Khalid Itum, a 43-year-old former executive at cinema subscription service provider MoviePass Inc., has been found guilty by a jury of embezzling at least $260,000. The funds were used to repay money that he had borrowed to produce an event at the Coachella music festival. The verdict came after a three-day trial.
A press release from the U.S. Department of Justice reveals that Itum, who resides in Hollywood, was convicted on Thursday in a U.S. District Court on two counts of wire fraud.
The Justice Department's press release further details that Itum held an executive position at New York-based MoviePass from November 2017 to March 2019. The company was purchased by Helios & Matheson Analytics (HMNY) in August 2017.
The same press release states that Itum established Kaleidoscope Productions LLC, a Los Angeles-based company, in early 2017. This company offered production and marketing services. Utilizing his Kaleidoscope business, Itum arranged a promotional event at the annual Coachella Valley Music and Arts Festival in Indio in 2017.
According to the Justice Department, to cover his Coachella festival expenses, Itum borrowed money from two individuals. Subsequently, he submitted fraudulent invoices to HMNY for expenses and services allegedly provided by Kaleidoscope in an attempt to repay these loans. HMNY and MoviePass employees paid these false invoices through transfers to Itum’s Kaleidoscope bank account. As a result, HMNY and MoviePass suffered a total loss of at least $260,000.
The Justice Department's press release concludes with information about Itum’s sentencing hearing which is scheduled for April 29. He could face up to 20 years in federal prison for each count of wire fraud. The FBI’s New York Field Office led the investigation into this case with support from the FBI’s Los Angeles Field Office.