FBI agents arrested American actor Zach Avery on Tuesday in Los Angeles for allegedly masterminding a Ponzi scam that defrauded victims of hundreds of millions of dollars, according to US authorities.
According to the Securities and Exchange Commission, Avery, whose real name is Zachary Horwitz, told investors that his company 1inMM Capital will purchase film distribution rights and license them to Netflix and HBO, but that he had “no commercial arrangement with any company.”
Instead, the 34-year-old ran the business like a Ponzi scheme, using funds from new customers 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 that plaintiffs have yet to be reimbursed for $227 million.
Horwitz, who was characterized as a “small-time star” by the Los Angeles Times, struggled to find recognition as an actor. He appeared in the critically panned film “Last Moment of Clarity,” which was released in 2020.
He reportedly used proceeds from the scam to fuel a luxury lifestyle that included flights to Las Vegas, the purchase of a $6 million home, and the hiring of a millionaire interior designer, according to investigators.
Horwitz used some of the funds from the investors to purchase a six-bedroom house for USD 6.5 million in LA’s posh Beverlywood neighborhood three years ago.
Avery fabricated email exchanges with Netflix and HBO executives to excuse the delays when the payments were due.
Horwitz was arrested on a wire theft charge at his Beverlywood home on Tuesday morning.
The program began in 2015, according to authorities, and Horwitz and 1inMM guaranteed victims returns of more than 35 percent.
To prove his authenticity, “Horwitz supplied investors with forged or fictitious signatures on false license agreements, as well as fake 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.