A former Carroll High School student who moved to California to pursue a career in acting now faces charges of bilking investors out of $227 million in a Ponzi scheme.
The classmates.com website shows a photo of Zachary Horwitz as a junior in the 2004 Carroll yearbook. And a Wikipedia entry on him says his parents split when he was 10 years old, and he moved from Tampa, Florida, to Fort Wayne, where he lived with his mother and stepfather.
He attended Indiana University where he played football until an injury ended his career.
Horwitz, 34, eventually moved to California to pursue a career in acting. The Los Angeles Times described him as a “small time actor” who has appeared in minor films under the stage name Zach Avery.
On April 6, the Department of Justice U.S. Attorney’s Office, Central District of California, issued a news release saying Horwitz had been arrested “on a federal criminal complaint alleging that victims put $227 million – investment principal that has yet to be repaid – into a scheme based on false claims their money would be used to acquire licensing rights to films that HBO and Netflix had agreed to distribute abroad, particularly in Latin America.”
The criminal complaint filed April 5 charges Horwitz with wire fraud, a crime that carries a statutory maximum penalty of 20 years in prison.
According to the affidavit in support of the complaint, over the course of about five years, Horwitz solicited investors to invest in his company – 1inMM Capital LLC – which he claimed would use the funds to purchase regional distribution rights to films and then license the rights to online platforms such as Netflix and HBO. Horwitz provided promotional materials to investors that claimed 1inMM Capital offered “safe” investments because “we receive confirmation from each of our outputs indicating their desire to acquire the rights to any title we purchase PRIOR to us releasing funds for the film.”
According to the news release, “instead of using the funds to acquire films and forge distribution deals, Horwitz allegedly operated 1inMM Capital as a Ponzi scheme, using victims’ money to repay earlier investors and to fund his own lifestyle, including the purchase of his $6 million Beverlywood residence.”
The alleged scheme began in 2015, when investment firms began entering into 6-month or 12-month promissory notes with 1inMM Capital based on Horwitz’s statements. The funds were supposed to provide money for 1inMM Capital to acquire the rights to a specific film. To convince investors he was legitimate, the affidavit states, Horwitz provided investors with fake license agreements, as well as fake distribution agreements with Netflix and HBO, all of which contained forged or fictional signatures. Representatives for Netflix and HBO have denied that their companies engaged in any business with Horwitz or 1inMM Capital, the affidavit states.
Investors started to complain after 1inMM Capital began defaulting on notes in 2019, the affidavit states. To prolong the scheme in the wake of mounting defaults, Horwitz provided excuses that were purportedly given by Netflix and HBO, forwarding to investors correspondence with Netflix and HBO in which Horwitz again fraudulently used the identities of Netflix or HBO employees.
According to the affidavit, private investment firms have transferred approximately $227 million to 1inMM Capital pursuant to promissory notes since late 2018. Horwitz, through 1inMM Capital, allegedly has defaulted on all these underlying notes.
During Horwitz’s initial appearance, a United States Magistrate Judge set his bond at $1 million, but he will not be released from custody until the bond is approved. An arraignment was scheduled for May 13.
The FBI is investigating this matter. The U.S. Securities and Exchange Commission provided substantial assistance.
This case is being prosecuted by Assistant United States Attorneys Alexander B. Schwab and David H. Chao of the Major Frauds Section.