The federal indictment alleged that Farnsworth and Lowe knew that the $9.95 MoviePass "unlimited" plan was unsustainable and "a temporary marketing gimmick to grow new subscribers" that would not produce enough revenue, despite claiming that the model had been tested and "would be profitable or break even on subscription fees alone," the Justice Department said. "The FBI is committed to ensuring these types of frauds and swindles are uncovered and the perpetrators are held responsible for their actions in the criminal justice system." "Attempted scams of this nature erode the public's faith in our financial markets," the statement added. Driscoll, the assistant director in charge of the FBI New York field office, in a statement included with the Justice Department's announcement outlining the allegations. "As alleged, the defendants deliberately and publicly engaged in a fraudulent scheme designed to falsely bolster their company's stock price," said Michael J. The service relaunched this year with a new advertising component. Although the move did exponentially increase MoviePass' subscriber base, it cut profits significantly, and the company filed for bankruptcy protection in 2020. The indictment comes about five years after MoviePass, which first launched in 2011, was acquired by Helios and Matheson and later announced a significant drop in the app's monthly subscription fee - just $9.95 a month to see an unlimited number of movies - in a bid to grow membership. Farnsworth is confident that the facts will demonstrate that he has acted in good faith, and his legal team intends to contest the allegations in the indictment until his vindication is achieved." Mitch Lowe and Ted Farnsworth attend the New York premiere of "Gotti" on June 14, 2018.ĭave Kotinsky/Getty Images for The "Gotti" Film Farnsworth, concerning matters that were publicly disclosed nearly three years ago and widely reported by the news media," Bond said. "The indictment repeats the same allegations made by the Securities and Exchange Commission in the Commission's recent complaint filed on September 27th against Mr.
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