A Malibu man has been found guilty of wire fraud after a jury determined he deceived investors out of approximately $25 million. Bernhard Eugen Fritsch, 63, was convicted following a nine-day trial in which prosecutors argued he misled investors about his tech company, StarClub.
Fritsch claimed he was developing an app called StarSite, which would help celebrities and influencers make money through social media advertisements. To lure investors, he falsely stated that major media companies had invested in his venture and that he was on the brink of securing a deal with Disney. However, none of these claims were true, and the revenue he reported was fabricated.
Instead of using the funds for his business, Fritsch reportedly spent the money on a lavish lifestyle, including luxury cars like a McLaren and a Rolls-Royce, renovations on his Malibu mansion, and maintaining a yacht. He faces up to 20 years in prison for his actions.
Despite the conviction on one count of wire fraud, the jury found him not guilty on a second count. Fritsch remains free on bond pending his sentencing, which is scheduled for later this year. His attorney did not respond to requests for comment following the verdict.
The case highlights the risks investors face when dealing with startups and the importance of due diligence. Prosecutors noted that many people lost significant amounts of money due to Fritsch’s fraudulent actions, with one individual alone investing over $20 million. Law enforcement has since seized the yacht and luxury vehicles purchased with the stolen funds.
In addition to the federal trial, Fritsch has faced multiple lawsuits in Los Angeles County over similar allegations of financial misconduct. These legal challenges underscore a pattern of behavior that has raised concerns among his former investors.