A sentencing date was not immediately available Friday for a Malibu man who was convicted of defrauding investors out of more than $20 million by lying to them about his technology company's financial performance.
Bernhard Eugen Fritsch, 63, was found guilty late Thursday in downtown Los Angeles of one federal count of wire fraud, according to the U.S. Attorney's Office.
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Evidence presented at a nine-day trial showed that Fritsch, the founder and chief executive of Santa Monica-based StarClub Inc., made false claims to prospective investors, 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.
From 2014 to 2017, Fritsch raised more than $20 million from investors to build out the company's app, claiming celebrities and influencers would use the technology to post content on social media sites such as Facebook. At the same time, he claimed, the app would deliver advertising content and share ad revenue with the celebrity poster, prosecutors said.
Fritsch also claimed he would use the investors' money to build out StarClub's channels and technology and for general corporate purposes. Instead, Fritsch used much of the money to enrich himself and support a luxurious lifestyle, including the purchase of luxury cars such as a McLaren and a Rolls- Royce, fixing up his yacht and renovating his Malibu mansion, located near Carbon Beach, evidence showed.
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. The victim also introduced Fritsch to other victims who invested millions of additional funds in the company. Prosecutors estimate that Fritsch caused at least nearly $25 million in victim losses because of his scheme.
The jury in L.A. federal court found Fritsch not guilty of a second wire fraud count. He remains free on bond.
U.S. District Judge Dale S. Fischer is expected to schedule a sentencing hearing to occur in the coming months. Fritsch faces a sentence of up to 20 years in federal prison, according to the U.S. Attorney's Office.
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