US actor in low-budget films accused of running $690m Ponzi scheme
On the surface Zachary Horwitz, 34, appeared to be the stereotypical wannabe actor, attempting to build his career in Hollywood by taking a series of low-impact roles. But while playing small parts in predominantly low-budget films, Horwitz was also running a $690m Ponzi scheme, according to the Securities and Exchange Commission (SEC), using the ill-gotten money to buy a $5.7m Los Angeles mansion and fund a lavish lifestyle.
Horwitz, who acted under the name Zach Avery, promised financial backers 35% returns on their investments by claiming his distribution company, 1inMM Capital, had licensing agreements with Netflix and HBO, the SEC said.
But those relationships never existed, and investors were instead bilked out of $227m in the last three years alone, according to the FBI.
Horwitz allegedly bought his sprawling home, which features a built-in cinema, a gym and a wine cellar, with the misappropriated money.
Court documents allege he also spent more than $137,000 on private jets and paid $700,000 to a “celebrity interior designer”.
The actor’s apparent financial success was not being matched by his struggling film career. As Zach Avery, Horwitz had a small, uncredited role in the Brad Pitt second world war drama Fury, but most of his acting was in far less heralded movies.
His most recent role came in the thriller Last Moment of Clarity, a film which according to the Guardian report has a “lazily written” script, full of “daft coincidences”.
“Brothers Colin and James Krisel and/or actor Zach Avery must be either very well financed or ridiculously persuasive because they’ve managed to pull together a supporting cast and budget for this debut thriller that far exceeds what the script seems to warrant,” the Guardian reviewer Leslie Felperin wrote.
Horwitz was arrested on Tuesday and charged with wire fraud, a crime which carries a penalty of up to 20 years in prison.
“We allege that Horwitz promised extremely high returns and made them seem plausible by invoking the names of two well-known entertainment companies and fabricating documents,” Michele Wein Layne, director of the SEC’s Los Angeles regional office, said in a statement announcing the charges.
Layne said the SEC had frozen Horwitz’s assets, to “secure for the benefit of investors what remains of the money raised by Horwitz”.
The SEC alleges that Horwitz showed investors “fabricated agreements” showing 1inMM Capital had agreed distribution deals with Netflix and HBO, and promised huge returns. Instead Horwitz, “for many years”, “paid supposed returns on earlier investments using funds from new investments”, according to the SEC.
Between 2014 and 2019, Horwitz raised more than $690m, the SEC said. Since late 2018 private investment firms paid $227m to 1inMM Capital, the US attorney’s office in the central district of California said. Horwitz allegedly defaulted on all payments.
Horwitz’s attorney, Anthony Pacheco, did not immediately respond to a request for comment.
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