According to US authorities, American actor Zach Avery was arrested by FBI agents in Los Angeles on Tuesday for allegedly masterminding a Ponzi scam that defrauded investors of hundreds of millions of dollars.
According to the Stock and Exchange Commission, Avery, whose real name is Zachary Horwitz, assured investors that his firm 1inMM Capital will buy film distribution rights and sell them to Netflix and HBO but had “no commercial relationship with either group.”
Instead, the 34-year-old ran the company like a Ponzi scheme, using funds from new buyers to pay off existing ones, according to a complaint from the US Attorney’s Office for the Central District of California.
According to the SEC, his scheme earned more than $690 million. The Department of Justice stated that it started in 2015 and the victims’ $227 million investment is yet to be repaid.
Horwitz, described as a “small-time actor” by the Los Angeles Times, never found success as an actor. In 2020, he appeared in the widely panned film “Last Moment of Clarity.”
He reportedly used the scheme’s proceeds to fund a luxury lifestyle that included trips to Las Vegas, the purchasing of a $6 million mansion, and the hiring of a millionaire interior designer.
According to officials, the program launched in 2015, and Horwitz and 1inMM guaranteed victims returns of more than 35%.
To establish his legitimacy, “Horwitz supplied investors with forged or fictional license agreements, as well as forged or fictional distribution agreements with Netflix and HBO,” according to the US Attorney’s Office.
Horwitz has been charged with wire fraud, and if convicted, he could face up to 20 years in jail.