While we all know that backing a company/project on Kickstarter has significant risk, The BrewBot campaign is somewhat unique given the size of each individual investment and International customer base, press articles, and subsequent $1.5M investment in 2014.
It is one thing to submit $10-20 or even $200 for a "trinket", game, book, record, etc., that may or may not deliver but there is quite a different level of expectation when one invests several thousand. Hopefully, this has not posed a financial hardship to any of the backers, yet I am sure that every one of us backed this project with the expectation of receiving something of value. Certainly those that placed orders directly with BrewBot post-Kickstarter have even a stronger expectation of delivery.
So it is time to start looking at our situation from a broader legal framework. Being based in the US, I'll start here and expand Internationally as my research grows.
One obvious starting point for US based people is Mail and Wire Fraud.
There are three elements to mail and wire fraud:
- Intent;
- A "scheme or artifice to defraud" or the obtaining of property by fraud; and,
- A mail or wire communication.
To be fraudulent, a misrepresentation must be material.
Perhaps a bit of a hurdle to prove, but after three years we certainly have a long runway to collect evidence.
Does this cover International transactions? Fortunately yes, "wire fraud has been expanded by Congress to include foreign wire communication or interstate connections via (e.g.) an e-mail server or telephone switch or radio communication."
What are your thoughts? Is there sufficient evidence of fraud?
