Bernhard Eugen Fritsch, 63, was found guilty of one count of wire fraud. That is not representative of his crimes.

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 USD20 million from people who thought they were investing in the building of 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.

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 USD15 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 to build StarClub’s channels and technology and for general corporate purposes. Instead, Fritsch used much of the 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 boat and renovating his Malibu house, located near Carbon Beach. 

Law enforcement seized the boat, McLaren and the Rolls-Royce and they are subject to forfeiture proceedings.

Did the prosecution drop the ball? 

One victim handed over more than USD20 million in StarClub over the course of two years, based on Fritsch’s false statements. This victim also introduced Fritsch to other victims who in turn handed over millions of dollars for additional funds in the company. Prosecutors estimate that Fritsch caused at least approximately USD25 million in losses to victims.

The jury found Fritsch not guilty of a second wire fraud count. How, one has to ask. 

He remains free on bond.