Portland man, Federal Trade Commission, settle in the first case involving crowdfunding.
BY JACOB PALMER | DIGITAL NEWS EDITOR
The Federal Trade Commission settled its first case involving crowdfunding recently and a Portland man was at the center of the allegations.
According to the FTC, Erik Chevalier raised $122,000 to create a board game called “The Doom That Came to Atlantic City.” But instead of delivering the game after a successful Kickstarter campaign, Chevalier used the funds to pay his rent and move to Oregon.
“He represented in a number of updates that he was making progress on the game,” the FTC wrote in a release on that matter. “But after 14 months, Chevalier announced that he was canceling the project and refunding his backers’ money … Chevalier spent most of the money on unrelated personal expenses such as rent, moving himself to Oregon, personal equipment and licenses for a different project.”
The settlement order imposed a judgement of $111,794, which has effectively been suspended due to Chevalier’s inability to pay. He’ll owe the full amount to project backers if the FTC finds that he “misrepresented his financial condition.”
(SOURCE: Portland Business Journal)
As a part of the settlement, Chevalier agreed to avoid “deceptive representations related to crowdfunding campaigns” in the future.
The $122,000 he raised — far surpassing his company’s goal of $35,000 — was one of the 21 most successful crowdfunding campaigns in the state as of February 2014, according to the PBJ.