In its first crowdfunding case, the Federal Trade Commission has taken legal action against the developer of a board game who raised more than $122,000 on Kickstarter but failed to deliver a product.
Erik Chevalier of The Forking Path Co. launched a fundraising campaign in 2012 for The Doom That Came to Atlantic City, a lighthearted Lovecraftian board game created independently by industry veterans Lee Moyer and Keith Baker. With pledge incentives that included original art, pewter playing pieces and an afternoon of hosted gaming, the Kickstarter effort rocketed past its original $30,000 goal.
However, in July 2013 Chevalier announced to backers that the game was simply “beyond my abilities," and wouldn't be produced. He also revealed he'd already much of the $122,000, triggering threats of lawsuits.
In a proposed settlement filed Wednesday in federal court, and first reported by Courthouse News Service, Chevalier must pay the FTC $111,793.71, although that order has been suspended until his financial situation improves.
In addition, he's prohibited from misrepresenting himself in crowdfunding campaigns and from failing to honor refund policies. Chevalier also cannot disclose or otherwise benefit from donors' personal information.
According to court documents, Chevalier issued very few refunds for The Doom That Came to Atlantic City, and spent the money on personal expenses, including rent, moving, personal equipment and licenses for another project.
“Many consumers enjoy the opportunity to take part in the development of a product or service through crowdfunding, and they generally know there’s some uncertainty involved in helping start something new,” Jessica Rich, director of the FTC’s Bureau of Consumer Protection, said in a statement. “But consumers should able to trust their money will actually be spent on the project they funded.”