47 Ronin director Carl Erik Rinsch was sentenced Monday to 30 months in prison for defrauding Netflix out of $11 million from a deal with the company to make a sci-fi series he never delivered.
A Manhattan jury last year found Rinsch guilty of wire fraud, money laundering and multiple counts related to engaging in illegal monetary transactions. He had spent funds earmarked for a series titled White Horse on risky securities trades, using profits from those investments to sue Netflix for further payments to finish the show and purchase luxury goods.
Rinsch faced a maximum term of 90 years, with federal prosecutors recommending a 60-month prison sentence. Instead, U.S. District Judge Jed Rakoff issued a sentence on the lower end of the sentencing guidelines after evidence of an untreated mental health condition emerged.
“The perhaps improper medication Mr. Rinsch received may have…
Investment fraud targets the human desire for financial growth by promising high returns with “low to no risk.”
- Ponzi Schemes: Named after Charles Ponzi, these schemes pay “returns” to earlier investors using the capital brought in by newer investors. There is no actual underlying business; the system collapses when new recruitment slows down.
- Pyramid Schemes: Similar to Ponzi schemes, but participants are usually required to sell a product or service. The primary “profit” comes from the recruitment fees of new members rather than actual product sales.
- Pump and Dump: Fraudsters spread false, positive rumors about a cheap stock (the “pump”) to drive up the price. Once the price peaks, they sell their shares (the “dump”), leaving other investors with worthless stock.