2-02-2024 2:11pm

DOJ news release - Former MoviePass exec found guilty of embezzling funds to pay debt related to Coachella Festival

Anita Johnson-Brown Editor

LOS ANGELES – A former executive of MoviePass Inc., a cinema subscription service, has been found guilty of embezzling at least $260,000 from the company and its parent company. The embezzled money was used to repay the borrowed money for producing an event at the Coachella music festival. Khalid Itum, 43, of Hollywood, was found guilty of two counts of wire fraud by a jury. However, the jury acquitted Itum of two counts of money laundering. The Justice Department announced this verdict on Thursday afternoon.

By Anita Johnson-Brown|The Los Angeles News

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Khalid Itum, 43, of Hollywood, was found guilty Thursday afternoon of two counts of wire fraud. The jury in the case acquitted Itum of two counts of money laundering.

According to evidence presented at a three-day trial, Itum was a MoviePass executive from November 2017 until March 2019. 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. In August 2017, Helios & Matheson Analytics (HMNY), a New York-based data analytics company, acquired MoviePass.

In the spring of 2017, Itum registered Kaleidoscope Productions LLC, a Los Angeles-based company that provided production and marketing services. 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.

Itum caused HMNY and MoviePass a total loss of at least $260,000.

United States District Judge Virginia A. Phillips scheduled an April 29 sentencing hearing, at which time Itum will face a statutory maximum sentence of 20 years in federal prison for each wire fraud count.

The FBI’s New York Field Office investigated this matter. The FBI’s Los Angeles Field Office provided substantial assistance.

Assistant United States Attorneys David Y. Pi and Mark Aveis of the Major Frauds Section handled the trial in this matter.