Netflix director Carl Rinsch sentenced to over 2 years in prison in $11 million fraud case

Carl Rinsch, the director convicted of defrauding Netflix of $11 million, was sentenced on Monday to two and a half years in prison.

Much of Monday's sentencing hearing was spent discussing Rinsch's mental health, an issue that had played out in court filings but was not part of his criminal trial. During the trial, a Manhattan federal jury heard evidence that the director, instead of delivering an ambitious sci-fi epic called "White Horse" to Netflix, went on a luxury spending spree that included a $439,000 handmade Hästens mattress.

US District Judge Jed Rakoff pushed back against a prosecutor who argued that Rinsch was motivated solely by greed.

"If he had purchased one Rolls-Royce, or even maybe the Rolls-Royce and the Ferrari, that would have been at least consistent with the view you're now expressing," Rakoff said. "But he purchased five Rolls-Royces plus the Ferrari. That suggests someone who is not operating solely from greed, but also someone who's got a kind of manic state of mind."

At the same time, the director's conduct was egregious, the judge said. There was overwhelming proof that Rinsch had lied about his conduct, Rakoff said.

"He chose to do this. And he chose to continue it and to cover it up for years," Rakoff said.

Rinsch, wearing a blue suit with a salmon tie and matching pocket square, told Rakoff that the experience of going through the criminal justice system forced him "to confront things about my life and my health that I have been unable to confront" and that he was receiving mental health treatment.

"I will spend every day of the rest of my life working to restore the trust I've lost," he said in the lower Manhattan courtroom.

One of his attorneys, Daniel McGuinness, told Business Insider he looked forward to appealing the case.

Prosecutors brought fraud charges against him following the collapse of "White Horse," a science fiction project about clonelike beings that form their own society.

Netflix initially agreed to pay $44 million for Rinsch to deliver about 13 short episodes of the show. The director was a protégé of "Blade Runner" director Ridley Scott and had the support of Keanu Reeves, whom he had directed in the 2013 movie "47 Ronin."

After the project went over budget, Netflix agreed to pay Rinsch another $11 million to complete it.

Filming never picked up again. Rinsch moved the money through a series of bank accounts, invested in cryptocurrencies, and bought luxury goods. At trial, Rinsch testified that he believed the additional funds were mostly backpay for him paying out of pocket for earlier cost overruns.

The jury found Rinsch guilty in December. Before the sentencing, Reeves wrote a letter asking the judge to show leniency, saying that Rinsch tended to self-sabotage.

In addition to the prison sentence, Rakoff ordered Rinsch to pay $11 million in restitution, plus legal fees Netflix incurred assisting prosecutors and preparing executives who testified in the criminal trial. Rinsch separately owes Netflix millions of dollars in a related civil dispute over "White Horse."

A spokesperson for Netflix declined to comment. Rinsch declined to comment.

During the hearing, McGuinness noted the tall odds of Rinsch ever repaying the money he owed to Netflix. It is "preposterous" to think any Hollywood studio would give him millions of dollars for anything ever again, he said.

"I hope he has some career, some creative outlet," McGuinness said. "But it's going to be nowhere near the scope he had in the past."