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LA man found guilty of scamming investors, Hollywood stars out of over $20 million to fuel lavish lifestyle

A man from Malibu has been convicted of scamming investors and Hollywood stars out of more than $20 million through false claims about his celebrity app’s business performance. Bernhard Eugen Fritsch, the founder and CEO of StarClub Inc., a Santa Monica-based tech company, was held accountable for an elaborate fraud that fueled his lavish lifestyle, Fox News Digital has learned. Fritsch, 63, was found guilty by a jury on Thursday of one count of wire fraud after it was revealed that he lied to investors about the financial success and future potential of his tech company, according to the Department of Justice.  HOLLYWOOD DIRECTOR ARRESTED FOR ALLEGEDLY CHEATING NETFLIX OUT OF $11M He falsely promised that the company’s app, StarSite, would help celebrities and social media influencers monetize their brand endorsements. 

StarClub Inc.'s Private Party Hosted By Tyrese Gibson

Host Tyrese Gibson (L) and Founder and CEO of StarClub Bernhard Fritsch attend StarClub Inc.'s Private Party hosted by Tyrese Gibson in November 11, 2014. (Mike Windle/Getty Images for StarClub)

Instead of using the funds for the app's development, Fritsch spent millions on luxury cars, yachts, and a multimillion-dollar Malibu mansion, the press release stated.  From 2014 to 2017, Fritsch raised over $20 million, pitching StarClub as a game-changer for the entertainment industry. He claimed the app would allow celebrities to easily post branded content on social media, generate revenue from advertising and share profits with influencers. LIKE WHAT YOU’RE READING? CLICK HERE FOR MORE ENTERTAINMENT NEWS As Fritsch pitched the StarClub offering to investors, he made several false and fraudulent claims, including that his company was on the verge of entering commercial deals with, or obtaining investments and buyout offers from major media companies such as Disney – that StarClub earned $15 million in revenue in 2015.

StarClub Inc.'s Private Party Hosted By Tyrese Gibson

Model Khadija Neumann (L) and Founder and CEO of StarClub Bernhard Fritsch attend StarClub Inc.'s Private Party. (Mike Windle/Getty Images for StarClub)

Instead of using the funds to expand the company or improve its technology, Fritsch purchased luxury cars like a McLaren and a Rolls-Royce, renovated his multimillion-dollar Malibu home and even made costly upgrades to his yacht. Law enforcement seized the yacht, McLaren and the Rolls-Royce, and they are subject to forfeiture proceedings. One victim invested more than $20 million in StarClub over the course of two years, based on Fritsch’s false statements, according to the Department of Justice.  This victim also introduced Fritsch to other victims who invested millions of additional funds in the company. Prosecutors estimate that Fritsch caused at least approximately $25 million in victim losses because of his scheme.

StarClub Inc.'s Private Party Hosted By Tyrese Gibson

In 2014, singer and actor Tyrese hosted a private party for StarClub Inc. (Mike Windle/Getty Images for StarClub)

Sources close to Fox News Digital have learned that Hollywood celebrities, including Enrique Iglesias and Tyrese Gibson, may be involved in this high-profile scheme.  In 2014, singer and actor Tyrese hosted a private party for StarClub Inc. Actresses including Caitlin O’Connor, Elise Neal, rapper Trinidad James and model Khadija Neumann attended the star-studded event. CLICK HERE TO SIGN UP FOR THE ENTERTAINMENT NEWSLETTER Meanwhile, Fritsch has been sued in Los Angeles County Superior Court three times over allegations of fraudulent financial schemes.  Music executive Haqq Islam and his company sued StarClub and Fritsch in 2013, claiming breach of contract and fraud, according to The Los Angeles Times.  Islam alleged that Fritsch owed him $750,000 for luring Hollywood stars such as Jessica Simpson to meet with Fritsch and consider participating in StarClub’s business ventures, according to reporting by Courthouse News Service. CLICK HERE TO GET THE FOX NEWS APP Reps for Tyrese, Iglesias and Simpson did not immediately respond to Fox News Digital’s request for comment.  The jury found Fritsch not guilty of a second wire fraud count. He remains free on bond.

A sentencing hearing is scheduled for Fritsch in the upcoming months. Fritsch faces a statutory maximum sentence of 20 years in federal prison.

Stephanie Giang-Paunon is an Entertainment Writer for Fox News Digital. Story tips can be sent to stephanie.giang@fox.com and on Twitter: @SGiangPaunon.

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