LOS ANGELES (CNS) - A former executive at the cinema subscription service MoviePass Inc. faces sentencing April 29 for having embezzled at least $260,000 from MoviePass and its parent company to repay money he borrowed to produce an event at the Coachella music festival.
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Khalid Itum, 43, of Hollywood, was found guilty Thursday in Los Angeles federal court of two counts of wire fraud. The jury acquitted Itum of two counts of money laundering, according to the U.S. Department of Justice.
Itum was an executive from November 2017 until March 2019 with MoviePass, a New York-based company that charged subscribers a flat monthly fee in exchange for credits they can spend on movie tickets from any theater in the company's network of participating cinemas, according to the indictment.
In August 2017, Helios & Matheson Analytics, a New York-based data analytics company, acquired MoviePass.
In spring 2017, Itum registered Kaleidoscope Productions LLC, a Los Angeles-based company that provided production and marketing services. The same year, Itum, through Kaleidoscope, organized a party at the annual Coachella Valley Music and Arts Festival in Indio, prosecutors said.
Neither MoviePass nor HMNY participated in the Coachella event. Itum borrowed money from two individuals to help fund Kaleidoscope's costs, but to repay the borrowed money, he submitted sham invoices to HMNY for services purportedly rendered by Kaleidoscope and a different company owned by an Itum associate, prosecutors said.
Itum caused HMNY employees to wire money from MoviePass and HMNY accounts to a Kaleidoscope bank account to pay the sham invoices. The defendant concealed his scheme by falsely telling HMNY's auditor that Kaleidoscope had been used to pay legitimate MoviePass expenses from the 2018 Coachella festival, evidence shows.
The DOJ said that Itum caused HMNY a total loss of $260,000.
Itum faces up to 20 years in federal prison for each wire fraud count, prosecutors noted.
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