One of Indiegogo's Biggest Successes is Getting Sued for Fraud 

By Kate Knibbs on at

The supposedly innovative, affordable Sondors e-bike slayed its crowdfunding goal earlier this month, raising over $5 million to become the second-most successful Indiegogo campaign of all time. Now its creator is getting sued for fraud by the company that ran his crowdfunding gambit.

And it’s not the only sketchy thing about this campaign.

Storm Sondors, the man peddling the e-bike, has already faced criticism for changing the specs on what he calls “the Tesla of e-bikes” during the campaign. Critics say he’s exaggerated claims of what the budget e-bike can do to the point of fraud.

Now he’s getting sued by Agency 2.0, the PR firm that pushed his campaign, for “contractual fraud”. Aka: never paying them.

This doesn’t necessarily mean that Sondors is guilty, of course, or that his bike is bunk — Agency 2.0 is the very same PR firm that got behind the notorious crowdfunding disaster, the Kreyos smartwatch, which was the disaster, so it’s not like it has a flawless record.

This does mean that the e-bike’s future is in flux. And Sondors’ history of not pulling through on projects is worrisome considering he just promised over 12,000 people a remarkably ambitious design. He was accused of a similar “don’t pay people” a few years ago, when he was working as a toymaker:

In 2008, Sondors was sued for fraud by ToyJobs, a recruiter in the toy industry, according to the ToyJobs Web site. The company accused Sondors of hiring employees found by ToyJobs without paying the company a commission. According to ToyJobs, the Superior Court in New Jersey awarded a default judgment of nearly $40,000 against Sondors in 2011.

I’ve asked Sondors’ team for comment, but funders are already spinning their (potentially forever nonexistent) e-wheels on Indiegogo, and what I’ve said before about dubious crowdfunding projects bears repeating: You’re taking a risk and the crowdfunding platform isn’t going to come to your rescue if these projects turn out to be dismal failures or blatant scams.

These platforms exist to help people raise money, and let’s not forget the company can take a cut. They are businesses built on a reputation of idealism that is often at odds with the way they treat the idealists who fuel their success.

[Yahoo via Alyssa Bereznak]

Screenshot via Indiegogo