“Do you understand what it is the government alleges you’ve done wrong?” U.S. Magistrate Jean P. Rosenbluth asked him.
“Yes I do,” he replied.
Assistant U.S. Attorney Alexander Schwab urged Rosenbluth to keep Horwitz detained until trial, saying he might flee if released.
“The odds that the defendant has some of that money squirreled away are quite high,” he said.
Rosenbluth shared the prosecutor’s concern, saying, “There is a lot of money, quote unquote, missing here.”
But she agreed to release Horwitz on a $1-million secured bond.
Horwitz launched his company in 2013. He told investors that 1inMM Capital would license film rights to HBO, Netflix and other online platforms for more money than what he paid for the distribution rights, according to the FBI. The company’s 2015 report promised “solid returns and safe investments.”
Each investment was tied to the rights to a specific film. In one case, the FBI agent said, JJMT gave Horowitz’s company $742,250 to pay for distribution rights to the film “Bitter Harvest,” with a promised repayment within six months of $999,845 — a 35% return.
Horwitz sent JJMT what he said was an agreement between HBO and 1inMM Capital to distribute the film in Africa and Latin America for three years. But the purported signature of the “president of operations” for HBO Latin American Holdings was forged, according to the FBI.
As the payment came due, however, Horwitz started sending fake emails from HBO executives to justify delays, and he did the same thing with fabricated emails from Netflix, the FBI said.
“In reality, neither Horwitz nor 1inMM Capital ever engaged in email correspondence with Netflix or HBO,” Verrastro wrote, “nor did Horwitz or 1inMM Capital ever have any business relationship with Netflix or HBO at all.”
