DOJ: Former MoviePass Executive Arrested for Allegedly Embezzling $260,000
February 23, 2023
A former executive at subscription movie theater ticket service MoviePass has been arrested on a federal grand jury indictment alleging he embezzled $260,000 from MoviePass’ parent company, New York-based data analytics firm Helios & Matheson Analytics (HMNY), to repay money he borrowed to produce an event at the Coachella music festival in Indio, Calif.
The Department of Justice reported that Khalid Itum, 42, of Los Angeles, was arrested by the FBI on Feb. 21, charged with two counts of wire fraud and two counts of money laundering.
At his arraignment in U.S. District Court in Los Angeles, Itum pleaded not guilty to the charges, and an April 18 trial date has been scheduled. He was released on $75,000 bond.
MoviePass was a New York-based company that charged subscribers a flat monthly fee in exchange for credits they could spend on movie tickets from any theater in MoviePass’s network of participating cinemas. The service and HMNY filed for bankruptcy in 2020 after blowing through hundreds of millions of investor dollars.
If convicted, Itum could face a statutory maximum sentence of 20 years in federal prison for each wire fraud count and up to 10 years in federal prison for each money laundering count.
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According to the indictment, Itum, who was hired in November 2017 to oversee daily operations at MoviePass before departing the company in March 2019, organized a party at the annual music festival, using MoviePass funds to pay for it. Neither MoviePass nor HMNY officially participated in the Coachella event.
According to the indictment, Itum allegedly submitted sham invoices to HMNY for services purportedly rendered by his production company and a third party. Itum allegedly had HMNY employees wire money from MoviePass and HMNY accounts to his production company’s bank account to pay the sham invoices. Itum allegedly concealed his scheme by lying to HMNY’s auditor that his production company had been used to pay legitimate MoviePass expenses from the 2018 Coachella festival.
Itum’s lawyer, in a statement, denied the charges, contending the executive had received clearances from MoviePass and HMNY regarding the funds.
“The prosecutors have got it wrong,” read the statement. “Khalid Itum worked earnestly and honestly for MoviePass. The only money paid to him or his consulting company was for genuine services provided to MoviePass and its corporate parent, and the money was spent in entirely legitimate ways.”
MoviePass, which has been acquired by its original founder, is attempting to relaunch the service.