NEW YORK (AP) — A Hollywood writer-director was arrested Tuesday on charges that he swindled USD11 million from Netflix for a sci-fi show that never aired, instead steering the cash toward cryptocurrency investments and extravagant purchases that included a fleet of Rolls-Royces and a Ferrari.
Carl Erik Rinsch — perhaps best known for directing the film “47 Ronin” — has been charged with wire fraud and money laundering over what federal prosecutors allege was a scheme to defraud the streaming giant.
Prosecutors said Netflix had initially paid about USD44 million to purchase an unfinished show called “White Horse” from Rinsch, but later provided an extra USD11 million when he claimed he required more funds to complete the show.
Instead of allocating the extra funds to complete production, Rinsch discreetly transferred the money to a personal brokerage account, where he made a series of failed investments that resulted in a loss of roughly half of the USD11 million in two months, prosecutors allege.
The filmmaker then dumped the remaining money into the cryptocurrency market, which proved to be a profitable move, with Rinsch later transferring the profits into a personal bank account, according to an indictment.
From there, Rinsch spent about USD10 million on personal expenses and luxury items in a spending spree that, according to prosecutors, included about USD1.8 million on credit card bills; USD1 million on lawyers to sue Netflix for more money; USD3.8 million on furniture and antiques; USD2.4 million for five Rolls-Royces and one Ferrari; and USD652,000 on watches and clothes.
Rinsch, 47, was arrested in West Hollywood, California, and had an initial court hearing on Tuesday.
He was seen in a federal court in Los Angeles wearing a turtleneck and jeans, with shackles on his arms and legs. He did not plead and only responded to the judge’s inquiries. When questioned if he had gone through the indictment, he replied “not cover to cover” but informed the judge that he comprehended the allegations.
U.S. Magistrate Judge Pedro V. Castillo ordered that he be released later Tuesday after he agreed to post a USD100,000 bond to assure he’ll appear in court in New York, where his indictment was filed.
His newly appointed attorney, Annie Carney, declined to comment outside court. She said during the hearing that she had not yet seen the prosecution’s evidence against Rinsch. When discussing the terms of his release, she said, “the allegations in this case are purely financial.”
Rinsch’s New York court date had not yet been set.
Netflix declined to comment
