In a first for donation-based crowdfunding, the creator of a Kickstarter campaign has been ordered by a state court to pay civil penalties, restitution, and court costs for failing to deliver products to his contributors. Edward J. Polchlopek, aka Ed Nash, and his company, Altius Management, have been ordered to pay a total of $54,851.29 for failure to deliver decks of ‘retro-horror themed’ playing cards.
Polchlopek successfully raised $25,146 on a $15,000 ask back in October 2012 for his crowdfunding campaign for Asylum Playing Cards. The campaign promised to ship contributors a single deck of the cards for a donation of $9 by December of the following year; however, it took until June 2015 before any contributors reported receiving their cards or any other rewards offered. Polchlopek also made no attempt to communicate with his contributors since July 2013. As a result, Washington Attorney General Bob Ferguson filed suit against Polchlopek and Altius Management under the state’s Consumer Protection Act in April 2014.
According to Ferguson, “Washington state will not tolerate crowdfunding theft. If you accept money from consumers, and don’t follow through on your obligations, my office will hold you accountable.”
Out of the 810 contributors to the campaign, 31 were from Washington. The $54,851.29 Polchlopek has been ordered to pay is based on $668 in restitution to those 31 contributors, $31,000 in civil penalties ($1,000 each), and $23,184 in court costs and fees. It should be noted here that court costs and fees accounted for about 42 percent of the fine.
The case against Polchlopek and Altius Management is considered to be the first to set a legislative precedent for crowdfunding theft, which according to Ferguson, will no longer be tolerated by Washington state. Ferguson has also encouraged affected contributors from other states to “file a complaint with their state attorney general to seek restitution,” so Polchlopek’s financial troubles may be far from over.