Hollywood actor Zach Avery arrested for masterminding Ponzi scheme

Hollywood actor Zach Avery was on Tuesday arrested in Los Angeles by the Federal Bureau of Investigation (FBI) for allegedly defrauding investors of hundreds of millions of dollars through a Ponzi scheme.

The Securities and Exchange Commission (SEC) said that Avery told investors his company, 1inMM Capital, would buy film rights and license them to streaming platforms like Netflix and HBO, promising them return of more than 35%.

However, the actor, whose real name is Zachary Horwitz, had “no business relationship with either companies”. 

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According to the US Attorney’s Office for the Central District of California, Avery used his company to operate a Ponzi scheme, paying back old investors using money acquired from new ones.

He raised more than $690 million through his scheme, the SEC said. The Department of Justice said that it began in 2015 and that $227 million acquired from victims was yet to be repaid.

Avery allegedly splurged the money on a lavish lifestyle, which authorities said included trips to Las Vegas, buying a house in prime locations worth $6 million and hiring celebrity interior designers. 

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Described by the Los Angeles Times as “a small-time actor”, Avery failed to make it big in the industry. He last starred in the widely criticised 2020 film “Last Moment of Clarity”.

“Horwitz provided investors with fake license agreements, as well as fake distribution agreements with Netflix and HBO, all of which contained forged or fictional signatures,” to establish his legitimacy, the US Attorney’s Office said.

Avery has been charged with wire fraud, and could face up to 20 years in prison if convicted.