Netflix filmmaker indicted for gambling $11M on stocks & crypto instead of funding sci-fi show

Carl Erik Rinsch, a filmmaker, faces federal charges in the U.S. for allegedly misusing $11 million allocated by Netflix for a sci-fi series. 

Prosecutors claim Rinsch diverted the funds into speculative investments, including stocks and cryptocurrency, and spent a substantial portion on luxury items rather than producing the intended show.

Director spends Netflix’s millions on stocks, crypto, and luxury instead of filming

According to an indictment unsealed in a Manhattan federal court on March 18, Rinsch has been charged with fraud and money laundering. If convicted, he faces up to 20 years in prison. 

Prosecutors claim that in March 2020, Netflix gave Rinsch $11 million to cover expenses such as storyboarding, actor payments, and editing for the sci-fi series initially titled White Horse, later renamed Conquest.

However, instead of using the capital to produce the film, Rinsch allegedly transferred $10.5 million to a brokerage account and traded stocks on speculation. 

According to reports, he lost more than $5.5 million on speculative call options in a biopharmaceutical company. In the meantime, he assured Netflix that Conquest was going well.

Rinsch seemed to do better with cryptocurrency, reportedly earning millions in February 2021. Instead of reinvesting that money into the show, the lawsuit claims he splurged on nearly $3.8 million worth of furniture and antiques, five Rolls-Royces, a Ferrari, luxury watches and high-end clothing with a value of more than $3 million.

While the Department of Justice (DOJ) did not name Netflix in its indictment, The New York Times previously reported on Netflix’s dispute with Rinsch in November 2023. The streaming giant had paid Rinsch a total of $55 million before cancelling Conquest in early 2021, citing erratic behavior.

Prosecutors also allege Rinsch spent nearly $1.8 million to pay off credit card statements and $1 million in legal fees, including a lawsuit against Netflix for more money and costs associated with his divorce and his generous outlays.

Rinsch is also accused of one count of wire fraud, one count of money laundering, and five counts of engaging in monetary transactions with unlawfully obtained funds. The fraud and money laundering charges each carry a maximum sentence of 20 years, and the monetary transaction charges could add another 10 years.

Rinsch’s arrest echoes Hollywood’s history of filmmaker financial battles

Rinsch was arrested on March 18 and has been assigned to Judge Jed Rakoff in a federal court in New York. His lawyer, Annie Carney, did not respond to requests to comment on the case.

Rinsch’s money quo with Netflix recalls previous controversies in which filmmakers have found their lives tied up in litigation over money. One of the highest-profile cases was that of Harvey Weinstein, who sued his brother, Bob Weinstein and other executives, alleging that they misled him into personally guaranteeing a $45 million loan in 2016. 

Weinstein claimed Bob and other directors covered up the dire state of The Weinstein Company’s finances, which ultimately resulted in its bankruptcy. He alleges he was tricked into financial ruin while others profited. 

Rinsch’s arrest comes less than a year after an arbitrator awarded Netflix $8.8 million in damages over arbitration initiated by Rinsch, who alleged the streaming giant had breached their contract and owed him at least $14 million. 

However, former Los Angeles Superior Court Judge Rita Miller determined that none of Rinsch’s purchases were essential for the production.

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