Bernhard Eugen Fritsch, a 63-year-old Malibu man, has been convicted of defrauding investors out of more than $20 million by making false claims about the financial prospects of his celebrity-focused tech company, the U.S. Attorney’s Office for the Central District of California announced on April 4.
Fritsch, the founder and CEO of StarClub Inc., a Santa Monica-based company that developed software to help celebrities and influencers monetize their social media endorsements, was found guilty of one count of wire fraud.
From 2014 to 2017, Fritsch misled investors by claiming that StarClub had earned $15 million in revenue and was finalizing major commercial agreements with companies such as Disney. He promised investors that their money would fund the development of the app and general corporate operations. However, Fritsch used significant portions of the funds to finance a lavish lifestyle, including purchasing luxury vehicles like a McLaren and a Rolls-Royce, renovating his Malibu mansion near Carbon Beach, and making repairs to his yacht.
One investor contributed over $20 million based on Fritsch’s false claims and later referred additional investors who poured millions more into the scheme. Prosecutors estimate that the scheme caused approximately $25 million in losses.
Law enforcement has seized the McLaren, Rolls-Royce, and yacht, which are now subject to forfeiture proceedings. Fritsch was acquitted of a second wire fraud charge and remains free on bond. A sentencing hearing has not yet been scheduled, but he faces up to 20 years in federal prison.
