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Remember MoviePass? The subscription-based movie ticketing service that crashed and burned in 2018 and 2019?
Well, it’s back in the news and once again it’s money-related.
No, it’s not dead. Like a phoenix rising from the ashes it just keeps coming back.
This despite hemorrhaging money so badly that its parent company Helios & Matheson Analytics (HMNY) filing for Chapter 7 bankruptcy and announcing that it had to cease all business operations in January of 2020.
The latest money-related MoviePass news comes from the U.S. Attorney’s Office in the Central District of California.
According to the Department of Justice, a former MoviePass executive, Khalid Itum, was recently found guilty of embezzling from MoviePass and its parent company.
As if the company didn’t have enough trouble turning a profit.
Making the story even more bizarre is what Itum spent the money on after embezzling it.
Apparently, he stole at least $260,000 from MoviePass and its parent company to repay money he borrowed to produce an event at the Coachella music festival.
There’s a MoviePass and Fyre Festival joke in there somewhere, I just put a finger on it.
The now 43-year-old from Hollywood, Calif. was a MoviePass executive, serving as vice president of business development and then executive vice president, in the years the company completely tanked, from November 2017 until March 2019.
Interestingly, Khalid Itum had already been charged in 2010 with felony theft after being accused of stealing more than $36,000 from a previous employer, Workspaces LLC. He pled guilty to to second degree theft – a misdemeanor – and avoided deportation back to Jordan.
Despite all of that, he was still put in charge of MoviePass’ day-to-day operations in 2018.
“Khalid has a proven track record and I believe he will serve our financial goals and increase our overall operating performance,” Ted Farnsworth, CEO of Helios & Matheson Analytics, said at the time of Itum’s promotion.
He now faces a statutory maximum sentence of 20 years in federal prison for each of the two wire fraud counts for which he was found guilty last week.
“In the spring of 2017, Itum registered Kaleidoscope Productions LLC, a Los Angeles-based company that provided production and marketing services,” the U.S. Attorney’s Office wrote in a press release. “That year, Itum, through Kaleidoscope, organized a promotional event at the annual Coachella Valley Music and Arts Festival in Indio. Neither MoviePass nor HMNY participated in the Coachella event.
“Itum borrowed money from two individuals to help fund Kaleidoscope’s costs at Coachella. To repay the borrowed money, Itum later submitted sham invoices to HMNY for expenses and services purportedly rendered by Kaleidoscope.
“Itum caused HMNY and MoviePass employees to wire money from MoviePass and HMNY accounts to a Kaleidoscope bank account to pay the sham invoices.
“Itum concealed his scheme by lying to HMNY’s finance department that Kaleidoscope had been used to pay legitimate MoviePass expenses from the 2018 Coachella festival and provide other consulting services.”