A director who was hired by Netflix to make a science-fiction series was convicted on Thursday on charges that he had engaged in an $11 million scheme to defraud the streaming giant, the U.S. attorney’s office in Manhattan said.
Prosecutors said the filmmaker, Carl Erik Rinsch, 48, secured funding from Netflix from 2018 to early 2020 to make the series, which was initially called “White Horse” and renamed “Conquest.” But he put the money in a personal brokerage account and used it to trade securities instead of putting it toward the production, prosecutors said.
Netflix canceled development for the show in early 2021 after Mr. Rinsch’s behavior turned erratic. In texts and emails to Netflix executives, he claimed to have discovered Covid-19’s secret transmission mechanism and told his wife, a producer on the show, that he could predict earthquakes and lightning strikes.
After the company informed Mr. Rinsch that it would stop funding “Conquest,” he went on a spending spree with the show’s remaining production money, speculating on cryptocurrency, living out of five-star hotels in California and Spain and buying five Rolls-Royces and a Ferrari as well as high-end furniture, including a $439,000 handmade mattress, prosecutors said. He said the cars and furniture were props for the show, but an arbitrator ruled that none of the purchases were necessary for the production.
Mr. Rinsch, who lives in Los Angeles, was arrested in March in West Hollywood, Calif., and was charged with wire fraud, money laundering and making monetary transactions derived from unlawful activity. Taking the stand in his own defense at trial, Mr. Rinsch said he believed the $11 million was meant to keep the production of “Conquest” afloat during the coronavirus pandemic and to conduct preproduction on a potential second season of the show.
But former Netflix executives testified that they had agreed to only one season of the show and that the $11 million was supposed to be used to finish episodes for that season, which Mr. Rinsch failed to do. Mr. Rinsch never produced any episodes of the series, and Netflix had to write off the $55 million it spent on the project.
On Thursday, a jury in Federal District Court in Manhattan convicted him of the wire fraud, money laundering and illegal monetary transaction charges. He faces up to 90 years in prison but is expected to receive a lighter sentence based on sentencing guidelines.
Benjamin Zeman, Mr. Rinsch’s lawyer, criticized the verdict.
“I think the verdict was wrong and I fear that this could set a dangerous precedent for artists who become embroiled in contractual and creative disputes with their benefactors, in this case one of the largest media companies in the world, finding themselves indicted by the federal government for fraud,” he said in an email.
Netflix declined to comment.
Before Mr. Rinsch’s recent troubles, he was considered a rising talent. He learned the craft under the Hollywood legend Ridley Scott and directed the big-budget Hollywood action movie “47 Ronin” starring Keanu Reeves. He had hoped to turn “Conquest” into a franchise on par with “Star Wars” or “Game of Thrones.”
The collapse of the series became an emblem in Hollywood of an era of profligate spending that film and television studios were scrambling to end.
Michael Levenson covers breaking news for The Times from New York.
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