An aspiring actor who moved to Hollywood from Indiana starred in “Hollywood’s biggest Ponzi scheme,” raising more than $690 million by convincing family, friends and other investors that he was running a successful film licensing business.
According to court documents, Zachary Horowitz, who appeared under the stage name Zach Avery in small roles in films starring Brian Cox, Bruce Dern and Olivia Munn, claims he is in negotiations with HBO, Netflix and Sony to acquire the Spanish-language rights to the film.
During the five-year scheme, Horowitz targeted his three best friends from college, who in turn persuaded their parents, grandparents, siblings and in-laws to rob them of their life savings.
According to the Securities and Exchange Commission, Horowitz, 37, promised investors returns of more than 35 percent and then used money from new investments to pay out notional gains on earlier investments over the years.
He pleaded guilty to securities fraud in 2021 and was sentenced to 20 years in prison in 2022.
His bold plan, authorities say, involved taking out loans from friends to finance movie rights deals and then selling them to major streaming services for a profit.
Horowitz has used his illicit profits to live a seemingly idyllic life with his wife and children in a $6 million mansion near Beverly Hills.
But investigators allege Horowitz simply found an old distribution agreement, copied and pasted it into a fake Microsoft Word document, and then concocted the story to friends and family.
To persuade investors to lend to him, Horowitz forged signatures of executives whose names he searched for on LinkedIn.
He also showed investors fake text messages he claimed were from executives at Netflix and HBO.
Jacob Wonderlin, a friend of Mr. Horowitz’s since their undergraduate days at Indiana University in Bloomington, was persuaded to invest $37,000 after Mr. Horowitz showed him a contract that appeared to be selling rights to Sony for a Mexican romantic comedy called “Deseo.”
Within 90 days, Wonderlin was repaid the principal plus $9,000 in profits. According to The New Yorker magazine.
Horowitz also alleged to Wonderlin that his film company, Rogue Black, was backed by former Starbucks CEO Howard Schultz.
He showed Wonderlin an email that appeared to have been sent from Schultz’s own account, The New Yorker reported.
Wonderlin was so amazed by the returns that he persuaded his parents to invest half their retirement savings in it.
Horowitz’s friends told him he could make more than 20 percent, which piqued their interest and led them to lend him more money.
“We get paid on time. Real cash. Definitely,” Joseph DeAlteris, another college friend, told The New Yorker.
Some of Mr. Horowitz’s friends took out additional loans to help him do more deals, and even considered quitting full-time jobs in finance to help him expand.
Mr. DeAlteris persuaded his widowed mother, a former physician’s assistant, to invest $40,000. Over a two-year period, Mr. Horowitz’s friends raked in 27 fictitious movie deals, according to The New Yorker.
Investigators say Horowitz was able to get away with the scheme for five years by destroying evidence.
He hired a woman to pose as an HBO executive and have the woman talk to investors on the phone and answer questions about potential deals.
Horowitz also told investors not to contact the streaming platforms directly because he has signed non-disclosure agreements with them.
Prosecutors said Horowitz used the money to pay for private jet flights, yacht trips, $605,000 in luxury cars, including a Mercedes-Benz and an Audi, $174,000 for party planners and $54,600 for a “luxury watch subscription” service.
As an actor, Horowitz had begun to enjoy modest success in the film industry, appearing in a supporting role in 2020’s “Last Moment of Clarity” opposite “Succession” star Cox.
The following year, he co-starred with Bruce Dern in “Gateway,” which also starred Mann.
But the Ponzi scheme collapsed in 2020 when Horowitz ran out of investors to pump more money into the scam. When early investors began demanding their money back, Horowitz delayed it and threatened to sue them.
Eventually, deceived investors began contacting law enforcement, who then launched an investigation.
One of the investors was screenwriter Robert Henney, who told the federal judge presiding over Horowitz’s case that he lost $1.8 million in the scheme.
Another investor, 64, said he was forced to retire to make ends meet after losing $1.4 million.
“I cry every day. I have stopped seeing friends and family out of embarrassment over this financial loss. I now have a deep distrust of other human beings,” the anonymous investor said in Los Angeles federal court on February 14, 2022, the same day Horowitz was sentenced to 20 years in prison.
The mother of a disabled 46-year-old daughter said she could “never earn what has been taken from me and my daughter” but that “the psychological damage is even greater.”
Horowitz’s wife filed for divorce after his arrest.
