A Los Angeles man pleaded guilty this afternoon to a federal securities fraud charge and admitted operating a Ponzi scheme that raised at least $650 million with bogus claims that investor money would be used to acquire licensing rights to films that HBO and Netflix purportedly had agreed to distribute abroad.
Zachary Joseph Horwitz, 34, who resides in the Beverlywood neighborhood of Los Angeles, admitted his fraudulent scheme has caused more than $230 million in losses.
Horwitz pleaded guilty before United States District Judge Mark C. Scarsi, who scheduled a sentencing hearing for January 2, 2022. When he is sentenced, Horwitz will face a statutory maximum sentence of 20 years in federal prison.
Over the course of about five years, Horwitz used his company – 1inMM Capital LLC, which purported to be a film distribution company – to solicit investors with false claims their money would be used to purchase regional distribution rights to films and then would generate profits by licensing the rights to online platforms such as Netflix and HBO.
The scheme began in 2014, when groups of private investors began entering into hundreds of six- and 12-month promissory notes with 1inMM Capital based on Horwitz’s statements. The funds supplied under each note were supposed to provide money for 1inMM Capital to acquire the rights to a specific film. The promissory notes guaranteed a specified payment on a specified maturity date, as well as the specified amount to…