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Carl Erik Rinsch, the Hollywood director known for "47 Ronin," was arrested on Tuesday for allegedly defrauding Netflix out of $11 million.

Prosecutors claim Rinsch misused funds meant for a sci-fi series and instead spent the money on luxury items and cryptocurrency investments.

Authorities revealed that Netflix initially paid Rinsch $44 million to develop a show titled "White Horse." However, when the director requested an additional $11 million in 2020, claiming it was necessary for production, Netflix complied.

Instead of using the funds as intended, Rinsch allegedly transferred the money into a brokerage account, where he made a series of unsuccessful investments, losing nearly half within two months. He later moved the remaining funds into cryptocurrency, where he saw substantial gains.

According to federal prosecutors, Rinsch used the money for extravagant purchases, including five Rolls-Royces, a Ferrari, $1.8 million in credit card payments, $3.8 million on furniture and antiques, and $652,000 on watches and designer clothing.

According to AP News, He also spent over $1 million on legal fees, including suing Netflix for additional funds.

Rinsch, 47, was arrested in West Hollywood and appeared in a federal court in Los Angeles. Dressed in a turtleneck sweater and jeans, he was shackled as he stood before the judge. When asked if he understood the charges, he responded, "Not cover to cover," but acknowledged the allegations against him.

Hollywood Director Rinsch Released on $100K Bond Ahead of Fraud Trial

US Magistrate Judge Pedro V. Castillo set Rinsch's bond at $100,000, allowing him temporary release before his trial in New York, where the indictment was filed.

His defense attorney, Annie Carney, declined to comment outside of court, stating she had not yet reviewed the prosecution's evidence. "The allegations in this case are purely financial," Carney noted during the hearing.

The FBI, which conducted the investigation, issued a strong statement regarding the case.

"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," said FBI Assistant Director Leslie Backschies. "The FBI will continue to reel in any individual who seeks to defraud businesses."

Netflix has declined to comment on the situation. The streaming giant had previously won a $12 million arbitration ruling against Rinsch after he claimed the company owed him more money, Deadline said.

The director never paid the settlement, and his alleged fraudulent actions eventually led to his indictment.

If convicted, Rinsch faces serious legal consequences, including up to 20 years in prison for wire fraud, 20 years for money laundering, and additional charges carrying potential 10-year sentences each. His court date in New York has yet to be determined.