Actor Gets 20 Years In $650M Netflix/HBO Ponzi Scam

February 15, 2022 Crime, Movies

From the Justice Department:



A Los Angeles man was sentenced today to 240 months in federal prison 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 that HBO and Netflix purportedly had agreed to distribute abroad.

Zachary Joseph Horwitz, 35, of the Beverlywood neighborhood of Los Angeles, was sentenced by United States District Judge Mark C. Scarsi, who also ordered Horwitz to pay $230,361,884 in restitution to his victims. Horwitz pleaded guilty in October 2021 to one count of securities fraud.

For more than five years, Horwitz raised millions of dollars from investors, many of whom were personal friends, based on false claims that their money would be used to acquire film distribution rights, which then would be profitably licensed to online platforms such as Netflix and HBO.

But the whole business was a lie. In reality, Horwitz’s company neither acquired film rights nor entered into any distribution agreements with HBO or Netflix. The purported copies of film licensing agreements and distribution agreements were fake.

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 government’s sentencing memorandum.

To give investors a sense of security, Horwitz furnished them with purported film license agreements between 1inMM Capital and sales agents for production companies, as well as purported distribution agreements with Netflix and HBO.

Investors started to complain after 1inMM Capital began defaulting on notes in 2019. In response, Horwitz falsely reassured investors that any missed payments on promissory notes were caused by the streaming platforms, and that payment on the notes would resume.

To support these false excuses, Horwitz sent the investors fabricated emails and text messages using the identities of actual employees of HBO and Netflix.

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