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[line trilling]

- Hello?

- Hi, this is Joslyn Jensen.

I'm calling about
the documentary film.

- I'm sorry.

What--what film?

[inquisitive music]

- I'm making a documentary
about Zach Avery.

And I was hoping
that Zach would talk to me

so he could tell his side
of the story for the film.

- All right, no.

I can just tell you
right off the bat, no.

Absolutely not.

- The FBI arrested actor
Zachary Joseph Horwitz,

accused of convincing
several investment firms

to give him nearly a quarter
of a billion dollars.

- Today I'm very excited
to be interviewing Zach Avery.

Zach, hello.
- Hello.

How are you?
- Very exciting.

You've had a real big jump
in your career.

- I took a kind of not
straight path into acting.

Could I have done this?
Why didn't I do that?

Why didn't I see it coming?

But this is my dream.

This is what I've wanted
to do forever.

- I don't want
to be bothering you.

I want to understand because
I've spoken to another person

who told me that you would.

And now you're not going to.

- The FBI says Zach Horwitz,

who goes by the screen name,
Zach Avery,

used the victim's money
to repay earlier investors

and to fund his lifestyle.

- Yeah, that's basically it.

Do a little entrepreneur stuff
on the side as well,

but mainly--mainly acting.

- Who is this guy?
Where did he come from?

And how could he
possibly have done

something this outlandish?

- And who the fuck
are you, Ronnie?

- I could tell
from the beginning

that it was really
going to be a juicy one,

that it had everything.

It was Hollywood.

It was a Ponzi scheme.

It was a huge amount of money.

- More than $700 million

for completely phony
investment deals.

- That's a staggering
amount of money

that was moving around,

all for the purchase
and resale

of movie rights
that weren't real.

- Turn around.

Get down on your knees.

- We can just tell the truth.

We can just tell the cops
what happened.

- We have this treasure trove
of clips of Zach's acting,

which we can actually use
to mirror

what's playing out
in real life.

There are times watching this
when his lines are like

he's speaking directly
to the story we're telling.

It's almost like
he's answering for his crimes.

- Same shit,
different toilet, officer.

How the fuck are you?

- I don't think anyone
really knows who he is.

Maybe even he doesn't even
really know who he is.

He might just be playing
multiple characters,

even to this day.

- I can't ask a pathological
liar for his life story

and expect him to tell me
the truth, right?

Especially in a movie
that's all about scamming,

as we try to figure out
how he did it.

- How is somebody able
to concoct a scheme this large

and make it seem legitimate

and, you know,
actually carry it on

for the number of years
that he did,

all by himself?

- Our secret, okay?

- Needs to get
a little curvier.

- So this is
the real Zach Avery,

in his real office,

where he does
a lot of his interviews.

Yeah, and then
this is our re-creation,

which is pretty good.

I want to have reenactments.

So we're going to hire
an actor to play Zach Avery.

We're not really looking
for an impression.

But I just want
to see these guys

embody Zach in an interview.

This one.
- All right.

- It looks like you're
so guilty of financial crime.

- No, that's okay.

I might be.

- Speeding?

- Camera speeding.
- All right.

Slate in.

- Scene one, take one, mark.

- I'll be auditioning
for Zach Avery.

- Reading for Zach Avery.
- Zach Avery.

- Zach Avery.
- Zach Avery.

- I'm auditioning today
for the role of Zach Avery.

- All right.

Have you done any research
on the real Zach Avery at all?

- Every morning,
I read the paper.

I saw that.
That was a crazy story.

- So I think
it's kind of interesting

that he's able to, like,
be that charming

and that, like,
convincing of a person.

- I would never do something
like this, personally.

But I could see
how the desperation

would take hold.

- This industry is--

it's all about
fake it till you make it.

And everyone will tell you,
if you're not confident,

pretend to be.

You know, put on that--
that façade or that mask

so that others will, you know,
feed off your comfort.

- Do you know
when we're gonna find out,

you know, who gets the role?

I have a vacation coming up.

So I'm just wondering.

- Look at the eyes.

Hmm.

Yeah, this is him.

- Here was an actor
nobody had ever heard of,

who'd been in some
pretty bad movies.

And he was accused
of pulling off

an unbelievably audacious
Ponzi scheme.

It was like, what?

- There's this idea
that Hollywood is a place

of immense wealth
and people are beautiful

and it's a glamorous
environment.

And I think that can have
an allure to it

that people want to be
associated with.

- And when they can't
do it legitimately,

some people in Hollywood
end up moving

toward criminal activity.

And Ponzi schemes are
one of those things.

- It's not usually as hard
as it was in this case

to sort of figure out
where a con man came from.

There's kind of
a mad scientist quality

to what he was doing.

So I just set out right away

to kind of reconstruct
the whole scam.

- As I mentioned at the top,
we're fellow Midwesterners.

- Yes, definitely.
- From the land of the corn.

- Yeah, exactly.

Good old Indiana.

- He grew up
in Fort Wayne, Indiana.

In terms of who he was
as a kid and what he was like,

it was really hard
to figure all of that out.

[upbeat pop music]

♪

- So tell me about this place.

[laughter]

- Generations
of Fort Wayne youth

have passed through here.

Zach definitely would have
come here.

He moved to town when
he was in his early teens.

What are the odds that you'll
go to school with somebody

who ends up making news
for, you know,

masterminding this
multimillion dollar

Ponzi scheme?

- So what was your reaction

when you heard about
the Ponzi scheme?

Like, you knew
he was a Hollywood guy?

- No. I had no idea.

You know, he never acted
in high school.

Like, I did plays
all four years of high school.

And Zach and I never
crossed paths once.

- So he was more of, like,
a jock type of guy...

- Absolutely.
- At that time.

- When I read all the coverage
about what he did,

like, it just occurred to me,
you know,

this guy is a supervillain.

And classmates and I were all
there for his origin story.

- Yeah. Wow.

So it seems like
what you're telling me

is that high school, where--

it was like
the glory days for Zach.

- Oh, absolutely.

All you have to do is, like,
crack open a yearbook

and just see.

It's like a greatest hits.

[indistinct chatter]

[school bell rings]

[distant laughter]

[soft music]

♪

[whistle blows]

- Interestingly,
Zach actually had

a kind of burgeoning career
in football.

- Yeah.

- What was that experience
like for you?

- So went to Indiana
University, started playing.

[muffled cheering]

[whistle blows]

[crowd cheering]

- But it was derailed...
- It was.

- For the better,
you could argue now.

- Basically, it was--
before even the first season,

is when I got injured.

It was a total, like, blow.

Like, my kneecap was
over on the left side.

Like, it was rough.

- Man, I knew I knew you.
It was the Rose Bowl.

Three years ago,
you beat SC, right?

- Yeah, I got my knee
folded back

about 90 degrees
the wrong way.

- Whoa.
That's why you never went pro?

- Tore the ACL.

My knee stayed out.

[both laugh]

- That's all.

- He was a good
high school football player.

- Mm-hmm.

- But the embellishing,
like saying,

"Oh, yeah, I was going to play
football at IU."

He wasn't good enough
to play in the Big Ten.

- What?
He never played in college?

- I don't know.

But my brother
probably knows, like,

if he actually ever suited up

for Indiana University
football.

- Hey, Robbie.
- Hey, Derek.

Did Zach ever
actually play football

at Indiana University?

- No.

- And then you said
that was before--

- Yeah, so that was training
before freshman year,

like, actual,
like, season happened.

- Did he ever go
to, like, a tryout

or anything?

- No.

He was never on
the football team.

I think he tore his ACL
playing intramural football.

- [laughs]
- Oh, okay.

- What was, like, the--

the impetus for you to then
say, "Okay, I'm gonna act"?

Like, "I want to act"?

- My mom's
a lifelong educator.

She's a teacher.

She fully was,
"You need an education

and you need to go that route
before doing anything else."

And so I really didn't have
a choice in my head

of, like,
"I'm gonna be an actor.

"I'm gonna follow the arts
and I'm gonna be an artist,

and that's it,
and that's what I want to do."

I was going to school
for psychology.

- You started
at Indiana University.

- Mm-hmm.

- How did that kind of train
your mindset for acting?

- As the actor,
you need to be empathetic

and, like, being able to tap
into these emotions.

And in psychology,
you kind of want

to study why people are doing
the things they're doing,

which obviously goes
hand-in-hand.

- Psychological expertise
and acting and ruthlessness--

these various ingredients
that just together

make for a good con artist.

And psychology was a really
big part of Zach's talents,

as it were.

- My research is mostly
about personality

and how it influences
primarily antisocial behavior.

So I'm really interested
in sort of what kind of traits

make people do bad things.

- Is there anything, like,
that would be a tell?

- Extreme confidence,
I think, is a pretty big one.

I mean, folks,
I think, who are,

like, kind of Ponzi schemers

are kind of
partially psychopathic

because they have
some of the traits

that are associated
with psychopathy,

also the traits
associated with narcissism

and Machiavellianism.
- Hmm.

- But they have
decent impulse control.

- Thanks for joining
class today.

Can we pull
our chairs together?

I just want to have
a little bit of a talk

before we get
into exercises today.

Really, all we have to do is--

we want to get into character, right?

We always talk about,
"I want to get into character.

How do I get
into this character?"

Well, the villain of the story

doesn't know
that he's the villain.

He's just living his own life,

doing things that he feels
justified in doing.

So our job as the actor
is to ask ourselves,

what would get me

to do the things
that that person did?

What is the justification?

- Does anything
stand out to you?

- Well, a lot of crime
is about,

like, a lack of restraint.

So it's not about, like,

"I really, really
want that badly."

It's, "I kind of want that,

"and there's nothing
keeping me from going after it

in whatever way that I want."

- And that's where it gets
kind of fucked up

because we're like,
wait a second.

We all have the ability
to do those things.

If you're pushed,
if you're prodded,

if you have enough desperation
and need...

- When you start to take
those sorts of barriers away,

the world is your oyster, right?

I mean, you can do
almost anything.

- As an actor, I feel like

part of the mystique
of what we do

is that you don't want people
to know

who Zach is as a person.

I want people to be able
to see me on a screen

and say, "That character is
someone I'm believing."

Caught some chatter
on the inside

that might be a real score
if moved on pronto.

This kook's brother ripped

a couple elbows
from the cartel.

- Sounds good.

- This is really incredible.

Did you know that Zach
has a blog?

Well, listen to this.

"From one
of my favorite movies,

"'The Pursuit of Happyness.'

"After Will Smith's
character's son

"tells him he's going to be

a professional
basketball player..."

- [laughs]
I'm going pro!

- Oh!

- "He says, 'Don't ever let
someone tell you

you can't do something,
not even me.'"

both: You got a dream,
you gotta protect it.

- "'People can't do
something themselves,

they want to tell you
you can't do it.'"

both: If you want something,
go get it.

Period.

- Zach gets out of school.

He leaves Indiana University
and moves to Chicago.

I have to assume
that Chicago is

just kind of
a center of gravity

in that part of the country.

You're leaving college
and going to the big city,

Chicago is gonna be that.

One of the mysteries
about his time in Chicago

was this smoothie bar, Ful.

The question was,
who gets out of college

and just opens a business
in Chicago?

That's not easy to do.

You need some real money.
Where did it come from?

I've actually heard
both versions,

that there's
a rags-to-riches version

but also
a came-from-money version.

Zach is said
to have told people

that Howard Schultz,
the CEO of Starbucks,

had bankrolled him

together with this big
finance firm called Maveron.

He would tell people that they
were behind this smoothie bar.

We do know
that right around that time,

his mother had come into a lot
of money, millions of dollars,

that she inherited
from her second husband

after he died.

- I'm Zach.
This is Anton.

We are Ful.

We're really excited
to be a part

of the Lakeview community

and excited to be in Chicago

and fuel the minds, bodies,
and spirits

of the Chicago area.

- I think it went under
very quickly.

- I think for me, it was
always in the back of my head.

You know, I always knew
that, you know,

LA was kind of like the dream.

- And to fund this goal
of moving to LA--

because, you know,
that's where

everything is for acting--

you did sell QuickBooks
software door-to-door.

Do you think that kind of
made you a stronger person

mentally and emotionally?

Because I'm sure
a lot of people said no

to what you were selling.

- Oh, yeah, for sure.

98% of the people
that I talked to

said no or didn't even listen
to what I was selling,

and said no immediately.

- Not interested. Sorry.
- Ah.

- I'm in the middle
of a card game.

And--
- What are you playing?

- I'm--canasta.

- It was one of
those things that--

I needed money.
I needed a job.

I needed something
to make enough

to be able to do the thing
that I knew I was gonna do.

- At the exact same time
that Zach Horwitz owns

a smoothie shop in Chicago,
he's also busting his ass,

going door-to-door
selling QuickBooks software

to get him and Mallory to LA.

I mean, that doesn't
make any sense.

Especially because we know
a couple years earlier,

his mom inherits millions
after her husband died,

which does actually justify
how a kid

right out of college
could have the capital

to open a smoothie shop.

But if I--if my mom has
a couple million dollars,

I'm not going door-to-door.

[laughs]
It doesn't make any sense.

But I think this is like
the college football.

This is just, you know,
stuff that he's using

to spice up his origin story.

- It's hard at the beginning.

You gotta--you gotta
climb the ladder

and--and see what works.

- So let's leave psychology

and smoothie bars behind
in Chicago.

He and his partner, Mallory,
pack up the car

and move to LA.

[tense music]

♪

- I think the scary part
about Zach is,

he came to LA with the plan,
with the scheme,

with a persona.

And it was calculated.

It wasn't something
he just kind of fell into.

He knew what he was doing
from the start.

When I was 21 years old,
I kind of packed up my job

at a pinnacle of my career
and I went out to LA.

I wanted to chase
the Hollywood dream.

I wanted to meet people,
network with people.

I wanted to do everything
I possibly could.

And I was enamored
by the industry.

I think Hollywood
represents opportunity.

And anything you want to do is
available for you to do there.

I got a call for a role.

It was a small role, but
I said, hey, what the heck?

You never know
who you're gonna meet.

You hear stories like that
all the time in LA.

You just have to go.

You never know what directors
or producers or connections

you're gonna meet.

I was on that drive
for two hours.

Almost turned around 25 times.

Like, "What am I doing?
This is two hours away.

It pays nothing."

But I pushed through
and showed up to set.

It was one of those roles
where everybody kind of

looks the same,
talks the same.

But me and Zach
were just obviously cut

from a different cloth.

We instantly bonded.

We exchanged phone numbers
and made it a plan

to link up right after that.

And that's--that's the day
I met Zach Horwitz.

And that's a movie I wish
I would've never shown up to.

I can tell you that much.

- If you know that you came
from Indiana or wherever

and drove across country
or flew here

to land in this place,
to follow this dream,

you obviously had
something in there that said,

like, "I'm good enough.

I can do this."

And it is, yeah,
about studying,

going to class,
and things like that.

But it's also about making
connections with people.

- After meeting Zach on set,
literally the next day,

he invites me over
to meet his girlfriend

and just kind of hang out
and talk shop

and get to know each other.

I meet Mallory,
who, at the time,

wanted to be
a wedding planner.

She had big aspirations

to be a celebrity stylist
in LA.

And she was going
to school for it.

And they tell me
their story about, you know,

being from a small-town family
and small-town school.

- Zach and Mallory have been
together since they were 19.

And there's really no evidence
to suggest

that she knew about the scam.

But their relationship,
their family,

is a huge part
of what makes him credible.

So this is your camera here.

You can just, you know,
stare down the barrel.

We're gonna do a slate.
How's it going?

- Doing all right.
- Good, good, good.

- How about you?
- Yeah, I'm great.

Thanks for being here.

- It kind of struck me
as really familiar

because I had a friend
whose father, actually,

was a part of a Ponzi scheme.

The aftermath leaves
a lot of hurt.

- I think he's a psychopath.

And I don't like
men like that.

- I guess there's a lot that
we don't know about people,

just from passing by.

- It almost seems like
a parallel universe, like--

like it's someone
that I could have known.

- Do you think
she knew what was up?

- Probably not.

The woman doesn't
normally know.

- I think
that she convinced herself

what he was saying was true.

- I mean, his eyes are--
are stunning.

Very attractive eyes.

Pulls you right in.

He definitely had
charisma and confidence.

And you couple that
with good looks

and if you know what to say,
people will believe you.

♪

So I give Zach
my two months' expertise

on what I figured out
in the industry.

And I told him that if you
want to make it in LA,

you got to do
something yourself.

So he kind of leans into me,

and he goes,
"Well, how much does it take

to make a movie?"

And I'm like, "Well,
like blockbusters, or--"

he's like, "No,
something kind of smaller."

I'm like, "Well, I think
you make one

for a couple million,
you know?"

And he's like, "Really?
Okay, okay."

I look at him, and--

"What do you mean?"

Like, you know, he had
this kind of persona

that, like,
"Well, I can afford that."

So I'm just kind of like, huh.

And he tells me about

a company he founded
called Ful.

He told me
he was so successful,

he opened multiple stores
in a matter of six months.

And he told me
it eventually sold to Maveron.

He was whispering all this.

He was being
a little bit coy about it,

but I was
absolutely intrigued.

And I asked him, "How much
did you sell Ful for?"

And he leans over to me
like he's telling a secret.

And he's like,
"Look, I'll tell you,

"but you can't tell Mallory.

"You know, I just don't
want Mallory to know

exactly how much it is."

And he leans over and tells me
he sold it for $11 million.

So, you know, in my head,
I was like,

okay, you know,
I just met this guy.

He wants to make
a movie in LA.

And he's got 11 million bucks
in his--his pocket.

You know,
he's my new best friend.

You know what I mean?

So this is someone I might
develop a relationship with.

[soft music]

So me and Zach spent
literally the next two weeks,

day and night,
you know, dusk till dawn,

thinking we're Ben Affleck,
Matt Damon.

I mean, we're writing
script ideas and outlines.

And you hear the story of how
they wrote their own script

and made it big,
won the Oscar, and...

- I just said to Matt,
losing would suck

and winning would be
really scary.

And it's really, really scary.

- It's kind of who we thought
we were gonna be, you know?

We were just a couple people

just wanting to tackle
the Hollywood dream.

- Who are some of your biggest
inspirations, acting wise?

- I would say Tom Cruise,
for sure.

You know,
he's--he's one of those guys

that every single movie
he's in, he's good.

Leo is amazing.

I mean, he is--he's just--

what he's able to do
is ungodly.

- You don't get
these lines right,

I'm gonna blow your
fucking brains out tonight.

- And then more recently,

Bradley Cooper, I think,
is incredible as well,

especially "A Star Is Born"
that he just did.

I mean, writing it,
directing it, acting in it,

totally transforming
into this guy,

those are the performances
that I watch that I'm like,

I'm in the right job,
because at some point,

if I get even close to that,
everything's great.

- You want answers.
- I want the truth!

- He was my brother.

And he was
one hell of a soldier.

Everything he did,

work, school, friendship,

he did it 110%.

I am completely
and utterly in love with you.

I'm the man of the house now.

You know why?

'Cause you're just
a fucking child.

[dark music]

- Okay, so we have
this script in hand.

And, you know,
what we learned is,

you got to have
an actor attached.

- It's got
a major star interested.

- Which star?
- Who are the stars?

- We need a male lead,
and we need him now.

- Two.

- And action.

- You get
an A-list actor attached,

that brings a certain value
to your movie--or a director.

- Cut. Very good.

- Right, 'cause if you get
the right director attached,

then the right actor
will attach themselves.

- Happy birthday,
you son of a bitch.

- So since we didn't have
an A-list director attached,

that made it
extremely difficult

to get an A-list actor
attached.

- No stars. Just talent.

- No stars?

- Yeah, this was like
six, seven, eight months

of just grinding
and hitting the pavement,

talking to everybody
under the sun,

hearing their opinions
on how we should do it.

It was exhausting.

But this was just trying
to make it happen in LA.

- What I think I understand
from Craig is that

Zach's not offering to use
any of his "$11 million"

to fund the movie that
he wants to make with Craig.

That is key.

- Zach created
a couple short films

early on in his career
to try and get his name out.

One was "The Laughing Man."

- Mommy always said
I was different.

- This is a fan-fiction
origin story on the Joker

from the Batman series.

And I remember
when it came out.

And--you know,
it was pretty creepy.

[disturbing music]

[maniacal laughter]

You know,
it went a little viral

when--but that really got
his name out there

and grabbed some attention.

- I'm not gonna kill you.

I'm just gonna hurt you--

really, really bad.

- Here's another entry
from Zach's blog.

"My sister gave me
a framed picture

"about ten years ago
that said,

"'When the odds are
one in million,

"be that one.'

"This was the impetus

"for naming my company
what it was named.

"I absolutely love
this phrase,

"and I believe it can be
a driving force

for positivity
and productivity."

Wow.

[soft music]

♪

- Cool?
- Yes.

- Great.

- My name is John Verrastro.

I'm a Special Agent
with the FBI

in the Los Angeles
field office.

High-yield investment fraud
and Ponzi schemes

are common in Los Angeles.

The size and scope
of this one is quite unique.

Zach Horwitz was
purportedly purchasing

the rights to various movies.

And then he was
licensing these rights

to Netflix, HBO, and then
other distribution platforms.

- Somehow, he seems
to have gotten ahold

of legitimate film licensing

and film
distribution contracts

that Netflix, HBO,
or others were using.

Once he had legitimate
contracts in his hands,

then he was able
to take it and run.

And that's exactly
what he did.

- Zach Horwitz started this
mostly, you know, utilizing,

like, friends and family

as his initial set
of investors.

- Zach gave me the opportunity

to become an investor
in 1inMM.

So he says, "Craig, I think
I can get you in, you know?

I think you can invest."

So my thought process is,
of course.

These are deals with Netflix,
HBO, Howard Schultz.

They're doing them.

And now I have
that same opportunity

to become an investor
in this same platform

that Zach has created?

No-brainer. Right?

I don't think twice.

I take out my savings that
I have in a real estate fund.

And I give it to Zach.

And I become the first
investor in 1inMM Capital.

[sentimental music]

- My wife and I are
always looking for ways

to earn passive income.

I had invested in real estate

and in a few small companies
here and there.

And so I was looking
for other investments.

Scott Cohen,
a good friend of mine,

he said, there's some
opportunity in film.

And I am a screenwriter.

So I was intrigued.

And he sent me, like,
an investor pack.

When I first saw
the business plan,

it was, as most are, just
sunshine and roses, right?

It's all the positive aspects
of this deal.

- What was going on
in my head then

was not how good a salesman
this guy was.

It was that there was HBO
and Netflix and these films.

Like, why would I
have to trust him?

I see these contracts.

- Right away, I said to him,

"How do we know
this isn't a Ponzi scheme?"

And the answer I got back
was just that,

"Of course it isn't,
and here's why."

And I trusted that.

- In its most simple form,
the Ponzi scheme

is the money part of a scam.

My name's Supervisory
Special Agent Doug Thompson.

And I work with the FBI
in the White Collar unit.

The money comes in.

And that money is used
to pay returns.

There's no actual business
going on.

There's no profits
in most of these cases.

And those payments
that the investors believe

are the profits are actually
just the initial capital

that the investors gave.

New investors are
paying old investors.

You have to have a scheme
to defraud the folks

whose money you're taking.

So when you've
misrepresented to them

what you're gonna
take the money for,

you accept the money,

now you've gone down the road
of committing fraud.

- I met Zach Avery when I was
raising money for venture.

And he was part of the VC team
that invested.

He didn't come across
as, like, a tech guy.

So I just assumed, like,
yeah, he's a trust fund kid.

You know, he's charming.

And he was able
to kind of talk enough,

like, venture, talk enough,
like, Hollywood.

It's kind of, like,
a hot place to be right now,

is being able to move
between those worlds.

And, you know, you see
folks like Ryan Reynolds...

- You're an actor.

You're the owner
of cell carrier Mint Mobile.

- Jessica Alba,
with the Honest Company.

Snoop Dogg is another one.

They have all done very well
being an investor

and also an entrepreneur
and also an actor.

Zach, you know, he played
that character well,

that, "Hey, I'm this guy

that can do a little bit
of everything."

- What's the difference
between a pyramid scheme

and a Ponzi scheme?

- They're related.

- Okay.
- Okay?

And I would say that you might
classify a Ponzi scheme

as sort of the evil cousin
of the pyramid scheme.

- All right.

- In a Ponzi scheme,

there's one person
running the show.

So you got--
you got your con man.

- Okay.

- Okay, let's call it ZH
for Zach Horwitz.

And he comes up
with this scheme.

And he's got friends
out there,

potential investors.

- A-B-C.

A, Always, B, Be, C, Closing.

Always Be Closing.

Always Be Closing.

- And he gets them to invest.

So they put money in.

- The entry level was
10 grand.

- Okay, so he's taking in
at least 30 grand here.

- Okay.
- Okay?

And he's promising
that in six months,

they'll get back their money
plus 15%, okay?

That's a really good rate
of return.

- Mm-hmm.

- Your profit on a mere
$6,000 investment

would be upwards of $60,000.

- Now, how is he gonna
pay them back?

So then he says, "Well, I got
to get some more money."

So he goes out, finds
another group of investors.

- We are looking to make
strategic relationships

to move that along.

But I kind of agree
with Mark Zuckerberg

when he said,
"Move fast and break things."

- Right?
- Uh-huh.

- Okay.

And then some of this money

is going to pay off
the early investors, okay?

But if you've upped the ante,

it's no longer 10,000
to get in.

You need 20,000 now
or 30,000 or 40,000.

But these people might decide,

"Well, I'm gonna just take
this money.

It was a good deal,
so I'll just go in again."

- I am talking about
giving you $100 million.

- If you go above 4,
we might have something.

- I can do that.

- So he gets paid off
in principle.

But he reinvests.

Now, of course, these people
expect their money too.

Okay?

So then you go to--
you know, you keep doing it,

especially since you're
draining some money out.

So you have to get
more and more.

As long as they think
that it's legitimate

and that they are, in fact,
earning these returns...

- I got a whole suite
full of mainframe computers.

- We're not really interested,
Henry.

- Oh, they are so beautiful.

Listen to 'em hum.

- [chuckles]

Henry, don't try
Mr. Hemming's patience.

- You sure?

- It tends to feed on itself.

And if that happens enough,
then you're in good shape.

- The key to a Ponzi scheme
is getting more investors

in the Ponzi scheme.

There's a pattern to it,
where they identify the people

they want to target.

They build rapport with them.

They convince them that
they've got this secret way

of creating obscene amounts
of wealth.

And that grooming part of this
is important,

because it's not just
to get them to invest,

but you want them
to bring in their friends

and their social network.

- There is a feeling
of exclusivity

in that you've been
invited in.

You've now joined this club.

And there's always
this notion that,

particularly in Ponzi schemes,

there are only so many deals
to go around.

- He just had
the Hollywood lingo down.

And he had so much
bravado behind it,

and he seemed to talk
the talk that, you know,

people who were
outside of that world

were susceptible to it.

So I think in that respect,
that's how his scheme worked.

- Oh, it's not a problem.

A friend in need
is a friend indeed, right?

- There was a sense
of intrigue

that is beyond
the typical scheme,

where someone says,

"You're going to be investing
in the stock market."

They don't know anything
about these companies.

But they do all think they
know something about movies.

And I think investors
enjoyed saying

that they were investing
in films.

- Most of the investors
investing in movies

and in Hollywood
don't really understand

how movies and Hollywood
really work.

And that's where
Ponzi schemes,

fraudsters live.

They love to get in an area
where you know a little bit

but you don't fully
understand it.

- When you use actual,
real movie titles that exist,

where somebody can go
and verify,

"Okay, this seems legitimate,
and we can get these returns

"because he's actually using

"our money
to purchase these things,

"and then he has these
existing agreements

"where he's selling them
to them,

so the money's gonna come in."

- When it was presented to us,
it came from a company

called JJMT out of Chicago.

They were sort of the advisors
to us on account of 1inMM,

which was the company
that was purportedly buying

the rights to these films.

And all of the members of JJMT
were in the finance sector.

So as far as we understood,
they had vetted everything.

And that lended credence
to this whole scheme.

- The investors would ask,
"Well, what if you can't

get it distributed
or something like that?"

"Oh, you don't have
to worry about that.

"There's some kind
of a fail-safe thing.

Don't worry, it's always
a safe investment."

- You had every bit
of documentation

you could possibly imagine
to, you know, believe

that you are,
you know, undertaking--

putting your money
in an incredibly safe

and secure investment.

You know,
there was even clauses,

if HBO doesn't pay
or Netflix pay,

what would happen then?

How would, you know,
we get our money back?

And it was all laid out.

- So in a case like this,

with promissory notes
being used,

at the expiration
of the promissory note,

whether that was
in six months or a year,

Zach Horwitz wired the funds
back to the victim investors.

And then for the next note,
the victim investors

would wire the money back.

- You lend the money
for six months.

You get the 35%, 40% return,
whatever it is.

And then boom, you're out.
It's over.

- So that was the thing.
I mean, I did get money.

And, you know, I guess
I could have walked away.

And--you know,
but it seemed legit, right?

- And the other thing that was
always presented to us

was that, these aren't
gonna last forever.

At some point, there will be
other players in the game.

And HBO or Netflix
will realize

that they could cut
the middleman out.

And Zach--Zach's whole
business would be gone.

And so that was another thing
that got people to try and put

as much money as they could in
as quickly as they could,

because they knew that this
was a limited opportunity.

- Around 2017, one of my
neighbors down the street

told me the story about
these guys killing it in film.

I had a production company
called Forager Film.

We made a lot
of independent films

starting in about 2013
and going forward.

I've had a lot go to Sundance,
Berlin, South by Southwest.

I definitely don't have
all the answers.

So I always want to talk
to people about that.

So in '17, we had two movies
going to Sundance.

And I'm like,
"Two movies at Sundance.

I know this business."

Prior to '17,
we knew if we came in

at a certain price point,
there'd be buyers out there.

And the buyers weren't there
in '17.

And so it was getting really
hard for us to sell movies.

Then I come back
to the summer and he's saying,

"Oh, these guys are
killing it in film."

He's like, "Oh, no,
the guy would tell them

"what Netflix would need.

"And they'd go out
and either make the movie

"or find the movie,
some foreign films.

"And they would then turn
around and sell to Netflix.

"And they're returning
some crazy amount of money

all the time."

And I'm going, wow,
I'm having a real tough time

selling movies to Netflix,
Amazon, take your pick,

because they want to make
their own films.

- Hmm.

So that was the first time
you kind of, like,

"Wait a second,

I know how this gets done,
and that's not it"?

- Exactly.

The story they were telling,

they were telling
a lot of people.

And they were hitting
the North Shore,

where there's a lot of wealth
and that kind of thing.

And my neighbor was
really seriously

looking into this at the time.

He goes, "Well, I think
I'm gonna do something."

And I was like, "Okay."

- So when you say,
"do something,"

like, give them money?

- Yeah, he was gonna
give them money,

about $50,000 at the time

because the returns
they were talking about

were, like, close to 100%.

You could do that
once or twice in movies.

But consistently?

Why wouldn't Netflix
figure this out and, like--

- Doesn't smell right.
- Exactly.

There was nothing good
that was gonna come of it.

- I would see a title.

Some of them were something
as ridiculous

as "Satanic Panic."

[metal music]

It's not a film
I was ever gonna watch.

And it was most often
in HBO Latin America

or the Latin American markets
for Netflix.

So the library of films
from which he pulled

consisted mainly of titles
we'd never hear of.

And from what I understood,
that made sense, right?

Like, a movie that didn't cost
a lot to make,

the financiers would be happy
to get 4 million bucks for it.

And then we would pay for it,

we would own
the rights to that,

and then the streaming company
would give us

this amount back.

So I think that was one
of the smart things he did,

was to use obscure titles

that we would never
really know or even check on.

[tense music]

- Zach had a spider web
of lies he would tell

to help his image,
his persona.

He was always building
these lies up,

that he was this
wildly successful investor,

multiple business owner.

Then from
a friends standpoint,

this person had grown to be,

you know, my closest
and best friend in LA.

How do you get
so close to somebody,

look someone in the eye,
and, you know,

know that it's just not real?

- It's too easy.
It's just too easy.

- Hollywood has
an allure to criminals.

They want to own homes
in Hollywood Hills

and in Brentwood.

They want to drive
expensive cars.

And they want to be part
of that entire scene.

- I got way too drunk,
stupidly hooked up

with some girl
I had no business being with.

The end.

- Zach wanted to be famous.

But unfortunately for Zach,

he's a pretty fucking
terrible actor.

- [sputtering]

- Zach Horwitz,
that was his greatest role.

The real Zach
is closer to Zach Avery.

That's a cheater.

It's a liar.
It's a psychopath.

That's the real Zach.

- Zach was great at being
convincing to everyone,

except when he was on camera.

[gunshots]

- One of the mysteries was,

how is he getting these parts
in the first place?

- Do I know you?

- I'm the guy.

- What else is coming
down the pipe for you?

- We're gonna talk about

"The Last Moment of Clarity"
today.

Brian Cox, how did he
make you feel on the set?

- He was incredible.

He's just such a master
at his craft.

- "Gateway."
- Yeah.

- Olivia Munn.
- Dahlia!

- Mike?
Oh!

- This amazing talent,
do you just feel like

it forces you to up your game
immediately?

- It does.

It completely elevates
every single thing

you're doing because you know

you can't just
kind of phone it in.

- It started to look to me
like maybe he was putting

money from the Ponzi scheme
into the movies

to get the producers
to cast him.

- When it comes
to living in LA,

there's an undeniable pressure
to be somebody.

And I think
that pressure breaks people.

For Zach, it was very obvious
that he didn't want to wait.

- They're coming.

- Stay here.

- If you go on these auditions
the normal way,

I mean, you're gonna be going
on auditions a long time,

you know,
unless you just get lucky

and you're
that one in a million.

I'll tell you what,
any role he got,

it wasn't for his ability
in the audition.

- "Oh, ho, ho, coffee."

Remember B Man?

That dude from first-year
contracts class?

"Stomp on those bananas."

- As far as the ability
to cut a check...

- Yeah.
- Money talks.

- Well, yeah, definitely.

- Zach found that shortcut,
that way around

the one in a million
opportunity.

And he was buying
his way into roles.

Every single role,
whether it's major or minor,

Zach paid for
using investor funds.

- You may have
impressed someone.

You may have met someone
that I'm like,

"He doesn't fit for this
or I'm not gonna

bring him on to this project
because X, Y, or Z."

- I want to show you
something.

- "But I'm also doing
something in a month

"or someone else is doing
something that I know

that he may fit for."

- He began
creating relationships

with these producers.

And producers would say,
"Hey, well, I can get you,

you know, in this role
if you can give me X amount."

And he would pay it freely.

We're talking $100,000,
$200,000 for a small role.

- There were at least
four movies that he was in

that the Securities
and Exchange Commission

has confirmed that he used
proceeds from the Ponzi scheme

to help finance the movies
that he was cast in.

The exact amount is
not exactly clear.

But it's somewhere
in the $10 million,

$20 million range.

- I want to kind of get
into "The White Crow,"

directed by Ralph Fiennes--

and I wish I knew him,
and you do.

But what was it like to--
to work on that film?

- Yeah, it really was

an eye-opening experience
for me.

Yeah.

My specific role,
it's a guy named Michael.

He's an American journalist
that essentially was getting

the American perspective
on this kind of journey.

- Just having
that little glimpse

of seeing his face
on the big screen,

you know, it was all worth it
for him.

- Every new project
you go into,

you're nervous
because as you grow also,

I start thinking, like,
am I gonna be good in this?

Do I know what I'm doing?

You have
that imposter syndrome,

where it's like,
am I supposed to be here?

Are they gonna find out that
I'm this fraud the whole time?

- He was flying private jets
out to the sets.

One of the stories was
about him going out to film

a movie in Kentucky.

He arrived there
and I believe got paid

less than what he spent
on his accommodations.

- That's what happened here.

- Selling these
very unbelievable schemes,

I don't think
it's that hard in Hollywood

because people deal
with extraordinary stories

all the time.

And so there's a part of it
that makes it very easy,

where people are
very optimistic

and anything's possible.

[soft music]

- In many of these cases,

and in this case
in particular,

you build your credibility
through the people around you.

And then just over time,
it gets larger.

And as it appears to work,
you know,

more people, you know,
believe in it

and then start investing
in it.

- So I started to see Zach--
on his Instagram,

he's going
to Berlin Film Festival

and South by Southwest
and Cannes.

And I'm just like,
you know, damn.

I'm just kind of working away,

you know, at my kind of
original job in Orange County,

and I'm seeing Zach just--
just kind of living the dream.

You know, his cars improve
and house improve.

And I just couldn't
believe it, man.

It was cool to see.

- One of the important factors
for investors

is to see that, hey,
the guy has a track record.

And to prove that,
look at where he lives.

Look at his family.
Look at the cars.

Look at the watches.

I mean, who else has
a watch subscription service?

Why not buy a damn watch?

Why not have
a collection of watches?

He did all the things
to have the appearance

that he was the most
successful person he could be.

- In the era of social media,
you can create yourself

to be whatever you want.

The character of Zach Avery
kind of fit the mold

of that new kind
of con artist,

where you can
leverage technology

to be whoever you want
in this world.

- I think the persona
that Zach had

rather carefully fashioned

was important for him
to attract money.

I think he needed people
to see him that way.

And then, of course,
it was also important to him

to present the husband he had
promised his wife to be,

that he was
gonna be successful,

that he was this great actor.

[melancholy music]

- Zach marries Mallory.

And they have two kids.

He's just living a lifestyle
now that, honestly,

only some of us dream about.

- This is on my Insta story.
Relax. Hold on.

- And you got to witness this
at every major life event

that Zach and Mallory have.

[cheers and applause]

- For me, it's very clear
that you are

an absolutely amazing mother.

- Whoo!

- You're an absolutely
amazing wife,

amazing friend...
- Yes.

- And an absolutely
amazing person.

- Whoo!

- So I fell in love with you
14 days before you turned 20.

[laughter]

- Whoo!
- Whoo!

- And now I've been with you
10 years and 14 days.

[laughter]

- Amazing.

- And I promise you,
I'm gonna love you

every fucking day
for the rest of my life.

[cheers and applause]
- Yeah, buddy.

- Mallory got serenaded.

And it was just
the most romantic

and probably intimate thing
I've ever been to.

You know, and it
honestly kind of made--

made all of us husbands
and boyfriends

kind of look bad
because, you know,

Zach put on quite the show.

And that was, I think,
the pinnacle of his success.

The closer you were to him,
the more you loved Zach,

the more he took advantage
of you.

- Do you think you could
love another woman?

- No, not if I have you.

You're one in million.

[soft dramatic music]

- As he was
drawing in investors,

the money he would bring in

would pay back
the earlier investors.

And you could reinvest
or you could cash out.

But the returns were so great
that people would reinvest.

- So you're constantly
just giving more.

You're never actually
making money.

You're just giving
more and more and more.

- After the first year or so,

you know the payments are
coming out.

They're coming out on time.

And everybody is
being made whole

and getting all the payments
that they were promised.

So we stopped
really paying attention.

- And he never act like
he needed the investment

or even wanted the investment.

He was always like, "Well,

I'll have to think about it,"
you know?

"Maybe. I don't know if I can.
We'll see."

You know, if you know
anything about sales,

you know "no's"
the strongest word in sales.

He was just an absolute
master manipulator.

- It seems oftentimes,

at least with
the Ponzi schemes

and these high-yield
investment frauds,

they don't really believe
that what they did was wrong.

Some of them actually believe
what they're doing is real,

even though
everything isn't real.

To these individuals,
the idea of itself being real

makes it real.

- But, of course, he's taking
the money out for himself.

And this is all
just a huge lie.

- The main reason
Ponzi schemes fail is,

the person running the scheme
is taking too much money out.

They will start purchasing
luxury items.

They'll buy cars, homes.

They'll start developing

an entirely
different lifestyle

that's very extravagant.

They don't have
enough money coming in

to pay the Ponzi payment
because they've taken it.

- So here's another quote
from the blog.

"I was always obsessed
with belief in a superior life

"that existed
just beyond my grasp,

"a feeling that a better party
was happening somewhere else.

"But every once
in a while, however,

"this sensation was punctuated
by a visceral electric

sense of presence, times where
I truly felt like I belonged."

I am not sure
how to feel about this,

because, you know,

this is what he's choosing
to write about

while he's serving his 20-year
sentence in federal prison.

First of all,
I didn't even know

you could have a blog
in prison.

This is the very little,
subtle acknowledgment

of this scam that--

the closest thing he gets
to saying why he did it,

just because, you know,
there were times

when he felt like he belonged.

[indistinct chatter]

- If not, that's fine.

And actually--
I'm not exactly sure.

- Should I just look
in the lens?

- Hmm.

- I think there's something
especially sick about somebody

who could not only
take advantage

of their friends and family,
but use them as bait in a way.

- I don't know, like,
the psychology of this human

is fascinating.

- It's strange and curious
how somebody could have

that much confidence

and that little
of a conscience.

- I had some family members
lose their pensions

in the Bernie Madoff
Ponzi scheme,

which I'm sure
we all remember.

And I'm really curious
about the type of person

that could do that,
like, the egos involved

because I witnessed
the damage,

psychological and financial,
from the victims' side.

[somber music]

♪

- And come visit us
in Las Vegas when we re-open.

We'd love to have you.
- For sure. I'd love to come.

- In court,
one of his victims did say

that he had spent a weekend
with Zach in Las Vegas.

To take someone to Las Vegas

and hang out with them
for a weekend--

he's spending real
face-to-face time

with these people,

knowing that he's taking
their money

and never giving it back,

and these are
their life savings.

That struck me
as incredibly predatory.

He's really leaving
these people destitute.

- Knowing that, you know,
I'm not some hedge fund

or one of the big investors,
I mean,

why did you need my money?

Tell me how I'm gonna, like,

pay the bills
that I have to pay.

What am I gonna do
with the money

that I was supposed
to have been saving up?

I've read the houses
and the cars

and the luxury watch service.

How did you sleep at night?

Did you wonder if the cops
were gonna knock on the door?

Or did you even think
about that

when you were
going through all this?

- Lo and behold,
how Zach operated

with the people
closest to him,

he didn't want anybody
being friends with anybody.

Mallory and I, we were close
at the beginning.

But as time went on,
we were just a little distant.

I could tell there was
just something off.

And I couldn't put
my finger on it.

And come to find,

he was pinning everybody
against each other,

especially everybody close
in his life.

He didn't want me
talking too much to Mallory.

He didn't want her
talking to me either

because Zach knew

the more time I'd spend
with Mallory,

I'd start asking
more questions.

The more time I'd spend

with some of his other
LA friends

and some of his
acting friends,

and I'd bring up,
you know, 1inMM,

And then
they would ask questions.

So he kept everybody
on their own individual island

while he masterfully
manipulated them

and everyone around them.

We could all be
just his own personal pawns

in his own game.

- At this point in time,

the investment had grown
quite large.

The payment amounts that were
being sent back and forth,

they were
in the millions of dollars.

- I think there is

kind of a runaway
freight train quality

to what wound up happening.

- Zach was able to create this
aura around you of legitimacy

by associating
with other people,

like Howard Schultz,
who are legitimate.

- We were told that
Howard Schultz had bankrolled

his initial investments.

And from there,
the story went on

and became kind of this legend
of Zach.

- That's something that's been
missing from this story,

is how much this relationship
Zach conveyed he had

with Howard Schultz
and these very powerful people

was all a part
of Zach's persona.

- I dream the kind of dreams
that other people said

would not be possible.

- He'd have his phone out.

And his phone would
literally buzz.

[phone buzzes]

And he'd look at it and say,
"Oh, it's Howard again."

He would call him Howie.

Then he'd show
the text message.

Like, how are you supposed to
know this is fake, you know?

When you're seeing
live emails on his computer

and you're shown text messages

with their names and--
and you're even receiving--

supposedly receiving emails
from Howard Schultz himself.

These characters
in Zach's story

were so real to all of us.

It was uncanny how timely

these text messages
came in as well.

- We do take it at face value.

I find it hard to,
in my life, assume

that somebody is lying to me.

When I heard that
Howard Schultz was involved,

it made sense to me
in the sense

that this guy must have had
some money,

seed money, to start
somewhere along the line.

And that he had found himself
in a relationship

with Howard Schultz,
it's like,

seemed fortuitous for him,
but it certainly could happen.

[dramatic music]

♪

- Zach and I go out one night
just to hang out and--

at least what I thought
was just some--

some innocent fun,
just to catch up.

[phone dings]

He takes out his phone
and shows a live message

interaction with Ted Sarandos,
the man in charge of Netflix.

Ted Sarandos and him are
going back and forth.

And Ted asks Zach if he's
ready to sell his library yet.

He's got an over 400,
500 film library, supposedly,

that Ted would acquire
for anywhere from 400

to 700 grand apiece,

with 11, 12, 13 years left
of film rights.

And Zach responds with,
"It depends."

And then Ted responds with,
"Depends on what?"

And Zach says, "The zeros."

I'm seeing this
live on his phone.

Ted sends over an offer.

It's a massive offer.

Zach hits the floor,

falls down to his knees,
and starts crying.

♪

And he's saying,
"Craig, we made it.

We did it."

I start crying.

This is just the greatest
thing that's ever happened.

Zach's telling me how,

"You're gonna be
taken care of.

Gonna get
a portion of the sale."

And--and I'm just
through the moon.

You know, I run home and,
you know, tell my girlfriend.

And we're just so excited.

He's got me tuned up.

I am all in on 1inMM Capital.

- I've been looking through
Mallory's divorce filing

and I actually found
the answer

to a huge question
in this case.

So here it says, "There have
been countless text messages

"and emails
Zach would show me.

"Many times I would see him
receive notifications

"while he would be
sitting right next to me.

"Now I have learned
that Zach was actually sending

"the fabricated messages
to himself

"using an app to make it
appear as though

"he was receiving
communications

from third parties."

So check this out.

I put in my phone number.

I put in the message.

"Hey, Zach, ready
to sell me your library?"

And then I can select
today's date and the time.

[phone dings]

Oh, it's Ted Sarandos.

"Hey, Zach, ready
to sell me your library?"

Then all I have to do,
if I'm him,

is memorize my lines.

"That depends."

I send that back.

I already have
another one coming in.

"Depends on what?"

"The zeros," and et cetera.

- To locate real people
and create communications

with these people and then
sending them to investors

and saying, "Look,
I'm talking to these people,"

when really you're not.

Zach Horwitz's ability
to produce

documents that support that
was unique.

- The amount of work involved
in keeping track

of all of these different
deals is unbelievable.

[phone dings]

He's got hundreds of millions
of dollars on the table

that he's got to keep track of
and make sure people are

getting repaid
and bring in new money

to make sure it's possible
to repay them.

It's just really,
really elaborate.

You had to realize
that at some point,

the whole thing was gonna
collapse under its own weight.

- We'll see what happens.

You never know what
tomorrow holds, obviously.

[laughs]
- Yeah.

- Behind the scenes,
things were beginning

to fall apart for Zach Horwitz
and 1inMM Capital.

- When we first stopped
getting payments,

my wife's first reaction was,
"What's going on?

There's some kind
of scam happening."

She had, just prior to that,

wanted to pull
all the money out.

We were assured
everything was fine.

There's a little bit of panic
that sets in.

[tense music]

- So there are really
two parts to this fraud.

The first part was the actual
fraud itself, the agreements,

getting the investors
to invest.

Then at the end of 2019
when the payments stopped,

what could be determined was,

wasn't getting enough
new investor money

to repay existing investors.

And that's why the investment
collapsed at that point.

This is where part two
of the fraud starts.

- Zach just sending
text messages

and email communications
on the daily.

- We had screenshots
of text messages

that were
supposed to have been

between him
and HBO or Netflix,

like, why--why have things
suddenly changed?

And more importantly,
both these massive companies

had stopped paying,
coincidentally,

at the same time.

- I mean, we think
we're just in,

like, kind of this war
to receive payment.

- And then once
it starts falling apart,

he's now having to create
all this false documentation,

emails from HBO and Netflix.

- It just became more
and more convoluted for him.

And, of course,
each time he lies,

he's got to back that up
with more.

I would imagine
that was his full-time job.

When he wasn't filming,
he was forging documents.

- We call those
lulling statements.

And what they're doing is
buying themselves time,

either to bring in
new investors,

get influx of money
so they can pay the people,

or, if this is really the end,

this may be the time
that they're

going to exit the Ponzi scheme
and then make a run for it.

- You see it oftentimes
in these Ponzi schemes.

But the extent to which
he really went down that path

is like probably nothing
I've seen before.

And that, in turn, caused
more damage to investors

because now they believe that,

"Oh, he's actually working
to recover our money."

And these--these are
large companies.

These are
legitimate companies.

And they're gonna make good
on these payments.

So now these investors
are now digging themselves

into further financial loss.

- He came after myself
and my parents

for any last dime that
he could squeeze out of us.

And we didn't think,
in a million years,

that, you know, I'd never
see that money again,

that my parents would never
see their retirement again.

- Regarding Netflix,
once the audit's done,

hoping to get a date
when they're gonna pay.

That's kind of the latest
and greatest.

And if Netflix pays,
we get some breathing room

and get to survive.

- Scott Cohen was
playing tennis at a club.

And he ended up playing
with a man who was in charge

of Howard Schultz's finances.

Scott said to him, "Hey,
it's sort of a small world.

I work with Zach Horwitz."

And the guy looks
and says, "Who?"

He said,
"Well, you know, Zach.

"Sometimes Zach Avery.
But he's--he's an actor.

He does all the film
finance deals with Howard."

And he looked at him and said,
"I don't know who that is.

Never heard of him."

He didn't tell me that

until everything began
to fall apart.

He just kind of kept it
to himself.

I think he started to realize
that things weren't as rosy

as he was trying
to make them out to be.

- Clearly, you can see
everybody is motivated

and pushing,
other than the fucking people

that owe us the money,

which is just
a fucking disgrace.

- He hired counsels
to represent him

in fake litigation.

- Another reason why we all
felt this was legitimate--

his lawyers,
from a very big law firm,

reached out
and said things like,

they want nobody to try
and contact HBO or Netflix

because that would
jeopardize the relationship

that Zach had cultivated
over these number of years.

And so we were instructed
basically not to do so.

- So I go to Zach.

And I'm like,
"Zach, you know, hey,

"you know,
we got our house here

that we're gonna lose
if I don't get my money back."

He's like,
"Oh, man, I'm sorry.

"You know, it should be paid.

It's gonna be paid any time.
Here, look."

And then he'd forward emails
and forward communication

or show on his phone
that, you know,

things were gonna be paid.

So if there was any a time

where Zach could have
just maybe looked out

for myself,
my family, my fiancé,

that would have been it.

He had no financial gain
by letting us lose our home

and keep putting money
out to this home.

He could have just said,
you know, "Hey, Craig,

"there's gonna be
other houses.

"You know, I would just wait
for this HBO stuff

to get cleared up."

Then I would have been
begrudgingly like, "Oh, fine.

"You know,
we just lost our house,

but we'll get another one."

But that just shows me
that Zach

is just absolutely soulless.

Two weeks go by.

And we finally think
we're coming to agreement now

with WarnerMedia,
you know, the owner,

the parent company of HBO.

And then, of course,
COVID hits.

- The entertainment industry
in California has been

decimated by COVID-19.

- Netflix shutting down
production

on all of its scripted
television and film projects.

- You know, now we're into,
you know,

May and June and July.

And what a perfect
built-in excuse

for Zach to play off of.

- The individuals perpetrating
the frauds often use

current events as reasons
for why the investment

isn't working anymore.

- Everything was going fine,
except that the attorney

for Netflix just got COVID, right?

And then I said,
"I mean, this is strange

because Netflix has
more than one attorney."

But, of course, each time
any investor brought up

any concerns, they were met
with explanations and answers

that were meant to satiate us.

And for a period of time,
it did.

- And it was just
a nightmarish year of COVID,

first and foremost, and then,

you know, dealing
with this disaster

of not having any funds.

You know, he cleaned us out.

He cleaned myself, my family,
and closest friends out.

- If you look back
at some of the texts

that we're getting
during the time

that we had ceased being paid,

there was just
a sort of a "bro" element.

I don't know if there's
a better way to put it.

Here we have a member
of JJMT saying,

"This year fucking sucked.

"But hoping for a quick
blastoff of positivity

starting next week, boys."

Then Zach responds, "100,
double exclamation point.

"Fuck 2020 in all ways.

"2021, baby.

LFG." Let's fucking go.

- It takes a specific type
of person, I think,

to do this.

I don't think most people
can do it,

at least not on the level
that we're talking about,

where you're talking about
tens of millions of dollars

and you're going
to destroy these people.

They're going to lose
their, you know, life savings.

They're going to lose
their homes.

That's a particular level
of human callousness

that most people
probably don't have.

- A lot of actors have
a deep insecurity.

And it's one of the reasons
why they want to be on film,

why they want to be
someone different,

why they want to portray
these other characters.

And I think that's part
of what drove him to that.

But I think
most importantly for him

was just this idea of fame.

And he was willing to do
whatever it took to get there.

- You're gonna need something
when you get there, no?

- Thank you.

- Very few Ponzi schemers
actually have a exit strategy.

They sometimes flee and get
out of the jurisdiction.

But it's hard
to really disappear now.

- Can you show us how it all
kind of breaks down?

- You've got several
of these investors.

They're paying in.
Okay?

These people are
earning their returns.

And somebody
in one of these tiers,

let's say it's this person,
draws out.

And maybe he recruited.

Well, now, it's not enough
to support it.

And the whole thing collapses.

So nothing's coming in.

And at the same time,
the people

that got screwed down here,
at the bottom,

are just going to the police.

- I don't know that there's
a lot more time left

in the patience box
with 1inMM.

This is a real
fucking disaster.

- I think that Scott,
at that time,

actually reached out
to the FBI.

And that's when it kind of
all came crumbling down.

- The case was initiated.

A victim attorney
contacted the FBI office,

that they believe that
Zach Horwitz had committed

a fraud against their clients.

- One of the first things
we do in these fraud cases

is the financial analysis.

The FBI has created an entire
cadre of forensic accountants

in addition
to the special agents.

And so they get
the bank accounts

and then trace
where all the money went.

- The FBI was on the case.

The SEC was on the case.

- We know what's going on.

And then we interview
the victims

to see what they thought
they were investing in.

- Oftentimes,
these investigations can last

6 months, 18 months,
even years.

One of the things that
enabled this investigation,

in particular, to move quickly
was the documentation

that the victim investors had.

- One of the key elements
of this is,

was there a scheme
to defraud the victims?

The way we prove the scheme
is showing what they were told

and what actually happened.

And that's how
we identify the fraud.

- There was a lot of pressure

that Zach Horwitz
is gonna flee.

That's often a concern
of investors,

that this thing's
falling apart now,

and he's gonna take
all the money and run.

[suspenseful music]

[indistinct radio chatter]

[sirens wailing]

- The morning of the arrest,
out of nowhere,

FBI agents are
pounding on the door,

and there are agents
all swarming into the yard,

demanding that they
come downstairs.

It's just complete panic.

And suffice it to say,

Mallory was
pretty freaked out.

- When Zach's wife
came to the door,

she didn't know
why we were there.

And then the next person
to come down was Zach Horwitz.

I don't know if he had
any inkling

that the FBI was
investigating him.

I'm guessing it's probably
at the time of the arrest.

Well, that reminds me
of something else

I'll tell you about.

One of the unusual things
about him was--

is oftentimes,
when we arrest these people,

they'll often say, like,
"Oh, why are you here?

"This is all
a misunderstanding.

It's a real business."

[distant sirens wailing]

Zach didn't say a word.

He was very calm.

He wasn't in shock.

So that was unusual.

I mean,
when you arrest somebody,

usually they want to know what
they're being arrested for.

But he never asked
that question.

After Zach was arrested,
we Mirandized him.

Myself and another agent
attempted to interview Zach.

But he declined.

He never made any statements
to law enforcement.

- When I first saw
the "LA Times" article,

I was blown away.

I was just like, this--
this can't be true.

- I didn't believe it.

You know, I was almost mad.

Like, I didn't even know
what to think

because there was just no way
in my being--

how is this even real?

That was my first reaction

until I just kind of sat there

and, you know,
let it all digest.

And then that's when
it sunk in

that one of my best friends
has been conning myself,

my family,
and some of my closest friends

for the last ten years,
and that he stole

everything from us,

and that I might not ever
see it again.

- The day
they raided his house

was a good day, you know?

You finally see somebody

getting their comeuppance, right?

And more importantly for us,
I guess it began the process

to be able to hold him
accountable and--

and perhaps in a very
unlikely scenario, that--

that some of the money
could be recouped.

- It seems
that a lot of the people

who invested in this

and who lost money
were older people

or people in transitions,
people going through divorces,

people who lost members
of their family recently,

people who had sick members
of their families.

And so a lot of these people,
I think,

were vulnerable
in that respect.

And I think he was able
to really capitalize on that.

- When these cases
come to trial,

what kind of jail time can you
expect as a Ponzi schemer?

- I see that most of the cases
end up at two to seven years.

But it's
a complicated process.

Depending on the number
of victims,

the number goes up.

Depending on the loss amount,
the number goes up.

Your role in the crime,
the number goes up.

Aggravating circumstances--
did you target elderly people?

Did you target groups
that would be

particularly injured
by your crime?

That causes the number
to go up.

There's a cap,
like, at 20 years.

But the judge can deviate

from those
sentencing guidelines.

- I just went
into the courthouse

and asked about the camera.

And they said no cameras in
federal court, which is fine.

Kind of what I expected.

Check, check.

Sound good?

- Yeah, just hide the wire
a little bit.

- Oh.

Better?
- Yeah.

- Okay.

So here he is,
coming in, right here.

- I have sat through a lot
of statements to the court

by people who have been
convicted of crimes.

And his lacked specificity
in a way that struck me.

When I was writing my story

and I was trying to find
quotes from it,

I actually just
threw up my hands

because he really didn't say
that much.

It was--it sounded
very generic.

- We found out that Zach had
sent a letter to the judge.

And in it,
he had asked the judge

to be lenient upon him
because, in fact,

it was the fault
of the victims

for not seeing the red flags.

And it went over about as well
as you can imagine.

The judge was not too pleased.

- I fucked up.

I'm a piece of shit.

- Actor Zachary Joseph Horwitz
is agreeing to plead guilty

to a $650 million
Ponzi scheme.

- When Zach agreed
to plead guilty in October,

he appeared in court.

And he pled guilty to a single
count of securities fraud.

And with that agreement,
other charges,

with decades more in prison,
were dropped.

- When Zach Horwitz
was sentenced,

you know, he was sentenced
to 20 years

and ordered to pay
$230 million in restitution.

A 20-year sentence,
you know, was--

I was a little surprised
by it.

I think in this case,
I think it's just

the sheer numbers involved.

- It was really striking
to hear the judge go over

all of the money that was
spent during this scheme.

The $7 million
on the American Express card.

I think it was $700,000
for interior design.

The Mercedes Benz
of Beverly Hills.

Where is that money now?

- I think I know
the answer to this,

and it's a bummer.

But what about the victims?

Do they ever get
their money back?

- This is one of the toughest
things I have to tell people,

because they all believe
that the money is

squirreled away somewhere.

And it's not.

- All the money
has been spent.

And that's why the actual
investment collapses.

They spend the money,
dinners, travel,

like, things
that you can't recover.

- They frequently tell me
that they know,

at some point,
they're gonna get caught.

If you know
that the end is coming,

just spend the money.

- He had his house
and the contents of the house.

And that--really,
that was about it.

You know, there was
approximately a little over

$2 million that was recovered
from the sale of the house.

- I don't see myself

as the victim who was
impacted the most

because some of the stories
I've heard

have been far more tragic
than mine.

My wife and I lost
$1.8 million in total.

It took us a long time
to save that kind of money.

It's--again, it's relative.

To some person, 120,000 would
be the equivalent of that.

And to some, it's 120 million.

For us, that 1.8

was everything that we had
managed to accrue

over a long period of time.

And so that was just wiped

just so somebody could
feel good about himself

and cast himself
in a few movies

and party in Vegas
a little bit.

And that's--that's tough
to deal with.

- Speeding.

- It's bad regardless,
strangers or people you know.

But to get family
and friends involved, it's--

that's a whole other level

of just blocking out
right and wrong.

- You just want to believe
the best of a person

and kind of block out
everything else.

- I've personally known
a lot of Zach Averys.

I just never thought
that any one of them

would be smart enough
or cold enough

to pull
something like this off.

- It's so fascinating to me
that something like this

could happen in our industry,
like, right in my backyard.

- He did a lot of things
that we,

on different levels, you know,
would consider terrible

or immoral or dishonest.

- At the end of the day,
it's sort of just

an unforgivable thing
to lie that way,

to scheme that many people,
and take that much money

all for yourself.

- The greed
took him over completely.

- Really made me consider
my past actions.

I think I'm making
really good progress now.

- When I went to court
to watch Zach be sentenced,

you know, there was
a realization that all of us,

all of the victims,
had been sentenced.

And for some,
it was a life sentence, right?

We are now forced to pick up
the pieces of the lives

that this guy has shattered.

But there are those that
I know will never be able to,

not just because
the amount of money,

but just because of the time
it took to get there

and how much time
they may have left.

- My mom's in the other room,
just found out that she,

you know, has terminal cancer.

You know, my parents'
retirement's in this fund.

How do you go in the hall
and go look at your dad

and tell him
that their money's gone,

this was all a lie?

Like, how do you have
that conversation?

You know, imagine having
that conversation.

It was one of the hardest
conversations I've ever had.

You know, he was just--
he loved Zach as well.

And just the hurt,
you know, in his eyes

and my mother's eyes,
and I just--

you know, it just wasn't--

I just couldn't believe it,

that everything I thought
was my life

and what was real just wasn't.

- How could somebody do that,
just lie to all the people

that knew him, trusted him,
and, like, just full-on lie?

How am I gonna face my kids?
They're upstairs.

Like, how am I gonna
face my wife?

This is gonna be a stain,
like, forever in our marriage.

Like, how do we--
how do we get past that?

You know, and what happened
in your past

that you would
make this happen,

so I can avoid that
with my kids

and make sure
they don't turn out like you?

- At a sentencing, the defense
is given an opportunity

to make a statement.

And during the whole period
of his sentencing,

he was sitting at a table
with his counsels

and, you know, was very
just expressionless.

And then when he got up
to make his statement,

he became animated
and was very remorseful

about all the damage
he had caused

and the irreparable
financial loss

he had created
to all the victims

and all the people that,
you know, he had betrayed.

And then after he had
made his statement,

he--he sat back down
and went back

to, you know,
that same poker face.

So maybe--maybe
at that point in time,

we were seeing a little bit of
Zach Avery in the courtroom.

- After the court case,
I went to the bathroom.

And as I was walking out,
the door opened.

And in walks Zach Avery,
Zach Horwitz.

And it's
such a strange feeling

because there's this guy
that's ruined my life.

And he--he walked past me
and he looked up,

and we kind of met eyes.

And he's like,
"Hey, man, I'm, like--

"I'm so, so sorry.

I'm so sorry."

And it's just--
well, I should hope so.

I mean, I'm sure you're more
sorry you got caught

and you're spending
20 years in prison.

But I said, "Look, dude,
what was your endgame?"

And he said,
"I didn't have one."

It's almost worse to hear
than he just messed up, right?

It's like,
he never had a plan.

He just was taking
people's money and spending.

- That he perpetrated this
crime against people he knew,

people he didn't know,
and then his own family,

who also is dealing
with the wreckage

because he's got
two young sons

and he's in prison
for the next 20 years,

so by the time he gets out,
they'll be adults.

- He's in jail now and is
leaving his two kids behind.

That is his legacy
that he's in prison, you know?

And he is a criminal.

And, you know, I wish
he'd stay behind bars

the rest of his life.

- Okay, we're speeding.
- Speeding.

- Okay.

- 59. Take one. Mark.

- I guess if I'm being honest,
just the type of egos

that are involved
in running schemes like this--

what makes that guy tick,
you know?

- I would love to actually
meet him, honestly.

Like, I'm so curious.

- He's crazy.

I mean, what is wrong
with this guy?

How can you be so smart

and so stupid
at the same time?

- I mean,
I'd watch this movie.

[laughs]

- I always try
to do things the way

you're supposed to do them.

And whenever I see
somebody getting away

with just breaking the rules,

it makes me really angry.

- I'm very interested
in exploring

how someone's capable
of carrying that much guilt

on their own shoulders.

- So you're gonna be looking
straight down the barrel.

- When people read
about financial crime,

they are engaging with it
from an arm's length

because nobody wants
to identify with the criminal

because they don't think
they can lie at that level

or be cruel.

And we really don't have
that much sympathy

for the victims either because
nobody thinks of themselves

as being reckless or naive
or stupid enough

to get scammed like that.

But I think what you're doing
with the director

"character" in this movie
is different

because it just shows you
how easy it is

for anyone to get taken in.

I don't think of myself
as a scammer.

But I'm an actor.

So to me,
this is just another role.

- I'm auditioning today
for the role of the director.

- The director.
- The director.

- I'm Joslyn Jensen,

and I'm auditioning
for the role of the director.

[dark music]

♪