MW Netflix paid $55 million for a show. Prosecutors say the creator blew it on Rolls Royces and crypto.

By Lukas I. Alpert

Netflix paid Carl Erik Rinsch top dollar during the peak streaming boom for a sci-fi series he never delivered, losing it all on bad investments and luxury goods, prosecutors say

This is when peak streaming went boom.

In 2018, at the high point of television's streaming boom, Netflix Inc. $(NFLX)$ agreed to pay $55 million to a little-known writer and director for a sci-fi series he had created that they hoped would turn into a major hit.

But federal prosecutors say the show's creator, Carl Erik Rinsch, instead took a substantial chunk of the money and blew it on highly speculative investments and used millions to buy a fleet of five Rolls Royces and a pair of mattresses that cost over $630,000.

Rinsch never delivered a single episode of the show, originally called "White Horse," and later "Conquest," according to court filings.

The debacle underscores the frenzy that swept through Hollywood starting in the years just before the pandemic, during which streaming companies threw around huge sums of money to fill their lineups as viewers increasingly cut the cord.

"Carl Erik Rinsch orchestrated a scheme to steal millions by soliciting a large investment from a video-streaming service, claiming that money would be used to finance a television show that he was creating. But that was fiction," said Matthew Podolsky, the acting U.S. Attorney in Manhattan, where the seven-count criminal case against Rinsch was filed.

A message left with Rinsch's attorney wasn't immediately returned. A spokesman for Netflix declined to comment.

Rinsch, 47, had had limited success in Hollywood as a director before striking the lucrative deal. In 2013, he directed a film called "47 Ronin," an historical fantasy that takes place in medieval Japan. The film cost $175 million to make but was a box-office bust.

In 2016 and 2017, he began working on a sci-fi series about a group of superintelligent clones who had been banished to a walled-in area in a city in Brazil and began warring with humans and among themselves, according to court papers.

With backing from a number of production companies and actor Keanu Reeves, Rinsch managed to produce a number of short episodes, which he began to shop around in order to create a full-length series.

He initially reached an agreement with Amazon Inc. $(AMZN)$, but then Netflix swooped in at the last minute and outbid its rival, offering $44 million up front. Rinsch agreed and began to work on completing the series, prosecutors said.

During production, Rinsch began acting erratically, according to a report by the New York Times, claiming he had discovered COVID-19's secret transmission mechanism and had begun to be able to predict lightning strikes.

Within 18 months, however, Rinsch went back to Netflix, asking for $11 million more to complete the show. Netflix agreed and sent the money to an account for Rinsch's production company, according to prosecutors.

But Rinsch then allegedly transferred the money into his personal accounts, investing roughly half of it into call options for an unnamed biopharmaceutical company. The investment tanked, and most of the money was lost, prosecutors said.

Rinsch took the rest and invested it in cryptocurrencies where he made money, prosecutors said.

Of the proceeds, Rinsch allegedly spent $2.4 million to buy five Rolls Royces and a Ferrari and $1.8 million to pay credit-card bills. He paid over $1 million on lawyers to sue Netflix for more money and for his divorce.

Rinsch allegedly spent $638,000 for two mattresses, $295,000 on luxury bedding and linens, $395,000 to stay at the Four Seasons hotel and $652,000 on watches and clothes.

Rinsch was arrested Tuesday in Los Angeles where he will initially be charged with one count of wire fraud, one count of money laundering and five counts of engaging in monetary transactions in property derived from specified unlawful activity.

-Lukas I. Alpert

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March 19, 2025 08:17 ET (12:17 GMT)

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