Hollywood Scandal: Tech Founder Convicted of $20 Million Fraud Against Celebrities
A Malibu man has been found guilty of scamming investors and Hollywood stars out of more than $20 million by making false claims about the performance of his celebrity-focused app.
Bernhard Eugen Fritsch, the founder and CEO of StarClub Inc., a tech company based in Santa Monica, has been held accountable for a sophisticated fraud scheme that funded his extravagant lifestyle, as reported by Fox News Digital.
At 63 years old, Fritsch was convicted by a jury on Thursday for one count of wire fraud after it was revealed that he misled investors regarding the financial success and future prospects of his tech venture, according to the Department of Justice.
He falsely assured investors that his app, StarSite, would enable celebrities and social media influencers to monetize their brand endorsements effectively.
Instead of channeling the funds into the app's development, Fritsch squandered millions on luxury cars, yachts, and a multimillion-dollar mansion in Malibu, as detailed in a press release.
Between 2014 and 2017, Fritsch raised over $20 million, promoting StarClub as a revolutionary tool for the entertainment industry. He claimed that the app would allow celebrities to effortlessly post branded content on social media, generate advertising revenue, and share profits with influencers.
While pitching the StarClub opportunity to investors, Fritsch made numerous false and fraudulent claims, including assertions that his company was on the brink of securing commercial deals or receiving investments and buyout offers from major media companies like Disney. He even claimed that StarClub had generated $15 million in revenue in 2015.
Rather than investing the funds to grow the company or enhance its technology, Fritsch indulged in luxury purchases, including a McLaren and a Rolls-Royce, renovated his multimillion-dollar Malibu residence, and made expensive upgrades to his yacht.
Law enforcement has since seized the yacht, McLaren, and Rolls-Royce, which are now subject to forfeiture proceedings.
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One victim reportedly invested over $20 million in StarClub over two years, based on Fritsch’s deceptive statements, according to the Department of Justice. This victim also introduced Fritsch to other investors who contributed millions more to the company. Prosecutors estimate that Fritsch's fraudulent activities resulted in approximately $25 million in losses for victims.
Sources close to Fox News Digital have indicated that several Hollywood celebrities, including Enrique Iglesias and Tyrese Gibson, may be entangled in this high-profile fraud case.
In 2014, singer and actor Tyrese hosted a private party for StarClub Inc., which was attended by actresses such as Caitlin O’Connor, Elise Neal, rapper Trinidad James, and model Khadija Neumann.
Additionally, Fritsch has faced three lawsuits in Los Angeles County Superior Court over allegations of fraudulent financial schemes.
Music executive Haqq Islam and his company filed a lawsuit against StarClub and Fritsch in 2013, alleging breach of contract and fraud, as reported by The Los Angeles Times. Islam claimed that Fritsch owed him $750,000 for enticing Hollywood stars like Jessica Simpson to meet with him and consider participating in StarClub’s business ventures, according to reporting by Courthouse News Service.
Representatives for Tyrese, Iglesias, and Simpson did not immediately respond to requests for comment from Fox News Digital.
The jury acquitted Fritsch of a second wire fraud charge. He remains free on bond as he awaits sentencing.
A sentencing hearing for Fritsch is scheduled for the coming months, where he faces a statutory maximum sentence of 20 years in federal prison.
