A resident of Malibu has been found guilty of defrauding investors, including Hollywood celebrities, out of more than $20 million through misleading statements regarding the performance of his tech company. Bernhard Eugen Fritsch, the founder and CEO of Santa Monica-based StarClub Inc., was convicted on a charge of wire fraud after it emerged that he misrepresented his firm's financial achievements to attract substantial investments. Instead of channeling these funds into app development as promised, Fritsch indulged in an extravagant lifestyle marked by luxury car purchases, yacht ownership, and the acquisition of a high-value Malibu property. The Department of Justice revealed that one major investor lost over $20 million due to Fritsch’s deceitful claims about potential partnerships with prominent media entities like Disney.
From 2014 to 2017, Bernhard Fritsch managed to raise over $20 million under the guise of revolutionizing the entertainment industry with his app, StarSite. This application purportedly aimed to assist celebrities and social media influencers in monetizing their endorsements. However, evidence showed that rather than investing in technological advancements or expanding operations, Fritsch diverted the money towards personal luxuries. Among his acquisitions were a McLaren, a Rolls-Royce, significant upgrades to his yacht, and renovations to his Malibu mansion. These items have since been seized by law enforcement and are undergoing forfeiture proceedings.
The scheme unraveled when it became evident that Fritsch had fabricated numerous claims to lure investors. He falsely asserted that his company was nearing agreements with major corporations such as Disney and claimed annual revenues of $15 million in 2015. Such misrepresentations led multiple individuals, some introduced by initial victims, to pour millions into StarClub. Prosecutors estimate total losses amounting to approximately $25 million due to this elaborate deception.
Hollywood figures, including Enrique Iglesias and Tyrese Gibson, reportedly participated in events linked to Fritsch's ventures. In 2014, Tyrese hosted a private party for StarClub Inc., drawing attendance from notable personalities within the entertainment sector. Additionally, Fritsch faced legal action three times in Los Angeles County Superior Court concerning allegations of fraudulent practices. One lawsuit came from music executive Haqq Islam, who accused Fritsch of owing him $750,000 for facilitating meetings between Hollywood stars and Fritsch's business initiatives.
Fritsch was acquitted of a second wire fraud count and remains at liberty pending bond. A sentencing hearing is set for the coming months, where Fritsch could face up to 20 years in federal prison if fully penalized under statutory maximums. The case highlights the risks associated with trusting unsubstantiated claims in high-stakes investment scenarios, particularly involving glamorous portrayals of success and celebrity involvement.