Former MoviePass Executive Khalid Itum Convicted of Embezzlement – The Hollywood Reporter

A former MoviePass executive has been convicted of embezzling at least $260,000 from the subscription movie service to repay money he borrowed to fund a party at Coachella Valley Music and Arts Festival in 2018.

Khalid Itum was found guilty on Thursday on two counts of wire fraud, though he was acquitted of money laundering charges, announced the Department of Justice.

The guilty verdict, returned by a jury after a trial in federal court in California, was the latest reminder of fraud perpetuated by MoviePass executives. The DOJ in 2022 charged former chief executives Theodore Farnsworth and J. Mitchell Lowe with securities fraud for engaging in a scheme to artificially inflate the price of the company’s stock by misleading investors. The false statements involved claims that MoviePass’ business model in which subscribers could see unlimited movies in theaters with no blackout dates for a flat monthly fee of $9.95 was a tested, sustainable business model.

According to evidence presented at the trial, Itum — who stepped down in 2019 from his position as executive vice president of the struggling movie-ticketing service after just a few months on the job — borrowed money from two individuals to help fund a party in 2018 at Coachella. To repay the debt he incurred, he submitted sham invoices to MoviePass.

Itum will be sentenced on April 29. He faces a maximum sentence of 40 years in prison.

In 2022, the Securities and Exchange Commission initiated criminal proceedings against Itum, as well as Farnsworth and Lower.