Florida Man Goes To The Movies
This Week In Blunders – Jan. 5-11
“Movies are like magic tricks.” – Jeff Bridges
It’s movie night in federal prisons across America, a chance for MoviePass executive Ted Farnsworth to catch at least a little entertainment.
Farnsworth, 62, who pleaded guilty on Tuesday to defrauding investors, has been locked up since his bond was revoked in August 2023. While out on bond, he allegedly used company funds to pay for male prostitutes.
It was a nice touch in the Justice Department’s press release to describe Farnsworth as “a Florida Man.” How else do you explain an entrepreneur from Miami with a famously ridiculous scheme like MoviePass?
MoviePass, launched in 2017, offered a sweet deal to moviegoers while it lasted. For less than $10 a month, they got a movie ticket every day. The subscription service grew to three million customers, but even a third-grade math student could see that it made zero economic sense for the company.
MoviePass filed bankruptcy in 2020 after racking up hundreds of millions of dollars in losses for its investors. But it made for a well-received film on HBO last year called MoviePass/Movie Crash.
Farnsworth ran MoviePass’s publicly traded parent company, Helios & Matheson Analytics Inc. Former Netflix and Redbox executive Mitchell Lowe, who pleaded guilty in September, served as MoviePass’ CEO.
They may have hoped they could eventually monetize their growing subscriber base. They also must have hoped their idiotic 2018 gangster biopic, Gotti, would have turned a dime. But in the meantime, they made up stories.
“Farnsworth … repeatedly lied to the public to artificially inflate these companies’ stock prices, defraud investors, and enrich himself and his co-conspirators,” said Principal Deputy Assistant Attorney General Brent S. Wible in a news release. “He concealed that MoviePass’ subscription model was a money-losing gimmick.”
Farnsworth can now look forward to weekend entertainment on the Federal Bureau of Prison’s movie channel.
Sorry, Florida Man, but there’s nothing R-rated. You’re going to have to enjoy reruns of PG films like “Shrek.” And your movie privileges can be revoked for bad behavior.
[[[[Click while it’s still free: The Business Blunders Hall of Shame.]]]
Cue another prison scene
A bit-part actor who appeared in “Iron Man 2” received an eight-year prison sentence on Monday.
Keith Lawrence Middlebrook, 57, was convicted in May on wire fraud charges after selling a fake Covid-19 treatment and telling investors that Magic Johnson was involved in one of his bogus companies.
Middlebrook insisted that he’s “completely innocent” and plans an appeal. A judge denied his motion for an acquittal.
“Magic Johnson is the biggest liar I’ve ever seen and we’ll prove it,” Middlebrook’s attorney told the Los Angeles Times after the hearing. “I believe Magic lied under oath to protect himself from being involved with this.”
The former Lakers point guard testified that he did not even know Middlebrook.
Who’d want to know such bad actor?
In other Florida Man news
Matthew Brown ran Elite Payroll, serving small businesses St. Lucie, Martin and Palm Beach Counties.
He thought it would be a good idea to collect Social Security, Medicare and federal income taxes from his clients’ employees, and then keep $22 million of it for himself.
“Instead of paying over the funds he held in trust for Elite Payroll’s clients, Brown purchased commercial and residential real estate, including his multi-million-dollar home, and high-value luxury assets including a Valhalla 55 Sport Yacht, a Falcon 50 Aircraft and a collection of cars including Ferraris, Porsches and Rolls Royces,” the Justice Department said in a press release on Wednesday.
What a nice, sunny life while it lasted. He pleaded guilty and now faces up to five years in prison.
McKinsey partner tries to hit delete
McKinsey & Co. is the consulting giant that helped bring the opioid crisis to America.
Last month, the firm reached a deferred prosecution deal and it agreed to pay $650 million for its work with OxyContin peddler Purue Pharma. On Friday, one of its former partners, Martin Elling, 60, pleaded guilty to an obstruction charge.
McKinsey apparently learned nothing from the document-shredding debacle that ended the life of one of its competitors, Arthur Andersen in the Enron era. Destroying evidence in a federal investigation is a serious crime, and Elling, a U.S. citizen who resides in Bangkok, faces 20 years.
The Feds even uncovered an email in which Elling proposed deleting emails.
“It probably makes sense to have a quick conversation with the risk committee to see if we should be doing anything other [than] eliminating all our documents and emails,” he wrote. “Suspect not but as things get tougher there someone might turn to us.”
More corrupt than the commies
Yvette Wang, 45, received a 10-year prison sentence on Monday for her role in a complex scheme that involved a bogus nonprofit set up to bash the Chinese Communist Party.
It also ran Himalaya Exchange, a fraudulent cryptocurrency exchange that’s been seized by the FBI.
Wang was the top lieutenant for Chinese billionaire Miles Guo who was sentenced in July to 10 years in prison in the $1 billion fraud case. The money they raised went to million-dollar sports cars, a New Jersey mansion and other luxury items, prosecutors say.
Guo built his following in the U.S. hanging out with Steve Bannon, a former strategist for President Donald Trump. In 2020, the pair announces an initiative to overthrow the Chinese government.
Somehow, it was capitalism that landed them both behind bars.
Business Blunders heightens awareness of the follies that plague America’s financial system. Please help make the business world a more honest, less reckless, less authoritarian place by:
Liking and commenting on posts, which boosts the Substack algorithm.
Sharing this newsletter with friends and associates.
Subscribing. Free or paid, I’m so glad you’re here.
Don’t Miss These Blunders
Bigots Fly Free United Airlines may be under fire for its diversity efforts, but it just settled a nasty racial discrimination case
Lock ‘Em Up Welcome to the Business Blunders Hall of Shame commemorating top business leaders convicted of felonies
Tip Your Banker? This Week in Blunders – Dec. 29 - Jan. 4
Unshackling Ponzi Perps It’s a bad idea to let convicted swindlers go free. Biden just gave clemency to a slew of them
Married To Madoff Victims of a fraud that regulators missed decades ago are finally getting most of their money back
MAGA Mad About Musk This Week in Blunders – Dec. 22-28
Biggest Business Blunders of 2024 It was an ignominious year for economic forecasters, CrowdStrike, Boeing, FTX, Mattel, Truth Social, Red Lobster, Fisker, Spirit Airlines, TicketMaster and the dumbest bank embezzler in history
Go To Zelle This Week in Blunders – Dec. 15-21
Basketball Jones Former Harlem Globetrotter and NC State point guard gets seven years for a Covid-19 loan scam
Sorry About That Opiod Thing This Week In Blunders – Dec. 8-14
Spoiled, Rotten Day Trader Ian G. Bell touted a wealthy background to allegedly dupe investors in his money-losing investment scheme
Shot In The Back Did maddening back pain drive Luigi Mangione to murder UnitedHealthcare CEO Brian Thompson?
The Killionaire Here's why the man who gunned down UnitedHealthcare's CEO became an instant folk hero
Enron Was A Parody Of Itself Here's where CEO Ken Lay ate before he died
Expelled U.S. Rep. George Santos on Friday urged a New York federal judge to delay sentencing in his federal fraud case for six months, saying he needs time to earn money through his new "Pants On Fire" weekly gossip podcast to pay roughly $580,000 owed in restitution and forfeiture.
DENVER — United Airlines, Inc. a Delaware corporation with a major hub at Denver International Airport, will pay $99,000 and provide other relief to settle a federal lawsuit for a hostile work environment based on race and national origin, the U.S. Equal Employment Opportunity Commission (EEOC) announced today.
Eil Pureté mortgage fraud
https://patch.com/new-york/pleasantville/3-investors-plead-guilty-119m-mortgage-fraud-conspiracy
Boeing review:
https://www.cnbc.com/2025/01/05/boeing-one-year-since-doorplug-blowout.html
The U.S. Department of Justice and The Boeing Co. have until mid-February to rework a plea agreement in the American aerospace giant's 737 Max criminal conspiracy case, a Texas federal judge ruled Saturday, ensuring that the incoming Trump administration will oversee final negotiations on any potential new deal.