The Sentence That Won’t Be Served: How German Innovator Bernhard Fritsch Escaped American Justice

The U.S. Attorney’s Office in Los Angeles is asking Judge Dale S. Fischer to impose a 15-year sentence on Bernhard Fritsch on October 20.

There’s just one problem: Fritsch is gone.

After a split verdict in April 2025—acquitted on one count of wire fraud, convicted on another—he left the country. Court filings now place him in Munich, Germany.

Prosecutors are seeking both prison time and restitution. But Germany does not extradite its own citizens to the United States for non-violent financial crimes. Unless Fritsch returns voluntarily or travels to a country that honors U.S. extradition requests, he will never serve the sentence.

The Rise

Fritsch is sixty-four. He studied at the Technical University of Berlin and the University of the Arts. He earned degrees in media, entertainment technology, and music production.

He began with the Brandenburg Philharmonic as CEO and creative director. From there, he moved into arranging, producing, and building the first digital studio. He worked with Quincy Jones, Pavarotti, Sting, Stevie Wonder, The Who, Carlos Santana, McCartney, and Michael Jackson. He had deals with ABC, NBC, CBS, HBO, Sony, Disney, MGM, and Columbia Records.

In 1996, he founded MCY—MusicCity.com—the first commercial platform to sell music and video online. Three years later, it went public on NASDAQ. 

Fritsch holds 29 U.S. patents. One—No. 6,247,130—covers digital music distribution. The systems he built became the blueprint for iTunes and Spotify. Apple settled with Fritsch to license it for iTunes.

Fritsch’s last venture before his arrest was StarClub, a Santa Monica startup that let creators earn directly from their content by integrating brand deals, analytics, and payments into one platform. Launched in 2014—before the “influencer economy” was known—its companion app StarSite allowed users to post photos and videos and receive a share of the ad revenue. The platform offered social-media monetization before Meta or Google introduced similar programs, attracting users ranging from Enrique Iglesias and Ludacris to thousands of aspiring creators.

The Investor

Bernhard Fritsch’s troubles began with investments from Danny Guy, a hedge-fund operator whose model was the short sale. 

Through Salida Capital in Toronto and later Harrington Global in Bermuda, Guy built his fortune on bets that rewarded collapse.

Public filings link Guy to donations made to the Clinton Foundation during the U.S. review of Russia’s purchase of Uranium One in Wyoming. This deal transferred control of 20 percent of America’s uranium deposits to Russia. Russian state disclosures later revealed that Russia’s nuclear agency Rosatom acquired Guy’s hedge fund. Still, it appears, not before most of his investors lost most or all of the money they invested with Guy.

Guy resurfaced in Bermuda under Harrington Global. In 2016, Concordia International collapsed and cost investors another $150 million. More people lost everything. Guy moved on. His critics describe in lawsuits and complaints that Guy profits from failure, aids foreign control of strategic assets, and resurfaces offshore after investor losses.

At first, Danny Guy positioned himself as an ally, urging Bernhard Fritsch to sell StarClub to Facebook. Fritsch declined. Guy then suggested a “death spiral,” a reverse takeover, which fools the public into buying stock through a merger with a secretly failing company, then sells the stock at a high price before the collapse. Fritsch declined.

Guy then proposed a $100 million Goldman Sachs offering—promising a rapid market exit -to prop up the stock, then sell it off and let the company sink or fail. Fritsch declined.

In mid-2017, Guy met repeatedly with AUSA Karen Escalante and FBI Agent Gregory Austin in Santa Monica, at Shutters on the Beach and the Fairmont Miramar.  

The Affidavit

On August 2, 2017, FBI Special Agent Austin submitted an affidavit in support of a criminal complaint charging Bernhard Fritsch with wire fraud. The filing requested both an arrest warrant and authorization to search the offices of StarClub Inc.

Agent Austin alleged that roughly $7.9 million of StarClub’s $35 million in funds were “diverted” to Fritsch’s companies.

The affidavit does not claim that the transfers were hidden, unauthorized, or unsupported by company documentation. The government’s primary witness was Danny Guy, identified only as “D.G.” in the affidavit. Guy also supplied secret recordings of meetings with Fritsch, but the affidavit did not state that any independent forensic authentication of those recordings was conducted.

Agent Austin’s affidavit reproduces excerpts of emails, investor materials, and business presentations in which Fritsch described negotiations with major firms, including NBCUniversal, Yucaipa Companies, William Morris Endeavor, Fortress Investment Group, Access Industries, and The Walt Disney Company. Though it does not cite any particular false statement made to induce a specific wire transfer, Austin cites Guy’s belief that he was misled.

The affidavit classifies inter-company transactions as suspicious but does not provide specific evidence of falsification, concealment, or unjust personal enrichment.

The affidavit cites a $1 million wire from Bermuda in January 2016 as proof of wire fraud. Yet the transfer is not linked to any alleged misrepresentation or false record. The affidavit does not allege any offshore diversion of funds, hidden accounts, falsified invoices, or forged documents.

The affidavit presents certain business expenditures as red flags. Mortgage and tax payments for Fritsch’s Malibu residence are presented as evidence of fraud, despite being recorded as documented housing expenses associated with relocation. Two company-financed vehicles—a McLaren and a Rolls-Royce are described as “lavish spending.” Vendor transfers correspond to payroll and contracted services, not fictitious entities. 

The Sting

The affidavit culminates in its description of an FBI undercover meeting in May 2017 involving a Special Agent posing as an investor, Danny Guy as informant, and Fritsch with two StarClub executives and legal counsel present. The conversation included discussion of business growth, possible investment structures, and partnerships with major entertainment firms. Fritsch’s comment about returning “20 or 25 percent” of proceeds to Guy is characterized as a potential kickback, forming part of the alleged fraud narrative – despite finder’s fees being standard in the investor fund raising industry.

Overall, the affidavit presents the appearance of a complex financial investigation. Its foundation rests on inference, interpretation, and the belief in the veracity of Danny Guy.

It identifies no authenticated false documents, no proven inducement of investor funds through deception, and no corroborated evidence of personal enrichment beyond declared compensation. The affidavit portrays corporate operations, inter-company transfers, and unfulfilled business negotiations as indicators of criminal intent rather than standard features of a struggling but legitimate startup.

The affidavit authorized a fishing expedition. The search to get the evidence the FBI lacked, based on Guy’s word that they would find it. 

The affidavit met procedural form. It had financial tables, a cooperating witness, and references to the agent’s “training and experience. ”

In America, it was sufficient for a warrant despite its lack of evidence of fraud. It was a warrant that hints at fraud in persuasive language, and in most countries, it would never be sufficient to permit what happened next.

Germany’s legal system, governed by the Strafprozessordnung (StPO, or Code of Criminal Procedure), imposes stricter evidentiary and proportionality requirements for issuing search warrants than those applied under U.S. federal law. A German court would not have approved a warrant like the one used against Bernhard Fritsch

The Raid

A judge approved the warrant. Thirty-two federal agents came for Fritsch and to seize items at the office.  He was arrested and taken in handcuffs. The search warrant authorized the seizure of StarClub’s financial, corporate, and electronic records – including every computer, phone and data base.  Deprived of access to its codebase, financial systems, and client data, StarClub could no longer operate, pay employees, or meet obligations. Fifty employees were immediately made unemployed.

Though framed as an evidence-collection effort, the warrant was a de facto corporate shutdown executed before any finding of wrongdoing. After the raid, remaining investors lost their investments —losses caused not by mismanagement, but by the enforcement itself.

Detention and Delay

The FBI took Fritsch into custody. One can imagine the surprise. He did not know he was under investigation on August 1, and by August 2, he was in a detention center, cut off from his business and his life.

At his initial hearing, prosecutors presented no evidence of flight risk, but they wanted him held without bail. A compliant Judge Rozella Oliver ordered Fritsch detained. He remained in custody for 20 weeks at the Los Angeles Detention Center.

By the time he was released, StarClub was gone, its assets seized, his Malibu home encumbered, and his passport surrendered. He wore an ankle monitor. All this punishment before any proof of wrongdoing at trial is a feature of the US criminal justice system.

The promised “speedy trial” set for October 2017 was delayed year after year—until proceedings finally reached 2025.  Legal costs and bond obligations consumed what remained of his resources. One of his AI patents earned an Edison Award, winning over IBM and Adobe, but with investors dispersed and infrastructure destroyed, Fritsch was unable to bring his technology to market.

The Sixth Amendment Clash

In March 2025, Judge Dale S. Fischer oversaw a dispute over Fritsch’s Sixth Amendment rights. Fritsch wanted to replace his public defenders. They had filed a sworn declaration stating they were unprepared, could not ethically proceed, and disagreed with his defense strategy. He asked to dismiss them and retain private counsel, or, if denied, to represent himself.

Judge Fischer refused to delay the trial, ruling that new attorneys would need too much time to prepare. Fritsch opted to proceed pro se, and the judge dismissed his public defenders with about five days left to prepare for trial. 

Days later, prosecutors moved to have the public defenders reinstated, and despite their withdrawal and their cessation of trial preparation, Judge Fischer ordered them back. 

When criminal defense attorney Kirk Schenck appeared with a signed retainer to represent Fritsch, the judge rejected him as “too late” and denied Fritsch’s request to defend himself. The case went to trial with the same public defenders he had sought to replace.

Judge Fischer’s actions restricted both pillars of the Sixth Amendment: the right to counsel of one’s choice and the right to self-representation. By denying Fritsch’s retained attorney entry to the case and simultaneously forcing back public defenders who had declared a conflict and stopped preparing, the court left him with neither effective counsel nor the autonomy to defend himself.

What Judge Fischer did is exceedingly rare and legally dubious—rulings that denied counsel of choice and self-representation, and even the dismissing and reinstating of the public defenders at the very last minute hampered their trial preparations. In most democracies, it would be unthinkable; in America, it passes as the procedure necessary to convict the defendant regardless of factual innocence.

The Trial

Federal prosecutors charged Bernhard Fritsch with two counts of wire fraud, building their case on the testimony of investor Danny Guy. Guy testified he had invested $22 million in StarClub between January 2014 and November 2015. Prosecutors alleged that Fritsch induced those investments through false statements about the company’s performance made during a meeting that was secretly recorded.

Maybe the prosecutors never thought about it, but there was a problem with the secret recording. It was at a hotel where public events occurred. It was therefore possible to date the secretly recorded meeting. That date was December 7, 2016. That presented a fatal flaw: Guy’s investments had ended nearly a year before the alleged misrepresentations at the hotel occurred. 

Under federal law, wire fraud requires a false statement made before the transfer of funds. The evidence showed the opposite. You cannot induce an investment with a lie if the investment has already been made. This killed the wire fraud. But this was an American court, and the law meant little.

The Constructive Amendment

Prosecutors merely pivoted. They had dropped money-laundering counts before the trial. Now they had no wire fraud. What could they do? They could bring the money laundering charges through the back door.

Mid-trial, prosecutors reframed the case as a dispute over Fritsch’s spending rather than how he obtained the funds. What began as an accusation of deceit to get money evolved into a trial about how he spent the money, irrespective of whether he used deceit to obtain it.

The prosecution’s theory shifting is known as a constructive amendment. It transformed an uncharged allegation into a new offense. What began as “revenue fraud” quietly became “spending fraud.” Instead of proving that Fritsch lied to obtain money, prosecutors argued that he misused funds afterward.

Judge Fischer allowed it. The public defenders, not fully experienced and out of their league, did not know how to fight it. The courtroom became now a matter of optics: photos of luxury cars in Malibu, tuition checks, and the polished deck of the yacht Madame Musique. 

The prosecution showed bank records to the jury as PDFs modified to read “Bernhard Fritsch Account,” though the originals did not have his name on them.  Legitimate corporate accounts were presented as if they were his private slush funds – the addition of his name, actual alterations of the original documents, went unexplained to the jury – a jury composed of mostly younger working people with little experience in business.

Even the bizarre cross-examination of FBI Agent Gregory Austin was not enough to turn the tide of a one-sided trial. Agent Austin conceded he had never verified the authenticity of any of Guy’s materials, never obtained original documents, and had relied on Guy for investigative guidance—speaking with him daily for months as they built the case together. But he asserted he believed in Guy.

The Verdict and Escape

On April 3, 2025, a federal jury convicted Bernhard Fritsch on one count of wire fraud and acquitted him on the other. After the split verdict, prosecutors moved to have Fritsch immediately taken into custody. Judge Dale S. Fischer delayed the decision and scheduled a detention hearing for June 2, 2025. 

For eight years, Fritsch had complied with every court order—surrendering his passport, wearing an ankle monitor, attending all hearings, and filing required reports without incident. He had hoped to remain out on bail to prepare his appeal. His appellate attorneys felt he had numerous issues that might vacate his conviction.

By this time, Fritsch had become somewhat of an expert on the American system of justice. As the hearing approached, Fritsch’s public defenders told him that they expected the judge to revoke his release and remand him to prison ahead of the sentencing. They advised him not to drive to court, anticipating he would not be driving home after the hearing.

Fritsch chose not to appear for the remand hearing. Judge Fischer revoked his bond, ordered it forfeited, and issued a federal warrant for his arrest. According to FBI filings, Fritsch had traveled south to Mexico before the court had even convened. 

More than two months later, authorities in Los Mochis detained him. The FBI was alerted, but a Mexican judge denied immediate extradition to the US because Fritsch was a German national. Within two weeks, the German Embassy issued him an emergency passport and arranged his return to Germany. According to government filings, Fritsch made it back to his homeland on October  7.

The Aftermath

Under Article 6 of the 1978 U.S.–Germany Extradition Treaty, Germany does not surrender its citizens for non-violent financial offenses. German prosecutors treat investor-misrepresentation cases as civil matters rather than crimes, meaning the U.S. charges against Fritsch would not be extraditable under German law. 

You could say Bernhard Fritsch tried to cheat the law and he succeeded. But I would reverse it. The American law tried to cheat Fritsch and they did not succeed.

Fritsch, just returned to Germany, is already at work developing new technologies. He has a track record of being ahead of his time.

After founding one of the first digital media studios; inventing the precursor to iTunes which Apple had to license from him for iTunes and launching the tech to support the influencer economy—tech that the government shuttered but which remerged on Facebook and other platforms shortly after StarClub closed, Fritsch has new patents to present to the world.

His latest projects – begun while under indictment – include AIMS, an AI platform designed to identify intent and prevent terrorism, and Monogram, a clean-energy system capable of reducing fossil-fuel emissions by up to 80% while generating verified, investment-grade carbon credits. 

The same man once bound and shackled before the government presented an iota of proof to a jury in America may soon shape emerging global industries in Germany.

Judge Fischer is scheduled to pronounce sentence on October 20. The prosecutors will stand, the formalities will unfold. The chair reserved for the defendant will remain empty. So will the handcuffs and the shackles.

Bernhard Fritsch will be eight thousand miles away, sketching the blueprints of the next machine. Somewhere far away, in Munich, a man who once believed in music and machines will begin again, as if the future were his to build after all.

Frank Parlato

Frank Parlato is an investigative journalist, media strategist, publisher, and legal consultant.

Frank Parlato

Frank Parlato is an investigative journalist, media strategist, publisher, and legal consultant.

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