A Hollywood filmmaker faced conviction on Thursday for orchestrating a scheme that swindled Netflix out of $16.5 million for a series that never came to fruition. Instead, the funds were diverted towards indulgent expenditures.
These extravagant purchases included multiple Rolls-Royces, a Ferrari, and approximately $1.5 million in high-end mattresses and luxury bedding.
Carl Erik Rinsch, recognized for his work on the movie “47 Ronin,” was found guilty of wire fraud, money laundering, among other charges, according to court documents and statements from a spokesperson for federal prosecutors in New York.
Rinsch’s lawyer, Benjamin Zeman, expressed disapproval of the verdict, suggesting it could establish a harmful precedent for artists entangled in contractual and creative conflicts with their patrons.
“This situation marks a notable instance where one of the globe’s largest media firms finds itself implicated by federal authorities for fraudulent activity,” remarked Zeman.
Prosecutors revealed that Netflix initially disbursed about $66 million for a sci-fi project titled “White Horse.” Rinsch claimed additional funds were necessary to complete the series, prompting Netflix to release an extra $16.5 million.
But instead of putting the money toward the show, Rinsch steered the cash to a personal account where he made a series of failed investments, losing around half of the $16.5 million ($USD 11 million) in a couple of months, according to prosecutors.
He then put the remaining funds into the cryptocurrency market, netting some profit, though Rinsch then deposited the money into his own bank account.
Then came the lavish purchases, prosecutors said, with Rinsch buying five Rolls-Royces and one Ferrari, along with $979,700 ($USD 652,000) on watches and clothes. He also bought two mattresses for about $958,600 ($USD 638,000) and spent another $443,200 ($USD 295,000) on luxury bedding and linens. In addition, he used some of the money to pay off about $2.7 million ($USD 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.
