(CN) — Actor Zachary Horwitz was center stage Monday afternoon when he admitted to a federal court in California that he ran a multimillion-dollar Ponzi scheme.
Credited on films as Zach Avery, Horwitz pleaded guilty to a federal securities fraud charge and confessed to raising at least $650 million in a scheme that resulted in more than $230 million in losses.
According to a statement from the U.S. Attorney’s Office for the Central District of California, Horwitz used his business that he claimed was a film distribution company to woo investors with phony claims that their money would go toward purchasing regional distribution rights to films and they would subsequently profit by licensing those rights to platforms like Netflix and HBO.
Investors entered into hundreds of promissory notes with Horwitz’s company, with Horwitz telling them the acquisition and licensing of the film rights would lead to enormous 25% to 45% investment returns.
In his plea agreement, Horwitz admitted that he misrepresented the “business activities and the promissory notes themselves were false and deceptive.”
Horwitz provided investors with fake distribution agreements with platforms like Netflix or HBO, despite never entering into any such agreements. When antsy investors began to complain that Hortwitz’s company was failing to make payments, he assuaged their concerns with emails and texts he falsely claimed were sent by representatives of streaming services.
Funds that Horwitz claimed were going to acquire film rights and negotiate distribution deals instead went toward repaying earlier investors and his own seemingly lavish lifestyle, including a $6 million home in the Beverlywood neighborhood of Los Angeles’ Westside.
“Horwitz defrauded five major groups of private investors, but these entities derived funds from more than 250 sub-investors,” said the U.S. attorney’s statement. “Horwitz admits that he owes investors more than $230 million and that his scheme has caused substantial financial hardship to at least five investors.”
Special agents for the Federal Bureau of Investigation took Horwitz into custody in April 2021. He pleaded guilty before U.S. District Judge Mark Scarsi and faces a maximum penalty of 20 years in prison. His sentencing hearing is scheduled for Jan. 2, 2022.
Horwitz’s few acting credits, according to IMDb, are limited to lesser-known horror flicks, thrillers and short films, along with an uncredited role in the Brad Pitt-helmed war movie “Fury” and a minor role in the biopic “The White Crow,” starring Ralph Fiennes.
"Mr. Horwitz has accepted responsibility for his actions, and today’s plea is an important step in that process of accepting responsibility," said Horwitz's attorney Ryan Hedges in an email statement.
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