Actor Zach Avery Arrested In Alleged $690 Million Ponzi Scheme
Actor Zachary Joseph Horowitz, also known by his stage name Zach Avery, was arrested earlier this week for fraud as part of an alleged $690 million Ponzi scheme.
The 34-year-old allegedly defrauded money from investors who thought their money would be used to finance distribution rights for films to run on HBO and Netflix, the Wall Street Journal reported.
He was arrested on Monday, April 5, by the FBI after several investment firms allegedly gave him almost a quarter-billion dollars over a five-year period.
Avery and his company 1inMM Capital LLC were also sued in civil court by the Securities and Exchange Commission; the film licensing rights scheme is said to have primarily hit Latin American markets.
Avery began to use fake promotional material via 1inMM Capital LLC in 2015 to dupe investors into handing over the funds, according to the affidavit in support of the criminal complaint, which also states that he gave them fake license agreements as well as fake distribution agreements with Netflix and HBO. Both companies said they had no such deals with Avery.
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The investors reportedly gave him six-month and one-year promissory notes that were meant to go towards acquiring the rights to films, but instead Avery allegedly funded his lavish lifestyle, which included the purchase of a $6 million Beverlywood home, and used it to repay prior investors.
He made his first appearance in federal court in downtown L.A. on Tuesday, April 6, and bail has been set at $1 million with an arraignment scheduled for May 13.
The Ponzi scheme raised more than $690 million in total, according to a release from the Securities and Exchange Commission; private investment firms transferred approximately $227 million to 1inMM Capital pursuant to promissory notes since late 2018, according to a release from the Department of Justice.
Avery has been charged with wire fraud and faces up to 20 years in prison if convicted. He has not yet commented publicly on the arrest.
His acting credits include The Devil Below, You’re Not Alone and The Gateway, which is yet to be released.