Future Tense

FTC Fines Kickstarter Campaign Creator Who “Used Most of the Funds on Himself”

The recently closed Atlantic Club Hotel and Casino on July 30, 2014. The video game The Doom That Came to Atlantic City! isn’t doing so hot, either.

Photo by Spencer Platt/Getty Images

For the first time, the Federal Trade Commission has taken action against the creators of a Kickstarter campaign that failed to live up to its promises.

A warning accompanies virtually every project on the crowdfunding site. Below a heading that reads “Risks and dangers,” the project’s authors enumerate everything that might go wrong, even if the project meets its goals. Some allude to technological uncertainty, while others speak to the vagaries of production or the difficulties of distribution. Few (if any) of them own up to the biggest danger of all: that the campaign’s creators might take the money and run.

But it appears that’s exactly what happened with The Doom That Came to Atlantic City!, “A light hearted Lovecraftian game of urban destruction” that raised more than $122,000 in 2013. To the dismay of the project’s 1,246 backers, its creator, Erik Chevalier, canceled the game a year after his initial funding campaign concluded. Though he claimed he hoped “to eventually refund everyone fully,” money never materialized. The game was eventually released by a different group of designers, but undisclosed parties still filed an FTC complaint against Chevalier.

On Thursday the FTC released its findings in that case, explaining in a press release that Chevalier had “used most of the funds on himself.” The settlement imposes a $111,000 judgment against Chevalier—presumably the funds raised by the project, less Kickstarter’s own cut and its substantial processing fees—though the FTC notes that this penalty “will be suspended due to Chevalier’s inability to pay.”

This marks the first occasion on which the FTC has taken action against the deceptive tactics of a crowdfunding project creator. It is, however, far from the first case where a creator has failed to meet promises: Pictures for Sad Children’s John Campbell burned 127 copies of a book he had printed thanks to Kickstarter funding rather than send them to backers. More recently, Alex Fundora, creator of “dinosaur survival” game The Stomping Land, which had raised $114,000, disappeared without paying artists attached to the project or providing a finished product to the thousands who had supported it.

In an open Twitter chat following the announcement of the decision against Chevalier, FTC representatives declined to discuss similar cases that might be in progress, allowing only that they are “aware of potential for fraud” on Kickstarter and other similar platforms.

In a statement about the case, a Kickstarter representative told us, “Kickstarter creators have an incredible track record when it comes to following through on their promises. But creators who abuse our system and backers’ trust expose themselves to legal action.” The Kickstarter representative didn’t say whether the company would be returning its portion of Doom’s funding to the game’s backers.