“47 Ronin'' director Karl-Eric Rinsch was found guilty of defrauding Netflix of $11 million for a show that never materialized, and used the money to buy luxury items such as a Ferrari, several Rolls-Royces and luxury bedding, federal prosecutors in Manhattan announced.
Rinsch was found guilty after a week-long trial. He was found guilty of one count of wire fraud and one count of money laundering, each carrying a maximum sentence of 20 years in prison, the U.S. Attorney for the Southern District of New York announced Thursday.
He was also found guilty of five counts of engaging in financial transactions in property derived from certain illegal activities, each of which carried a maximum penalty of 10 years in prison.
According to the indictment, the director began filming “White Horse” around 2017, about a scientist who creates a human-like species that rebels against its creator.
Prosecutors said Netflix initially paid Rinsch about $44 million in 2018 and 2019 to make the unfinished sci-fi series, then transferred another $11 million around March 6, 2020, after Rinsch said he needed additional funds to finish production.
Instead of putting money into the show, prosecutors said, Rinsch moved the cash into several different bank accounts “before consolidating it into a personal brokerage account.”
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Rinsch then used those funds to make a number of personal and speculative purchases. Prosecutors say he lost about half of his $11 million in a series of failed investments in a few months.
According to prosecutors, he used the rest of the money for cryptocurrency markets and “personal expenses and luxury items, including at least $1.7 million in credit card bills, at least $3.3 million in furniture, antiques, and mattresses, at least $387,000 in Swiss watches, and at least $2.4 million in five Rolls Royces and a red Ferrari.”
“Karl Eric Rinsch took $11 million earmarked for a television show and bet it on speculative stock options and cryptocurrency trading,” said U.S. Attorney Jay Clayton. “Today's convictions show that when someone steals from investors, we will track that money and hold them accountable.”
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Mr. Rinsch's lawyer, Benjamin Zeman, said in a statement to the New York Times that he disagreed with the verdict.
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“I am concerned that this could set a dangerous precedent for artists who find themselves embroiled in contractual and creative disputes with their patrons, in this case some of the world's largest media companies, and be prosecuted for fraud by the federal government,” Zeman said.
Netflix said it had no comment when contacted by Global News about Rinsch's conviction.
Rinsch was indicted in March for “participating in a scheme to defraud a subscription video-on-demand streaming service” after failing to complete production on “White Horse.”
“Karl Eric Rinsch orchestrated a scheme to steal millions of dollars by soliciting large investments from video streaming services, claiming that the funds would be used to finance a television show he was producing. But that is fiction. Rinsch instead allegedly used the funds for personal expenses and investments, including highly speculative options and cryptocurrency trading,” Acting U.S. Attorney Matthew Podolsky said in March.
“Mr. Rinsch's arrest is a reminder that our agency and our partners at the FBI remain vigilant in the fight against fraud and will bring those who cheat and steal to justice,” Podolsky added.
A sentencing hearing for Rinsch is scheduled for April 17, 2026.
—With files from The Associated Press
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