Peachy Printer Funds Embezzled To Build New Home Instead of $100 3D Printer (hackaday.com)

Reader szczys writes (edited): Peachy Printer made it big on Kickstarter, raising over half a million dollars on the promise to build the first 3D printer and scanner costing $100. The company has now collapsed due to embezzlement (Editor's note: BBC's coverage is better) of those funds. The original investor stole around $350,000 of backer's money and funneled it into a new home. This was discovered about 18 months ago but became public only now as the company is unable to meet their already delayed delivery dates. Peachy Printer has posted a video admitting the screw-up. Sounds familiar?

Comments

Re:Trusting a single bank account

[Luthair]

Because the barrier for creating a kickstarter is so low that even people with no common sense or project management skills can start one.

Re:Legal Recourse?

[sbaker]

So...force him to give the money back - right? The problem is...the money isn't sitting in an account someplace. The guy spent it on building a house.

So take possession of the house and sell it...or allow the guy to take out a mortgage and pay the money back that way? The problem is that - the house is only half-built...it's worth practically nothing in it's present state...he needs a construction loan to finish it.

So - the smart thing to do (seemingly, at the time, after talking to lawyers) was to let the guy finish building the house - then he can get a mortgage - then he'll pay the money back - and everyone walks away a little older and wiser, but otherwise unscathed. But - if you make this all public and get the cops involved - then he'll never get the loan (nobody lends money to admitted embezzlers) - so he can't finish building it and everyone loses.

So - you draw up a legal agreement - that you get your money in stages as the construction loan comes in - and, just for safety's sake - you get the evildoer to confess on camera, so that if he doesn't pay up - you'll go to the cops. ...and since he didn't pay up - the cops are now involved.

Admittedly, this may not have been the smartest course of action...but then letting even a close friend sit on $600,000 without putting it into a shared account...also not so smart.

This statement...

[rickb928]

"He worked in Northern Alberta as a heavy duty mechanic"

When I read this, I nearly stopped reading further, but curiosity conquered me.

Sorry, but the qualifications floor me.

"David hired an Accounting and Financial Consulting firm to assist in the management of Peachy Printer's finances."

Yup, surely THEY did a great job. Recourse here? I'm betting they did nothing but dip their beaks.

"Due to the fact that the Kickstarter campaign was over before Peachy Printer existed as a corporation, we did not have a corporate bank account set up to receive the funds. As a result, David’s personal account was set up to receive the funds."

Oh, here is where it went bad. I would have left it at Kickstarter until the corporate account was ready.

From here on, it's faith in others, failed human beings, and predictable outcomes.