LOS ANGELES (KNX) — A Los Angeles man was sentenced Monday to 20 years in federal prison for operating what prosecutors have characterized was a Ponzi scheme that raised at least $650 million on phony foreign film-rights deals.
Zachary Joseph Horwitz, 35, of Beverlywood, was sentenced in L.A. federal court and ordered to pay more than $230 million in restitution to his victims. Horwitz pleaded guilty in October of last year to one count of securities fraud.
“Horwitz portrayed himself as a Hollywood success story,” prosecutors wrote in a sentencing memorandum. “He branded himself as an industry player who, through his company [...] leveraged his relationships with online streaming platforms like HBO and Netflix to sell them foreign film distribution rights at a steady premium.”
“But, as his victims came to learn,” they added, “He was not a successful businessman or Hollywood insider. He just played one in real life.”
For more than half a decade, Horwitz raised millions of dollars from investors, some of whom were personal friends, based on bogus claims that their money would be used to buy film distribution rights, which would then be licensed to streamers like Netflix and HBO.
The scheme began in 2014 and lasted until Horwitz was arrested by the FBI in 2021. Over the course of those seven-odd years, Horwitz, through his company, 1inMM Capital, entered into hundreds of six-to-twelve-month promissory notes with investors. The funds attached to each note were intended to provide money for 1inMM to acquire rights to a specific film, and was supposed to be repaid using profits from licensing that film to a big streamer. The notes guaranteed repayment on a specified date, with returns ranging from 25 to 45 percent.
Instead of using investments to acquire film rights and close distribution deals, Horwitz used victims’ money to repay earlier investors and fund his own lavish lifestyle. He used investor funds to buy his $6 million Beverlywood home, luxury cars, and trips by private jet, prosecutors alleged.
Horwitz ultimately raised the $650 million from 250 individuals, either through direct investment in 1inMM, or indirectly through “five major groups of private investors,” according to the U.S. Justice Department.
Three years ago, 1inMM Capital began defaulting on all outstanding promissory notes, and to date, remains in default to investors on a total outstanding principal of approximately $230 million.
“His scheme has caused substantial financial hardship to dozens of investors,” the Justice Department claimed.
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