Wild Abuse Allegations Taint Indiegogo Helmet Maker Skully (digitaltrends.com)

Skully raised $2.4 million on Indiegogo in 2014 to manufacture motorcycle helmets with built-in Augmented Reality. Now they're filing for bankruptcy, and informing customers that refunds are unlikely on their $1,500 pre-ordered helmets. But a lawsuit filed by Skully bookkeeper Isabelle Faithhauer "claims the Wellers used the funds raised by the Indiegogo campaign and a secondary $11 million round of funding in 2015 as their personal 'piggy banks' to buy several motorcycles, two Dodge Vipers, groceries, and so on," according to a Digital Trends article shared by KingGypsy: The Wellers took trips to Bermuda and Hawaii using company funds, she said, went to strip clubs, rented a Lamborghini, and paid for personal housekeeping services on the company credit card, as well as paying out funds ranging from $500 to $80,000. Lastly, she claims that the Wellers asked her to fudge the books to obscure the expenses. Faithhauer claims that when accountants came calling with questions about the expenses, she was up front about what was going on. She says that when she took a pre-approved vacation to Disneyland in December of 2015, she was fired upon her return and offered a severance package, which the suit calls "hush money." She declined the offer.
"Following her termination at Skully, Faithhauer claims that when she found a new job, her new employer contacted the Wellers at Skully and were told she could not be trusted with confidential information. She was fired from that job as well."

Comments

She needs some crowdfunding herself

[RobinH]

She did the right thing and she's being punished for it. Does she have a GoFundMe page?

This kind of stuff seems to be rampant in business, just look at the Wolf of Wall Street, etc. Rampant corruption is a sign of a failing society. If you promise me a helmet for your $1500, that money had better be spent on developing the helmet, not hookers and blow. I understand that crowdfunding is risky, but it should only be risky because they're developing new technology, not because it's just one big lie. Failing to develop the technology is a legitimate risk, but blowing the money is criminal.

Re:She needs some crowdfunding herself

[Midnight Thunder]

If you are going to fund something you should probably also try to do some due diligence. Sure, it is probably not easy, but in many ways you are acting as an investor and should take the same precautions that a professional investor would.

Re:She needs some crowdfunding herself

[aaarrrgggh]

While the owners sound like scum, the story sounds a bit fishy. As a business owner who has had to deal with a problem office manager, I have first-hand experience with someone that "can't handle confidential information." Also, the fact that they had "personal" expenses folded into the company isn't really a surprise-- the things listed are only really suspicious if they actually spent $10MM on them; I wouldn't blink as long as the expenses were more than 10% of their operating expenses, excluding assets properly kept on the company books.

Now, if the company had only one other employee, the owners paid themselves $500k a year each, plus squandered over $2MM per year on unnecessary expenses, their creditors will very likely see to it that the Wellers spend a lot of time in court and have some fun with the IRS.

But, in most states for a former employer to actually say something material to a new employer would be asking for trouble. The worst I ever said of a former employee was "they needed more time mentoring that we were capable of spending." I didn't say that the dipshit didn't put any energy into learning and the three man-years we spwasted on him made him the second worst hire we ever made...

Re:She needs some crowdfunding herself

[Zumbs]

If you are giving money how to you know the money will be used for the correct purpose?

You don't. But when you are entering into a business arrangement with someone, promising to spend money received on a mutually agreed purpose, but have no intention on spending said money on the agreed purpose and spend the money on something else, you are committing a crime. In my opinion it is good that witnesses to such villainy come forward. Sadly, many of those con artists manage to avoid getting caught.

Re:She needs some crowdfunding herself

[PopeRatzo]

Now, if the company had only one other employee, the owners paid themselves $500k a year each, plus squandered over $2MM per year on unnecessary expenses, their creditors will very likely see to it that the Wellers spend a lot of time in court and have some fun with the IRS.

The people who are burned are the investors. People who had the poor judgement to think that a no-strings donation on Kickstarter or some other "indie" funding site will actually get them something in return.

It's a classic internet scam. Instead of ripping one person off for a lot of money, you rip off a LOT of people for a LITTLE money. With the new Supreme Court decision weakening class action lawsuits, you can just flip the finger and walk away to start another "indie" company and do the whole thing over again.

Think of the thousands and thousands of games that have been crowdfunded. Now count the number of those games that have actually gotten full, successful releases. It's a relative handful. All the people who donated to all the other projects are just SOL.

Re:WTF..??

[Anonymous Coward]

When you're the only one confused, maybe it's a sign that the problem is you. The only way it could be more explanatory is if it was

(Wild Abuse) Allegations Taint Helmet (a thing you wear on your head) Maker (someone who constructs (builds or assembles) things) Skully (the name of the company (organization of people (plural of person))) who used Indiegogo (a crowd-funding (collecting money from various people to achieve a goal, in return for specific rewards if said goal is achieved) website (a data file on the internet, typically in HTML (Hyper Text Markup Language) format (a specification (rules (instructions)) used to structure text (letters (lines and curves arranged in a particular way) grouped into words by punctuation (little dots and squiggles) and white space (empty space not containing letters or punctuation)) for presentation (display) by a computer (electronic device)))) to Raise Money (a medium of exchange with value agreed upon by all people participants in the exchange of goods or services)

I hope that helps (sarcasm) you.

This is why I don't consider crowd funding schemes

[Hasaf]

Crowdfunding is not an investment, it is pre-purchasing a product that isn't in production, that is all it is. The buyers have no management, or ownership, control of the company. If a company has such a great idea then they can seek funding through selling shares of ownership. The investors, as owners, they can demand accountability from the other owners.

Crowdfunding is nothing but giving money to a person in the hope of a product at some future time. Investing is ownership.

Erh... people? Could we wait for the verdict?

[Opportunist]

What we have so far are allegations of an ex-employee. I have had that before. You have to fire someone for being an insufferable asshole and the next months are spent in a court room.

Don't get me wrong, if they embezzled their customer's money, hang them on their nuts 'til they fall off and ensure they land on their heads, preferably on something sharp. But I'd like to know that they really did it before I put the wire 'round their gonads.

"Confidential"

[Tablizer]

when she found a new job, her new employer contacted the Wellers at Skully and were told she could not be trusted with confidential information.

That's technically true: she spilled the beans on their wild spending. "Fair" is another matter.

I'm actually surprised they fired her.

[hey!]

I worked for a manager like this; her previous gig almost put the formerly comfortably endowed Christian Science Church into bankruptcy by leading disastrous foray into broadcasting that cost the Church hundreds of millions of dollars. The Church only survived by publishing a book which it had previously condemned as heretical in order to obtain a 90 million dollar bequest that came with that book.

After she was fired from her job at the Church my boss hired her to transform the medium-sized non-profit I worked for into a media powerhouse -- pretty much the same thing she had promised to do at the Christian Science Monitor. And it had pretty much the same results, but I got a close up view of how people like this operate. The day she took over it suddenly became like working in the Soviet Kremlin. Whereas managers had formerly worked closely together, they were now forbidden to discuss what was going on in their departments with anyone else; all information had to come and go through her. However as IT guy nothing that was going could really be hidden from me; I knew very well that the financial systems were telling us we were overbudget and rapidly running to the end of our cash, but I was literally forbidden by the CEO to pass any information to him except through the COO.

So I did the only honorable thing open to me. I resigned. As a former senior manager I got an exit interview with the CEO in which I explained that the reason I was quitting was that the organization was going to go bankrupt in about three months if he didn't immediately sideline the COO and put the CFO in charge. The CEO was shaken by this news, but in the end my giving him a last chance didn't matter. His hiring of an obviously dangerous manager was driven by his greed, ego and ambition. To save himself he'd have to set those things aside, and he just couldn't.

Re:I'm actually surprised they fired her.

[hey!]

Wasn't so cool to live through.

Re:This is why I don't consider crowd funding sche

[Immerman]

I seem to recall that the fact that it's not an investment is what makes it legal at all - there's so many regulations around investment that small timers can't realistically hope to get into the game - even if they met all the requirements, hiring the professionals required to keep the paperwork straight would eat all the funding they received.

Counterpoint

[SuperKendall]

I am happy to contribute to crowd-funded projects.

The reason is, a lot of things get made that never would be otherwise.

Sure some of them don't work out at all. Some of them are more mediocre than you were expecting.

But I've had a number of items that were just as good or better than I was expecting. In all honestly I am happy to pay some overhead via failed projects, for the really great products I have received over the years in return for crowdfunding.

You can say "just wait and buy if it's any good" - but if everyone does that nothing interesting gets made.

I would also argue that funding a crowd-sourced project very much is an investment - it's just that the return is not monetary, it's support for and idea or a person that you think deserves it, the return is to see an idea really take off or a person you like thrive.

Re: WTF..??

[brasselv]

whoever downmodded this, deserves to be wished a pimple in a very embarrassing place .