Actor Zach Avery used money from Ponzi scheme to buy $6 million home and pay credit card debt
The home, which is now marked as for sale with a pending offer, is listed on Zillow as a six bedroom, eight bathroom, 7,670 square foot "reimagined Traditional estate by famed designer Lonni Paul."
The home boasts a pool and adjoining jacuzzi, cabana with a fireplace, a chefs kitchen, "a private master suite with custom closets and a spa-like master bath," and a "chilled 1,000-bottle wine cellar," according to the Zillow listing.
Photos on Zillow show a living room that opens to a covered outdoor patio; a grand piano below a stunning chandelier and massive abstract piece of artwork; a home theater with ten plush recliners and a sectional; and a home gym worthy of a luxury hotel.
Still, after Horwitz bought the house, he also "wired two payments of $70,000 to Lonni Paul Design for retainer/couch/side table," according to a criminal complaint filed by the U.S. Securities and Exchange Commission on Monday in the United States District Court for the Central District of California.
Horwitz swiftly paid American Express in three installments: first, he put $70,328.05 toward the card, then $57,351.25, and finally, $164,241.06, the criminal complaint said.
The influx of money, prosecutors said, belonged to investment groups. Horwitz had allegedly told them that their money would multiply risk-free because it would purchase distribution rights to films, which he said he would "license to major online platforms such as Netflix or HBO," according to the criminal complaint.
Horwitz, 34, is accused of scamming five investor groups, though the bulk of the funds he acquired were from a private firm. He would send fake annual reports to the investors from his fraudulent company, 1inMM Capital, complete with a graphic of a non-existent film library, prosecutors allege.
Some of the money Horwitz made in the alleged $227 million "was used to repay investors for previous investments ... consistent with a Ponzi scheme," according to the affidavit. "In some instances, the investors were repaid with their own money," the complaint said.
But when Horwitz was unable to pay investors dividends, he would doctor emails to look like they were from HBO and Netflix executives explaining the delay in funds, the criminal complaint said. Netflix and HBO have denied that their companies engaged in any business with Horwitz or 1inMM Capital, according to the affidavit.
Netflix in February sent a cease and desist letter to Horwitz demanding that he "stop making misrepresentations regarding his agreements with Netflix," prosecutors said. But he allegedly continued to forge emails to look like they were from Netflix, making excuses to investors about why they had not been repaid.