The Justice Department on Tuesday charged Carl Erik Rinsch, whom Netflix hired to make a science-fiction series that was never completed, with an $11 million scheme to defraud the company.
According to the indictment, which was announced by prosecutors for the Southern District of New York and the Federal Bureau of Investigation’s New York Field Office, Mr. Rinsch secured funding from the streaming company from 2018 to early 2020. But he put the money in a personal brokerage account and ultimately used it to trade securities, instead of putting it toward the series, the indictment says.
Federal prosecutors charged Mr. Rinsch, who was arrested on Tuesday in West Hollywood, Calif., with wire fraud, money laundering and engaging in monetary transactions derived from unlawful activity.
The indictment does not cite Netflix by name. But the company has been involved in public disputes over the filmmaker’s planned series, which was initially called “White Horse” but was renamed “Conquest.” Last May, an arbitrator ruled that Mr. Rinsch owed the company nearly $9 million in damages.
“Carl Rinsch allegedly stole more than $11 million from a prominent streaming platform to finance lavish purchases and personal investments instead of completing a promised television series,” Leslie Backschies, an F.B.I. assistant director, said in a statement.
The New York Times covered the dispute between Mr. Rinsch and the streaming giant in 2023. He had sold Netflix the television show near the height of the streaming boom a few years earlier. But Netflix canceled the development of the show in early 2021 after Mr. Rinsch’s behavior turned erratic. In texts and emails to Netflix executives, he claimed to have discovered Covid-19’s secret transmission mechanism and told his wife, a producer on the show, that he could predict earthquakes and lightning strikes.
After Netflix informed Mr. Rinsch that it had decided to stop funding “Conquest,” he went on a spending spree with the show’s remaining production money, living out of five-star hotels in California and Spain, and buying a fleet of luxury cars and high-end furniture. He said the cars and furniture were props for the show, but the arbitrator, Rita Miller, a former Los Angeles Superior Court judge, ruled that none of the purchases were necessary for the production.
He never produced any episodes of the series, and Netflix had to write off the $55 million it spent on the project.