Director Carl Rinsch Indicted on Charges of Defrauding $11 Million From Netflix

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Movie Director Carl Erik Rinsch is facing accusations of fraud and money laundering due to the alleged misuse of a $11 million budget provided by Netflix. Instead of using it for film production as intended, he reportedly splurged on high-end vehicles, vintage home decor, and expensive mattresses.

Rinsch required the finances with the intention of wrapping up “White Horse,” an unfinished science fiction television series as stated in the indictment. However, it’s alleged that he didn’t use the funds for its intended purpose but rather diverted them towards high-risk investments, luxury hotel stays at the Four Seasons, and other extravagant expenditures. Additionally, he employed lawyers to take legal action against Netflix.

47-year-old Rinsch was taken into custody on Tuesday in West Hollywood, as stated by the U.S. Attorney’s Office for the Southern District of New York.

Netflix declined to comment.

Initially, the accusations were detailed in an article published by The New York Times in November 2023. Additionally, they are outlined extensively in a public arbitration decision from August of the same year. The arbitrator mandated that Rinsch should reimburse $11.8 million, and this ruling was confirmed by a judge in the Los Angeles Superior Court in November.

Based on court documents, it was revealed that Rinsch presented the show, referred to as “Conquest”, to Netflix executives like Cindy Holland (then in charge of original content) in January 2018. At this point, Keanu Reeves, his mentor, had already provided funding for six short episodes and a three-minute preview to be filmed. This all happened before Cindy’s departure from the company in 2020.

Netflix decided to put $44 million towards purchasing the show and creating its initial season. A timetable was created which included multiple months of shooting in Kenya, Mexico, Romania, Berlin, Hungary, and Uruguay during the year 2019.

Initially, Rinsch started filming in Brazil, but soon exceeded his budget as indicated in court documents. Despite assuring delivery of an additional seven episodes, as per the arbitrator’s decision, he communicated to Netflix that he could only finish a single episode with the funds they had allocated.

Following a temporary halt in filming in Hungary late last year, Netflix chose to provide extra funding. The production ceased in December 2019, leaving a substantial amount of work behind. Subsequently, Rinsch decided to expand the script and requested an additional $11 million to finish the initial season, as reported by the court ruling. Eager to save the project, Netflix consented to provide the funds in March 2020, according to the verdict.

Amidst the sudden disruption caused by the global outbreak of COVID-19, film productions came to a grinding halt everywhere. In the sweltering summer of 2020, I found myself huddled in a hotel meeting room with Holland and another Netflix executive, where we shared updates on the project’s status.

According to the judgment, Rinsch devoted much of the meeting to discussing diverse theories he’d been crafting regarding COVID, the cosmos, interconnectedness, gender identities, deity, higher purposes, and procreation. However, his discourse did not revolve around ‘Conquest.’

Without a clear indication that he would complete the show, Netflix officials came to this conclusion. Meanwhile, the main actor departed due to concerns about the project’s instability. Consequently, during that autumn season, Netflix chose to forgo the expenses associated with the series.

As alleged in the court documents, Rinsch swiftly shifted close to $11 million into his brokerage account. A significant portion of this sum, roughly half, was reportedly squandered by taking risks on investments like call options for a biopharmaceutical firm and put options for an S&P 500 ETF. Simultaneously, he was still expressing confidence to Netflix about the show, claiming it was “amazing” and progressing smoothly, according to the indictment.

As per the charges, he channeled the leftover funds towards cryptocurrency investments at the start of 2021, leading to significant gains. However, the court decision reveals that Rinsch extravagantly bought numerous items towards the end of 2021, justifying these purchases as necessities for a second season of the show that Netflix had not yet commissioned. Furthermore, he was concerned about the IRS taxing him if the money wasn’t spent, according to the ruling.

The expenses detailed encompassed a total of $638,000 for high-end mattresses, $295,000 for luxury bedding and linens, $180,000 on kitchen appliances, an enormous $5.4 million on furniture, and the staggering sum of $1.68 million for two Rolls Royces, as per the arbitrator’s decision. Furthermore, the indictment reveals that he splurged on five Rolls Royces and one Ferrari to the tune of $2.4 million. Additionally, he took care of his rental expenses in Spain and legal fees to contest Netflix for breach of contract in court proceedings.

On Tuesday, an unsealed grand jury indictment charged Rinsch with wire fraud, money laundering, and five instances of utilizing tainted funds in a financial transaction. If found guilty, Rinsch could spend several years behind bars, and the authorities are additionally pursuing the seizure of his assets.

In August, I, as a movie critic, lodged an appeal challenging the arbitrator’s interpretation of our agreement. I contended that the arbitrator misunderstood the contract, believing it to stipulate 13 episodes instead of the number initially agreed upon. However, my appeal was denied, and the judge upheld the arbitrator’s decision.

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2025-03-19 05:18