Hollywood Scandal: Where Did Netflix’s Millions Go?

Carl Erik Rinsch, a well-known filmmaker, is facing federal charges in the United States for allegedly misappropriating $11 million that Netflix had allocated for the production of a sci-fi series Conquest. Instead of funding the project, prosecutors claim that Rinsch redirected the money into speculative investments in stocks and cryptocurrencies, while also spending lavishly on luxury goods, including high-end cars, antiques, and designer clothing.


Luxury Lifestyle Instead of Filming

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

In 2020, Netflix provided Rinsch with $11 million to cover the pre-production phase of White Horse, later renamed Conquest. However, instead of using the funds for the series, he allegedly transferred $10.5 million into his brokerage account and made speculative investments in stocks and cryptocurrencies.

Reports suggest that he lost over $5.5 million trading options on pharmaceutical companies. On the other hand, his crypto investments in 2021 reportedly brought in millions. Instead of reinvesting in the project, Rinsch allegedly spent large sums on luxury cars—including five Rolls-Royces and a Ferrari—along with furniture, antiques, and high-end clothing.


Netflix Pulled the Plug on the Project and Won in Court

While the Department of Justice (DOJ) did not name Netflix in its indictment, The New York Times previously reported on the legal battle between the filmmaker and the streaming giant in November 2023. Netflix had invested a total of $55 million in the project but canceled Conquest in 2021, citing Rinsch’s erratic behavior.

Additionally, Rinsch is said to have spent nearly $1.8 million paying off credit card bills and another $1 million on legal fees—including lawsuits against Netflix and expenses related to his divorce.


Facing a Lengthy Prison Sentence

The filmmaker has been charged with fraud, money laundering, and five counts of engaging in unlawful financial transactions. If convicted, he could serve up to 20 years in prison for fraud and money laundering, with additional financial fraud charges potentially adding another 10 years.


Hollywood's History of Financial Scandals Repeats Itself

Rinsch’s case echoes other high-profile financial scandals in Hollywood. Famed producer Harvey Weinstein previously sued his brother and executives of The Weinstein Company over alleged fraudulent loans that led to the company’s financial collapse.

Rinsch’s arrest comes just months after an arbitrator awarded Netflix $8.8 million in damages following a legal dispute initiated by the filmmaker. Los Angeles Superior Court Judge Rita Miller ruled that none of Rinsch’s luxury purchases were relevant to the production of Conquest.

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