Director Carl Rinsch found guilty of using $11 million Netflix budget to buy luxury items

Hollywood filmmaker Carl Erik Rinsch has been found guilty of defrauding Netflix of $11 million (P649 million) for a supposed sci-fi TV show that never materialized.

According to a report by international outlet AP News, Rinsch was convicted of wire fraud, money laundering, and other charges seven months after his arrest in March.

Detailing the case, the prosecutors said Netflix had initially paid Rinsch about $44 million (P2.6 billion) for the unfinished sci-fi show dubbed White Horse. He later requested an additional $11 million (P649 million), saying he needed extra funds to finish production.

However, instead of producing the show, Rinsch diverted the money into his own account and made investments, which failed, ultimately losing roughly half of the $11 million within just a few months.

The other half was then put into the cryptocurrency market and made some profit, but he transferred it to his own bank account.

The prosecutors added that other than investments, he also made lavish purchases, including buying five Rolls-Royces, one Ferrari, and spent $652,000 on watches and clothes(about P38.5 million). He also bought two mattresses for about $638,000 (~P37 million) and paid another $295,000 (~P17 million) on luxury bedding and linens. 

He also used part of the funds to pay off about $1.8 million (~P106 million) of his credit card bills.

For his part, Rinsch said on Tuesday's hearing that he had finished filming the first season of the show and that he needed the funds to start the pre-production of the second season. He also testified that his purchases were entirely legitimate, claiming that the Rolls-Royces were needed for the show, per a Variety report.

However, Netflix said that the first season was not finished, and that they never ordered a second season.

Rinsch’s attorney, Benjamin Zeman, believes the verdict was wrong and “could set a dangerous precedent for artists who become embroiled in contractual and creative disputes with their benefactors, in this case one of the largest media companies in the world, finding themselves indicted by the federal government for fraud.”

Rinsch previously directed films The Gift and 47 Ronin, which starred Keanu Reeves. His sentencing is set for April.