A Malibu entrepreneur who lived a life of luxury by scamming Hollywood elites and investors out of $20 million has finally been convicted, while his victims are left waiting for justice.
At a Glance
- Bernhard Eugen Fritsch, 63, of Malibu, has been convicted of wire fraud for scamming over $20 million from Hollywood investors
- Fritsch falsely claimed his company StarClub had deals with Disney, substantial revenue, and notable investors to lure victims
- Instead of developing the promised celebrity monetization app, Fritsch spent investors’ money on luxury cars, yachts, and a Malibu estate
- One victim invested over $20 million and unwittingly recruited others, with total losses estimated at $25 million
- Fritsch faces up to 20 years in federal prison at his upcoming sentencing
Hollywood Elite Fall Victim to Elaborate Tech Scam
Another day, another wealthy elite claiming victimhood after throwing millions at a get-richer-quick scheme without doing basic due diligence. Bernhard Eugen Fritsch, 63, of Malibu, has been convicted of wire fraud after running a sophisticated scam that drained over $20 million from investors, including several unnamed Hollywood stars. Fritsch, who founded StarClub Inc., promised an app that would revolutionize how celebrities and influencers monetize brand endorsements on social media platforms. It was exactly the kind of tech scheme that appeals to Hollywood types eager to cash in on their fame without actually doing any real work.
From 2014 to 2017, Fritsch operated his scheme with remarkable audacity, making outlandish claims about his company’s performance and prospects. He fabricated stories about imminent commercial deals with major media companies like Disney, falsely claimed $15 million in revenue for 2015, and invented partnerships with global investment banking firms. These lies weren’t particularly creative, but apparently, they were convincing enough for Hollywood’s finest, who seemed more concerned with FOMO than facts when handing over their millions.
Luxury Lifestyle Funded by False Promises
While his investors waited for their promised returns, Fritsch wasted no time enjoying their money. Rather than developing the promised app, he funneled the funds directly into supporting a lavish lifestyle befitting a Hollywood mogul. The fraudster purchased luxury cars including a McLaren and a Rolls-Royce, acquired a yacht, and maintained a sprawling Malibu estate. Nothing says “trustworthy tech entrepreneur” quite like immediately blowing investors’ cash on ostentatious displays of wealth that would make even the most vapid influencer blush.
“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” – DOJ
Law enforcement has seized Fritsch’s ill-gotten toys, which are now subject to forfeiture. One can only imagine the Hollywood elites who fell for this scam are quite eager to see the government auction off these luxury items to recoup at least a fraction of their losses. But let’s be honest – recovering $25 million worth of McLarens and yachts that have already depreciated significantly is about as likely as a Hollywood celebrity admitting they got conned because they didn’t bother to verify a single claim before writing a check.
The Pyramid Effect: How One Victim Led to Many
In a particularly uncomfortable twist that highlights just how effective Fritsch’s manipulation was, prosecutors revealed that one victim invested over $20 million and then became an unwitting recruiter, promoting the scam to friends and associates who subsequently invested themselves. It’s the classic social proof con that works especially well in tight-knit communities like Hollywood, where insiders assume that if someone in their circle vouches for an investment, it must be legitimate. The ripple effect of this one investor’s misplaced trust contributed to the estimated $25 million in total losses.
“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” – DOJ
This isn’t Fritsch’s first rodeo, either. Court records show he has faced multiple lawsuits for fraudulent schemes in the past. Apparently, his previous legal troubles weren’t enough to make investors think twice before handing over their millions. A simple background check might have saved them from becoming the latest entries in Fritsch’s ever-growing list of victims. Then again, the Hollywood elite aren’t exactly known for their due diligence skills when chasing the next big thing that promises to make them even richer.
Justice Delayed: What Comes Next
Fritsch now awaits a sentencing hearing where he faces a maximum potential sentence of 20 years in federal prison. While that might seem like justice to some, it’s a drop in the bucket compared to the financial devastation he caused. Even if he spends the next two decades behind bars, the chances of his victims recovering their lost millions are slim to none. And let’s not forget that while Fritsch’s victims can cry about their lost millions, many hardworking Americans face financial hardship every day without having millions to lose in the first place.
This case serves as yet another reminder that no matter how slick the pitch or how exclusive the opportunity sounds, basic principles of due diligence never go out of style. Even—or perhaps especially—when dealing with the rich and famous, the age-old advice rings true: if it sounds too good to be true, it probably is. As Fritsch discovered, you can only fake it until you make it for so long before the law catches up, leaving a trail of angry elites wondering how they got conned out of their millions by yet another smooth-talking charlatan in their midst.
