Former MoviePass manager arrested for alleged fraud

A former executive of controversial movie ticket subscription service MoviePass has been arrested on allegations that he embezzled hundreds of thousands of dollars to pay off debts incurred by throwing a party at the Coachella music festival, the US Attorney’s Office for the Central District of California with Wednesday.

Khalid Itum, 42, a Hollywood resident, faces two counts each of money laundering and wire fraud for his alleged embezzlement of about $260,000 from MoviePass parent company Helios & Matheson Analytics (or HMNY), the government agency said in a press release .

“In spring 2017, Itum incorporated Kaleidoscope Productions LLC, a Los Angeles-based company that provided production and marketing services,” the statement said. “This year, Itum organized a party at the annual Coachella Valley Music and Arts Festival in Indio through Kaleidoscope.”

Itum’s title at MoviePass was Executive Vice President.

According to the statement, neither MoviePass nor HMNY attended the Coachella event. Still, the bureau claimed Itum repaid money he borrowed to fund the event by filing “bogus bills” with HMNY.

Itum was arrested Tuesday and subsequently pleaded not guilty, according to US Attorneys. His trial is scheduled for April 18.

Ciaran McEvoy, a spokesman for the US law firms, said Itum is out on bail.

Adam Fee, Itum’s attorney, said prosecutors “got it wrong”.

“Itum worked seriously and honestly for MoviePass,” Fee said. “The only money paid to him or his consulting firm was for genuine services rendered to MoviePass and its parent company, and the money was spent in a perfectly legitimate manner.”

It’s a shameful return to the headlines for MoviePass, a much-ridiculed subscription service that launched in 2011 and offered subscribers virtually unlimited access to movie screenings for less than $10 a month. The platform closed its doors in 2019. In 2020, HMNY filed for bankruptcy.

Itum isn’t the only subsidiary of the company that faces charges. Theodore Farnsworth and Mitchell Lowe — former CEOs of HMNY and MoviePass respectively — were sued by the Securities and Exchange Commission last fall over allegations that they misled the public about MoviePass’s performance and fraudulently prevented subscribers from doing so to actually use the service.

Lowe’s attorney has said they disagree with the SEC’s allegations, while a spokesman for Farnsworth said his attorneys would contest the allegations.

Itum was also named as a defendant in the SEC lawsuit alleging that Farnsworth and Lowe approved bills that netted the former executive vice president $310,000, including for fraudulent kaleidoscope spending at Coachella.

Despite the brand’s troubles, MoviePass is trying to make another comeback. MoviePass was taken out of bankruptcy by its original founder, Stacy Spikes, who launched a new version of the service with what he felt was a more sustainable pricing plan.