A Hollywood director has been found guilty of defrauding Netflix out of $11 million for a show that never materialized, while instead using the money on lavish purchases that included several Rolls Royces and Ferraris and nearly $1 million in…
New York — The Hollywood director was found guilty Thursday of defrauding Netflix out of $11 million for a show that never materialized, while instead using the money on lavish purchases that included several Rolls Royces and Ferraris and about $1 million in luxury mattresses and beds.
Karl-Erik Reinsch, best known for directing the movie “47 Ronin,” was convicted of fraud, money laundering and other charges, according to court records and a spokesman for federal prosecutors in New York.
In a statement, Rensch’s attorney, Benjamin Zeman, said he believed the ruling was wrong and “could set a dangerous precedent for artists who become embroiled in contractual and creative disputes with their donors, in this case one of the largest media companies in the world, finding itself indicted by the federal government for fraud.”
Netflix initially paid Wrench about $44 million for an unfinished sci-fi show called “White Horse,” then sent more than $11 million more after he said he needed additional financing to finish production, prosecutors said.
But instead of putting the money into the offer, Wrench funneled the money into a personal account where he made a series of failed investments, losing about half of the $11 million in two months, according to prosecutors.
He then placed the remaining funds into the cryptocurrency market, making some profits, although Wrench then deposited the funds into his own bank account.
Then came the lavish purchases, with Wrench buying five Rolls Royce cars and one Ferrari, as well as watches and clothing worth $652,000, prosecutors said. He also bought two mattresses for about $638,000 and spent another $295,000 on luxury bedding and linens. In addition, he used some of the money to pay off about $1.8 million in credit card bills, prosecutors said.
Wrench never finished the show. He is scheduled to be sentenced in April.
Netflix declined to comment.