It Didn’t Stay Here: Feds say some proceeds of big L.A. Ponzi were spent in Las Vegas

big L.A. Ponzi

Zachary Horwitz, a/k/a Zach Avery (via LinkedIn)

The feds in Los Angeles just charged Zachary Horwitz, a little-known actor whose screen name is Zach Avery, with operating a long-running $690 million Ponzi scheme. According to court filings, Horwitz, 34, falsely told investors his company was in distribution deals with big players like Netflix and HBO while using some of proceeds to fund an expansive lifestyle.

Guess where some of that expansive lifestyle supposedly took place?

Yes, if court filings are to be believed, yet another thief spent part of his ill-gotten gain in that bug light of iniquity the world knows as Las Vegas.

Horwitz, who was briefly jailed on a criminal complaint before being released on $1 million bail, has not yet pleaded to the criminal charges in the formal indictment–13 counts of wire fraud, securities fraud and aggravated identity fraud. He gets the presumption of innocence.

But the allegations–brought in a criminal case by the U.S. Attorney’s office in Los Angeles and a civil case by the U.S. Securities and Exchange Commission, which has had his assets frozen–are more than enough to make him a candidate for my long-running list, It Didn’t Stay Here. This is a roster of folks into trouble elsewhere for something that happened in Las Vegas. My list is a cheeky refutation of “What Happens Here, Stays Here,” for many years the famous promotional slogan of the Las Vegas Convention and Visitors Authority. The full list can be found elsewhere on this page.

One Las Vegas angle is described in the civil complaint filed by the SEC. After transferring investor funds into his personal bank account, Horwitz “spent lavishly … For example, in 2016 and 2017 alone, Horwitz spent over $100,000 on trips to Las Vegas.” Unfortunately, the court paperwork doesn’t give us the juicy details we crave like which casino resort or fancy restaurant. Horwitz lives in Los Angeles.

According to court filings, Horwitz in 2013 started a company out of his home called 1inMM Capital LLC (apparently a reference to One in a Million). Its stated goal was to acquire and license distribution rights in Latin America movies to HBO and Netflix. Here’s what the SEC said happened next:

Since March 2014, until at least December 2019, Defendants raised over $690 million from investors by selling promissory notes issued by 1inMM, using fabricated agreements and fake emails with prominent third party companies with whom [Horwitz] had no actual business relationship. Horowitz then misappropriated and misused the offering proceeds.”

The court papers allege that Horwitz paid earlier investors with the proceeds from more recent investors rather than from business profits–the classic definition of a Ponzi long before I became New To Las Vegas. And in another element found in most Ponzi’s and their victims, Horwitz reportedly promised too-good returns for a non-equity investment, as high as 36% in six months and 43% in one year.

Like all Ponzis, Horwitz eventually got in over his head and couldn’t keep up payments, the feds allege. The federal filings imply that about $235 million hasn’t been repaid.

Although not directly relevant to the It Didn’t Stay Here list, there’s another Las Vegas angle. Most of the proceeds, the SEC said, came from investors who in turn raised money from friends, family and others, so-called feeder funds. A lengthy Los Angeles Times article two weeks ago by Michael Finnigan–after Horwitz was arrested but before he was indicted this week–suggests that one of of those groups was based in Las Vegas and led by a local steel company executive and a home loan officer. That group, the paper said, plunked in $80 million despite growing misgivings about the lack of financials from Horwitz.

If you can’t place the name of Zach Avery, don’t be surprised. According to the Internet Movie Database, most of his Hollywood career outside of, ah, finance has been bit parts in forgettable movies like “Trespassers,” a 2018 horror flick; “The White Crow,” a 2018 effort about the life of dancer Rudolf Nureyev; and “Farming,” a 2018 British film in which he played a cop. But he had a better role in a 2020 neo-noir clunker, “Last Minute of Clarity,” and higher billing in the thriller “Gateway,” which has yet to be released.

Clearly, the allegations in this matter are outrageous. But then again, every alleged Ponzi is outrageous. Horwitz may get a lot more famous from this case. Indeed, it might even make a decent movie, a la “The Wolf of Wall Street.” That’s the highly entertaining 2013 Leonardo DiCaprio movie based on the memoir of convicted penny-stock scammer Jordan Belfort (and, as it turns out, produced with stolen money). The court pleadings in Horwitz’s cases are full of over-the-top claims, including his alleged nerve in faking emails and wining and dining investors, and production of a 1inMM Capital annual report with posters of 52 film “deals.”

I wouldn’t be surprised if someone already is working on a script. The Las Vegas angles alone offer considerable promise.

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Comments

It Didn’t Stay Here: Feds say some proceeds of big L.A. Ponzi were spent in Las Vegas — 5 Comments

  1. AFAIK, the premium for a federal bond is usually 15 percent, and you also need collateral equal to150 percent of the bond. His bond is set at $1 million, so he’d have to pay the bondsman $150,000 up front and provide collateral of $1.5 million.

    Dunno about you, but that’s more than I can find under my couch cushions.

  2. Larry, don’t know, but presumably he was able to get a bail bond from a bail bondsman for less than that.

  3. So, where did he get the bail money? (I’m assuming his assets were already frozen by the time the judge rule on bail.)

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