A federal jury in Manhattan found director Carl Erik Rinsch guilty of defrauding Netflix of $11,000,000 intended for a sci‑fi series, a sum prosecutors say he diverted into luxury purchases, debt relief and speculative investments including cryptocurrency. The verdict closes a case in which Netflix had invested a total of $55,000,000 in the never‑completed project and recovered nothing.
Diversion of production funds, lavish spending and crypto trades
Between 2018 and 2020 Netflix advanced roughly $44,000,000 to Rinsch’s production company for a series initially titled White Horse (later rebranded Conquest); in 2020 he secured an additional $11,000,000 by claiming the budget was insufficient to finish post‑production. Prosecutors say Rinsch routed that $11,000,000 into personal accounts and used it for a pattern of non‑production expenditures: five Rolls‑Royces and a Ferrari, $652,000 on watches and designer clothing, $638,000 on premium mattresses, $295,000 on luxury bedding, and roughly $1,800,000 to pay down personal credit‑card debt. After a series of failed investments that reportedly erased about half of the $11,000,000, he shifted the remaining funds into cryptocurrency positions and, according to the prosecution, realized some gains.
The report of conversion of misappropriated production funds into crypto holdings raises direct questions about trade timing and position size; if trades were large relative to market depth, they could have created localized selling or buying pressure depending on execution. Such flows are relevant to institutional on‑ramps and custody practices because internally diverted capital entering spot or derivatives crypto markets can complicate reconciliation and recovery efforts.
Conviction, legal definitions and industry implications
Rinsch, 48, was convicted on multiple counts including wire fraud, money laundering and transacting in property derived from unlawful activity. Wire fraud is the use of interstate electronic communications to further a scheme to defraud; money laundering is the process of concealing the origins of illegally obtained funds by funneling them through legitimate‑appearing transactions. His attorney, Benjamin Zeman, framed the dispute as contractual, warning the verdict could affect artists involved in contentious production disputes; U.S. Attorney Jay Clayton said Rinsch “took $11,000,000 meant for a TV show and gambled it on speculative stock options and crypto transactions.” The jury deliberated for under five hours. Sentencing is scheduled for April 17, 2026, and prosecutors note exposure to substantial statutory maximums.
For Netflix the immediate financial consequence was a full write‑off of $55,000,000 and zero recovery to date. The case highlights operational risk in content finance: large, milestone‑based disbursements require robust oversight and clear custody channels, especially when transfers cross into high‑volatility asset classes.
The guilty verdict resolves a high‑profile allegation of misuse of production capital and spotlights how illicitly diverted funds can migrate into crypto markets and luxury consumption, complicating restitution. The next verified milestone is sentencing on April 17, 2026, which will determine penalties and any ordered financial remediation.