Malibu Man Found Guilty of Defrauding Investors Out of Over $20 Million via False Claims About Celebrity App’s Business Performance
million by lying to them about his technology company’s financial performance related to a software application designed to help celebrities and social media influencers monetize their brand endorsements, the Justice Department announced on Friday.
Image by Ray Shrewsberry • Ray_Shrewsberry from Pixabay
Bernhard Eugen Fritsch, 63, was found guilty late Thursday of one count of wire fraud.
According to evidence presented at a nine-day trial, Fritsch was the founder and CEO of StarClub Inc., a Santa Monica-based tech company. From 2014 to 2017, Fritsch raised more than $20 million from investors to build out the company’s app, also known as StarSite, claiming celebrities and influencers would use the technology to post content on social media sites such as Facebook. At the same time, the app would deliver advertising content and share ad revenue with the celebrity poster.
While pitching the StarClub offering to investors, Fritsch made several false and fraudulent claims, including that StarClub was on the verge of entering commercial deals with, or obtaining investments and buyout offers from major media companies such as Disney; that StarClub had earned $15 million in revenue in 2015; and that StarClub’s current investors included major media companies and a global investment banking firm.
Fritsch also claimed he would use the investors’ money...
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