A New York court on Dec. 11 convicted filmmaker Carl Erik Rinsch of fraud, capping a years-long saga that left Netflix with an estimated $55 million loss and no completed television series to show for it. The verdict marks one of the most costly production failures in the streaming company's history and underscores a broader retrenchment underway at Netflix as it reins in budgets, cancels underperforming projects and raises subscription prices.
Rinsch, once known for directing the studio film 47 Ronin, had been commissioned by Netflix to produce an ambitious science-fiction series during the platform's expansionary push in the late 2010s. Prosecutors said the director diverted production funds for personal use rather than completing the project, which was acquired by Netflix in 2018 and ultimately abandoned.
Court records showed that Netflix initially paid roughly $44 million for the unfinished series, granting Rinsch unusually broad creative control, including final cut. In March 2020, Rinsch sought an additional $11 million, telling Netflix the money was required to complete production. That sum was transferred, but prosecutors demonstrated it was deposited into Rinsch's personal account and never used to advance the show.
Instead, evidence presented at trial detailed a series of speculative investments and personal purchases. Rinsch lost nearly half of the additional funds through stock-market trading, moved other portions into cryptocurrency-where he generated gains-and spent millions on luxury items rather than production costs.
Among the expenditures cited in court filings were:
- Purchases of five Rolls-Royces and a Ferrari
- More than $650,000 spent on luxury watches and clothing
- Approximately $650,000 on high-end mattresses and bedding
- Legal fees used to pursue claims against Netflix for additional money
By 2021, Netflix concluded that the series effectively did not exist beyond a handful of short clips. The company canceled the project and absorbed the loss. In a separate arbitration ruling in 2024, Netflix was awarded $12 million in damages, though filings indicate the amount has not been recovered.
The Rinsch case differs sharply from other expensive Netflix cancellations, which were driven by viewership performance rather than alleged criminal conduct. Big-budget projects such as The Get Down and Marco Polo were shelved after failing to attract sufficient audiences despite heavy investment. Prosecutors argued the Rinsch matter was not a miscalculation of taste, but a deliberate misuse of funds.
The fallout has coincided with structural changes inside Netflix. Throughout 2025, the company moved to tighten oversight of production spending, reduce greenlights for costly auteur-driven projects and accelerate cancellations of shows that fail to meet performance thresholds. Executives have emphasized fiscal discipline as competition intensifies and growth in mature markets slows.
