A film and television director and writer was arrested in West Hollywood, California, on March 18 after allegedly defrauding Netflix out of $11 million.
A federal grand jury in New York unsealed a seven-count indictment against Carl Erik Rinsch, 47, of Los Angeles Tuesday.
The director is also known for the 2013 box office bomb “47 Ronin,” starring Keanu Reeves.
Rinsch faces a maximum of 90 years in prison if convicted of the charges, the U.S. Attorney’s Office reported.
He is charged with one count of wire fraud, one count of money laundering, and five counts of engaging in unlawfully conducting a monetary transaction using funds obtained illegally, according to federal prosecutors.
“As alleged, Carl Erik Rinsch orchestrated a scheme to steal millions by soliciting a large investment from a video streaming service, claiming that money would be used to finance a television show that he was creating. But that was fiction,” acting U.S. Attorney Matthew Podolsky said in a statement Tuesday.
“Rinsch instead allegedly used the funds on personal expenses and investments, including highly speculative options and cryptocurrency trading.”
Court documents filed in U.S. District Court in New York describe an agreement the director reportedly made through his production company with Netflix around 2018.
Sometime between June 2018 and October 2019, Netflix paid Rinsch about $44 million for the production.
Prosecutors said Rinsch demanded more money from the streaming company in late 2019 and early 2020, saying the funds paid up to that time were not sufficient to finish the series. On March 6, 2020, Netflix sent Rinsch’s production company about $11 million to complete the series, according to the indictment.
After getting the funds, the defendant allegedly transferred the money to personal accounts he controlled, and “engaged in trading in various securities using those funds,” according to the indictment.
By the end of April 2020, Rinsch allegedly had lost more than half of the $11 million, prosecutors claim.
Even after trading unsuccessfully, Rinsch “still did not spend the remaining funds he had stolen on White Horse,” according to the press release.
Instead, he allegedly transferred almost all the remaining funds to a cryptocurrency account in his own name, and used the money to speculate in cryptocurrency—this time successfully, according to the indictment.
Rinsch allegedly made several million dollars trading cryptocurrency in the following months and used those funds to buy luxury goods, including five Rolls Royces and a Ferrari, according to prosecutors.
He is also accused of spending about $1.8 million on credit card bills; nearly $1.1 million on divorce lawyers and lawyers to sue Netflix for even more money, and almost $400,000 on hotel stays and various luxury rental properties.
Nearly $640,000 was allegedly used to buy two mattresses, about $300,000 on luxury bedding and linens, and about $652,000 on watches and clothes.
According to the indictment, the director finished only about half of the show’s episodes, did not deliver the completed television show to Netflix, and never returned the funds.
Rinsch appeared with shackles on his arms and legs in a federal courtroom in Los Angeles Tuesday, wearing a turtleneck sweater and jeans. He did not enter a plea and only spoke to answer the judge.
When asked if he had read the indictment against him, he said “not cover to cover” but indicated that he understood the charges, according to the Associated Press.
U.S. Magistrate Judge Pedro V. Castillo on Tuesday ordered that Rinsch be released after posting a $100,000 bond to assure he'll appear in court in New York.
Rinsch’s attorney, Annie Carney, told the judge during the hearing that she had not yet seen the evidence against her client.
When discussing the terms of Rinsch’s release, Carney said, “the allegations in this case are purely financial.”
The Epoch Times reached out to Rinsch’s lawyer for comment.
Rinsch’s New York court date has not yet been scheduled.
Rinsch is also known for his work producing award-winning commercials.
He was a protege of filmmaker Ridley Scott, who directed “Blade Runner,” “Gladiator,” “Hannibal,” and “Black Hawk Down.”
The Federal Bureau of Investigations and the Internal Revenue Service’s criminal investigation unit worked on the case, according to the U.S. Attorney’s Office in New York.
