A Malibu man was convicted of fraud after he lied to raise more than $20 million for an app that would help influencers better monetize their endorsements.
The problem with the pitch for the app StarSite was that Bernhard Eugen Fritsch, 63, falsely claimed between 2014 and 2017 that his company, StarClub, was about to enter into deals with or receive investments from large companies like Disney, the U.S. Department of Justice said in a news release.
Fritsch furthermore falsely claimed that StarClub had taken in $15 million in revenue in 2015.
The pitch appeared to work, as one investor alone gave Fritsch more than $20 million and introduced him to other victims who added millions more. Officials put the total haul at about $25 million.
“Fritsch also claimed he would use the investors’ money to build out StarClub’s channels and technology and for general corporate purposes,” prosecutors said. “Instead, Fritsch used much of the investor money to enrich himself and support his luxurious lifestyle, including by purchasing luxury cars such as a McLaren and a Rolls-Royce, fixing up his yacht, and renovating his Malibu mansion, located near Carbon Beach.”
The yacht, McLaren and Rolls-Royce have been seized and “are subject to forfeiture proceedings,” officials added.
Fritsch was convicted Thursday on one count of wire fraud and acquitted on another.
His sentencing hasn’t been scheduled, but he faces a maximum sentence of 20 years in federal prison.
