A Los Angeles actor who orchestrated an elaborate Ponzi scheme that raised $650 million in fake licensing deals with HBO and Netflix has been sentenced to 20 years in prison.
In addition to the prison sentence, US District Judge Mark Scarsey Monday ordered Zachary Joseph Horowitz, 35, to pay about $230 million in compensation to more than 250 investors who funded his 1inMM Capital business.
Prosecutors said Horowitz would use loans from one group of investors to pay off the other, while taking millions of dollars to pay for his lavish lifestyle.
Some of his accomplishments include $700,000 for a famous interior designer to remodel his $5.7 million home in Beaverwood, California.
Horowitz relied on his personal relationships and “verbal” referrals to secure investors and told them he had experience in the media content distribution industry.
“Defendant Zachary Horowitz portrayed himself as a Hollywood success story,” prosecutors said in an affidavit. “He has described himself as an industry player, who, through his company … has leveraged his ties to online streaming platforms such as HBO and Netflix to sell them foreign film distribution rights at a fixed premium … but, as his victims learned, [Horwitz] He was not a successful businessman or familiar with Hollywood. He’s only played one in real life.”
Horowitz was indicted by a federal grand jury in May 2021 With five counts of securities fraud, six counts of electronic fraud and two counts of aggravated identity theft.
Horowitz also used some of the money to fund the low-budget films he appeared in, including “The Gate” and “The White Raven,” according to court documents.
From March 2014 to about December 2019, the fraudster raised millions of dollars from investors and promised them that he would use their money to buy licensing rights to hundreds of movies that would be resold to HBO, Netflix and other platforms abroad, especially in Latin America, the plaintiffs said.
According to the criminal complaint, “Horowitz showed investors several fictitious documents to substantiate his alleged deals with HBO and Netflix, including several fake movie distribution agreements.”
By 2019, 1inMM Capital began defaulting on its outstanding promissory notes, ensuring repayment by a specified maturity date. Investors were told that they would receive returns of 25 to 45 percent on their investment.
When investors began filing a complaint, prosecutors said Horowitz used the names of actual HBO and Netflix employees to send fake emails and text messages to reassure investors that their payments would be delivered because they were “about” closing distribution deals.