United States v. J. Mitchell Lowe — Preliminary Order of Forfeiture (S.D. Fla., Document 151)

Summary

A Preliminary Order of Forfeiture in United States of America v. J. Mitchell Lowe, Case No. 22-CR-20521-DSL, in the U.S. District Court for the Southern District of Florida, dated October 7, 2024 and entered on the docket October 8, 2024 as Document 151. It recites that a Superseding Information filed September 11, 2024 charged Lowe in Count 1 with Conspiracy to Commit Securities Fraud under 18 U.S.C. § 371, and that the Court accepted the guilty plea on September 16, 2024. It restates the Factual Proffer's account that Lowe, as CEO of MoviePass, conspired with the Chief Executive Officer of Helios & Matheson Analytics Inc. to inflate HMNY's stock price, and that Lowe received at least $388,224.13 in salary payments. The order grants the motion and enters a forfeiture money judgment of $388,224.00 under 18 U.S.C. § 981(a)(1)(C).

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“United States v. J. Mitchell Lowe — Preliminary Order of Forfeiture (S.D. Fla., Document 151).” Original at ecf.flsd.uscourts.gov. Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/preliminary-order-of-forfeiture-usa-v-farnsworth-dkt-151-s-d-fla-2908c49ff1/, SHA-256 b90ffb8952a506bc95d2f2e34e610b84382b33784a606b28f9fc41a6243d02fd.

Full text

Case 1:22-cr-20521-DSL Document 151 Entered on FLSD Docket 10/08/2024 Page 1 of 5

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

CASE NO. 22-CR-20521-DSL

UNITED STATES OF AMERICA

J. MITCHELL LOWE,

Defendant.
_______________________________ /

PRELIMINARY ORDER OF FORFEITURE

THIS MATTER is before the Court upon motion of the United States for entry of a

Preliminary Order of Forfeiture (“Motion”) against Defendant J. MITCHELL LOWE (the

“Defendant”). The Court has considered the Motion, is otherwise advised in the premises, and

finds as follows:

On September 11, 2024, the United States filed a Superseding Information charging the

Defendant in Count 1 with Conspiracy to Commit Securities Fraud in violation of 18 U.S.C. § 371.

Superseding Information, ECF No. 139. The Superseding Information also contained forfeiture

allegations, which alleged that upon conviction of a violation of 18 U.S.C. § 371, the Defendant

shall forfeit any property, real or personal, which constitutes or is derived from proceeds traceable

to such offense, pursuant to Title 18, United States Code, Section 981(a)(l)(C). See id. at 27.

On September 16, 2024, the Court accepted the Defendant’s guilty plea to Count One of

the Superseding Information. See Minute Entry, ECF No. 143; Plea Agreement ¶ 1, ECF No. 145.

As part of the guilty plea, the Defendant agreed to a forfeiture money judgment in the amount of

$388,224.00.

In support of the guilty plea, the Defendant executed a Factual Proffer statement, and the
Case 1:22-cr-20521-DSL Document 151 Entered on FLSD Docket 10/08/2024 Page 2 of 5

Court found that there was a factual basis to support the Defendant’s conviction. See Factual

Proffer, ECF No. 146. The Factual Proffer statement also provided a basis for the forfeiture of

property. See id. at 17.

Pursuant to the Factual Proffer statement signed by the Defendant, beginning in or around

August 2017, and continuing through in or around March 2019, within the Southern District of

Florida and elsewhere, the Defendant, as CEO of MoviePass Inc. (“MoviePass”), knowingly and

willfully conspired and agreed with the Chief Executive Officer and Chairman of the Board of

Helios & Matheson Analytics Inc. (“HMNY”) (“Coconspirator-1”), to commit securities fraud.

MoviePass was a privately held company that offered a subscription service through which

subscribers paid a flat monthly fee in exchange for a certain number of movie tickets per month.

To use the service, a subscriber would select a movie, theater, and show time through the

MoviePass application on the subscriber’s smartphone, and then use a MoviePass-branded debit

card that was loaded with the cost of the movie ticket to pay at the selected theater.

HMNY was a public company that purported to be a leader in data analytics and artificial

intelligence. HMNY’s common stock traded on NASDAQ.

By the summer of 2017, MoviePass was running out of money. The Defendant was on the

verge of shutting down MoviePass’s business operations when he met Coconspirator-1. In the

course of discussions about a potential deal between HMNY and MoviePass, Coconspirator-1 told

the Defendant that he was an expert in promoting stock and had access to large sums of capital

from sources on Wall Street.

Coconspirator-1 and the Defendant agreed on a plan to use MoviePass to artificially inflate

HMNY’s stock price and fraudulently raise new money. As part of the agreed on plan, on August

15, 2017, HMNY and MoviePass jointly announced that:

2
Case 1:22-cr-20521-DSL Document 151 Entered on FLSD Docket 10/08/2024 Page 3 of 5

a. HMNY had acquired a majority ownership interest in MoviePass (the

“Acquisition”).

b. The Acquisition allowed MoviePass to introduce a new “unlimited” plan

that purported to allow subscribers the opportunity to watch “any movie any theater

any day” for $9.95 per month.

c. HMNY would “increase shareholder value” by using HMNY’s “big data”

and “artificial intelligence” capabilities to monetize MoviePass’s subscriber data,

including from the new subscribers MoviePass expected to sign up as a result of its

newly-announced $9.95 “unlimited” plan.

Coconspirator-1 and the Defendant then agreed on a series of false and misleading talking

points, which Coconspirator-1 and the Defendant repeated in press releases, SEC filings,

interviews on podcasts and on television, and in print and online media, all of which were intended

to reach, and at times did in fact reach, investors and the general public throughout the United

States, including within the Southern District of Florida and elsewhere. Coconspirator-1 and the

Defendant appeared in the media and reviewed and approved the press releases and SEC filings.

Coconspirator-1 and the Defendant communicated regularly throughout the conspiracy – in-

person, by telephone and by text message – to discuss what they would say in joint and solo media

appearances to make misleading positive statements about HMNY and MoviePass to artificially

inflate HMNY’s stock price and attract new investors.

The Defendant agrees that he received at least $388,224.13 in salary payments during and

in furtherance of the conspiracy in 2017, 2018, and 2019, which constitute proceeds traceable to

the commission of the offense.

Accordingly, based on the foregoing, the evidence in the record, and for good cause shown,

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Case 1:22-cr-20521-DSL Document 151 Entered on FLSD Docket 10/08/2024 Page 4 of 5

the Motion is GRANTED, and it is hereby ORDERED that:

1. Pursuant to 18 U.S.C. § 981(a)(1)(C) and Rule 32.2 of the Federal Rules of

Criminal Procedure, a forfeiture money judgment in the amount of $388,224.00 is entered against

the Defendant.

2. The United States is authorized to conduct any discovery that might be necessary

to identify, locate, or dispose of forfeited property, and to resolve any third-party petition, pursuant

to Rule 32.2(b)(3) and 32.2(c)(1)(B) of the Federal Rules of Criminal Procedure, and 21 U.S.C. §

853(m).

3. Pursuant to Rule 32.2(b)(4) of the Federal Rules of Criminal Procedure, this Order

is final as to the Defendant.

4. The Court shall retain jurisdiction in this matter for the purpose of enforcing this

Order, and pursuant to Rule 32.2(e)(1) of the Federal Rules of Criminal Procedure, shall amend

this Order, or enter other orders as necessary, to forfeit additional specific property when

identified.

It is further ORDERED that upon adjudication of all third-party interests, if any, the Court

will enter a final order of forfeiture as to the property in which all interests will be addressed.

Upon notice from the United States that no claims have been filed within 60 days of the first day

of publication or within 30 days of receipt of notice, whichever is earlier, then, pursuant to Rule

32.2(c)(2) of the Federal Rules of Criminal Procedure and 21 U.S.C. § 853(n)(7), this Order shall

become a Final Order of Forfeiture and any duly authorized law enforcement agency shall dispose

of the property in accordance with applicable law.

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Case 1:22-cr-20521-DSL Document 151 Entered on FLSD Docket 10/08/2024 Page 5 of 5

DONE AND ORDERED in Miami, Florida, this 7th day of October, 2024.

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