Whitmore v. Horwitz was filed in the Central District of California on April 20, 2021, seeking class certification and unspecified civil damages. The complaint alleges fraud by omission, aiding and abetting fraud, breach of fiduciary duty, and aiding and abetting breach of fiduciary duty.
Plaintiffs are a group of investors seeking to represent a class of those who invested in Horwitz’s company, 1inMM Capital, LLC (“1inMM”). The defendants are Zachary Horwitz, 1inMM, and City National Bank (“City National”), the bank that Horwitz and 1inMM used.
According to the Complaint, 1inMM, by and through Horwitz, marketed and sold promissory notes as high-yield investments backed by purported content distribution contracts with Netflix and HBO. Unbeknownst to investors, those contracts never existed. 1inMM had no revenue and no expectation of ever receiving revenue. Horwitz instead paid investor returns using new investor money, raising more than $690 million before his Ponzi scheme collapsed. He used investor funds in the City National accounts to pay for personal luxuries, a house, and his extravagant lifestyle. The unlawful nature of Horwitz’s enterprise was revealed on April 5, 2021, when the SEC filed a criminal complaint based on Horwitz’s wrongful conduct. Horwitz now owes investors more than $230,000,000.
The claims against Horwitz and 1inMM are for fraud and breach of fiduciary duty, based on the fact that Horwitz made misrepresentations to investors and falsified records to substantiate his lies. The claims against City National are for aiding and abetting the fraud and breach of fiduciary duty, based on City National’s alleged failure to comply with the Bank Secrecy Act, 12 C.F.R. § 21.21, and other banking regulations.