Hollywood director arrested for scamming Netflix out of $11M
What's the story
Hollywood director Carl Erik Rinsch was arrested on Tuesday in West Hollywood on charges of money laundering and fraud. The US Attorney's Office for the Southern District of New York confirmed to local portals that he has been indicted on wire fraud, money laundering, and five counts of using illicit funds in a transaction. The indictment claims Rinsch swindled $11 million from Netflix, which he said was required to finish a sci-fi show that never materialized.
Fraud details
Here's what happened
Netflix won the bid for Rinsch's 13-episode show and paid $44 million for it through 2018-19. Per the indictment, Rinsch (47 Ronin) demanded an additional $11 million from Netflix to complete his unfinished show White Horse (later renamed Conquest). Instead of using the funds for production, he allegedly transferred most of the money to a brokerage account where he lost about half of it on risky investments. The remaining funds were used for cryptocurrency investments in early 2021.
Spending spree
Rinsch's lavish spending spree with the misappropriated funds
The indictment says Rinsch spent lavishly on several items in late 2021, claiming the purchases were needed for the show's second season, which Netflix hadn't ordered. The purchases included $638K on luxury mattresses; $295K on luxury bedding and linens; $180K on kitchen appliances; and $5.4 million on furniture, the arbitrator's ruling states. Per the indictment, he bought five Rolls Royce and one Ferrari cars for $2.4 million.
Legal issues
Rinsch's legal troubles escalated after Netflix halted production
Rinsch's legal troubles escalated when Netflix halted production of Conquest over his alleged fraud. Mounting production costs and delays in deliverables were good enough signals for the streamer. In 2021, after Netflix canceled the development of the show, Rinsch sent executives emails claiming he had found a way to map "the coronavirus signal emanating from within the earth" and told his wife he could predict earthquakes. He then used his crypto profits to fund a lawsuit against Netflix.
Court proceedings
Rinsch's initial court hearing and release
Rinsch appeared in a federal courtroom in Los Angeles on Tuesday, wearing a turtleneck sweater and jeans with shackles on his arms and legs. He did not enter a plea and spoke only to answer the judge's questions. US Magistrate Judge Pedro V Castillo ordered that Rinsch be released later on Tuesday after he agreed to submit a $100K bond to assure he'll appear in court in New York, where the indictment was filed.