NEW YORK, March 19 - A Hollywood writer-director has been arrested for allegedly defrauding Netflix of $11 million for a sci-fi show that never aired. Carl Erik Rinsch, best known for directing the film '47 Ronin', has been charged with wire fraud and money laundering. Federal prosecutors allege it was a scheme to defraud the streaming giant.
Prosecutors said on Tuesday that Netflix initially paid Rinsch about $44 million to buy an unfinished show called 'White Horse' but eventually paid him $11 million more when he said he needed more cash to finish the show.
Instead of using the extra money to complete the production, Rinsch quietly transferred the money to a personal brokerage account, where he made unsuccessful investments that lost about half of the $11 million in two months, according to prosecutors.
The filmmaker then dumped the rest of the money into the cryptocurrency market, which turned out to be a profitable move, and Rinsch eventually transferred the proceeds to a personal bank account. Rinsch spent about $10 million on personal expenses and luxury items, according to prosecutors. Rinsch, 47, was arrested in West Hollywood, California, and had his initial court hearing on Tuesday.
U.S. Magistrate Judge Pedro V. Castillo ordered his release later on Tuesday after he agreed to post a $100,000 bond and appear in a New York court. Netflix declined to comment.