Bitcoin Buyer Used $800k Smart Backpack Fundraising, Gets Sued By FTC: TNW Report
Man Who Raised $800k For Smart Backpack Sued By FTC
Douglas Monahan will face court after being accused of misusing the $800,000 worth of crowdfunding meant for a smart backpack, instead, using the funds to pay off credit card debt and purchase Bitcoin $BTC according to TNW.
According to the US federal trade commissions (FTC), Monahan is also alleged to have promised to sue investors for slander and libel, threatened hundreds of consumers to silence criticism, and may even have told someone he knew where they lived.
“Despite missing the delivery date for the iBackPack, Monahan started a second crowdfunding campaign in March 2016 via Kickstarter to produce and distribute the iBackPack 2.0, an updated version of the still-unproduced original iBackPack,” – The FTC
Court documents on iBackPack of Texas LLC show contributors were promised specific products in different tiers of investment and that funds began being raised on crowdfunding platform Indiegogo in 2015, raising over $720,000 by November 2016. Contributors who gave more than $169 were to receive an iBackPack with Bluetooth speakers included (various batters and cables included) and those pledging more than $299 were to get one with built-in Wi-Fi functionality.
Monahan’s company wrapped up a second round of crowdfunding in April 2016 to the tune of $76,000. He also is said to have raised $11,000 with two additional Indiegogo campaigns at this time. one for “MOJO”, a shoulder bag, and the other for “POW” a supposedly beneficial USB cable system.
The FTC directly claims (page 8) Monahan used a large share of the $822,000 on personal use:
“such as making Bitcoin purchases and ATM withdrawals, and paying off personal credit cards; for marketing efforts to raise additional funds from consumers; and for other business ventures.”
Monohan is also said to have made false statements about the status of his products, making claims like the POW cables were “done/finished/shipped over with” or “on their way here.”
Altcoin investors from 2017 may find those empty promises familiar, but his fraud does seem to be missing one thing at least- there was no fraudulent initial coin offering. Maybe next time.
Here is the full document:
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