Director Convicted of Defrauding Netflix
A Hollywood director has been found guilty of defrauding Netflix out of $11 million for a show that never came to fruition, using the funds instead to indulge in luxury purchases, including multiple Rolls Royces, a Ferrari, and almost $1 million on high-end mattresses and bedding.
Karl-Eric Rinsch, who gained fame with the film “47 Ronin,” was convicted of wire fraud, money laundering, and other related offenses, according to federal court records.
His lawyer, Benjamin Zeman, stated that the ruling was erroneous and could set a troubling precedent for artists dealing with contractual and creative disagreements. The case involved a major media corporation, which might also find itself facing federal fraud allegations.
Prosecutors detailed that Netflix initially paid Rinsch approximately $44 million for an unfinished sci-fi project titled “White Horse,” but later transferred over $11 million more at Rinsch’s insistence for additional funds needed for production completion.
Instead of applying the funds to the project, prosecutors allege that Rinsch funneled the money into a personal account and made a series of unsuccessful investments, losing about half of the $11 million within a few months.
Subsequently, Rinsch temporarily shifted the remaining funds into cryptocurrency, where he earned a profit but then deposited the earnings into his own bank account.
The funds were used to purchase five Rolls-Royces, a Ferrari, $652,000 in watches and clothing, and two mattresses worth around $638,000. Additionally, he spent $295,000 on luxury bedding and used part of the money to settle about $1.8 million in credit card debt.
At 48 years old, Rinsch was ultimately unable to finish the project. His sentencing date is scheduled for April.
Netflix refrained from making any comments regarding the situation.
U.S. Attorney Jay Clayton remarked that Rinsch “accepted $11 million for a television show and gambled it on speculative stock options and cryptocurrency transactions.” He added that today’s verdict highlights a commitment to holding individuals accountable when they defraud investors.
