A former executive at movie theater subscription service MoviePass Inc. has been found guilty of embezzling at least $260,000 from MoviePass and its parent company to repay money he borrowed to fund an event at the Coachella music festival, the Justice Department announced Friday, Feb.2
Khalid Itum, a 43-year-old man from Hollywood, was a MoviePass executive from November 2017 to March 2019, according to evidence presented at the trial. MoviePass, acquired by a data analytics company called Helios & Matheson Analytics (HMNY) in 2017, charged monthly subscribers a fee in exchange for credits they could use on movie tickets from any theater in MoviePass’s network.
In the spring of 2017, Itum registered Kaleidoscope Productions LLC, a Los Angeles-based company that provided production and marketing services, the DOJ’s statement said.
Itum borrowed money from two individuals to fund a Kaleidoscope promotional event at the 2017 Coachella Valley Music and Arts Festival in Indio which did not involve either MoviePass or HMNY, Friday’s statement said.
An FBI investigation revealed Itum later submitted fake expense invoices to HMNY which led to money from MoviePass and HMNY accounts being wired to a Kaleidoscope bank account. Authorities also found out that Itum lied to HMNY’s finance department by claiming that Kaleidoscope had been used to pay legitimate MoviePass expenses from the Coachella festival and provided other consulting services.
Itum caused HMNY and MoviePass a total loss of at least $260,000, the DOJ’s statement said.
Itum was found guilty Thursday, Feb. 1 of two counts of wire fraud and a sentencing hearing is scheduled for April 29, with a pontential maximum sentence of 20 years in federal prison for each wire fraud count.
The jury did, however, acquit Itum of two counts of money laundering.
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