FTC Says Kickstarter |User Deceived Donors

(CN) - For the first time, the Federal Trade Commission has taken legal action against the creator of a board game who raised more than $120,000 through a crowdfunding site, but never produced a finished product.

Erik Chevalier, doing business as The Forking Path Co., conducted a Kickstarter campaign seeking money to produce a board game called "The Doom That Came to Atlantic City" that had allegedly been create by two prominent board game artists.

But according to a complaint filed Wednesday by the Federal Trade Commission, Chevalier spent most of the money raised on himself. Under the terms of the settlement filed in conjunction with the complaint, Chevalier is prohibited from continuing to deceive donors, and must honor requests for refunds.

The agency's complaint says that when Chevalier started his "Doom" campaign on Kickstarter.com, he said that if he raised $35,000, backers would get certain rewards, such as a copy of the game or specially designed pewter game, figurines.

Chevalier raised more than $122,000 from 1,246 backers, most of whom pledged $75 or more in the hopes of getting the highly prized figurines, the complaint says.

Although Chevalier repeatedly claimed her was making progress on the game, after 14 months he announced he was cancelling the project and refunding his backers' money.

Despite Chevalier's promises he did not provide the rewards, nor did he provide refunds to his backers, the agency says.

In fact, according to the FTC's complaint, 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.

Under the settlement, Chevalier is prohibited from making misrepresentations about any crowdfunding campaign and from failing to honor stated refund policies.

He is also barred from disclosing or otherwise benefiting from customers' personal information, and failing to dispose of such information properly.

The order also imposes a $111,793.71 judgment that will be suspended due to Chevalier's inability to pay. The full amount will become due immediately if he is found to have misrepresented his financial condition, the agency said.

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