City National Bank is a named co-defendant in a class-action lawsuit filed in U.S. District Court for the Central District of California by victims of alleged Ponzi schemer Zachary Horwitz, a sometimes-Hollywood actor under the name Zach Avery who raised $690 million through a bogus film licensing company called 1inMM Capital, LLC.
Zachary Horwitz Alleged Mastermind Of Ponzi Scheme
The complaint alleges that City National, in maintaining at least seven separate accounts to which Horwitz was the sole authorized signatory, “knew of and substantially assisted Horwitz’s fraudulent scheme.” That scheme, for which the complaint says Horwitz now owes defrauded investors more than $230 million, involved the selling of short-term, high-yield promissory notes to investors, in exchange for which Horwitz promised to purchase movie rights and broker licensing deals, using his industry connections at HBO, Netflix, and Sony.
The business of 1inMM turned out to be fabricated, according to a criminal complaint filed by the SEC on April 5 against Zachary Horwitz and 1inMM, the day he was arrested.
All told, Zachary Horwitz raised $690 million from investors before his Ponzi scheme crashed.
Silver Law Group is a national securities and investment fraud law firm which represents Ponzi scheme victims in claims against the Ponzi schemer and any third parties who materially participated in the fraud or are otherwise liable under the law.
The complaint highlights numerous red flags in Horwitz’s financial activity—co-mingling of funds, pass-through activity in the accounts, and round dollar transfers—that occurred under City National’s watch. For instance: “In December 2018, the 1inMM capital account started with a balance of more than $4.3 million. Over the course of the month, it received more than $16.3 million in deposits comprised of investor funds. More than $18.4 million in wires left the account, round-tripping back to investors. And more than $680,000 in transfers were made to other Horwitz-related accounts, including $500,000 to Horwitz’s personal account.” During this time, no payments were recorded for film rights, and neither did any revenues come in from licensing deals to HBO or Netflix, two prominent outlets where Zachary Horwitz told investors he had connections that would bear fruit in film licensing deals.
To continue his Ponzi scheme, Horwitz allegedly sent investors fabricated emails with executives at HBO and Netflix. He meanwhile purchased a $5.7 million home, traveled on private jets, and paid off a personal credit card debt of $1.8 million. In 2018 and 2019, the lawsuit says, City National loaned Horwitz $1.4 million on a personal line of credit.
“Horwitz could not have carried out his scheme without a compliant financial institution willing to look the other way when confronted with suspicious account activity,” the complaint reads. “Despite City National’s recognition that Horwitz’s supposed business model related to film finance, the only business model consistent with Horwitz’s banking practices was the operation of a Ponzi scheme.”
Silver Law Group Represents Victims Of Investment Fraud
If you invested in 1nMM, contact Silver Law Group for a no-cost consultation at (800) 975-4345 or email@example.com. Scott Silver recently presented on prosecuting Ponzi schemes to the American Association of Justice and has a successful track record of recovering money for Ponzi scheme victims.