Carl Erik Rinsch, the director of 47 Ronin, has been charged by the Justice Department with defrauding the company of $11 million. Rinsch had struck a contract with Netflix to produce a sci-fi series, but he never delivered the series.
Rinsch was accused of engaging in risky securities trades with funds intended for the performance, according to an indictment filed on Tuesday by prosecutors for the Southern District of New York. He then allegedly used the millions of dollars in profits from the investments to sue Netflix for additional payments in order to complete the program and purchase luxury goods.
Rinsch was accused of wire fraud, money laundering, and numerous other offenses associated with transactions that originated from unlawful activities. If convicted, he may be sentenced to a maximum of 90 years in prison, provided that the sentences are served consecutively.
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Acting United States Attorney for the Southern District of New York, Matthew Podolsky, alleged that the director “orchestrated a scheme to steal millions by soliciting a large investment from a video streaming service, claiming that the money would be used to finance a television show that he was creating.” “However, that was a work of fiction.” Rinsch is purportedly accused of utilizing the funds for personal expenses and investments, which included cryptocurrency trading and extremely speculative options.
The New York Times reported that the indictment refers to White Horse, whose script was acquired by Netflix, but prosecutors did not identify Netflix as the defrauded corporation. Netflix declined to comment. Approximately in 2017, Rinsch commenced filming the series, which follows a scientist who develops a human-like species that rebels against its creators. Prosecutors allege that he utilized his own funds and investments from a variety of production companies to produce six shortform episodes of the series. These episodes were subsequently used to request funding from studios in order to complete the first season.
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According to the indictment, Netflix provided Rinsch with an additional $11 million in funds in 2020 at his request to finalize the series. It was intended for a variety of pre- and post-production projects, such as the payment of crew members and the editing of previously captured footage.
However, the prosecutor alleges that Rinsch transferred the funds, which were transmitted to his production banner, to his personal brokerage account. The indictment alleges that he lost over half of the funds in less than two months by trading in hazardous investments, and he subsequently used the remaining funds to purchase cryptocurrency. Rinsch subsequently generated millions of dollars, which he allocated to his personal expenditures, such as attorneys’ fees for his divorce and the purchase of five Rolls-Royces, luxury mattresses, and furniture.
Rinsch did not complete White Horse; rather, he pursued a lawsuit against Netflix for greater than $14 million in additional funds, which he claimed were his contractual obligations. According to the Times, an arbitrator determined that he was obligated to pay the company nearly $9 million last year.
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