Filmmaker Carl Erik Rinsch Indicted for Misusing $11M Netflix Funds

Filmmaker Carl Erik Rinsch has been indicted by federal prosecutors for allegedly misusing $11 million in funds provided by Netflix. The funds, intended for the development of a sci-fi television series, were instead used for high-risk stock and cryptocurrency trades. The U.S. Department of Justice unsealed the indictment in a Manhattan federal court on March 18, charging Rinsch with fraud and money laundering. If convicted, he could face up to 20 years in prison.

According to the indictment, Netflix provided Rinsch with the funds in March 2020 to finance the development of White Horse, later renamed Conquest. The money was supposed to cover expenses such as storyboarding, casting, and post-production. However, authorities allege that Rinsch diverted approximately $10.5 million into a brokerage account, engaging in risky trades, including call options on a biopharmaceutical company. These investments reportedly resulted in losses exceeding $5.5 million.

Despite the financial losses, Rinsch allegedly continued to assure Netflix that the production of the series was progressing smoothly. His luck changed in early 2021 when he profited from cryptocurrency trading. With these gains, he allegedly spent lavishly on luxury items, including nearly $3.8 million worth of furniture and antiques, five Rolls-Royces, a Ferrari, high-end watches, and designer clothing worth over $3 million.

Beyond his gambling and luxury purchases, Rinsch allegedly spent nearly $1.8 million on credit card bills and $1 million in legal fees. Some of these legal fees were used to fund a lawsuit against Netflix for additional money and to cover his divorce costs. Rinsch faces multiple charges, including one count of wire fraud, one count of money laundering, and five counts of engaging in unlawful monetary transactions. The fraud and money laundering charges each carry a maximum 20-year sentence, while the monetary transactions charges each hold a 10-year maximum penalty.

Following his arrest on March 18, Rinsch’s case was assigned to U.S. District Judge Jed Rakoff in New York. The indictment highlights the severe consequences of misusing funds intended for creative projects and the legal repercussions that can follow such actions. This case serves as a reminder of the importance of transparency and accountability in financial dealings, especially when large sums of money are involved. The outcome of this case will be closely watched by industry professionals and legal experts alike, as it sets a precedent for future cases involving the misuse of funds in the entertainment industry.