Federal prosecutors have indicted filmmaker Carl Erik Rinsch, alleging he misappropriated $11 million from Netflix to fund risky stock and cryptocurrency trades instead of producing a sci-fi television series.
The U.S. Department of Justice (DOJ) unsealed the indictment in a Manhattan federal court on March 18, charging Rinsch with fraud and money laundering.
If convicted, he could face up to 20 years in prison.
Prosecutors: Netflix Funded Rinsch’s Sci-Fi Series Before Alleged Misuse
According to prosecutors, Netflix provided Rinsch with the funds in March 2020 to finance the development of White Horse, later renamed Conquest.
The money was intended to cover expenses such as storyboarding, casting, and post-production.
However, authorities claim Rinsch diverted approximately $10.5 million into a brokerage account, making high-risk trades, including call options on a biopharmaceutical company.
The failed investments reportedly resulted in losses exceeding $5.5 million.
Despite depleting Netflix’s funds, Rinsch allegedly continued assuring the streaming platform that production was progressing smoothly.
His luck turned in early 2021 when he profited from cryptocurrency trading, prosecutors said.
With those gains, he allegedly spent lavishly, purchasing nearly $3.8 million worth of furniture and antiques, five Rolls-Royces, a Ferrari, high-end watches, and designer clothing worth over $3 million.
Although the indictment does not explicitly name Netflix, The New York Times previously reported on the company’s dispute with Rinsch over Conquest.
Netflix Paid $55M to Filmmaker for The Sci-Fi Project
Netflix reportedly paid him $55 million for the project but canceled it in early 2021 after his behavior became erratic. Prosecutors, however, claim he received $44 million in total.
Beyond gambling and luxury purchases, Rinsch allegedly spent nearly $1.8 million on credit card bills and $1 million in legal fees, some of which funded a lawsuit against Netflix for additional money and covered his divorce costs.
Rinsch faces multiple charges, including one count of wire fraud, one count of money laundering, and five counts of engaging in unlawful monetary transactions.
The fraud and money laundering charges each carry a maximum 20-year sentence, while the monetary transactions charges each hold a 10-year maximum penalty.
Following his arrest on March 18, Rinsch’s case was assigned to U.S. District Judge Jed Rakoff in New York.
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