A Hollywood-based film company has had its assets frozen after the Securities Exchange Commission (SEC) claims the firm was harbouring a Ponzi scheme.
1inMM (one in a million) Capital and its founder Zachary Horwitz are believed to have told investors they were purchasing film rights which would be resold to Netflix and HBO. However, it was discovered 1inMM had no business relationship with either firm.
The SEC claims the scheme raised over $690m, with Horowitz defaulting on more than $227m from investors who were led to believe they were going to be able to cash-in on the licensing rights to films by HBO and Netflix.
According to the SEC’s complaint, Horowitz supposedly presented investors with fabricated agreements and emails regarding deals with HBO and Netflix. It goes further on to say the company founder promised investors returns in excess of 35%, and for a number of years paid alleged returns on earlier investments using funds from new investments.
Horowitz was also purportedly found to have misappropriated investor funds for his personal use. This including purchasing a multi-million-dollar home, trips to Las Vegas and to pay a celebrity interior designer.
The SEC complaint charges Horowitz and his firm with violating the antifraud provisions of the federal securities laws. It also seeks a permanent injunction, disgorgement, prejudgement interest and civil penalties against the two parties.
Horowitz and 1inMM are due a court hearing for April 19, 2021 to decide if the asset freeze should remain in force for the duration of the litigation.
Director of SEC’s Los Angeles Regional Office Michele Wein Layne commented, “We allege that Horwitz promised extremely high returns and made them seem plausible by invoking the names of two well-known entertainment companies and fabricating documents. We obtained an asset freeze on an emergency basis to secure for the benefit of investors what remains of the money raised by Horwitz.”
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