A Hollywood writer-director was arrested on Tuesday after being accused of swindling $11 million from Netflix for a sci-fi show that was never completed. Instead of using the funds for production, he allegedly diverted the money into cryptocurrency investments and luxury purchases, including a fleet of Rolls-Royces and a Ferrari.
Carl Erik Rinsch, known for directing the film 47 Ronin, has been charged with wire fraud and money laundering in connection with what federal prosecutors describe as a scheme to deceive the streaming giant.
Prosecutors claim Netflix initially paid $44 million for an unfinished show titled White Horse that Rinsch had created. Later, Netflix provided an additional $11 million at Rinsch’s request to help complete the show. However, instead of finishing the project, Rinsch transferred the funds to a personal brokerage account, where he made a series of unsuccessful investments that led to the loss of about half of the $11 million in just two months.
The filmmaker then invested the remaining money into the cryptocurrency market, which turned out to be a successful move. Rinsch eventually transferred the profits into a personal bank account, as outlined in an indictment.
From there, Rinsch reportedly spent around $10 million on personal expenses and luxury items. Prosecutors say this included $1.8 million on credit card bills, $1 million on lawyers to sue Netflix for additional funds, $3.8 million on furniture and antiques, $2.4 million for five Rolls-Royces and a Ferrari, and $652,000 on watches and clothing.
Rinsch, 47, was arrested in West Hollywood, California, and had his first court appearance on Tuesday. He appeared in a federal courtroom in Los Angeles wearing a turtleneck sweater and jeans, with shackles on his arms and legs. He did not enter a plea but answered the judge’s questions. When asked if he had read the indictment, he replied, “Not cover to cover,” but confirmed that he understood the charges.
U.S. Magistrate Judge Pedro V. Castillo ordered that Rinsch be released later on Tuesday after he agreed to post a $100,000 bond to guarantee his appearance in court in New York, where the indictment was filed.
Rinsch’s newly appointed attorney, Annie Carney, chose not to comment outside of court. She mentioned during the hearing that she had not yet reviewed the prosecution’s evidence against Rinsch. Regarding the conditions of his release, Carney noted, “the allegations in this case are purely financial.”
A court date in New York for Rinsch had not yet been scheduled.
Netflix declined to comment on the case.