A Hollywood director who received tens of millions of dollars in production funding and squandered it on speculative options trading and cryptocurrency investments is now facing trial.
The U.S. Attorney’s Office for the Southern District of New York announced that on March 18, director Carl Erik Rinsch was arrested in West Hollywood, Los Angeles, and indicted on seven charges, including fraud.
Rinsch, known for directing the 2013 film 47 Ronin starring Keanu Reeves, is accused of violating contractual terms by using millions of dollars invested by a video streaming platform for a TV series project on personal expenditures such as speculative options trading and cryptocurrency investments.
Although the prosecution’s indictment did not specifically name the victim company, Hollywood media outlet Variety and other sources reported, based on previous court records, that Netflix was defrauded.
Leslie Backschies, Deputy Assistant Director of the FBI, stated that instead of completing the promised TV series, Carl Rinsch is accused of stealing more than $11 million from a central streaming platform to fund luxury purchases and personal investments.
The New York Times reported that Rinsch partially completed a script for a science fiction TV series called White Horse and signed a production contract with Netflix in 2018.
According to the indictment, Netflix provided Rinsch with approximately $44 million in production funds at the time.
After filming began, Rinsch reportedly demanded more money, claiming that the production could not be completed due to budget constraints. Netflix subsequently provided an additional $11 million, but Rinsch allegedly spent the money on stock options such as calls and puts.
In less than two months, Rinsch lost more than half of the $11 million and is believed to have spent the remaining amount on cryptocurrency investments, divorce litigation expenses, luxury hotel stays, and purchases of high-end cars and watches.
Ultimately, the Netflix series was never completed. Prosecutors stated that Rinsch could face up to 20 years in prison for wire fraud, up to 20 years for money laundering, and up to 10 years for each of the remaining five charges.
Netflix has declined to comment on the matter.
