The Wildest Parts of D-List Actor Zach Avery's Alleged Ponzi Scheme

Zach Horwitz has spent the past decade struggling to break out as an actor under the stage name “Zach Avery,” mostly performing in D-movies that were universally panned. Sometimes he took on roles so insignificant his characters weren't even given a name: “Basketball Player,” for instance, or “Demon 3.” Somewhere along the line, Horwitz allegedly found a better way to make money: running an elaborate Ponzi scheme that defrauded investors out of about $227 million.

On Tuesday, Horwitz was arrested for allegedly masterminding that scheme, and now faces a wire fraud charge that could land him in prison for up to 20 years. According to the Department of Justice, Horwitz's company, 1inMM Capital, purportedly bought film distribution rights and sold them to entities like HBO and Netflix, allowing the streamers to offer those movies in Latin America, among other territories. Horwitz allegedly got investors to give him cash to purchase those movie rights, claimed he sold the rights at a huge profit, and rewarded his investors with a dividend. 

But Horwitz never actually bought any movie rights—and he never did business with HBO or Netflix, according to criminal complaints released by the DoJ and the Securities and Exchange Commission. Instead, the DoJ and SEC claim Horwitz just borrowed money from one investor, then borrowed more from another, using new money to pay back his old debts, over and over again. In a sworn affidavit, John Verrastro, a special agent with the FBI, called Horwitz's venture a “classic Ponzi scheme.”

VICE dug through Verrastro's affidavit and the SEC's criminal complaint to unearth the wildest allegations against Horwitz, whom they claim raked in roughly $690 million through his company. We've compiled them below.

According to the SEC, Horwitz funneled millions of dollars from his investors into his personal bank account, then spent that money extravagantly. He allegedly blew:

• $124,582 on trips to Las Vegas
• $1,842,840 on American Express credit card bills
• $165,408 on “high-end automobiles”
• $137,072 on flights on private jets
• $54,600 on a “luxury watch subscription service”

He also allegedly used his investors' money to buy a six-bedroom, eight-bathroom house in Beverlywood, a ritzy Los Angeles neighborhood, for more than $5.5 million. The home (which he recently put up for sale) came complete with a gym, wine cellar, home theater, and private pool. To spruce things up a bit, he allegedly paid almost $70,000 to celebrity interior designer Lonni Paul—money that, according to the SEC, came straight from his investors.

According to Verrastro's affidavit, Horowitz sent investors an “Annual Report” on 1inMM that included a list of the movies he had purportedly acquired the rights to and sold to streamers. There are a few great films in there—The Spectacular Now, for one, and Dear White People—but overwhelmingly, these movies seem god-awful. Notably, the list includes The Hottie and the Nottie, a 2008 rom-com starring Paris Hilton in which she refuses to date a guy until he can find her “severely ugly friend” a boyfriend, per the movie's bio. Critics described the film, which earned a 6 percent approval rating on Rotten Tomatoes, as “an execrable Z-grade eugenics parable” and “astonishingly sexist.”

Another gem on 1inMM's list is 2004's Monster Island, which IMDB describes as such:

While the movie seems to never have been reviewed by an actual critic, one IMDB user called it “possibly the worst thing I have ever seen on TV.” 

In an effort to make his deals with HBO and Netflix look legitimate, Horwitz allegedly sent his investors copies of emails between himself and executives at the media companies, including Netflix's “Senior Counsel” and the head of the “HBO Latin America Team.” In reality, according to Verrastro's affidavit, Horwitz faked those emails, impersonated those executives himself, and forged their signatures on bogus documents. In one instance, he claimed he met with HBO executives at their office in LA and at the W Hotel in Miami, and even provided investors with “minutes”—but according to Verrastro, those meetings never happened. 

The textbook way to run a Ponzi scheme is to take money from one investor, then use it to pay back investors you already owe. For the most part, according to Verrastro's affidavit, that's exactly what Horwitz did. In a somewhat bizarre move, however, Horwitz allegedly paid back some investors “with their own money,” according to the affidavit. It's unclear exactly how that would work. In theory, Horwitz could have accepted money from an investor, and—once it was almost time to pay them back—get them to fork over an additional payment, then immediately use that cash to cover what he owed them. Verrastro's affidavit doesn't go into detail on that point, so there's no way to know for sure how it allegedly happened. 

According to Verrastro's affidavit, “by far the largest source of investor funds” came from JJMT Capital, a Chicago-based firm that gave Horwitz more than $485 million from 2015 to 2019. The co-founders of JJMT—Joseph deAlteris, Matthew Schweinzger, and Jacob Wunderlin—were good friends with Horwitz, whom they'd met while they were all studying at Indiana University, Forbes reports. According to Forbes, Horwitz's buddies got their friends, family, and business contacts to buy in to Horwitz's operation. Then Horwitz allegedly defaulted on his payments, and left them out to dry. According to Verrastro's affidavit, he still owes JJMT roughly $160 million.

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