A Hollywood director has been charged after reportedly ‘stealing; $11 million from Netflix.
The filmmaker was arrested last Tuesday (March 18) over the fraud case against him.
Carl Erik Rinsch had been working on a sci-fi show for a streaming service that he never finished.
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Netflix was named as the streaming platform by The New York Times after it was reported to have paid Rinsch’s company $44 million for his show ‘White Horse’.
In March 2020, Netflix sent the company a further $11 million after Rinsch claimed the money he had been paid was ‘not sufficient’ to finish the show.
This is according to the indictment that was filed with the Southern District of New York.
According to prosecutors, Rinsch didn’t use those funds to complete his series, which Netflix had renamed to ‘Conquest’.
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Instead, prosecutors claim that the filmmaker transferred ‘the funds he received through a number of different bank accounts before consolidating them in a personal brokerage account’ before using ‘those funds to make a number of personal and speculative purchases of securities’.
Prosecutors went on to say that Rinsch’s trading was ‘unsuccessful’ and he lost the $11 million given to him by Netflix in ‘less than two months’.
It has been argued that he went on to use the remainder of the money to ‘speculate on cryptocurrency, and on personal expenses and luxury items’.
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This included things like his divorce, legal fees in relation to his case against the streaming platform, over $3 million on ‘furniture and antiques’, over $2 million on ‘five Rolls-Royces and one Ferrari’ and ‘approximately $652,000 on watches and clothing’.
In a statement, acting US Attorney Matthew Podolsky said: “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, but that was fiction.”
Podolsky went on to say: “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.”
Rinsch 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.
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Netflix was previously awarded $8.8 million in damages after Rinsch alleged that the streaming giant had breached its contract with him and owed him $14 million.
However, a judge ruled that the purchases made had been unnecessary for the show’s production.