Gambling with Netflix Funds!

In an indictment unsealed on March 18 in Manhattan federal court, the U.S. Department of Justice charged Carl Erik Rinsch with fraud and money laundering. If convicted, he faces up to 20 years in prison.

According to the indictment, Netflix (though not explicitly named in court documents) paid Rinsch $11 million in March 2020 to finance storyboarding, pay actors, and edit footage for a sci-fi TV series titled “White Horse,” later renamed “Conquest.”

Instead, prosecutors claim Rinsch transferred approximately $10.5 million of those funds into a brokerage account, where he made a number of “extremely risky” trades, including call options on a biopharmaceutical company. He ultimately lost over $5.5 million on those trades.

Luck Turns in Crypto!

According to the indictment, Rinsch was more successful with cryptocurrencies. In February 2021, he made several million dollars trading crypto, which he used to purchase $3.8 million worth of furniture and antiques, five Rolls-Royces, a Ferrari, luxury watches, and over $3 million in high-end clothing.

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The Department of Justice’s filings reveal that Rinsch also spent around $1.8 million paying off credit card debts and $1 million on legal fees. These funds were partly used to sue Netflix for additional payments and to cover his divorce-related expenses.

The Series Never Aired!

According to the New York Times, Netflix canceled “Conquest” in early 2021 after Rinsch’s behavior reportedly became “erratic.” The Times reported that Netflix had paid Rinsch a total of $55 million, while prosecutors allege he received $44 million to produce the show, which was never completed or released.

Heavy Charges Filed!

Rinsch faces one count of wire fraud, one count of money laundering, and five counts of engaging in monetary transactions involving property derived from unlawful activity. Each fraud and money laundering charge carries a maximum sentence of 20 years, while each monetary transaction charge carries a maximum sentence of 10 years.

Rinsch was arrested on March 18, and his case has been assigned to U.S. District Judge Jed Rakoff in New York federal court. His attorney, Annie Carney, declined to comment outside the courtroom, according to the Associated Press.

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