A jury has convicted Khalid Itum, a former executive of the cinema subscription service MoviePass Inc., of embezzling at least $260,000 from the company and its parent company, Helios & Matheson Analytics (HMNY), to cover debts incurred from producing an event at the Coachella music festival. The Justice Department revealed the conviction occurred on Thursday afternoon, with Itum found guilty on two counts of wire fraud while being acquitted on two counts of money laundering.
Itum, 43, from Hollywood, served as an executive at MoviePass from November 2017 until March 2019. During his tenure, he registered Kaleidoscope Productions LLC, a Los Angeles-based company that organized a promotional event at Coachella in 2017. Despite neither MoviePass nor HMNY’s involvement in the Coachella event, Itum borrowed funds from two individuals to support Kaleidoscope’s expenses.
To repay these loans, Itum submitted false invoices to HMNY, claiming they were for services and expenses Kaleidoscope had provided. This led to employees of HMNY and MoviePass transferring funds to Kaleidoscope to cover these fabricated invoices. Itum misled HMNY’s finance department by asserting that Kaleidoscope had incurred legitimate expenses for MoviePass at the 2018 Coachella festival, among other consulting services.
The fraudulent activity resulted in a total loss of at least $260,000 for HMNY and MoviePass. United States District Judge Virginia A. Phillips has scheduled the sentencing for April 29, where Itum faces up to 20 years in federal prison for each count of wire fraud.