He The U.S. Securities and Exchange Commission obtained a freeze on assets to stop an alleged $ 690 million Ponzi scheme operated by a Los Angeles actor who lied about offers to sell movies Netflix Inc. and HBO.
Zachary Horwitz and his company, 1inMM Capital LLC, said it was raising money to buy movies it intended to resell, the SEC said on a Tuesday statement. In reality, he had no business relationship with either Netflix or HBO and relied on fabricated contracts and fake emails to scam investors, according to the regulator.
The U.S. Department of Justice issued a separate statement saying the FBI had arrested Horwitz on Tuesday. He uses the screen name “Zach Avery” and was criminally charged with raising $ 227 million that has not yet been repaid as part of a scheme in which he falsely claimed that he would acquire rights to movies that Netflix and HBO would distribute overseas, according to the statement.
A lawyer representing Horwitz did not immediately respond to an email seeking comment.
While Horwitz promised investors that they would get returns above 35%, he actually relied for years on the money raised from new customers to pay for previous ones, the SEC said. He used the funds for his personal expenses, including buying a home, traveling to Las Vegas and hiring a famous interior designer, according to the agency.
A California federal court has called a hearing for April 19 to determine whether the asset freeze should continue to apply as a litigation against Horwitz occurs, the SEC said.
(Updates to add an attempt to get the lawyer to the fourth paragraph.)