Carl Erik Rinsch, charged with wire fraud and money laundering, goes on trial Tuesday in Manhattan.
The feds say he defrauded Netflix out of $11 million for a never-finished sci-fi series.
Prosecutors say Rinsch spent Netflix's money on cars, crypto, and $638,000 for mattresses.

Filmmaker Carl Erik Rinsch is going to trial in Manhattan, fighting charges that he defrauded Netflix out of $11 million — money prosecutors say was conditioned on his delivering a humans-versus-clones sci-fi series he ultimately never completed.

Rinsch spent the money on himself instead, prosecutors say, using it to pay off his debts and splurge on luxury cars and furnishings, including two mattresses that together cost $638K.

Openings in the colorful case are expected early Tuesday afternoon.

AJurors can expect to hear a rollicking Hollywood tale featuring a bidding war (a half-dozen streamers, including Amazon, had vied for the project's rights) and at least one celebrity (Keanu Reeves was an early investor, according to the New York Times.)

They'll likely see raw footage from Rinsch's dystopian, AI-themed thriller, "White Horse," turning a federal courtroom in Manhattan into the project's first public screening venue.

And they'll hear extensive details of Rinsch's spending — with what prosecutors contend was Netflix's money — on cars, watches, clothing, luxury rentals, and those two very pricey premium mattresses.

"Mr. Rinsch, you can agree that these are extraordinarily expensive mattresses, right?" Rinsch was asked once, during a civil deposition.

"Not only extraordinary," he answered, according to a transcript included in his criminal docket. "Almost Cat in the Hat crazy expensive mattresses, yes," he added.

"But they appreciate in value, strangely."

A name inspired by the first horseman of the apocalypse

Rinsch, 48, is charged with wire fraud, money laundering, and engaging in unlawful monetary transactions, charges carrying a combined maximum penalty of 90 years in prison.

At the trial's center is an ill-fated TV series named for the color of the steed ridden by the first horseman of the apocalypse. (The name was later changed to "Conquest.")

Federal prosecutors say Netflix execs gave the Los Angeles native their first infusion of cash for "White Horse" — $44 million — in 2018, after falling in love with a trailer and six mini-episodes he'd already filmed.

Rinsch soon asked for more money, and in 2020, Netflix wired him $11 million on the condition that he use it for specific pre- and post-production purposes, including costumes, editing, and payroll.

Instead, according to the charges, Rinsch routed the money through a series of bank accounts and into his personal brokerage account.

Prosecutors say Rinsch then lost more than half the funds on speculative stock investments, all the while giving Netflix false, rosy updates.

"By the way, don't worry about the show," he emailed Cindy Holland in April 2020, telling the then-vice president of original content that his progress on the project was "awesome," "other level," and "game changing good," court documents said.

According to the indictment, Rinsch then invested the money he hadn't lost, this time in cryptocurrency, making nearly $10 million.

Prosecutors say he used these winnings to pay down credit card debt, hire divorce lawyers, and splurge on a warehouse worth of luxury items, including five Rolls-Royces — props, he contends, for "White Horse."

Not a single episode in the promised 13-episode, 120-minute first season was completed.

The trial, before US District Judge Jed Rakoff, is expected to last two weeks and will include testimony for the government by multiple former Netflix executives.

Court documents have named four ex-executives as having involvement in the project. They are Holland, Peter Friedlander (former head of US and Canadian scripted TV content), Rochelle Gerson (former head of business affairs), and Bryan Noon (former vice president, original series).

Rinsch's ex-wife, once a producer on the project, is also slated to be called by prosecutors, who have asked the judge to "police" her cross-examination "to avoid digression into a sideshow."

Rinsch blames the pandemic — and Netflix

In defense filings, Rinsch blames the project's implosion on the pandemic and on what his lawyers describe as the streaming giant's decision to abandon "White Horse" and write it off as a tax loss.

Prosecutors blame Rinsch alone, citing Netflix executives' belief that Rinsch's mental health had, in their words, "drastically decompensated" at around the time Netflix wired him the $11 million.

Rinsch's mental health — and the question of whether he could form the requisite intent to commit fraud — may be a significant issue at trial, particularly for his side.

"The defense is not making any argument or submitting any evidence that Mr. Rinsch was or is insane," his lawyers wrote in a defense filing two weeks ago.

Still, "the condition of his mind and mental state" is "worthy of exploration and contextualization," they wrote. (Business Insider Africa)

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