Hollywood director Carl Erik Rinsch was convicted on Thursday of defrauding Netflix out of $11 milion (£8.2m) for a science fiction show that never got made.
A federal jury in Manhattan found Rinsch guilty on multiple counts of wire fraud and money laundering, concluding that Rinsch, 48, had siphoned off the funds intended for his long-delayed series White Horse and used them to fund a life of luxury.
Prosecutors said the charges carry maximum sentences totalling 90 years in prison, though the actual sentence is expected to be shorter. He is scheduled to be sentenced on April 17.
Prosecutors told the jury that Netflix had already invested roughly $44 million (£32.8m) in the project, known as White Horse and later renamed Conquest, and later sent an additional $11 million (£8.2m) in 2020 after Rinsch requested more funds to wrap up production.
Rinsch had begun filming the series in 2017, completing six shortform episodes thanks to funding from his mentor Keanu Reeves, before pitching the project to studios.
Instead of using the additional money to finish the show, federal authorities said Rinsch transferred the funds into a personal account, where he lost around half of it on risky investments before shifting the remaining balance into cryptocurrency, yielding some profit.
Court filings show that he purchased five Rolls-Royces, a Ferrari, spent $652,000 (£486,752) on expensive watches and clothes, $638,000 (£476,300) on high-end mattresses, another $295,000 (£220,233) on luxury bedding and linens, and repaid $1.8 million (£1.3m) in personal credit-card debt, all paid for with money that Netflix believed was funding the series.
Prosecutors said he lived out of five-star hotels in California and Spain during this period.
Rinsch, best known for directing the 2013 film 47 Ronin, argued that the dispute was essentially contractual and that he believed the funds were reimbursement for work already done rather than strictly limited to post-production.
Rinsch was arrested in March in West Hollywood, California, and charged with wire fraud, money laundering and making monetary transactions involving criminal proceeds.
Taking the stand in his own defence on Tuesday, Rinsch said he believed the $11 million was meant to keep the production of Conquest afloat during the coronavirus pandemic and to conduct preproduction on a potential second season of the show.
But former Netflix executives testified that they had agreed to only one season of the show and that the money was supposed to be used to finish episodes for that season, which Rinsch failed to do.
He did not deliver a single completed episode of the series.
He also claimed that the cars and furniture he purchased were props required for the show, but an arbitrator ruled that nothing he bought was required.
Netflix cancelled development of the show in early 2021 after reports that Rinsch’s behaviour had become increasingly erratic, with a New York Times piece claiming he told executives he had discovered Covid-19’s “secret transmission mechanism” and told his wife, a producer on the series, that he could predict earthquakes and lightning strikes.
Netflix ultimately wrote off the $55 million (£41.06m) it spent on the project.
After less than five hours of deliberation, jurors rejected his defence and found him guilty on all seven counts brought by federal prosecutors.
Rinsch’s lawyer Benjamin Zeman wrote in a statement that he believed the verdict was wrong.
“I think the verdict was wrong and I fear that this 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,” he said in an email, according to The Times.
The Independent has reached out to Netflix for comment.
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