When you think of favorite snacks, it’s unlikely your go-to option is the delicious flavor of sun-dried Kobe Beef. It’s not because it doesn’t sound delicious. It’s because it doesn’t exist.
In one of the biggest scams in Kickstarter history, a company called Kobe Red opened a page on the crowdfunding site claiming they were preparing to distribute organic, beer-fed beef jerky treats and needed crowdfunded startup cash. By the time the team behind Kickstarter hired a private investigator to discover the validity of the business, Kobe Red had raised over $120,000.
If it hadn’t been for the unlikely help of a documentary crew and their trusted private investigator, it would have been the “biggest definitive fraud in the history of crowdfunding,” according to Quartz Magazine – a loss of over $120,000.
Check out the documentary team’s footage on the story below.
Through a series of fake online reviews, fabricated initial backers, and even live-tweeted “taste tests” at made-up events, the fraudsters at Kobe Red were able to fool over 3,000 real online supporters. It wasn’t until a duo interested in documenting the success of the crowdfunding site Kickstarter chose Kobe Red for one of their case studies that the lies started to set off warning bells.
Los Angeles filmmakers Jason Cooper and Jay Armitage attempted to contact the organization promoting Kobe Red, Magnus Fun, Inc. They had a short exchange of emails, but were never able to get any real documentation or meetings with the company owners. Magnus Fun, Inc. also promised to send footage from a tasting they had done at SXSW, but it never arrived.
The two filmmakers started to get a feeling that they – all all the Kobe Red backers – were being duped.
Several commenters on Kobe Red’s Kickstarter page felt the same. Some had contended with the company’s claim that they had thousands of pounds of meat read to be processed. This was incongruous with the idea that Kobe beed had just recently become legal to export from Japan to the U.S. Many said that it would be impossible for them to have that stock available in such a short time. Others questioned the company’s lack of personal information through Kickstarter, as well as the validity of screenshots from SXSW.
“I got a few emails from our backers” — Kickstarted is raising funds through Kickstarter, too — “that said they thought this was an obvious scam,” Cooper told Mashable. “Knowing that we weren’t the only ones really helped make this clear.”
It was in the midst of growing concerns from the documentary team’s financial backers that they decided to hire a private investigator (PI) to look into the validity of Magnus Fun, Inc. It was through this PI that they found a trail of lies, scheming, and fraud that led to the Kobe Red Kickstarter campaign to be unplugged – a mere hour before stealing $120,000.
The unnamed PI found that Magnus Fun, Inc. was not who they said they were. Not only had they created the Kobe Red fund just hours after a failed attempt at a totally unrelated product, there was no record of their company in California State, even though their Kickstarter page claimed that was their home base.
What really brought the company down was one of their most outspoken defenders, Mr. Stanley Owens. The PI realized that this was the same name as one of the business partners on the product, and tracked both names to the same address in Chicago. In addition, this address was found to be connected with a Desjon Allen, who had created several other bogus money-raising schemes, including the “George Zimmerman Defense Fund,” designed to exploit Zimmerman backers, and “Cure the Coast,” a thwarted attempt to make money from the Pepsi Refresh Project.
The PI and independent filmmakers published their findings immediately on Reddit, to viral success. Within hours of the close date for the Kickstarter campaign for Kobe Red, Magnus Fun, Inc.’s account was suspended and all the backers were able to keep their money.
Without the assistance of a good private investigator and a number of watchdogs in social media, this could scenario could have turned out quite differently. Fortunately, there are always professionals willing to help bring scammers to justice, especially in light of near-misses like the Kobe Red incident.