E. Martin Estrada, U.S. Attorney | U.S. Attorney's Office for the Central District of California
A Malibu resident, Bernhard Eugen Fritsch, has been convicted of defrauding investors for over $20 million through deceptive claims regarding his tech company's financial performance. According to the Justice Department, Fritsch's company, StarClub Inc., headquartered in Santa Monica, purported to offer a software application aimed at helping celebrities and social media influencers monetize brand endorsements.
During a nine-day trial, evidence revealed that Fritsch, aged 63, was responsible for misleading investors between 2014 and 2017. As the founder and CEO of StarClub Inc., he raised substantial funds, claiming that the company's app, known as StarSite, would allow celebrities to post content on platforms like Facebook, while simultaneously delivering advertising content and sharing the generated revenue.
Fritsch conveyed several false claims while presenting StarClub to investors, suggesting imminent commercial collaborations or buyouts from prominent media entities such as Disney. Additionally, he falsely claimed that StarClub generated $15 million in revenue in 2015 and had backing from major media and global investment firms.
Instead of advancing StarClub, Fritsch used significant portions of the funds for personal benefit, acquiring luxury vehicles and enhancing his yacht and Malibu mansion, located near Carbon Beach. The McLaren, Rolls-Royce, and yacht have been confiscated by law enforcement and are subject to forfeiture.
One investor was swayed to put in more than $20 million over two years, influenced by Fritsch's deceptive promises. This led to more victims contributing millions to the scheme, which prosecutors estimate resulted in about $25 million in losses.
The jury acquitted Fritsch of a second wire fraud count. He remains on bond as United States District Judge Dale S. Fischer is anticipated to schedule a sentencing hearing in the near future. Fritsch faces a potential maximum sentence of 20 years in federal prison.
The investigation into this case was conducted by the FBI. The case is being prosecuted by Assistant United States Attorneys Monica E. Tait, Sarah S. Lee, and Joseph L. De Leon from the Major Frauds Section.
