They say people will do anything to make it in Hollywood. And, recent years have shown us that is very much true. You turn over a rock in La, La Land, you’ll find a slug who has exploited lives, cheated investors, and broken the law. But rarely do these people face the music for their sins.
There was an aspiring actor named Zachary Horwitz, known as Zach Avery. While trying to make it big in Hollywood, he formed a film company supposedly seeking films rights. He raised millions, claiming he would buy the rights and license them to streaming services. But, as it turns out, it was a big scheme. Now, he is going to jail for a long time.
From Fox News:
Zachary Horwitz was sentenced to 20 years in federal prison on Monday for running a massive Ponzi scheme that raised at least $650 million from investors in phony Hollywood film licensing deals.
The aspiring actor from Los Angeles, who went under the screen name Zach Avery, was also ordered to repay more than $230.3 million…
Horwitz went on to use some of the money to repay earlier investors in a classic Ponzi scheme, prosecutors said. He also used the funds to support a more lavish lifestyle that included a $6 million home, expensive cars and private jets.
Zachary Horwitz was sentenced to a whopping twenty years in prison for a massive Ponzi scheme he ran out of Hollywood. He used his company, 1inMM Capital LLC, to raise at least $630 million from investors. He promised he was going to buy the distribution rights to movies and then license them to Netflix and other streaming services.
Not a bad business model, if you have the money to purchase film rights. But what Horwitz was actually doing was using that cash to repay earlier investors and support a lavish lifestyle that included a luxury home, cars, and private jets.
Prosecutors called it a “classic Ponzi scheme,” where a person (or group) cheats investors with false promises. It appears Horwitz never did what he told investors he would and used some of the money to convince his first investors that the business was paying off.
You can see how, eventually, that would have caught up with him. Raising that much capital, with nothing to show for it, would tick off investors. And the SEC would find out sooner or later. I guess Horwitz traded his freedom for a few years living in a fancy house.
Doesn’t seem worth it.
Source: Fox News