If you believe you are a victim in this case, please contact the Fraud Section’s Victim Witness Unit toll-free at (888) 549-3945 or by email at Victims can find case updates and additional information at. Trial Attorney Christopher Fenton of the Criminal Division’s Fraud Section is prosecuting the case. The FBI New York Field Office is investigating the case. Sentencing Guidelines and other statutory factors. A federal district court judge will determine any sentence after considering the U.S. ![]() If convicted, they each face a maximum penalty of 20 years in prison on each count. Behind the scenes, Farnsworth and Lowe allegedly directed MoviePass employees to implement numerous tactics to prevent certain subscribers from using the purportedly “unlimited” service for which they had paid to try to ease MoviePass’s cash shortfalls.įurthermore, Farnsworth and Lowe allegedly made these materially false and misleading representations in press releases, SEC filings, interviews on podcasts and on television, and in print and online media, all of which were intended to reach, and at times did in fact reach, investors and the general public throughout the United States.įarnsworth and Lowe are each charged with one count of securities fraud and three counts of wire fraud. These statements were misleading because, as the indictment alleges, Farnsworth and Lowe knew MoviePass did not have non-subscription revenue streams that would make MoviePass self-sufficient or otherwise offset the losses MoviePass experienced as a result of the unprofitable $9.95 “unlimited” plan.įarnsworth and Lowe are also alleged to have falsely claimed that MoviePass’s cost of goods, as reflected in the number of tickets each subscriber purchased using their subscription, was naturally declining over time consistent with their stated expectations. However, the indictment alleges that Farnsworth and Lowe knew HMNY did not possess these technologies or capabilities to monetize MoviePass’s subscriber data or incorporate these technologies into the MoviePass application.įarnsworth and Lowe also allegedly made false and misleading representations about the positive impact that multiple revenue streams (other than subscription fees) were having on MoviePass’s profitability and self-sufficiency. In addition, Farnsworth and Lowe allegedly made false claims that HMNY possessed and used technologies – like “big data” and “artificial intelligence” platforms – to generate revenue by analyzing and monetizing the data MoviePass collected from subscribers. As a result, MoviePass lost money from the $9.95 “unlimited” plan. Farnsworth and Lowe allegedly knew that the $9.95 “unlimited” plan was a temporary marketing gimmick to grow new subscribers and, in turn, artificially inflate HMNY’s stock price and attract new investors. The indictment alleges Farnsworth and Lowe falsely claimed that MoviePass’s $9.95 “unlimited” plan – in which new subscribers could see “unlimited” movies in theaters with no blackout dates for a flat monthly fee of $9.95 – was tested, sustainable, and would be profitable or break even on subscription fees alone. The FBI is committed to ensuring these types of frauds and swindles are uncovered and the perpetrators are held responsible for their actions in the criminal justice system.” “Attempted scams of this nature erode the public’s faith in our financial markets. Driscoll of the FBI New York Field Office. “As alleged, the defendants deliberately and publicly engaged in a fraudulent scheme designed to falsely bolster their company’s stock price,” said Assistant Director in Charge Michael J. “As these charges make clear, the Department, together with our law enforcement partners, will hold corrupt C-Suite executives who engage in securities fraud accountable for their actions.” ![]() of the Justice Department’s Criminal Division. “The Department of Justice is committed to protecting the public from being exploited by criminals for their personal profit,” said Assistant Attorney General Kenneth A. At the time of the alleged fraud, Farnsworth was HMNY’s Chairman and CEO, and Lowe was MoviePass’s CEO. Mitchell Lowe, 70, of Miami Beach, allegedly engaged in a scheme to defraud investors through materially false and misleading representations relating to HMNY and MoviePass’s business and operations to artificially inflate the price of HMNY’s stock and attract new investors. (MoviePass).Īccording to court documents, Theodore Farnsworth, 60, of Miami, and J. (HMNY), a publicly traded Florida- and New York-based company that was the parent of MoviePass Inc. An indictment was unsealed today in Miami charging two Florida men for their roles in a scheme to defraud investors of Helios & Matheson Analytics Inc.
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