Former MoviePass executive arrested for allegedly embezzling $260,000 for Coachella party
A former executive of the controversial movie ticket subscription service MoviePass has been arrested on charges of embezzling hundreds of thousands of dollars to pay off debt incurred by throwing a party at the Coachella music festival, the US law firm for the Central District of California announced Wednesday.
Khalid Itum, 42 and a Hollywood resident, faces two counts of money laundering and wire fraud for his alleged embezzlement of approximately $260,000 from MoviePass parent company Helios & Matheson Analytics (or HMNY), the government agency said in a press release.
“In the spring of 2017, Itum registered Kaleidoscope Productions LLC, a Los Angeles-based company that provided production and marketing services,” the statement reads. “That year, through Kaleidoscope, Itum hosted a party at the annual Coachella Valley Music and Arts Festival in Indio.”
Itum’s title at MoviePass was executive vice president.
Neither MoviePass nor HMNY participated in the Coachella event, the statement said. Nevertheless, the agency claimed, Itum paid off the money he borrowed to fund the event by submitting “sham bills” to HMNY.
Itum was arrested Tuesday and subsequently pleaded not guilty, the US prosecutor’s office said. His trial is scheduled for April 18.
Ciaran McEvoy, a spokesman for the US law firms, said Itum is out on bail.
Adam Fee, the lawyer representing Itum, said prosecutors were “wrong”.
“Itum worked seriously and honestly for MoviePass,” Fee said. “The only money paid to him or his consulting firm was for genuine services to MoviePass and its parent company, and the money was spent in completely legitimate ways.”
It’s an infamous return to the headlines for MoviePass, a much-derided subscription service founded in 2011 that offered attendees virtually unlimited access to movie screenings for less than $10 a month. The platform closed its doors in 2019. HMNY filed for bankruptcy in 2020.
Itum is not the only subsidiary of the company to be sued. Theodore Farnsworth and Mitchell Lowe — the former CEOs of HMNY and MoviePass, respectively — were sued last fall by the U.S. Securities and Exchange Commission over allegations that they had misled the public about MoviePass’s performance and fraudulently dissuaded subscribers from actually using the service. to use.
Lowe’s attorney has said he disagrees with the SEC’s claims, while a spokesman for Farnsworth said his attorneys would challenge the claims.
It was like that also named as a defendant in the SEC lawsuit, which alleged that Farnsworth and Lowe approved invoices that netted the former executive vice president $310,000, including for fraudulent Kaleidoscope expenses at Coachella.
Despite the brand’s struggles, MoviePass is trying to make another comeback. MoviePass was taken out of bankruptcy by its original founder, Stacy Spikes, who rolled out a new version of the service with what he says is a more sustainable pricing plan.