The two individuals who once ran MoviePass have been charged with engaging in a criminal scheme to defraud investors of Helios and Matheson Analytics (HMNY), a publicly traded company based in Florida and New York that invested and then took over the subscription-based movie ticketing service. Ted Farnsworth, former chairman and CEO of MoviePass parent HMNY, and Mitch Lowe, former MoviePass CEO, are each charged with one count of securities fraud and three counts of wire fraud. If convicted, the Florida men face possible prison time of 20 years per count.

The indictment alleges the duo made “materially false and misleading representations relating to HMNY and MoviePass’s business and operations to artificially inflate the price of HMNY’s stock and attract new investors,” according to federal prosecutors, who said the men reportedly exaggerated the firms’ technological capabilities, claiming to have access to big data analytics and artificial intelligence that were used to monetize MoviePass subscriber information.

“The indictment alleges that Farnsworth and Lowe in 2017, while describing the company’s $9.95 ‘unlimited’ movie plan as thoroughly tested, sustainable and profitable, were aware that MoviePass’s offer was a marketing gimmick and that its parent company did not possess the technology or capability to monetize subscriber data,” CNBC reports. Claims of “rigorous marketing testing” are also said to have been fabricated, the Justice Department said.

“MoviePass skyrocketed to popularity in 2017 because of its seemingly too-good-to-be-true unlimited movie pass that initially offered customers one movie voucher per day” that enabled them to watch films in participating theaters for $30 to $40 a month, explains CNBC, noting that “the hope was that most subscribers wouldn’t actually use the service regularly, in the same way that gyms are able to offset cheap monthly fees because of no-show subscribers.”

But subscribers began using MoviePass frequently, which resulted in losses. The company tried various pricing scenarios but was ultimately liquidated. MoviePass co-founder Stacy Spikes acquired the company in late 2021 and has been planning a relaunch.

Lowe and Farnsworth also weathered trouble with the FTC over fraudulent activity concerning MoviePass customers but settled. The Verge reports the duo is being sued by the SEC. A spokesperson for Farnsworth told The Verge that this indictment “repeats the same allegations made by the Securities and Exchange Commission in the Commission’s recent complaint filed on September 27,” rehashing matters publicly reported nearly three years ago.

Farnsworth, the rep said, “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,” The Verge reports.