Director Carl Rinsch gets prison term in Netflix fraud case

Hollywood writer-director Carl Rinsch was sentenced Monday to 2 1/2 years in prison for defrauding Netflix of $11 million meant to complete an unfinished science-fiction series, ending a criminal case that drew pleas for leniency from supporters including actor Keanu Reeves.

Rinsch, 48, best known for directing the 2013 samurai fantasy film “47 Ronin,” was convicted in December of federal wire fraud and other charges. The BBC reported he was convicted of federal fraud and money laundering after prosecutors accused him of misusing Netflix funds intended for a series initially called “White Horse.”

Prosecutors said Netflix paid Rinsch roughly $55 million for the show, including about $44 million in 2018 and 2019 and an additional $11 million in 2020 after he said he needed more money to finish production. Instead of using that final payment on the series, prosecutors said, Rinsch moved the money into a personal account.

According to prosecutors and trial testimony, Rinsch made risky investments and lost about half the $11 million within a couple of months. He later put remaining funds into cryptocurrency, made a profit and deposited the proceeds into his own bank account. Prosecutors said he then spent large sums on luxury goods, including five Rolls-Royces, a red Ferrari, $652,000 worth of watches and clothes, $638,000 on two mattresses and another $295,000 on luxury bedding and linens. They also said he used some of the money to pay about $1.8 million in credit card bills.

“Instead of using the money to make the show, Rinsch made risky bets on highly speculative stock options and cryptocurrency, and spent millions of dollars on luxury goods for himself,” U.S. Attorney for the Southern District of New York Jay Clayton said in a statement. “Today’s sentence sends a deterrent message: fraud will not be tolerated.”

Rinsch apologized in court before U.S. District Judge Jed S. Rakoff issued the sentence. “This process has forced me to confront things about my health, my judgment and my life,” he said. He acknowledged that “real harm was caused” and added, “I failed to recognize the danger of the state I was in.”

Rinsch and his lawyers told the court his actions were fueled by mental health struggles and medication problems, which they said he is now addressing with a new care provider. His psychological difficulties were not described in court, and Rinsch and his lawyers declined to detail them afterward.

Prosecutors had sought a five-year prison sentence, saying Rinsch had lied to obtain the money and then concealed what he had done. Prosecutor David Markewitz told the court that Rinsch had “every possible advantage,” including family money, an elite education, famous friends and a successful career, and said his motive “was naked greed.”

Rakoff said Rinsch’s mental health difficulties “may explain some of the excesses” but did not “detract from the court’s conclusion that he was determined to lie to get substantial monies from Netflix, lie to cover it up.” The judge also sentenced Rinsch to three years of supervised release. CBS News reported he owes about $11 million in restitution, while the BBC reported Rakoff ordered $11 million in forfeitures and a $700 fine.

At trial in New York, several Netflix executives testified that the company agreed to one season of the show, which Rinsch did not deliver, the BBC reported. Rinsch also testified, saying the situation was a misunderstanding and that he believed the money was intended to keep the show going during the pandemic.

Reeves, who starred in “47 Ronin,” wrote to the court before sentencing that Rinsch brought “exceptional joy and warmth to the people around him” and “creative inspiration to others through his creativity and vision.” Reeves also said Rinsch “can self-sabotage by amplifying the scale, scope and landscape of what had been negotiated,” and asked that the sentence be tempered with “leniency and mercy as well as justice.”

Rinsch is due to report to prison in September. His lawyers declined to comment after court, except attorney Daniel McGuinness said they looked forward to appealing. Netflix declined to comment on the sentence.