Tech CEO Convicted After Lavish Lifestyle Funded by Fake Promises
Bernhard Eugen Fritsch, 63, of Malibu, was found guilty late Thursday of one count of wire fraud following a nine-day trial in U.S. District Court in Los Angeles.
Fritsch, founder and CEO of StarClub Inc., a Santa Monica-based company, marketed a software platform known as StarSite, purportedly designed to help celebrities and social media influencers monetize branded content through ad revenue sharing. According to trial evidence, Fritsch raised millions between 2014 and 2017 by falsely claiming that StarClub was on the cusp of lucrative partnerships and investment deals with major media firms, including Disney.
Prosecutors said Fritsch told investors that the company had generated $15 million in revenue in 2015 and that major media companies and a global investment bank had already invested in the startup. According to the U.S. Department of Justice, none of these claims were true.
While he assured investors that funds would be used to develop the app and expand the business, investigators found that Fritsch diverted large sums to finance his lavish lifestyle, including luxury vehicles such as a McLaren and Rolls-Royce, renovations to his Carbon Beach mansion, and repairs to his yacht. Federal authorities later seized the vehicles and the yacht, which are now subject to forfeiture.
One investor, persuaded by Fritsch’s pitch, contributed over $20 million to the company over two years and helped bring in other victims, leading to an estimated $25 million in total losses, prosecutors said.
Fritsch was acquitted of a second count of wire fraud. He remains free on bond pending sentencing, which will be scheduled in the coming months by U.S. District Judge Dale S. Fischer. He faces a maximum sentence of 20 years in federal prison.
The FBI investigated the case. Prosecutors from the U.S. Attorney’s Office’s Major Frauds Section, Assistant U.S. Attorneys Monica E. Tait, Sarah S. Lee, and Joseph L. De Leon, are handling the case.
