Federal authorities said filmmaker Carl Erik Rinsch was arrested on Tuesday over charges he allegedly defrauded streaming giant Netflix out of $11 million in connection with a science fiction series he never completed.
Prosecutors didn’t name Netflix in the indictment or news release. But the dispute between Rinsch, 47, and Netflix has been well publicized since The New York Times first reported on the allegations against the filmmaker in a November 2023 article.
Between 2018 and 2019, Netflix, which is only referred to as “a subscription video on-demand streaming service” by prosecutors, had paid $44 million to Rinsch’s company for the filmmaker’s unproduced show, “White Horse,” according to the indictment.
Though Rinsch is a relatively unknown filmmaker — having only helmed one movie, titled “47 Ronin” — there was a competitive auction for the project, according to The New York Times. Rinsch’s pitch was for a science-fiction series about artificial humans.
In March 2020, Netflix sent Rinsch’s company an additional $11 million, after the filmmaker claimed the initial amount was “not sufficient” to complete the series, according to the indictment.
However, Rinsch did not use those funds to complete “White Horse,” prosecutors said. He never delivered any episodes of the show, which Netflix had renamed “Conquest.”
Instead, Rinsch transferred “the funds he received through a number of different bank accounts before consolidating them in a personal brokerage account,” prosecutors said in a news release. He then “used those funds to make a number of personal and speculative purchases of securities,” they said.
“His trading was unsuccessful,” prosecutors said, noting that in “less than two months” he lost half of the $11 million Netflix had given him. He then used the remaining money “to speculate on cryptocurrency, and on personal expenses and luxury items,” including legal fees related to his case against Netflix and his divorce; $3.787 million on “furniture and antiques”; $2.417 million for “five Rolls-Royces and one Ferrari”; and “approximately $652,000 on watches and clothing.”
Rinsch “never returned the fraudulently obtained funds,” according to the indictment. The streaming giant reportedly canceled the show in early 2021.
“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,” acting U.S. Attorney Matthew Podolsky said in a statement. “But that was fiction.”
Podolsky continued, “Rinsch’s arrest is a reminder that this Office and our partners at the FBI remain vigilant in the fight against fraud and will bring those who cheat and steal to justice.”
A spokesperson for Netflix declined to comment.
It is unclear if Rinsch has legal representation. A talent agent for Rinsch did not immediately respond to a request for comment.
Rinsch, who was arrested in West Hollywood, Calif., is being charged with one count of wire fraud, one count of money laundering and five counts of engaging in monetary transactions in property derived from specified unlawful activity, according to the news release. The Complex Frauds and Cybercrime is prosecuting the case.
The arrest comes less than a year after an arbitrator awarded Netflix $8.8 million in damages over arbitration initiated by Rinsch, who alleged the streaming giant had breached their contract and owed him at least $14 million.
But Rita Miller, a former Los Angeles Superior Court judge, ruled that none of the purchases were necessary for the production, according to The New York Times. NBC News has not reviewed a copy of Miller’s ruling, which was reported in May 2024.
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