WASHINGTON, D. C. – Attorney General Karl A. Racine today filed a lawsuit against Sivil, Inc., a company that raised more than $284,000 from members of the public through the “crowdfunding” platform Kickstarter to produce athletic apparel. However, Sivil failed to deliver that apparel to its supporters as promised. Instead, the suit alleges that Sivil and its owner, Willard Simon, spent at least $112,000 of the money raised on personal expenses while failing to take steps toward producing apparel or providing refunds to consumers.
“Sites like Kickstarter and other sharing economy innovators create exciting opportunities for entrepreneurship, but they also open up new ways for scammers to abuse the public’s trust,” Attorney General Racine said. “We are here to ensure that purported entrepreneurs spend the money entrusted to them on the advertised product, and not for self-enrichment.”
Crowdfunding involves individuals and businesses raising money for a project or venture from numerous people, often via the Internet. In many cases, consumers are enticed to make payments in exchange for the promise that they will receive the product that will be manufactured with the raised funds.
In 2015, Sivil launched a crowdfunding campaign and promised goods in return for contributions. More than 28 months later, and despite its promises, Sivil has yet to produce or deliver any athletic apparel to consumers. When contacted by concerned investors, it refused to grant refunds and made assurances that contributions were being used to manufacture the promised athletic wear. But according to the Attorney General’s complaint, Sivil and Simon spent at least $112,000 of the funds on personal expenses unrelated to the athletic apparel.
The suit seeks an injunction against Sivil and its owner enforcing the District’s Consumer Protection Procedures Act and limiting the defendants’ ability to take future payments from consumers. The lawsuit also seeks to recover all monies that backers paid to Sivil, as well civil penalties and the Attorney General’s costs.
A copy of the lawsuit is available here.
Consumers who have complaints about crowdfunding, or who have any other consumer concerns, can contact our Office of Consumer Protection at (202) 442-9828, by sending an e-mail to [email protected], or online using our Consumer Complaint Form.