MoviePass exec allegedly stole to pay for Coachella party

Khalid Itum, 42, was arrested Tuesday and charged with two counts of wire fraud and two counts of money laundering, the US Department of Justice said in a statement. Itum, a Jordanian resident of Los Angeles, pleaded not guilty and was released on $75,000 bail.

In 2017, before joining MoviePass, Itum created Kaleidoscope Productions LLC and borrowed money from two individuals for a party during an April music festival in Indio, east of Los Angeles, according to the indictment. In November 2017, he became an executive at MoviePass, which was acquired by Helios & Matheson Analytics a few months earlier.

To repay money owed for the Coachella party, Itum sent false invoices to Helios & Matheson for services allegedly provided by Kaleidoscope and other companies it owned, prosecutors said. The company paid the invoice, even though neither Helios & Matheson nor MoviePass participated in the Coachella event, prosecutors said. Itum left the company in March 2019.

MoviePass initially gained popularity after launching its subscription plan in August 2017, and within a year it reached a peak of 3 million members. But operating losses forced the company and its parent into bankruptcy in January 2020.

The indictment comes just months after two former MoviePass executives, Theodore Farnsworth, 60, and J. Mitchell Lowe, 70, were charged with securities and wire fraud for allegedly defrauding investors. Both men are being sued by the US Securities and Exchange Commission for similar allegations.

Itum’s trial date is set for April 18. If convicted of all charges, he could face up to 20 years in federal prison for each count of wire fraud and up to 10 years in federal prison for each count of money laundering.