For the first time in the history of Kickstarter, a company had to pay restitution for their crowdfunded project’s failure to deliver on the rewards that were promised.
Washington’s Attorney General, Bob Ferguson, ordered Edward J. Polchlopek III (Ed Nash) and his company, Altius Management, to pay $54,851 as a result of their failed “Asylum Playing Cards” Kickstarter campaign.
The campaign was launched on September 24, 2012 with a goal of $15,000. On October 31, 2012 it was successfully funded at $25,146 by 810 backers, including 31 from Washington state. Ed Nash claimed rewards included the card game and artwork by a Serbian artist.
However, on December 2012, the set date for the shipping of product and rewards, backers didn’t receive anything. Additionally, backers haven’t heard from the company since July 2013. After about 9 months of no word from Ed Nash, the Attorney General’s Office filed the first lawsuit for a Kickstarter Campaign ever on April 30, 2014.
The court then ordered a total of $668 in restitution for the 31 Washington state backers, $31,000 in civil penalties for violating the state Consumer Protection Act ($1,000 per violation) and $23,183 to cover costs and any other fees involved with the case.
Here’s what Ferguson said:
Washington state will not tolerate crowdfunding theft. If you accept money from consumers, and don’t follow through on your obligations, my office will hold you accountable.
Starting from June, some backers have said that they received their decks.