The film “Bitter Harvest” from 2017 would not be considered a success by many definitions.
“It’s a bad sign if even the prayers in this movie suck,” noted one reviewer who contributed to the film’s 15 percent review of Rotten Tomatoes.
The United States grossed less than $ 600,000. But that did not mean that there was still no potential for money to be made abroad. All investors had to do was help acquire the distribution rights and a number of other films in Latin America, Africa, and New Zealand. Important distribution agreements with HBO and Netflix were about to be formalized. Once those were implemented, investors would see a return of at least 35 percent.
That’s the essence of what the Securities and Exchange Commission and federal prosecutors call a Ponzi program run by Zachary J. Horwitz, a not particularly famous actor with a rather flamboyant home. Mr Horwitz, who went by the stage name Zach Avery, was arrested Tuesday for wire fraud. He is accused of scamming at least $ 227 million in investors and building his company’s relationship with HBO and Netflix.
“We claim that Horwitz promised extremely high returns and made them plausible by invoking the names of two well-known entertainment companies and fabricating documents,” said Michele Wein Layne, director of the SEC’s Los Angeles regional office, in a press release on Tuesday.
Prosecutors said the correspondence Mr. Horwitz forwarded to customers who included HBO and Netflix email addresses was as fictional as the subject of his most recent film, the horror film “The Devil Below” (Critic Score von Rotten Tomatoes: 0 percent). . According to Thom Mrozek, a spokesman for the US Attorney’s Office in Los Angeles, Horwitz did not appear in any of the 50 or so films that he promised would make millions for investors.
Mr. Horwitz was in jail on Wednesday, said Mr. Mrozek. See if you can reach out to other One in a Million Productions employees whose websites have the tagline “When Odds Are One in a Million. Be that ”, were unsuccessful. (The website was removed later on Wednesday afternoon.)
Mr. Horwitz’s attorney, Anthony Pacheco, did not respond to a request for comment.
The Ponzi program began to disintegrate when an investor wanted the money back in 2019 and couldn’t get it, Mrozek said.
For several years now, 1inMM – as the company puts its name – has found ways to pay investors. According to SEC court documents, not all films that investors believed helped purchase rights are listed, but the complaint includes an image of 1inMM’s “Library”; the 1989 Jean-Claude Van Damme film, “The Kickboxer “And the 2013 romantic comedy” The Spectacular Now “are included.
The way money can be made in the world of film distribution is by saying, “I’ll give you $ 100,000 for rights in Latin America,” Mrozek said for example, adding, “I’m going to HBO or to whoever and say, “Give me $ 200,000 to show the movie. ‘”
It’s possible that the company managed to acquire international distribution rights for a handful of films, or that it even started with good intentions, Mrozek said. What didn’t exist, however, was the relationship with HBO and Netflix that Mr. Horwitz shared with investors. That relationship essentially guaranteed them a return of 35 percent or more in six months or a year.
“I believed my investment was safe with HBO involved,” one investor told the SEC
First of all, Mr. Horwitz was able to keep his promises. In typical Ponzi fashion, previous investors received money from newer investors, Mrozek said. His clients continued to believe that it was wise to invest in tours of The Kickboxer in New Zealand and Latin America.
But at some point there wasn’t enough money to keep the illusion going – even with the help of the Johnny Walker Blue Label Scotch that Mr. Horwitz had sent to the directors, according to FBI agent John Verrastro, who laid out the scheme in a complaint. Mr. Horwitz also inappropriately used investor money on a $ 5.7 million home and $ 700,000 in fees on a prominent interior designer, according to the SEC
As of December 2019, 1inMM has been in arrears with more than 160 payments, according to court documents. A Chicago investor owed more than $ 160 million in capital and $ 59 million in profit wanted his return and couldn’t get it, Mrozek said. This investor contacted the authorities.
