Zachary Horwitz is set to plead guilty to a $650-million Ponzi scheme that cost investors more than $231 million. The low-budget sci-fi movie actor lied to five groups of private investors, claiming he had film rights that he would license to Netflix and HBO for use overseas. The actor agreed to plead guilty in exchange for some of the present charges to be dropped.
Court papers showed that the 34-year-old confessed to the massive Hollywood Ponzi scheme, which had investors dumping over $650 million into his fake LLC believing they were investing in fictitious movie deals with big-name entertainment companies. Zachary Horwitz used a lot of the investments to pay off other investors in an attempt to lure them into investing more money.
He would then use excess funds to finance his “lavish lifestyle,” which included a $5.7 million Beverlywood home, trips on private jets, and a $1.8 million credit card bill. In the plea agreement with the U.S. attorney’s office in Los Angeles, which Horwitz signed on Sept. 1, the actor acknowledged that he failed to repay $231 million to his investors.
According to the plea agreement, Zachary Horwitz will plead guilty to one count of securities fraud on Oct. 4 in exchange for the removal of several other charges including five counts of securities fraud, six counts of wire fraud, and two counts of aggravated identity theft. Prosecutors are still expected to request a hefty sentence from U.S. District Judge Mark C. Scarsi. If convicted, Horwitz faces up to 20 years in prison.
Detailed in the plea agreement, Horwitz admitted that for seven years he falsely represented his company, 1inMM Capital, LLC to his investors. He used false contracts to convince them that he was buying foreign distribution rights to movies and then licensing them to Netflix, HBO, and other streaming platforms. Those companies would pay for the rights to stream the content abroad in places such as Latin America, Australia, Europe, and Africa.
Investors lent 1inMM Capital, LLC anywhere from $35,000 to $1.5 million for each film deal. Zachary Horwitz then promised he could repay those investments with a 25 to 45 percent return within a year. Horwitz often repaid these investments with other investors’ funds, while using excess funds to finance vacations, luxury goods, and court-side tickets to basketball games.
Horwitz admitted to falsifying contracts and other correspondents with big-name companies like Netflix and HBO in order to successfully convince investors to finance the deals. In total, Horwitz conned more than 250 investors, including his college friends, their parents, and even their grandparents. For some, the investments were much, if not all, of their retirement funds.
According to Brian R. Michael, who represents three of the college friends Horwitz conned, the victims are happy to know that he “is being held accountable for his criminal fraud.” Reports claimed that many of the actor’s college friends have been assisting federal investigators in an attempt to recover Horwitz’s assets. They are then selling those assets so the victims “can rebuild their lives after the devastating harm he had caused so many people.”
Zachary Horwitz was arrested on April 6 when FBI agents busted into his $5.7 million home. According to Horwitz’s wife, Mallory Horwitz, “the banging of the doors literally caused our walls to tremble, and being woken up to a troop of FBI agents swarming our house was the most terrifying thing I had ever experienced.”
Mallory Horwitz filed for divorce in April, weeks after her husband was arrested. She claimed in a court hearing that Zachary Horwitz had been “deceiving and manipulating me and everyone around him, and he is not the person that I believed he was.”
Horwitz was a low-budget sci-fi movie actor known for his appearances in films such as Trespassers and The Devil Below. His Ponzi scheme was discovered in 2019 when he failed to repay investors in time. A subsequent lawsuit alerted Netflix to the forged contracts and fake correspondence. Earlier this year, the FBI secured enough evidence for an arrest and subsequent indictment by a grand jury.