How a PR Agency Stole Our Kickstarter Money
d-cal.com
d-cal.com
https://twitter.com/Woodshedagency The hashtags on their twitter description almost seem like satire.
edit : and this was not because the project sucked, the project is profitable now.
Yeah. Screaming in ALL CAPS too.
> #DIGITALBUSINESSDEVELOPMENT #MULTIMEDIAPRODUCTION #CROWDFUNDING #CONSULTING #DETROIT #ENGAGEMENT #NEWYORK #CHICAGO
And their twitter background. Hipster all the way.
There is now effectively a new business where “PR” firms fun the marketing cost in favor of 50% or sometimes more of the campgain and pretty much after that they cut the cord and go to fund their next scam.
> We're currently turning on all of our social media, sites, and lines of communication. They will remain on. Clearly turning them off was a big mistake. More on that in a bit. Jeff and I plan on staying online all night to answer and address any and all questions [0]
0. https://twitter.com/Woodshedagency/status/943632233088405505
This is definitely something that needs to go to the courts; it has to be a form of financial fraud, and depending on the amount raised by the KS, it could end up being a fairly big deal.
As it is, if I were a backer, I would feel like I had been defrauded in some manner. Even if I got the "prize" (game) in the end, when I back a KS, I don't do it solely for the item or prize being offered for being a backer, but because I want to see someone succeed with their ideas and company.
> The elements of wire fraud under Section 1343 directly parallel those of the mail fraud statute, but require the use of an interstate telephone call or electronic communication made in furtherance of the scheme.
> essential elements of wire fraud are:
> (1) a scheme to defraud and
> (2) the use of, or causing the use of, interstate wire communications to execute the scheme)
Source: https://www.justice.gov/usam/criminal-resource-manual-941-18...
"Upstart is a board game that simulates the ups and down [sic] of starting and sustaining a business."
A 3rd party contractor/service provider stealing your money is certainly one of the "downs" of running a business.
You don't explain, but I don't understand why you couldn't open a bank account. Citizenship is not required. There are online agencies as well, such as Paypal. Was the problem on Kickstarter's side? It seems to me they would have provisions for international clients.
I wish you luck, and am glad you are able to warn people. Out of state lawsuits against out of business corporations (I assume they are out of business, or are about to be) are difficult to collect, but hiring a lawyer is a necessary first step.
It was massively dumb to shut off their social media accounts, but I guess they were just folding under pressure. Smooth recovery.
Also it's remarkable how much power good writing has. Both for ill and for good.
This does not exactly make them look like innocent above board victims of libel.
https://news.ycombinator.com/item?id=15971899
The witch-hunt atmosphere in this thread is not my doing. Other people chose to upvote comments that agreed with the one sided smear campaign and downvote anything arguing for a more evenhanded approach.
Please note the final paragraph of that comment was added after it was downvoted into the negatives and initially was prefaced with "I have no idea why this is being downvoted, but... "
So I feel rather aggravated with my entire experience of this discussion. Get downvoted for an evenhanded comment, then later get lectured for a different one that could be framed as agreement with the smear campaign.
Not to self: Maybe I need to just avoid mudslinging discussions on HN lest I get mud slung all over me, no matter what I do. Trying to be a voice of reason in the face of this crap apparently does not do any good at all.
They claimed in a tweet earlier today that they were preparing a response however the fact they locked off their channel seems to imply their response is duck and cover.
It seems like the point of the post is to publicize what happened, and make sure other people are aware of the dangers of working with this agency:
> If we don’t tell people what happened, it could happen to someone else.
> We are cutting our losses and doing what we can on a legal front, but we need to warn the community.
The legal system moves slowly; this appears to be their way of holding them accountable for their actions, and for helping others avoid their fate.
I mean there's a reason why the "court of public opinion" isn't the best way to resolve issues...
edit: well, looks like Woodshead Agency protected their twitter account so you can't see the tweet now. That's not great.
And if they have a good explanation, why have they been blocking people on twitter for asking for it?
To play devil's advocate, they need to be able to respond to the accusation well. They can't just jot something down and fire it off, right? They're starting off in a defensive position, and need to address the accusation in away that paints them as the good guys (which they might be).
https://medium.com/@jeff_52578/how-a-failed-kickstarter-camp...
Court is the obvious way to handle it, but I see nothing wrong with going public to warn other people, or shame the company into paying up. The company is still apparently doing business. This goes a bit beyond not being able to pay your vendors, and depending on how exactly it went down, what Woodshed did could be outright illegal.
https://www.kickstarter.com/projects/rdacalos/upstart-the-bo...
Looks like $35k. No one would risk destroying their reputation over that small sum. I wonder what the other side of the story is?
Abuse is pretty common in gamedev, but this would be flagrant.
You really underestimate how bad some people's finances are right now in places like Michigan.
People have killed for far less...If they were in a bad enough financial position, they could have thought that they would borrow their client's money to pay immediate bills, and pay the account back with future client earnings. It happens quite frequently in the legal world--it's the number one reason lawyers get disbarred in CA after drug use.
If the other partners were not aware this was occurring until now, that might be a more benevolent explanation of why the agency has gone dark.
People risk a lifetime in jail over $35k, on a regular basis.
It's implicitly an "international" transaction, so why would rectifying the problem be considered unfairly burdensome when they entered into the relationship.
Then there's the issue of finding a lawyer who won't start off by asking 'and what is a kickstarter?' which is harder than you might expect. Also, I just thought, Kickstarter might have some kind of standing in this which might also require the case to occur in a US court. Not sure about that.
original post:
The summary as stated (and as i understood it) is as follows. I take no sides here, just trying to summarize the post since i managed to see it before it went bye-bye
> campaign did not succeed as promised, owners allegedly propped it up with own money from fraudulent credit cards that never cleared
> kickstarter paid woodshed $16K (the amount that did clear)
> depending on fee counting, woodshed owed 10% of that, plus 4K they spent on promoting the game
> their accountant told them that they are on hook if game isnt delivered since they have the money so they waited till game delivered
> their accountant told them they are on hook for taxes since they are in USA and got the money and they don’t know what to do now
> "words we said. allegations made. reputations ruined. it is in the hands of lawyers now"
The rest makes sense and I regret jumping to conclusions (though a quick tweet from Woodshed saying the story was inaccurate and they had a response coming without blocking people would have made it easier to trust them).
If it's true as told by Woodshed, if them I'd just refund the $16k to the backers, and wash my hands of it.
Not sure if anything changed from the original post or it was deleted by mistake.
Afair https://hackaday.com/2014/03/07/soap-the-home-automation-rou... dude(or was it two guys) running this scam just bought new car with crowdfunded money and posted pictures on instagram.
This is a perfect example of why we should all follow the "innocent until proven guilty" idea. There is no proof, no chance for the agency to refute claims, etc.
Convenient that they are also asking for more financing.
And if the other side has "cut off all communication," I don't know how you can expect them to not be one-sided.
Regardless, if the statement “we received none of the money” is true. There is definitely something bad going on here.
If I had an extra $1,000 in my account, I might accidentally spend it, but I could replace it eventually. If I had an extra $50,000 in my account, that would be much harder to replace, but I'm not sure how I could with a straight face say I spent it accidentally.
(https://medium.com/@jeff_52578/how-a-failed-kickstarter-camp...)
is a non-response of the best sort. It does absolutely nothing to dispel the presumption of guilt, though, and if anything, merely adds weight to the "you aren't responding because you're guilty" mindset.
As for “It’s not true, facts are X, Y, and Z.”, well, I'm Not A Lawyer. I presume that's a bit like a coach for a sports team giving a news conference to tell everyone which strategies and plays they're going to be making in the upcoming game. Facts can be disputed, procedural rules can get facts excluded, and so forth. Whether or not it is a "far better" strategy (weighing PR versus court battle) is too fuzzy for a lay person to judge accurately, I think.
If Woodshed are to be believed, D-Cal has basically tried to crush their reputation. They did the right thing not responding to tweets.
Lessons learned:
1. If you are not US-based, be aware that there are extra challenges wrt actually getting your money and it may take additional time to handle that piece, so don't delay setting that up and thereby get yourself inti a scheduling mess like we did, which is what led to this decision.
2. Be aware that a favor of this sort from a non bank business is risky. All kinds of things can go wrong.
3. If you can't get your ducks in a row to make this work properly, it may be a de fecto waste of time. We still haven't gotten our money, but made it work anyway. I would have had more time and energy for side projects etc had I not been wasting my time on this debacle.
4. Woodshed told us they are "reorganizing," which sounds like our money is being used as a free bridge loan. If so, that's an abuse of our naive trust. It also does not look good that they have largely stopped communicating with us. However, I still hope they do the right thing and get our money to us.
--
Of course, if they had that level of diplomatic skill in house, they might not feel they need a PR company. So, it sort of isn't shocking that they don't really know how to do this well, all things considered. The diplomancers they thought they hired to help craft their public communications are the very people with whom they have a conflict.
I will add that part of the reason to handle it this way is to cover your own butt, not to be "nice" to people who are probably assholes, by the sound of it.
I disagree. You protect yourself by doing your necessary homework before you even sign the contracts.
Contracts are helpful, but in the real world, getting a resolution can be very messy. Lawsuits are stressful, expensive and time consuming. If you've been through a lawsuit, you'll know that being right is often very small consolation, especially if your adversary happens to have better legal representation than you.
I'm not saying that. But in practice, the legal system favors those who can afford the time and money to go through the process. That's why a lot of cases are settled instead of going to trial. If the case isn't particularly clear cut, it's an expensive proposition for the individual or small business, especially if you can't find a lawyer who thinks your case is worth his/her while.
>> I've been through lawsuits
You or your company? Did you pay any of the legal fees out of your own pocket?
For this specific case, we're talking about $35K being a significant chunk of money for the OP. He had to close two bank accounts because they "hit negative balance".
How much do you think they can afford to spend to fight this case before it becomes a money pit? A good lawyer requires an up-front retainer, and is easily 150/hr, those billable hours add up very quickly.
Sure the contracts might be enforceable, but he's probably going to have to borrow money to even have a chance to squeeze money out of the PR company.
You might not need to go as far as hiring a PI, but some common sense would have gone a long way. Letting someone with whom you don't have a longstanding relationship hold your money for you is generally a bad idea. I have to wonder if they even checked with the PR company's "Australian client" to see if they were legit about doing wire transfers.
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trip to the woodshed.
Answer : we made a huge mistake to trust people with all our money. This mistake has led to all our problems.
I know it sounds obvious, but still.
"We were wrong."
They are the victims here (assuming they are telling the truth).
I don't blame people for being taken advantage of by a conman. I might advise them not to be so trusting, but I don't go around demanding they publicly take full responsibility for being the victim of a scam.
Because people who externalize tend to learn poorly.
Aren't the real victims here the Kickstarter backers?
Answer : I made a huge mistake to blame people for not doing what they clearly did. This mistake has led to my defensive shit-posting.
I know it sounds obvious, but still.
I just expressed my feelings.
They should have postponed until they had their financial infra in place.
I’m giving them the benefit of doubt. A small group of entrepreneurs working fast to launch a project occasionally misses how long a critical piece will take before the launch is already conmitted.