A struggling actor struck it rich in Hollywood—then the F.B.I. showed up.

Anyone who visited Zach and Mallory Horwitz in 2019 would have said that they had made it in Hollywood. They lived in a six-million-dollar home on Bolton Road, within walking distance of Beverly Hills; there was a screening room, a thousand-bottle wine cellar, and a cabana laced with flowering vines by the pool. The Horwitzes had hired a celebrity decorator and installed a baby grand piano and framed photographs of Brigitte Bardot and Jack Nicholson. On social media, Zach posted pictures of himself courtside at Lakers games; Mallory shared images of their toddler playing in the California sun. For Mallory’s thirtieth birthday, Zach paid the R. & B. artist Miguel to perform for friends at the Nice Guy, a voguish restaurant in West Hollywood.

The couple, college sweethearts from Indiana University, had arrived in California seven years earlier, in search of a new life. They had started the cross-country drive with their dog, Lucy, on New Year’s Eve. In L.A., Mallory trained to be a hair stylist, like her mother and grandmother back home in Santa Claus, Indiana. Zach, who had secretly wanted to act ever since he saw his first Broadway play as a child, landed a few tiny parts: he played Demon 3 in one film, an unnamed basketball player in another. He was not quite movie-star handsome, but he had gleaming teeth, an aquiline nose, imposing biceps, and turquoise eyes. For a stage name, he chose Zach Avery.

Although Zach was not an overnight success, bigger roles came soon enough. In 2017, he flew to Serbia for a film directed by Ralph Fiennes, then he was off to Virginia to shoot a movie with the Hollywood veteran Bruce Dern, in which he played opposite Olivia Munn. Before long, he starred in a thriller featuring Brian Cox, who played the patriarch Logan Roy on “Succession.” In an interview after the production, Zach praised Cox for “taking me under his wing,” and marvelled, with self-flattering deference, “When you’re sitting across the table from him, doing scenes, you almost have to pinch yourself and say, ‘How is this real?’ ”

Like many young stars, Zach dabbled in tech investments and started companies to produce and distribute films; he named his enterprises 1inMM, after his favorite saying, “When odds are one in a million, be that one.” Eventually, he encouraged Mallory to stop working at the salon. They had forty million dollars in the bank, he told her. Why go to work? All the while, Zach kept in touch with the friends who’d been with him during his rise. He took them to parties by private plane and always paid their way; he even made some of them rich, by dealing them into his businesses. In 2018, during a dinner in Montreal with three old friends from Indiana, one of them proposed a toast to Zach: “You’ve changed my life, my wife’s life, my children’s lives.”

But even in Hollywood, where professional envy is as ubiquitous as dental veneers, people around Zach were unusually puzzled by the divide between his success and his talent. “He is the worst actor I’ve ever worked with,” a former colleague told me. Sharing a scene with Zach, he said, was like interacting with a banana. The director Michele Civetta, who worked with Zach, told me that he was forced to invent ways to help him unlock emotion; otherwise, it was like “dealing with a dead horse.” Audiences reached a similar conclusion. After Zach appeared with Cox, in “Last Moment of Clarity,” one reviewer wrote that he delivered “such a dull, unappealing performance that the movie has a void at the center.” A viewer of another of his films declared, “Zach Avery’s acting was like a cancer to this movie. Every time he was on screen it died a little more. Good god, how did he make it past the auditions?”

Still, many people who encountered Zach thought that he seemed like just another lucky beneficiary of the capricious entertainment business. Gina Dickerson, a real-estate agent who met with him and Mallory, said, “In L.A. more than anywhere else, nobody really ever knows where the money is coming from.” Her colleague Tracy Tutor told me, “In Hollywood, the more you fake it, the more people actually buy it. You have the right car? You’re wearing the right suit? You know the right people? No one does the diligence.”

If anything, Zach struck people as too blandly genial to be anything other than what he appeared. Civetta, the director, noticed that he seemed determined to project wholesome simplicity—“milk and apple pie, his wife, his kids.” Tutor, the real-estate agent, who often appears with her clients on a reality show called “Million Dollar Listing Los Angeles,” considered casting Zach but concluded that he was too undistinguished to put on TV: “I said to the show, ‘This is the most boring, vanilla person.’ ”

As a teen-ager on the outskirts of Fort Wayne, where subdivisions give way to farmland, Zach Horwitz was an athlete, not a theatre kid. The Carroll High School yearbook featured a picture of him shirtless in the gym, under the headline “Best Bodies.” He was popular, but prone to telling fanciful stories that seemed engineered to draw attention. According to a classmate named Steve Clark, Horwitz once told peers that he had met the baseball star Derek Jeter at a mall in Florida, and that Jeter had invited him to dinner. The story seemed ludicrous, but Horwitz was beyond reproach. “He was handsome, and he was a football player, which is to say he was high-school royalty,” Clark said.

Horwitz’s parents, Susan and Howard, had divorced when he was young. For a time, he lived with his mother and sister in Tampa. During a visit to New York City when he was in grade school, he thrilled to a performance of “Annie Get Your Gun.” He asked his mother about the actors, and she explained that they were professionals, paid to entertain the crowd. Back home, he took to memorizing lines from movies like “Forrest Gump” and “Jerry Maguire,” and he talked of quitting school to become an actor, but his mother insisted that he get an education. By his sophomore year of high school, they had moved to Indiana; his mother had married Robert Kozlowski, a prosperous manufacturing executive. The family lived comfortably, with a vacation house on a lake.

In 2005, Horwitz started college in Bloomington, majoring in psychology. One day at the gym, he met Jake Wunderlin, who, like him, was a brawny former athlete from Fort Wayne. Unlike Horwitz, though, Wunderlin did not come from money. He was a scholarship kid—a tall, reserved honors student in finance who worked at the campus food court to help pay expenses. They grew close, and Wunderlin joined him on visits to his mother and stepfather, who had a big house near Zionsville, the richest town in Indiana. Horwitz gained a reputation for spending freely on friends, covering late-night drinks and pizza. “He was the one that would pay for everything,” Wunderlin told me recently. “He loved it. He never was mad about it, like, ‘Are you going to pitch in?’ ” Joe deAlteris, a business student who had been friends with Wunderlin since kindergarten, grew close with Horwitz, too. “I knew him as the guy who had a ton of family money,” he told me. “It felt like every semester he came back with a new car.”

Horwitz also had a knack for identifying a need in another person, a point of emotional access. DeAlteris was outgoing, a wide receiver on the Indiana team and a member of the Beta Theta Pi fraternity, but in 2009 his stepfather died, and he was overwhelmed with grief. It was not a subject that he discussed easily with the college-gym crowd, but Horwitz lost his own stepfather around the same time, and the two bonded. At social occasions, Horwitz liked to pose questions that generated moments of self-revelation. He once asked a circle of friends, “How much money is enough? How much would it take in your life to do whatever you want?”

Mallory met Zach at a tailgate party in 2008, just before her twentieth birthday, and was taken with his attentive manner. “Everyone loved him,” she recalled. “If there was a homeless person on the street, he’d say, ‘Let’s give some money.’ I felt like I had an extremely deep, rare connection with this person.” After graduating, she followed Zach to Chicago. She walked him to classes at the Chicago School of Professional Psychology; when he told her that he was dropping out, after less than a year, she strove to be supportive. He harbored fantasies of getting into the Chicago improv scene, but kept them to himself. Instead, he talked enthusiastically about a job as a salesman, providing accounting software to small businesses.

Wunderlin was working in the Indianapolis office of the wealth-management division at J. P. Morgan, and Horwitz called periodically to compare notes. Among friends, he let it be known that he had inherited money—as much as ten million dollars, some said—and Wunderlin got used to hearing him talk about the “crazy returns” that his mother’s financial team had achieved. In fact, the family’s money was contested. Horwitz’s stepbrother Steven had filed suit against several relatives, alleging that they had shortchanged him on his inheritance. He accused Horwitz’s mother, Susan, of fraud and manipulation, suggesting that she may have forged his father’s signature on a will while he was sick, in order to secure most of an estate that totalled more than eleven million dollars. Lawyers for Susan called the allegations “false and distorted” and fought the case; in 2011, they reached a confidential settlement.

As the case was nearing resolution, Horwitz called Wunderlin and told him about an enticing opportunity: he had attended a small-business convention, where he’d pitched a chain of fast-casual healthy restaurants—in effect, juice bars with supplements. He said that he’d caught the attention of venture capitalists backed by Howard Schultz, the founder and C.E.O. of Starbucks, who had a sideline as an investor in food startups. (Not long before, a V.C. firm that Schultz co-founded had put almost thirty million dollars into Pinkberry frozen yogurt.) Schultz himself had expressed interest, Horwitz told him. “He said, ‘I have a meeting with Howard,’ ” Wunderlin recalled.

Days later, Horwitz reported back that the meeting had gone well; if he could get a restaurant built, Schultz would consider an investment. Horwitz invited his friend to join the venture, saying, “I need to build a team.” Wunderlin wasn’t about to leave J. P. Morgan for a juice bar, but then Horwitz put him in contact with Schultz directly. In March, 2011, Wunderlin got a long e-mail from Schultz’s account, reflecting on the lessons of building Starbucks and declaring, “I have faith in you. Your team has faith in you.” It ended on a note of inspiration: “Be the person that you have always dreamed of becoming, Jake, and all the rest will fall into place.” Elated, Wunderlin showed the e-mail to his parents, quit his job, and moved to Chicago.

The restaurant, called FÜL, opened that summer. Mallory, who got her own galvanizing e-mail from Schultz, had signed on, and Horwitz recruited other friends. In the next six weeks, he shared exciting news: undercover test shoppers had visited and approved the restaurant; Schultz was preparing a thirty-million-dollar offer. Better yet, they had received a rival offer from a private-equity firm in Florida.

Though the business consisted of a single storefront, Horwitz gave out grandiose titles, naming himself the C.E.O. and Wunderlin the C.F.O., with a starting salary of two hundred and fifty thousand dollars. He leased an office capacious enough for each of them to have a suite. While Mallory ran the restaurant and Wunderlin plotted its growth, Horwitz spent most days in his office, with the door closed. One afternoon, he invited Wunderlin to join him at the bank, but had him wait in the lobby while he signed documents to prepare for a deal.

Then, all of a sudden, it was gone. The private-equity offer had collapsed, Horwitz said, for complex reasons involving his inheritance, his private investments, and the Securities and Exchange Commission. Worse, he added, when FÜL looked unavailable, Schultz had moved on to another health-food chain. Wunderlin was devastated. Without new investments, the restaurant would be finished by the end of the year. “We were left to fend for ourselves,” he said. He began looking for other work.

The only good news, Horwitz said, was that Schultz had offered him a job at Maveron, his venture-capital firm. Mallory later recalled that he showed her a contract for a position at the firm’s “Entrepreneur Outreach Program,” based in Los Angeles. It would be perfect, he told her: he would visit campuses and small-business conventions, cultivating young strivers. He did not mention that the move would also allow him to pursue his dream of being a star.

Acting is a discouraging business, but Hollywood aspirants have sustained themselves for decades with tales of predecessors who outhustled the competition. Dick Van Dyke danced to stardom in “Bye Bye Birdie” despite having never before taken a class. Eddie Redmayne got cast in “Les Misérables” by claiming that he was a seasoned equestrian, even though he hadn’t been on a horse since childhood. Making it through an audition often requires bluffing not just the casting director but also yourself. It’s a mentality that Ryan Gosling once called “self-mythologizing”—the ability to face a “hundred other people that are better-looking and more talented and somehow think that you should get the job.”

When Horwitz got to Los Angeles, he set about bluffing two audiences: his old friends at home and his potential new friends in Hollywood. Soon after arriving, he wrote on Twitter, “I normally wouldn’t name drop BUT I asked H. Schultz this AM what his goal is for me in my role, he simply says, ‘Just be good. Don’t stink.’ ” Before long, though, he started telling Mallory that he was bored with his job and talking about shifting his attention to acting. “I’m, like, ‘O.K., if this is going to make you happy, do what you want to do—as a hobby,’ ” she recalled. He tried acting classes and auditions. Then, when he struggled to get parts, he changed tack. Ever since Warren Beatty produced “Bonnie and Clyde,” it has been common for accomplished actors to develop movies and then star in them. Horwitz wondered, Why can’t I produce, too? He befriended two brothers, Julio and Diego Hallivis, who were looking to establish themselves in the film industry. Diego, who wore his hair in a tall black pompadour, was a fledgling director. Julio, wiry and intense, ran the business side. Horwitz recruited them for 1inMM Productions to make low-budget independent films—essentially B movies in which he might star. He leased office space in Culver City and three black Mercedes coupes for them to drive to meetings. When Horwitz wasn’t around, Julio spoke scathingly about him. An associate recalled that he often said, “He’s such a terrible actor. But he’s the money guy. He has family money, and he knows rich people.”

Horwitz had arrived in L.A. at a time of unusual opportunity. Five years before, Netflix had started streaming films and television shows, and, as Amazon worked to keep up, the two companies competed for talent and content. By 2019, Netflix would be spending more than twelve billion dollars a year on programming. Disney launched Disney+, and WarnerMedia created HBO Max. All told, there were more than two hundred and fifty online video services in America, feeding a seemingly inexhaustible demand. Money was coursing through the industry, the Times reported: “Florists, caterers, set decorators, chauffeurs, hair stylists, headhunters—it’s gravy train time.”

In March, 2013, Horwitz announced a partnership to buy the rights to cheap movies and distribute them to the Latin American divisions of Netflix, HBO, and other platforms. His new partner, Gustavo Montaudon, was well suited to the endeavor: he had spent decades at Twentieth Century Fox, distributing content across Latin America. The deal was covered in the trade press, helping to secure a transformation of Horwitz’s image. The struggling actor with a failed juice bar was identified, in Variety, as “the entrepreneur behind fitness-driven lifestyle brand FÜL.” (Some of his marketing materials went further, describing FÜL as a “multi-million dollar, multi-pronged fitness brand” with “seven locations” and “apparel sold in Target, Dick’s Sporting Goods and Sports Authority.”)

One of the first people Horwitz approached with his venture was Jake Wunderlin. By the spring of 2014, Wunderlin was in Chicago, working as a trader. He had just received a bonus of thirty-five thousand dollars, and he was engaged to be married. He and Horwitz remained friends, but they rarely talked business anymore, until Horwitz started dropping hints that Schultz was backing his work in the movie business. “Zach said, ‘I can let you in on a deal,’ ” Wunderlin told me. It was small by his usual standards, Horwitz said, but, if Wunderlin could put up thirty-seven thousand dollars, he could make nine thousand dollars in ninety days. The contract showed that Horwitz was selling Sony the rights to a Mexican rom-com called “Deseo,” described in the official summary as “A succession of erotic encounters weaved into a daisy chain of delightful sensuality.”

Wunderlin had recovered from the failure of the juice bar, but he was still wary: “I said, ‘I can’t lose this money. This is everything that I’ve ever saved.’ ” Horwitz persuaded him by pledging his own assets in case anything went wrong. The deal went through as promised; Wunderlin got his money, which he put toward a down payment on a house. He was hooked.

That fall, he flew to Los Angeles to be a groomsman at Zach and Mallory’s wedding, at the Four Seasons. Wunderlin was awed by his friend’s new life: “He was doing three-hundred-thousand-dollar deals.”

Back in Chicago, Wunderlin sat on a roof deck one night with some of their other college friends, including deAlteris, who was working in private equity. He asked if they wanted to pool their money on a larger film deal. “None of us had the gift of inheritance or anything like that,” he told me. “All of us were focussed on what’s next in banking or private wealth or sales and trading. We were all trying to figure out how to be successful.” They agreed to buy into a series of deals, and got lucrative returns, often twenty per cent or higher. Soon, they started taking out loans to fund more of Horwitz’s investments, and thought of quitting their jobs to do it full time. DeAlteris said, “We’re getting paid on time. Real cash. Without fail.”

Before long, they were encouraging their parents to put money in. DeAlteris’s mother, a widow and a retired physician’s assistant, invested forty thousand dollars. Wunderlin’s parents put up half their retirement savings. Within two years, the college friends had profited on twenty-seven of Horwitz’s movie deals. To handle the business, four of them formed a company—called JJMT Capital, for the initials of their first names—and started bringing in money from outsiders, including wealthy investors on Chicago’s North Shore. “People were banging down our door—‘I hear you guys have this great opportunity. Do you have any room for me?’ ” deAlteris said.

When Horwitz visited Chicago, he resumed his old conspicuous generosity. At a pizza parlor, he tipped the server two thousand dollars. “She came back out in tears,” Wunderlin recalled. At night clubs, Horwitz might pick up a forty-thousand-dollar check and leave another thirty thousand for a tip. As the party swirled around him, he would lean back in silence, with a blissfully satisfied look.

His friends felt a tinge of satisfaction, too; they were proud of the money that they made for their parents and friends. None of them knew much about the entertainment business, but they thought they knew due diligence. “I would pepper him with questions, and he would come back with answers to everything,” deAlteris said. They showed the contracts to industry experts, and Horwitz arranged for a member of their team to speak by phone with his main contact at HBO. Horwitz was always available to answer questions, but he told investors never to contact the streaming platforms directly, because he had signed nondisclosure agreements. “I’ve got basically three relationships—HBO, Netflix, and Sony,” he’d say. “If you guys go around me, you’re going to blow up my business.”

In fact, there was no business. Horwitz was not buying or selling movie rights. He had got his hands on a few distribution contracts, then copy-and-pasted them in Microsoft Word to make hundreds of fakes, forging signatures of executives that he found on LinkedIn. As new investors bought in, he paid off earlier investors with the proceeds—a Ponzi scheme. (Montaudon, his partner, has not been charged with any wrongdoing.) He sent out fake bank statements and ginned up bogus e-mails and text messages from HBO and Netflix, often using apps to send fake messages to himself at predetermined times. He arranged for a female accomplice, who has never been identified, to impersonate the contact at HBO. This kind of deception requires relentless discipline; Bernie Madoff insisted that every screw he might see on his yacht have its head turned in the same direction. Horwitz, too, had a fastidious streak. He held to a rigid schedule, growing upset if he couldn’t fit in a workout before noon, and he calmed himself by insuring that everything around him was in the proper place. He never went more than two weeks between haircuts.

His fraud rested on perceptions of Hollywood as a money factory—an idea that reached back to the nineteen-thirties, when Louis Mayer, the co-founder of M-G-M, was the highest-paid executive in the country. (Nineteen of the next twenty-five highest-paid execs also ran Hollywood studios.) The reality is that hits are unpredictable and the business is clannish and opaque—“a closed world,” as one longtime industry executive told me recently, “with its own language, own rules, own economics and caste system.” The finances are obscured by “Hollywood accounting,” invented by studios to shield revenues from inspection by stars, writers, and others who want a cut. (The screenwriter for “Men in Black” has said that the film earned more than half a billion dollars, but that the studio refuses to declare it profitable.) And yet, for all that volatility, movies have a charismatic appeal for the distant investor—the proverbial dentist from Omaha, lured by the unspoken prospect that he will somehow end up clinking glasses with Tom Hanks. “People try to buy their way in,” the executive said, “and what happens is they lose a lot of money and still get kicked to the curb.”

It’s tempting to wonder why Horwitz’s friends in Chicago thought they had found a vast source of revenue that people in Hollywood had somehow overlooked. But they didn’t think they had beaten the insiders; they thought their friend had become an insider. DeAlteris said, “It’s an old boys’ club, and it seemed like we just so happened to be old boys with somebody who knew some of the old boys.”

As their partnership flourished, their personal lives became more entwined; they attended one another’s weddings and took joint vacations. In 2016, Horwitz flew Wunderlin by chartered jet to Miami for a mutual friend’s bachelor party that stretched for a week. Late one night, the two set off from shore on paddleboards, pausing in the water to reflect on their good fortune. Wunderlin recalls that Horwitz said, “I have more money than I know what to do with. It’s like Monopoly money.”

By funnelling cash into his production company, Horwitz had provided himself with a string of minor roles, including that of a murderous psychopath in a short film made in homage to the Joker, and that of a victim of a home invasion in a movie called “Trespassers.” But, after five years in Hollywood, he seemed to be confined to B movies, until he devised a way to get closer to real stardom.

In June, 2017, Horwitz co-founded a company called Rogue Black, with Andrew Levitas, a filmmaker and a sculptor who had directed Amy Adams, Jennifer Hudson, and other prominent actors. (Levitas, who is not alleged to have been aware of Horwitz’s scheme, declined to comment.) In the next four years, according to court documents, Horwitz poured about twenty million dollars into Rogue Black, and Levitas arranged investments in eight movies, including “The White Crow,” directed by Ralph Fiennes, and “Last Moment of Clarity,” with Brian Cox. Horwitz received parts in four of them.

Some were so small that he was barely visible onscreen, but still he could claim proximity to famous actors. In 2018, he hired a publicist, Nedda Soltani, who had represented cast members of “Breaking Bad” and the “Real Housewives” franchise. He gave her pictures of himself on the red carpet at the Golden Globes. (He had never attended the awards ceremony, but a photo outside an after-party made it appear that he had. Soltani told me, “No one talks about that, but you could get a hotel room and wear your tux and just sort of be in the mix.”) When she asked for a biography, he conjured a story of humble Midwestern roots: an injury had kept him out of the N.F.L., so he supported himself as a door-to-door salesman before making his way to Hollywood. (In truth, Horwitz had played intramural football in college.) Soltani’s boyfriend was from Indiana, so Horwitz felt instantly relatable. “There was something about his eyes. He smelled good, his haircut was nice, he had a nice watch. He made you believe,” she said. “We built this little bio on him, and that became my pitch: Johnny Football turns to acting, rags to riches.”

The outlets that Soltani persuaded to feature her client were mostly obscure online venues—the kind, she said, that people solicit articles in “just to post them on their Instagram stories and say, ‘Look at me.’ ” But investors researching Horwitz could now find unquestioning recitations of his story. In an interview on AfterBuzz TV, a YouTube channel focussed on “Hollywood’s rising talent,” the host mentioned his “burgeoning career in football, which was derailed,” and asked about his association with Fiennes. Horwitz warmly recalled showing up for filming in Belgrade. “Walk on set, he’s in the back of this auditorium, and he says, ‘Zach!’ ” He described Fiennes’s avuncular instructions: “I loved what you did there. Bring exactly the same thing, but, if you turn just a little bit to the right, the light is going to hit you in a way that’s going to look amazing.” (Fiennes’s publicist said that she was unable to reach her client for comment.)

Hollywood has long had an ambivalent relationship with facts. The screenwriter William Goldman once described overhearing a producer tout so many bogus figures while working the phone that he finally had to cover the mouthpiece and ask, “Which lie did I tell?” In time, Horwitz had deceived so many friends and investors that he had to discourage them from talking to one another; he was always “building moats,” as one put it. He told an associate that he had sold FÜL for eleven million dollars but warned him not to mention it to Mallory, claiming that she had a small-town discomfort with people knowing their business.

Yet Horwitz never stopped stoking belief. Late one night at a club, he showed an investor named Craig Cole a string of text messages, telling him that Ted Sarandos, the C.E.O. of Netflix, was seeking long-term rights to the full library of films that he distributed. When the fake Sarandos asked what would secure the deal, Horwitz replied, “The zeros.” Moments later, a text came back with an offer in the hundreds of millions. Horwitz slumped to the floor, in a pantomime of triumph and gratitude. In “Bad Actor,” a forthcoming documentary about the case, Cole recalls that Horwitz started crying: “He says, ‘Craig, we made it! We did it!’ ” Cole wept, too; when he got home that night, he told his girlfriend that they were set for life.

Like other accomplished swindlers, Horwitz excelled by knowing his audience. In Chicago, he was a wealthy heir who flew private jets to movie shoots. In L.A., he was a plucky football talent selling door-to-door. (A surprising number of people he dealt with in California mentioned how good he smelled.) His difficulty showing emotion, a detriment onscreen, turned out to be useful in pitch meetings. Edgar Allan Poe, in an essay on swindling, noted the power of nonchalance—the kind of take-it-or-leave-it indifference that conveys credibility—and Horwitz often succeeded by convincing investors that he didn’t much care whether they bought in. “Remember Zach does not need any money from us,” one wrote to another in 2017.

That June, Horwitz met investors at the Four Seasons in Beverly Hills. Over dinner, he sat beside Jim Russell, a Las Vegas steel executive, and, according to court documents, said that he had made some twenty million dollars the previous year. Russell was concerned when Horwitz insisted that his business records were too confidential to share, and later sent an e-mail to one of his partners describing the evasion as a “Red Flag!!” But the partner dismissed the concern, writing, “This is the goose that lays the golden egg.” Russell relented, and his group put in another five million.

By 2019, Horwitz even seemed to be improving his acting. In May, he showed up in Norfolk, Virginia, to shoot a movie called “The Gateway.” It was understood that his financial support guaranteed him a place onscreen. “This is truly not uncommon,” Civetta, the director, told me. “I’ve heard countless stories from friends who’ve made films. It’s, like, ‘Oh, yeah, if you want half a million dollars, this wealthy industrialist’s daughter has to have a secondary role.’ ”

Horwitz was assigned the role of a volatile ex-con named Mike, but in rehearsals he got timid and self-conscious; his voice went high and his mannerisms grew labored. So Civetta contacted a nearby jail and arranged for Horwitz to spend the night, talking to inmates and being searched and fingerprinted. When he returned, he showed a new ability to “change tonalities,” Civetta said. “He could go places relatively quickly in terms of diabolical rage.” When the movie came out, Variety observed, “Probably the best turn is by Avery,” who “makes potentially cardboard villain Mike into a frighteningly credible sociopath.”

As the end of 2019 approached, Horwitz had raised three hundred and fifty-eight million dollars in the past year. He was running what scholars of confidence games call an “affinity fraud,” built around trust and personal connections. He found wealthy investors—in Napa Valley, Orange County, Las Vegas, and Chicago—who then spread the word on the tennis court and the charity circuit. But every network has limits, and the arithmetic of a Ponzi scheme is unforgiving. When you run out of new investors, the mechanism begins to collapse. After Thanksgiving, Horwitz fell behind on his payments for the first time.

To fend off concerns, Horwitz blamed the delay on the big media platforms and promised a speedy resolution. On January 4th, though, Wunderlin and deAlteris arrived at his house on Bolton Road to figure out what was happening. For three days, Horwitz walked them through documents; he had thousands of pages of fake contracts and e-mails and bank statements, which he presented calmly. “Cool as a cucumber,” deAlteris recalled. The possibility of fraud never occurred to him, deAlteris said: “I thought it was wild disorganization that he had so much money coming into his bank account.” The friends went back to Chicago feeling relieved.

But Horwitz fell further behind, and he gave more excuses. Covid-19 was disrupting business; HBO was reorganizing its operation; Netflix was auditing its distribution deals. He needed time with his family, he said—Mallory had recently given birth to their second child. All the while, he kept up his patter. In October, he texted an investor, “just heard from HBO,” and then passed along a fake e-mail from executives asking for a “week grace period.” He commiserated: “always something w them.”

Near the end of 2020, Horwitz bought one last bit of time by saying that money was piling up at Freeway Entertainment, an account-management firm, and would soon be distributed. But the delays were becoming untenable for his friends in Chicago. People who had given them money to invest were threatening to sue. One was Marty Kaplan, a financier who, along with partners and family members, had ten million dollars at risk. According to Kaplan’s lawyer, deAlteris had reassured him by citing his friendship with Horwitz, adding, “I wouldn’t be able to pay rent if something went wrong.”

In all, Horwitz owed the Chicago group a hundred and sixty-five million dollars. He had got his lawyer at the prominent firm K&L Gates to send a letter warning them that the details of the deals were “strictly confidential,” but on February 23rd Wunderlin and deAlteris decided to call Freeway to check the account balance. Wunderlin made the call from his home in Chicago; he patched in deAlteris, at his kitchen table across town. Horwitz had given them a copy of his contract with Freeway, as well as statements showing a growing balance. DeAlteris flipped through the paperwork to find the account number, then read it aloud. The representative paused and asked to hear the name again. The firm had no record of a Zach Horwitz, he said. DeAlteris grew impatient: “I’m looking at the fucking bank statement! You clearly misheard me.”

By the time they hung up, they could see an impending catastrophe. “All the dominoes fell after that one,” deAlteris said. Wunderlin, who had been pacing during the call, dropped to his knees. He had been the first of the friends to put money into Horwitz’s scheme, followed by his family and then by outsiders who contributed a harrowing sum. When I asked him about it more than two years later, he fell silent and struggled not to cry. “I still can’t really talk about it without doing this,” he said.

That afternoon, their lawyer contacted the F.B.I. to report a suspected fraud. Other investors were reaching similar conclusions. On March 15th, F.B.I. agents came to deAlteris’s house to record a call with Horwitz. Wunderlin was there, too. On the phone, Horwitz ran through his usual reassurances, until Wunderlin cut in: “Here’s the problem with that. That’s not fucking true. We spoke to Freeway. There’s no money in that account. Where in the fuck is our money?”

There was a long pause—long enough that they had to ask Horwitz if he was still on the line. Finally, he said, “I think the lawyers should do the talking.” Wunderlin couldn’t restrain himself: “You’re not going to tell me where any of the money is? What did you do with it?” He talked about his mother’s savings, his father’s savings, but Horwitz stayed silent. Wunderlin sensed that he might have realized he was being recorded. “It was like talking to the wall,” he said.

In L.A., Horwitz’s friends noticed that he seemed paranoid, worrying that he was being monitored through their phones. When they asked what was going on, he evaded the question, saying that he didn’t want to expose them to trouble.

According to court documents, Horwitz had been using Adderall and Xanax and drinking heavily, sometimes staying up most of the night. Mallory was worried about his behavior, but she believed that he had just been having trouble recouping money that HBO and Netflix owed him. They had begun to talk about a simpler life—maybe somewhere quieter, like Nashville or Austin. By spring, they had put their house on the market and found a buyer. The offer was set to be officially accepted on April 6th.

That morning, before dawn, Mallory was asleep beside Zach and their three-year-old when she awoke to banging on the front door. From down the hall, she could hear their baby crying, and she ran to soothe him. Looking through the window, she saw F.B.I. agents, guns drawn, and heard them shouting Zach’s name. Mallory rushed downstairs with the baby in her arms and opened the door. Agents streamed in. Zach, now on the stairs, asked if he could put on a shirt. The agents refused, and walked him out onto Bolton Road. John Verrastro, the agent in charge, was startled by Horwitz’s behavior. He had come to expect defendants in white-collar cases to express something during their arrests—bewilderment, outrage, despair—but Horwitz showed none of that. “He didn’t seem surprised,” Verrastro said.

Mallory quickly filed for divorce. According to her filings, their joint accounts had been frozen by the authorities; the only money in her name was a checking account with a balance of $100.75. Horwitz was charged with thirteen counts of fraud, in the service of what prosecutors called an “intricate illusion”—the largest Ponzi scheme in Hollywood history. He had raised more than six hundred and ninety million dollars by deceiving hundreds of investors, beginning with his closest friends. A woeful actor onscreen turned out to have been an astonishingly convincing performer in life.

The extent of the lie was almost too great for Mallory to grasp. Her husband never had any deals with HBO or Netflix. He had never even met Howard Schultz. When Zach left for late-night meetings, there were no meetings. The only thing real was his slender imprint on the screen. In her filings, she wrote, “I loved him. I idolized him. Zach is a masterful manipulator and liar and brainwashed and gaslit me into believing he was this perfect man, something he made everyone around him feel. Only a sociopath can live the sort of deceptive life Zach lived for nearly ten years.” Mallory’s father bought her and the children one-way tickets to Indiana. On May 1st, she flew home.

Horwitz got out on bail: a million dollars, posted by his mother. For a week or two, the case made headlines worldwide, but he stayed out of sight, telling his kids that he was working as a dog-walker. Among people who knew him, the reaction that I encountered most often was disbelief that he was bright enough to manage such a scheme. “I don’t know how the fuck he was capable of it,” one of his closest friends told me. Another associate said, “If you had asked me if this man even had Photoshop downloaded to his computer, I would’ve told you, ‘Absolutely not.’ ” More than a few surmised that his Latin American distribution network must have been a front for a drug cartel.

The government didn’t agree. The S.E.C. named him as the sole defendant, noting that he alone had controlled the bank accounts at 1inMM. When I told Verrastro, the F.B.I. agent, that many people were perplexed nobody else was charged, he said he couldn’t go into detail about that decision. But he hastened to add, “The one thing that’s clear in this case is there was no one above him. He is the main guy.”

As with many frauds, the prosecution triggered a series of lawsuits, as investors fought over the remaining assets and accused one another, as well as various banks and law firms, of failing to spot the crime. Alexander Loftus, a lawyer representing some of the investors, filed suits against Horwitz’s friends in Chicago. “When you’re acting like a broker, it’s your job to see if this is good or not before you sell it,” he told me. Ultimately, Loftus said, the friends in Chicago agreed to give up more than nine million dollars—though they maintain that they acted in good faith. “My family members who trusted me, they’re not savvy,” deAlteris said. “I thought that I was being fairly objective with how I approached it. My family members weren’t. One chip became two chips, which became all their chips.” Their lawyer, Brian Michael, told me, “It’s inconceivable that they would’ve questioned a fraud that was rooted in a friendship long before Zach went to Hollywood, that they allowed their own families to participate in.”

In the end, there was surprisingly little money to recoup. A receiver, appointed by the court to hunt for assets, reported that an “unknown” sum might be “hidden.” But lawyers involved in the case told me that Horwitz expended most of the money keeping the scheme going. The rest he used to pay for jets and yachts and the pursuit of stardom: prosecutors listed $605,000 to Mercedes-Benz and Audi, $174,000 to party planners, $54,600 for a “luxury watch subscription” service. Six months after his arrest, confronted by extensive evidence of his deceptions, Horwitz pleaded guilty.

On the afternoon of February 14, 2022, I attended the sentencing in a federal courtroom in L.A. Horwitz arrived early, in a tailored blue suit and brown wingtips. His mother and other relatives filled the rows behind the defense table. Prosecutors declared, in a written argument to the judge, “It is difficult to conceive a white-collar crime more egregious.” They noted that Horwitz had begun his scheme by “betraying the trust of his own friends, people who lowered their guard because they could not possibly imagine that someone they had known for years would unflinchingly swindle them and their families out of their life savings.”

Victims had been invited to submit descriptions of the impact on their lives. One investor, identified as a sixty-four-year-old who lost $1.4 million, described coming out of retirement to pay for food and shelter: “I cry every day and have stopped seeing friends or family because of the shame of this financial loss and have a now severe distrust of other human beings. If it was not for my spiritual beliefs, I would have committed suicide.” Another wrote, “I am the mother of a 46-year-old special needs daughter. . . . I will never be able to earn what has been taken from me and my daughter but the emotional damage . . . is even greater.”

Some victims chose to speak in person. Robert Henny, a lanky screenwriter with two young children, stepped to the microphone. “I don’t live an extravagant life style,” he said. “My career could hit bumps and we’d be O.K. Even after my wife’s cancer diagnosis, we were O.K. For fifteen years, we lived frugally.” They had lost $1.8 million in the scheme. “For the first time, we are not O.K. I don’t know if we ever will be,” he said.

When it was Horwitz’s turn to speak, he stood before the judge, his shoulders hunched and hands clasped. “I became the exact opposite person from who I wanted to be,” he said. He wept and paused to collect himself. “I am destroyed and haunted every day and night by the harm that I have caused others.” He asked the judge for a lenient sentence, one that would allow him to “return to my young boys when they are still boys.”

The judge, Mark C. Scarsi, was unmoved. He applied the maximum sentence that prosecutors had requested: twenty years in prison. (Elizabeth Holmes, the founder of the disgraced biotech startup Theranos, was sentenced to eleven years; Sam Bankman-Fried, the billionaire founder of FTX, is serving twenty-five.) As the sentence was announced, Horwitz stared into the distance and then up at the ceiling.

After the courtroom emptied out, Henny stopped at the bathroom. As he was preparing to leave, the door opened and Horwitz walked in. “We look at each other,” Henny recalled. “And he goes, ‘Hey, I just want to tell you, I’m so sorry.’ ” Henny, who is six feet four, towered over him. “You took everything from us,” he said.

One of Horwitz’s relatives poked his head in the door and said, “Hey, are we all good here?”

Horwitz reassured him, “Yeah, we’re O.K.,” and the door closed again.

Henny could have asked him why he did it, or how he lived with himself. But, as a writer, he was interested in only one thing: “How did you think you were going to get out of this? What was your endgame?”

Horwitz paused, and then said, “I didn’t have one.”

Until the end, Horwitz seemed to have believed that one of his identities was going to save him—actor, producer, investor. Something had to work. Fake it till you make it.

One morning last November, I took a cab out to the Federal Correctional Institute at Terminal Island. It sits on a peninsula at the far end of an industrial strip, south of Los Angeles, jutting into the waters of the harbor. The facility is surrounded by barbed wire and gun towers, but tauntingly close to the city. Walking inside, I could hear seagulls and the distant rumble of cranes on the docks.

I had exchanged letters and e-mails with Horwitz since his sentencing, in which he agreed to keep the “lines of communication open” but wouldn’t say “anything specific.” He seemed more interested in projecting a narrative of rehabilitation. He described a shift in his mind-set and said, “I am healthier for it every single day.” He imagined teaching a class to fellow-inmates, called “Emotional Intelligence Through Acting,” that would give them a “safe space to express vulnerability.”

I had stopped by the prison hoping to get Horwitz to speak more frankly about his crimes. In the visiting room, he wore a khaki shirt tucked into khaki pants, his hair cropped. He was relaxed and unfailingly polite. But, for all his talk of expressing vulnerability, he was still unwilling to answer questions on the record. In an e-mail later, he told me that publicity doesn’t help, because “all the wounds keep getting ripped open and additional salt being poured on top.”

I was wary of whatever he might tell me, in any case. He had always been conscious of his ability to persuade. At family Thanksgivings, when relatives went around the table saying what made them grateful, he treated it as a “performance,” he wrote later, prepping an answer and “artificially manufacturing it in order to get the sought after result.”

In prison, Horwitz had access to a computer for fifteen minutes at a time. He used it to start a blog, which he called Be That 1, a new variation on his favorite slogan about beating the odds. He offered occasional glimpses of his thinking during the scam—how he’d been “obsessed with belief in a superior life that existed just beyond my grasp”; how he had “put on the smile” despite “living an absolute hell,” with the knowledge that his life was “all bullsh*t ”; how he had portrayed “utmost confidence to everyone” to mask “deep, unresolved internal insecurities.” He recalled the feeling of living a “fabricated life that I had forced myself to believe was reality.” To sustain the delusion, he developed self-protective habits—“avoiding phone calls . . . avoid opening mail . . . avoid checking e-mails”—even though “on some level it was simply denial of what was inevitably coming.”

He also indulged in the language of self-help. Prison, he wrote, was a “journey” of “mending the wounds” and finding “genuine emotion.” People he had tricked were infuriated by the blog; it seemed glib or, perhaps, strategic—a way of assembling material for a relaunch of his life after prison. “I think he wants to be the next version of that guy from ‘Wolf of Wall Street,’ ” Mallory told me. “He loved that movie and watched it over and over again.”

Even from prison, Horwitz couldn’t seem to control his instinct for imposture and assimilation. Reading his blog, the producers of the documentary “Bad Actor” came upon lines that sounded out of place; they turned out to be copied from “Never Finished,” a self-help book by David Goggins, a former Navy SEAL. Goggins wrote that “humility is the antidote to self-pity. It keeps you rooted in reality and your emotions in check.” Horwitz had published that passage in his own voice, changing only “you” and “your” to “me” and “my.”

In Horwitz’s fantasies, you hear echoes of the long tradition of American artifice: of Napoleon Hill, who wrote in “Think and Grow Rich” that “whatever the mind of men can conceive and believe, it can achieve,” and of the clergyman Norman Vincent Peale, who declared, “As you act and persevere in acting, so you tend to become”—a principle impressed on a young real-estate scion named Donald Trump when his family attended Peale’s sermons. At times, this tendency still seems strong enough to overwhelm the systems that we’ve developed to punish it. Even after Elizabeth Holmes was convicted, she voiced a belief that lies are just a stop on the way to truth. Asked what she thought would’ve happened if she had not courted so much attention, she told an interviewer, “We would’ve seen through our vision.”

In my conversations with people who knew Horwitz, many wondered why he risked so much. If it was all for money and fame, why not get out before it became so destructive? I concluded that he was seeking something harder to attain. He spent years performing the parts of a life he desired—the chosen protégé, the coveted talent, the loyal friend. He needed applause, from the server at a pizza restaurant and from his friends toasting him at dinner.

In the end, Horwitz got fame only where most people would want it least: from the true-crime audience. After his arrest, a commenter on Reddit wrote, “This is 100% going to be a movie.” Another agreed: “I’d watch the shit out of this.” Before long, Horwitz’s scheme was the focus of podcasts with names like “Scamfluencers,” “Crime and Wine,” and “Oh My Fraud.” His story was re-created for episodes of “The Con,” on ABC, and “American Greed,” on CNBC.

But most of the people who had worked with him were eager to forget him. When I wrote to a Hollywood veteran, asking about the experience, the response was “Your e-mail is something that I have dreaded in the back of my head for a long time.” The traces of his Hollywood life have been scattered or effaced. The house on Bolton Road was sold and the contents auctioned off. A poster with the slogan that inspired the name of his scheme went for forty-five dollars. And, despite all that Horwitz risked to make it on the big screen, his acting is hard to find. In “The White Crow,” his appearance was edited down to half a second. When “The Gateway” came out, in 2021, he was nowhere on the posters, and Olivia Munn never mentioned him on the press tour. When Brian Cox published a memoir, the movie he made with Zach Avery did not even make the index.

Looking back through his hours of effortful acting, there is one scene that stands out. It’s in “Trespassers,” the home-invasion movie, when his character admits to his wife that he has cheated on her. On set, the director, frustrated with his attempts to get Horwitz to perform, finally told him to ignore the script and let himself go: “Just strip it away. Throw away the line. Just tell her.” After a pause, Horwitz gave himself over to a few seconds of unconcealed feeling. “I fucked up,” he said. “I’m a piece of shit!” He sounded present and broken and strangely relieved. For a moment, you could almost forget that Horwitz was acting. ♦

https://www.newyorker.com/magazine/2024/06/03/master-of-make-believe