Ponzi schemes are fraud investment vehicles structured as legit investments. However, in reality, the investment from new investors is passed on as returns to existing investors.
Horwitz's scheme took millions from investors who thought that their money was going to movies on Netflix and HBO.
He was arrested in 2021 on charges of wire fraud through the Los Angeles attorney’s office. So, what happened, and what is his reported net worth now? Keep reading to find out.
Zachary Horwitz's Ponzi scheme raised $650 million from investors.
Between March 2014 and December 2019, Horwitz used fabricated agreements and fake emails to raise at least $650 million from investors by selling promissory notes issued by 1inMM.
Horwitz lied to investors that he had acquired rights to several movies that would be licensed to streaming platforms like Netflix and HBO.
He backed up his lies with fake documents signed by fictitious executives.
Some of the movies investors thought they were supporting included Desolation and Blood Quantum on HBO and Active Measures on Netflix.
Horwitz described himself to investors in company documents as bringing “a wealth of knowledge, reputation, and experience,” the SEC complaint stated.
The largest investor in the Ponzi scheme was Chicago-area firm JJMT Capital LLC.
According to a story in The Wall Street Journal, Horwitz attended Indiana University with the founders of JJMT Capital LLC. Horwitz would present them with an annual report and a bottle of Johnnie Walker Blue Label scotch every year to show the success of their investment in his company.
Three of Horwitz's close family friends and their families were among the over 200 people who lost a collective $230 million in the Ponzi Scheme.
Horwitz promised investors returns of 25 percent and, for a while, he made good on those returns using money he received from new investors. In late 2019, he started defaulting on payments.
Horwitz tried to reassure investors by falsely claiming that the platforms that licensed the movies weren't paying on time. He offered excuses like audits and corporate restructuring at HBO and Netflix for the delayed payments.
Zachary Horwitz used the funds for personal use.
Apart from using the money from new investors and paying existing ones, Horwitz misappropriated and misused the funds for his own personal expenses, including the purchase of a $6 million luxury home in the Beverlywood neighborhood of Los Angeles.
Horwitz also used investor funds for personal expenses including:
- Over $345,000 on charted planes
- About $6.9 million for American Express credit card bills
- Almost $700,000 to a celebrity interior designer.
- Over $604,000 on luxury vehicles
Horwitz pleaded guilty to charges of securities fraud in 2021
In April 2021, the SEC announced an asset freeze on Horwitz to salvage whatever it could from the Ponzi scheme.
However, the SEC's intervention was too late and investors ended up losing millions of dollars in the scheme. In February 2022, Horwitz was sentenced to 20 years in prison.
What is Zach Horwitz's net worth now?
Before his Ponzi scheme made headlines, Horwitz, (credit as Avery) appeared in several lesser-known movies including the 2014 war drama Fury, which starred Brad Pitt and Shia LaBeouf.
On Horwitz’s LinkedIn profile, he says that he received a doctorate in industrial-organizational business psychology from the Chicago School of Professional Psychology.
Actor, Convicted criminal
Net worth: $4 million
Zach Horwitz is an actor, who went by the name Zach Avery, and convicted criminal, who was sentenced to 20 years in prison for securities fraud. It was found that Horwitz ran a $690 million Ponzi scheme that defrauded investors of over $227 million.
In 2022, he was ordered to pay $230 million in restitution.
Birthdate: December 5, 1986
Birthplace: Berkeley, Calif.
Birth name: Zachary Joseph Horwitz
Marriage: Mallory Hagedorn (2014-present)
Children: Two sons
The profile also says that Horwitz founded 1inMM Productions in 2012 along with a company called One Key Entertainment, which is described as a “leading independent feature film distribution company that focuses on providing quality content to the thriving Latin American film marketplace.”
As for his reported net worth, it is reported to be $4 million before his sentencing, according to The Sun. However, Horwitz now owes $230 million in restitution, dropping his net worth into the negative.