A Hollywood director was convicted Thursday on charges that he defrauded Netflix out of $11 million for a show this never happened, and instead he spent the money on lavish purchases, including several Rolls-Royces, Ferraris, and approximately $1 million worth of mattresses and luxury bedding.
Carl Eric Rinsch, best known as the director of “47 Ronin,” was found guilty of fraud, money laundering and other charges, according to court records and a spokesman for federal prosecutors in New York.
In a statement, Rinsch's lawyer, Benjamin Zeman, said he believed the verdict was wrong and “could set a dangerous precedent for artists who find themselves embroiled in contractual and creative disputes with their benefactors, in this case one of the largest media companies in the world, who find themselves accused of fraud by the federal government.”
Prosecutors said Netflix initially paid Rinsch about $44 million for an unfinished sci-fi show called “White Horse” and then sent another $11 million after he said he needed more funding to complete production.
But instead of investing in the show, Rinsch transferred the money to a personal account, where he made a series of bad investments, losing about half of the $11 million in a couple of months, prosecutors said. He then invested the remaining funds in the cryptocurrency market, making some profit, although Rinsch then deposited the money into his bank account.
Then, prosecutors say, lavish purchases followed: Rinsch bought five Rolls-Royces and one Ferrari, as well as $652,000 worth of watches and clothing. He also bought two mattresses for about $638,000 and spent another $295,000 on luxury bedding and bedding. He also used some of the money to pay off about $1.8 million in credit card bills, prosecutors said.
Rinsch never finished the show. His sentencing date is set for April.
Netflix declined to comment.
U.S. Attorney Jay Clayton said in a statement that Rinsch “took $11 million intended for a television show and bet it on speculative stock options and cryptocurrency transactions.”
“Today's verdict shows that when someone steals from investors, we will follow the money and hold them accountable,” Clayton said.
