The Department of Justice arrested filmmaker Carl Rinsch in West Hollywood, Calif., charging him with wire fraud and money laundering in a scheme that allegedly stole millions from Netflix.
Rinsch secured funding from the streaming company from 2018 to early 2020 to create a sci-fi series “Conquest,” but used the money for his own use, the indictment says. Netflix is referred to as “Streaming Company-1” in the indictment.
Acting U.S. Attorney Matthew Podolsky said: “As alleged, Carl Erik Rinsch orchestrated a scheme to steal millions by soliciting a large investment from a video streaming service, claiming that money would be used to finance a television show that he was creating. But that was fiction. Rinsch instead allegedly used the funds on personal expenses and investments, including highly speculative options and cryptocurrency trading.”
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The New York Times reports that Rinsch sold Netflix the television show and secured $44 million in funding between 2018 and 2019. In 2020, he received an additional $11 million, which he reportedly used to make several unsuccessful personal investments. The DOJ alleges that Rinsch used the remaining money to pay for luxury items, spending $2,417,000 to purchase five Rolls-Royces and one Ferrari; and approximately $652,000 on watches and clothing.
Netflix canceled its development in 2021 after Rinsch’s behavior “turned erratic.” The Times cites texts and emails he sent to Netflix executives, where he “claimed to have discovered Covid-19’s secret transmission mechanism and told his wife, a producer on the show, that he could predict earthquakes and lightning strikes.”
In the end, Rinsch didn’t produce any episodes of the show, and “Netflix had to write off the $55 million it spent on the project,” per the Times.
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The DOJ’s indictment spells out the charges Rinsch faces: one count of wire fraud (maximum sentence of 20 years), one count of money laundering (maximum sentence of 20 years), and five counts of engaging in monetary transactions in property derived from specified unlawful activity (maximum sentence of 10 years in prison.)
“The FBI will continue to reel in any individual who seeks to defraud businesses,” writes FBI Assistant Director Leslie Backschies.
