Actor Zach Avery Arrested for Allegedly Running Multi-Million Dollar Hollywood Movie Ponzi Scheme

Actor Zachary J. Horwitz, best known under his stage name Zach Avery, was arrested Tuesday in Los Angeles in connection with a massive Hollywood Ponzi scheme, which federal authorities allege defrauded investors out of more than $227 million.

Avery is accused of fabricating licensing deals with Netflix, HBO, as well as other platforms, in order to secure funding for his film distribution company, 1inMM Capital LLC, according to the FBI.

Avery's lawyer and publicist did not immediately respond to PEOPLe's request for comment.

In a sworn affidavit filed in Los Angeles federal court, FBI agent John Verrastro said Avery then used the funds for "personal benefit" and to make payments to previous investors "in the style of a classic Ponzi scheme."

Avery founded the Los Angeles-based 1inMM Capital LLC in 2013, claiming to distribute English films to the Latin American market through partnerships with HBO and Netflix, the FBI said.

In 2015, he allegedly sent investors bottles of Johnny Walker Blue Label scotch, along with an annual report that said the company had "acquired and successfully distributed 49 films through the 1inMM Capital banner without incurring a single loss in the process."

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He also claimed to have expanded his partnership with Netflix and HBO to distribute films to Australia and New Zealand.

"With this growth, we have the ability to safely and profitably distribute more than 25 additional films per year, creating ample opportunity for investment and substantial growth of our thriving feature film library," the annual report read, according to Verrastro.

Investors were promised a return of up to 40 percent within a year, Verrastro said.

As payments were due, Avery fabricated email correspondence with Netflix and HBO executives to justify delays.

"In reality, neither Horwitz [Avery] nor 1inMM Capital ever engaged in email correspondence with Netflix or HBO, nor did Horwitz [Avery] or 1inMM Capital ever have any business relationship with Netflix or HBO at all," Verrastro wrote.

Since December 2019, he has defaulted on more than 160 payments and owes investors $227 million in principal alone, the affidavit states.

Each of the payments was allegedly tied to a single film that Avery and 1inMM Capital claimed to hold distribution rights to and had licensed to HBO or Netflix.

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Avery is facing wire fraud charges. He appeared in court on Tuesday via teleconference.

Assistant U.S. Attorney Alexander Schwab reportedly urged the judge to keep Avery detained until trial, saying he is a flight risk, the Los Angeles Times reports.

"The odds that the defendant has some of that money squirreled away are quite high," he said, according to the LA Times.

Despite concerns, a judge set Avery's bond at $1 million, but he will remain in custody until the bond is approved. An arraignment has been set for May 13 to discuss the matter, the U.S. Attorney's Office said.

Avery's acting credits include Last Moment of Clarity, The White Crow, and Farming. He also was an extra on Brad Pit's war film Fury.

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