Actor Zach Avery Arrested for Allegedly Running Multi-Million Dollar Ponzi Scheme
American actor Zach Avery was arrested by FBI agents in Los Angeles on Tuesday for allegedly masterminding a Ponzi scheme that defrauded investors of hundreds of millions of dollars.
Avery, whose real name is Zachary J. Horwitz, told investors his company 1inMM Capital would buy film distribution rights and license them to Netflix and HBO but in fact had “no business relationship with either company”, according to the Securities and Exchange Commission.
Instead, the 34-year-old operated the company as a Ponzi scheme, using money from new investors to pay older ones, the US Attorney’s Office for the Central District of California said in a statement. The SEC said his scheme had raised more than $690 million. The Department of Justice said it began in 2015 and that $227 million put in by victims was yet to be repaid.
In a sworn affidavit filed in Los Angeles federal court, FBI agent John Verrastro said Avery then used the funds for “personal benefit” and to make payments to previous investors “in the style of a classic Ponzi scheme.”
In 2015, he allegedly sent investors bottles of Johnny Walker Blue Label scotch, along with an annual report that said the company had “acquired and successfully distributed 49 films through the 1inMM Capital banner without incurring a single loss in the process.”
He allegedly used money from the scheme to fund a lavish lifestyle, which authorities said included trips to Las Vegas, buying a house worth $6 million, and paying a celebrity interior designer.
Authorities said the scheme had started in 2015, and that Horwitz and 1inMM promised victims returns of more than 35 per cent.
To establish his legitimacy, “Horwitz provided investors with fake license agreements, as well as fake distribution agreements with Netflix and HBO, all of which contained forged or fictional signatures,” the US Attorney’s Office said.
Horwitz, described by the Los Angeles Times as “a small-time actor”, failed to find success as an actor. He appeared in films such as Fury (2014), Curvature (2017), Farming (2018), The White Crow (2018) and critically panned 2020 film, Last Moment of Clarity (2020).
Horwitz has been charged with wire fraud and could face up to 20 years in prison if convicted.