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Financial Forensic Report 5.24.2021

THE DOOM THAT CAME TO KICKSTARTER

Crowdfunding has quickly become one of the most popular forms of fundraising for anything from art projects to medical bills. Kickstarter, the most popular name in crowdfunding, was founded in 2009 as a platform that connects creators with investors, called backers. Each funding campaign requires 100 percent of pledges from backers; otherwise, the creator doesn’t receive any funding. Much like a public radio pledge drive, backers are given incentives to pledge money, and those rewards are received regardless of the project’s success. Unfortunately, these policies have created opportunities for fraud. 

Eric Chevalier started a Kickstarter campaign for “The Doom That Came to Atlantic City,” a board game he planned to develop. The buzz around this project helped raise $122,000 from 1,246 donors. In exchange for the donations, the backers were promised early releases of the game or specialty pewter game pieces. A little over a year later, Chevalier announced that the project was a failure, citing his “inexperience in board game publishing, co-developers’ ego conflicts, legal issues, and technical complications.” This announcement was not made until all the donors’ payments had been processed and his project was completely financed. Rather than refunding the investors’ money, the FTC claims Chevalier kept the money. Although Chevalier did agree to a settlement with the FTC for $111,793.71, he now claims he is broke.

Conversely, a backer can also defraud a project. “Encik Fahran” (possibly a fake name) appeared to be a very philanthropic backer in the Kickstarter universe, as he would donate $100-$1,000 to several Kickstarter projects. Once Fahran received his donor premium, he would call his credit card company and dispute the charge, keeping the premium and the money. Alex Heberling, a creator on Kickstarter and victim of Fahran, reported his conduct to Kickstarter, who simply advised her to check out Amazon’s Payments FAQ section. After contacting another Kickstarter campaigner, Heberling found out that Fahran had been scamming hundreds of other campaigns. Heberling raised awareness on social media, and Kickstarter quickly reassured her that their Trust and Safety Team was looking into the matter.

According to Kickstarter’s website, they are only a platform for project creators to connect with project investors. If a project creator doesn’t follow through on their claims, it’s only their reputation that is at risk. The Trust and Safety portion of their website explicitly states, “Kickstarter doesn’t evaluate a project’s claims, resolve disputes, or offer refunds — backers decide what’s worth funding and what’s not.” In the Accountability section of their FAQ, Kickstarter recommends that potential backers research a project creator’s credentials and reputation before pledging to fund a project. Also, Kickstarter has started verifying the identity of their creators, which is notated by a green check mark next to the creator’s name. Despite the Fahran incident, Kickstarter still does not offer creators much advice on how to protect themselves from fraudulent backers. 

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MIRACLES

She waited patiently for the pharmacist to give her some attention, but he was too busy at the moment. Tess cleared her throat with the loudest noise she could muster up. “And just what do you want?” the pharmacist asked in an annoyed tone of voice, he was talking to his brother visiting from Chicago. “Well, I want to talk to you about my brother,” Tess answered back in the same annoyed tone, “he’s really really sick…and I want to buy a miracle.”

“I beg your pardon” said the pharmacist.

“His name is Andrew and he has something bad growing inside his head and my Daddy says only a miracle can save him now. So how much does a miracle cost?” “We don’t sell miracles here little girl, I’m sorry but I can’t help you,” said the pharmacist.

The pharmacist’s brother was a well dressed man. He stooped down and asked the little girl, “What kind of miracle does your brother need?”

“I don’t know,” Tess replies with her eyes welling up. “I just know he’s really sick and Mommy says he needs an operation, but Daddy can’t pay for it so I want to use my own money.” “How much do you have?” asked the man. “One dollar and eleven cents” Tess answered barely audible. “And it’s all the money I have, but I can get some more if I need to.”

“Well, what a coincidence” smiled the man. “A $1.11…that’s the exact price of a miracle for little brothers. Take me to where you live. I want to see your brother and meet your parents. Let’s see if I have the miracle you need.”

That well dressed man was Doctor Carlton Armstrong, a surgeon specializing in neuro surgery. The operation was completed free of charge and it wasn’t long until Andrew was home again and doing well. Mom and Dad were happily talking about the chain of events that had led them to this place. “That surgery was a real miracle” her mother whispered. “I wonder how much it cost?” Tess smiled, she knew exactly how much the miracle cost…$1.11 plus the faith of a little child.

In our lives, we never know how many miracles we will need. A miracle is not the suspension of a natural law, but the operation of a higher law!

We all know our very best friend is Jesus our Lord and Savior.

He says His oath to us –
When we are sad…He will dry our tears.
When we are scared…He will comfort our fears.
When we are worried…He will give us hope.
When we are confused…He will help us cope.
And when we are lost and can’t see the light…He will be our beacon shinning so bright.

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Diagnostic & Prescriptive Judgment Enforcement
By: Joe H. Dickerson, CFE

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Jim Thomas
, Prosecuting Attorney

2014-11-11T18:21:32+00:00

Jim Thomas
, Prosecuting Attorney

“They went overboard in providing excellent service. I was very pleased with what they provided for me as their end product. Financial Forensic Services really understands how a case needs to be put together in order to be presented to a jury. Their PowerPoint presentation tied everything together. It was thorough, it was concise, and it got the job done.”

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R. Michael Sentel
, Former Section Chief Legal Division, FDIC

2014-11-11T18:13:08+00:00

R. Michael Sentel
, Former Section Chief Legal Division, FDIC

” I was prepared to dismiss a federal case involving millions of dollars against a local individual who claimed to have no substantial assets. After your staff hit the records and delved into the transactions behind the transactions, you discovered the individual to actually be worth a few million dollars. We continued the case to conclusion. We were also very happy with the financial background examinations you conducted of the former directors of two failed national banks. The heart of any civil case is whether there is a pot at the end of the lawsuit. You were our lucky leprechaun in finding such pots.”

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Andrew Quiat
, Attorney

2014-11-11T18:12:51+00:00

Andrew Quiat
, Attorney

“Joe is the most competent investigator I’ve ever found. He has rare ability to find hidden assets. Others claim it, Joe has it. He understands the Rules of Evidence, he knows how to talk to people to develop a fact pattern, and he has a sixth sense for fraud. Joe has unquestioned integrity and delivers value for his services.”

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Thomas E. Root, 
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2014-11-11T18:20:05+00:00

Thomas E. Root, 
Attorney

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2014-11-11T18:21:13+00:00

Michael Whalen, 
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Jan Schlichtman
, Attorney at Law

2014-11-11T18:20:55+00:00

Jan Schlichtman
, Attorney at Law

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Tim Gabelhouse
, Attorney at Law

2014-11-11T18:20:41+00:00

Tim Gabelhouse
, Attorney at Law

“As an environmental law firm, we use Joe Dickerson to locate prior business owners and do corporate genealogies. He is persistent, that’s the key to a good investigator, and he has a knack for understanding how people move money and do business. That tells him what rocks to look under. Joe is vastly superior to other investigators in two ways: he lets you know what’s going on and he’s honest with you, because he tells you if there’s really anything there worth pursuing. He is unusually thorough and creative finding people. Joe has earned his fee every time.” “If the information is to be found, then I believe that they will find it. Their service enabled me to do a much better job for my client.”

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Frank Brainerd, Retired
Banker/Attorney

2014-11-11T18:20:20+00:00

Frank Brainerd, Retired
Banker/Attorney

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