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A Malibu man was convicted of fraud after lying to raise more than $20 million for an app that would help influencers monetize their support more.
App Starsite’s pitch issue was that between 2014 and 2017, 63-year-old Bernhard Eugen Fritsch falsely claimed that his company, Starclub, was about to receive deals or investments with large companies like Disney, the U.S. Department of Justice said in a news release.
Fritche further falsely claimed that Starclub received $15 million in revenue in 2015.
The pitch seemed to work as one investor alone gave Fritsch more than $20 million and introduced him to other victims who added millions. Authorities have brought total fares to approximately $25 million.
“Fritsch also argued that it would use investor money to build Starclub channels and technology, and for general corporate purposes,” the prosecutor said. “Instead, Fritche used much of the investor’s money to buy luxury cars such as McLaren and Rolls-Royce, repair yachts, and enrich the luxurious lifestyle and support the luxury lifestyle, including renovating the Malibu mansion near Carbon Beach.”
The yacht, McLaren and Rolls-Royce have been seized and “is subject to forfeiture proceedings,” officials added.
Fritsch was convicted of one wire fraud on Thursday and was not guilty of another fraud.
His sentence is not scheduled, but he faces a maximum sentence of 20 years in federal prison.
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