How We Uncovered the Biggest Fraud in Kickstarter History(kickstartedmovie.com)
kickstartedmovie.com
How We Uncovered the Biggest Fraud in Kickstarter History
http://www.kickstartedmovie.com/#!kobe-beef-scam/c17i0
87 comments
This is starting to sound like Inception. I'll get my Scheme manual to figure out how far down this recursive algorithm can go. (Infinitely?)
I so want this to be the case.
What if they create this fraud so that they can promote their movie...
...and then they use the movie as a launchpad to promote another fraud and pass it off as legit!
...and then they use the movie as a launchpad to promote another fraud and pass it off as legit!
I have an idea. You can pay me to place some Kobe Beef Jerky in strategic moments throughout the movie. I have consulted with both stakeholders and they will agree to this. It will be like Wayne's World 2! Zang :)
Obviously Kickstarter have access to more information than anyone outside the company so it's probably the case that this is fraud (comparing IP addresses and Amazon account details on backers etc) however looking through the comments on the Kickstarter there does appear to be some genuine comments.
For example there are two comments from before the project blew up from "B.B." and "tomicakes" both claiming to have tried the Jerky at one of the taste sessions these guys held, the "B.B" user registered in April 2013 and has created and backed other projects, "tomicakes" also backed another project and commented on it quite a few times.
If this is a case of fraud they went all out on it... the accounts using to shill pre-date the kickstarter. With this in mind it looks like it's possible that the problem was not the jerky did not exist but maybe they weren't using actual Kobe Beef? Maybe the fraud was the product itself, not the existence of the product?
For example there are two comments from before the project blew up from "B.B." and "tomicakes" both claiming to have tried the Jerky at one of the taste sessions these guys held, the "B.B" user registered in April 2013 and has created and backed other projects, "tomicakes" also backed another project and commented on it quite a few times.
If this is a case of fraud they went all out on it... the accounts using to shill pre-date the kickstarter. With this in mind it looks like it's possible that the problem was not the jerky did not exist but maybe they weren't using actual Kobe Beef? Maybe the fraud was the product itself, not the existence of the product?
"the accounts using to shill pre-date the kickstarter."
"April 2013", makes you feel that the account was legit? Did these accounts predate the other kickstarter the scammers ran?
Magnus Fun Inc had created another project - a mini coffee table book – that failed only 2 days before Kobe Red was launched.
"April 2013", makes you feel that the account was legit? Did these accounts predate the other kickstarter the scammers ran?
Magnus Fun Inc had created another project - a mini coffee table book – that failed only 2 days before Kobe Red was launched.
Kobe Red project was started on May 14, 2013.
B.B[1] posted a comment on May 18 saying, "i had kobe red jerky yesterday at the GREAT GOOGAMOOGA MUSIC AND FOOD FESTIVAL in brooklyn NYC and it was amazing!"
B.B has an account on Kickstarter registered in April 2013. The account has backed 6 projects and created 1. The project created was a "gay handbook for straight friends" (B.B identifies as a gay woman) created on April 17 that had 18 backers for a total of $501, the goal was $1700 and was not met.
Tomicakes[2] was created in May 2013, the account backed the KRJ project and another called "Natural Decadence: Gluten-free Grahams.". The account posted multiple comments on KRJ claiming to have tasted it at an event (and goes on to interact with B.B in the comments), tomicakes also commented on the "Natural Decadence: Gluten-free Grahams." project a couple of times.
There's more comments from people claiming to have tasted it with account histories. This is either people seriously committed to fraud (I guess it's possible when it's hundreds of thousands on the line... but the target was only 2k) or the fraud is the product quality. I feel that backing a wide variety of different projects and creating different projects across a wide variety of accounts is the point where this becomes more likely a misunderstanding vs. premeditated fraud.
The ways in which the project came out as a fraud are so very amateur that if this is a pre-meditated fraud (in that someone created fake projects, backed projects, created plausible accounts months in advance) I can't see how they managed to screw up so royally when it comes to whois and usernames?
[1] http://www.kickstarter.com/profile/brandb
[2] http://www.kickstarter.com/profile/1976351133
edit: oh I see what you mean about the first project, impossible to find out as the account has been removed and there's no google cache. If the project previously matches the current MO (30 day) then yes, it may well match up!
B.B[1] posted a comment on May 18 saying, "i had kobe red jerky yesterday at the GREAT GOOGAMOOGA MUSIC AND FOOD FESTIVAL in brooklyn NYC and it was amazing!"
B.B has an account on Kickstarter registered in April 2013. The account has backed 6 projects and created 1. The project created was a "gay handbook for straight friends" (B.B identifies as a gay woman) created on April 17 that had 18 backers for a total of $501, the goal was $1700 and was not met.
Tomicakes[2] was created in May 2013, the account backed the KRJ project and another called "Natural Decadence: Gluten-free Grahams.". The account posted multiple comments on KRJ claiming to have tasted it at an event (and goes on to interact with B.B in the comments), tomicakes also commented on the "Natural Decadence: Gluten-free Grahams." project a couple of times.
There's more comments from people claiming to have tasted it with account histories. This is either people seriously committed to fraud (I guess it's possible when it's hundreds of thousands on the line... but the target was only 2k) or the fraud is the product quality. I feel that backing a wide variety of different projects and creating different projects across a wide variety of accounts is the point where this becomes more likely a misunderstanding vs. premeditated fraud.
The ways in which the project came out as a fraud are so very amateur that if this is a pre-meditated fraud (in that someone created fake projects, backed projects, created plausible accounts months in advance) I can't see how they managed to screw up so royally when it comes to whois and usernames?
[1] http://www.kickstarter.com/profile/brandb
[2] http://www.kickstarter.com/profile/1976351133
edit: oh I see what you mean about the first project, impossible to find out as the account has been removed and there's no google cache. If the project previously matches the current MO (30 day) then yes, it may well match up!
Well, Googamooga has their list of vendors and they are not on there. Easy to verify: http://brooklyn-lineup.googamooga.com/?sort=Food
Yeah, Kickstarter does their best to make it hard to find failed projects - they're all noindexed.
Unfortunately if they follow up and read through various descriptions of their activities they will know what they did wrong and take steps to correct it making the next fraud all that harder to detect.
Well what to you know, mere minutes before I saw this submission on HN I received an email from Kickstarter saying that funding for the project has been suspended. I feel like an idiot for backing the project, but I guess it comes to show that even careful curation on Kickstarter's part isn't always foolproof.
Does anyone know if other crowdsourcing sites with less stringent requirements (e.g., Indiegogo) have problems with scam like this?
Does anyone know if other crowdsourcing sites with less stringent requirements (e.g., Indiegogo) have problems with scam like this?
Kobe jerky doesn't make any sense to me anyway. You don't really want a lot of fat in your jerky. It will go rancid.
True, but if I saw a bag of 7 oz. Kobe jerky in the store for 7$, I would a) question the legitimacy of it and b) buy it anyway just to see what jerky with that much fat actually tastes like. Just because something sounds like a bad idea doesn't mean it isn't worth trying just to see what happens.
How did Kickstarter curate it?
carefull curation ? there is next to no curation. The more projects people back the more money for kickstarter.
Yeah, this project was apparently reported to Kickstarter weeks ago by multiple people and they didn't give a fuck until it blew up into a huge PR shitstorm after the makers of Kickstarted found out about it. I mean, the company doesn't exist, their photos are stolen, their tastings provably didn't happen, the product probably isn't even possible let alone feasable at that price...
Oddly enough they are hiring folks to prevent this right now: http://www.kickstarter.com/jobs/trust
Not affiliated in any way just thought it was interesting.
Not affiliated in any way just thought it was interesting.
I find it more interesting that they are crowdfunding unravelling the alleged crowdfunding scam.
I don't think that's the case. Their documentary is on crowdfunders, not scams. The unraveled the scam because of the documentary and being mentioned by Kobe Red (though the publicity certainly is helping)
The link at the bottom of the content is:
"Please consider backing us on Kickstarter so that we can share more this story and 99% of crowdfunding stories that will inspire you."
I do understand that the scam isn't the focus of the documentary, I just find it ironic financing a movie about crowdfunding through crowdfunding.
"Please consider backing us on Kickstarter so that we can share more this story and 99% of crowdfunding stories that will inspire you."
I do understand that the scam isn't the focus of the documentary, I just find it ironic financing a movie about crowdfunding through crowdfunding.
Wow. That just screams "scam."
It's like someone just mechanically threw together a bunch of random concepts and terms they gathered through a quick google, without much effort make it seem plausible. They don't even seem to have tried to be subtle about it... ><
It's like someone just mechanically threw together a bunch of random concepts and terms they gathered through a quick google, without much effort make it seem plausible. They don't even seem to have tried to be subtle about it... ><
My favorite part: Japanese Kobe Beef is known worldwide for being the most ... juicy ... beef on the planet.
Is this an important property when making beef jerky? 'Cause I've never had juicy beef jerky.
Is this an important property when making beef jerky? 'Cause I've never had juicy beef jerky.
That was the first thing I thought. Isn't beef jerky supposed to be dry? How is dry grizzled fat any good?
There are juicy styles of beef jerky; Malaysian beef jerky for example.
http://www.malaysiabeefjerky.com/images/product/prod_bj.jpg
http://www.malaysiabeefjerky.com/images/product/prod_bj.jpg
That looks like 肉干 (rou4 gan1, or bak kua in hokkien).
It's usually made of pork. I've tried those made of chicken and beef ones. They taste yucky. Stick with the pork ones. I'm guessing in trying to capture the majority muslim market in Malaysia, they came up with the beef version.
It's usually made of pork. I've tried those made of chicken and beef ones. They taste yucky. Stick with the pork ones. I'm guessing in trying to capture the majority muslim market in Malaysia, they came up with the beef version.
the best part is the "testimonial" that is clearly trying to imply that it was Kid Cudi. "If that's for sale we want a lb for the tour" -Kid C
Anything involving Kobe beef in the US has a very high chance of being a scam, since it is not a protected term. Real kobe beef is extremely hard to get even in Japan.
Kobe beef wasn't exported prior to 2012, and today, the US has only received <400kg of it. Not much at all. It's almost certainly not Kobe beef if it's named as such - and certainly not if it's affordable.
Hmm. In 1999/2000 I had a $110 Kobe Beef cheeseburger (complete with truffles) at the Burger Bar in Vegas, so either (A) it wasn't Kobe Beef or (B) there was some limited exporting prior to 2012.
It wasn't, sorry. There are farms in the US that try to mimic the process, and there've been cattle flown in from Japan, which might have been what you had (but who knows, the real product isn't trademarked here).
Kobe beef is also around $300-400 for 1kg, so maybe $50-100 in ingredients alone, in Japan, for a burger, let alone what it costs when imported.
Not that it matters a great deal. You probably still got something good. There's other highly (and higher) valued beef in Japan too, Kobe is just a big prestigious brand.
Kobe beef is also around $300-400 for 1kg, so maybe $50-100 in ingredients alone, in Japan, for a burger, let alone what it costs when imported.
Not that it matters a great deal. You probably still got something good. There's other highly (and higher) valued beef in Japan too, Kobe is just a big prestigious brand.
Apparently, "Kobe" is used to describe many things, and, given that a prominent place like the burger bar is still selling their burgers 10 years later, their doesn't appear to be a lot of trademark police chasing people down.
http://travel.yahoo.com/p-interests-23233092
http://travel.yahoo.com/p-interests-23233092
"Kobe beef" is trademarked in Japan and is legally protected there, but not in the US, where anyone is free to use it as they like. You can still prove a beef cut has come from the real source via certification.
A couple of interesting things on this-
https://en.wikipedia.org/wiki/Geographical_indication https://en.wikipedia.org/wiki/Geographical_indications_and_t...
These things usually get codified in trade agreements. It seems that Japan hasn't been particularly concerned about protecting Kobe beef internationally, likely because there are so few exports simply due to production limits.
https://en.wikipedia.org/wiki/Geographical_indication https://en.wikipedia.org/wiki/Geographical_indications_and_t...
These things usually get codified in trade agreements. It seems that Japan hasn't been particularly concerned about protecting Kobe beef internationally, likely because there are so few exports simply due to production limits.
You had Wagu. Kobe wasn't exported until last year. Any prior "kobe" dishes were actually Kobe style Wagu.
Wagu (or Wagyu) being the breed of cattle used in Kobe beef
http://en.wikipedia.org/wiki/Wagyu
http://en.wikipedia.org/wiki/Wagyu
Various factors, some of which have been touched upon below:
1. There is almost 0 chance that you've tasted beef from a wagyu cow from the city of Kobe. Aside from import/export costs, the cost in Japan (having actually eaten Kobe beef from Kobe) is far closer to about $400-600 per steak (2kg perhaps?)
2. Americans have been importing wagyu cattle and crossbreeding them with cows here to create American "Kobe beef" http://en.wikipedia.org/wiki/Wagyu#United_States
1. There is almost 0 chance that you've tasted beef from a wagyu cow from the city of Kobe. Aside from import/export costs, the cost in Japan (having actually eaten Kobe beef from Kobe) is far closer to about $400-600 per steak (2kg perhaps?)
2. Americans have been importing wagyu cattle and crossbreeding them with cows here to create American "Kobe beef" http://en.wikipedia.org/wiki/Wagyu#United_States
I've got a bridge I'm selling in Detroit you might be interested in. ;)
I've got some bad news for you...
It's easy to get in the US, it just costs a lot. There are restaurants in NYC that have the certified product, expect your meal to run you around a grand.
I dunno if I (or most people) would call $1,000 a plate "easy to get."
I wager that most reading this in the US have $1000 sitting their bank account or in savings right now, and of the ones that don't most could somehow borrow or scrape together $1000 in less than 4-6 weeks if they really had to. So as such getting hold of $1000 is 'easy' for most people.
For a single meal.
The average American family that even has a savings account has around $6,000 in it, total (http://finance.zacks.com/much-money-average-american-family-...). You can see how spending 1/6 of your total savings on a single meal would strike most people as out of reach.
Not to mention that ~30% of families have no savings at all.
The average American family that even has a savings account has around $6,000 in it, total (http://finance.zacks.com/much-money-average-american-family-...). You can see how spending 1/6 of your total savings on a single meal would strike most people as out of reach.
Not to mention that ~30% of families have no savings at all.
I think we're talking past each other. I agree that spending $1000 on a single meal is impractical, wasteful and a bad idea for a whole host of reasons for the vast majority of people, but it isn't difficult to do from a purely implementation point of view. However just because something is easy to do, doesn't mean it is a good idea, and I think this qualifies as such a thing.
Are you defining 'real' as 'cattle breed X raised in method Y at location Z'? Because location shouldn't matter; I couldn't care less what the 'Kobe Beef Marketing and Distribution Promotion Association' thinks.
What do you think Kobe means? It specifically refers to a region of Japan. The breed of cattle is actually called "Wagu." If you want "kobe beef" that's fed and raised in a different manner, you can get Wagu and not pay the exorbitant prices.
'Kobe' is actually a city in that region of Japan, so the name already doesn't match the geographical location. Even pedantic-marketing Kobe beef doesn't ever have to visit Kobe.
"Wagyu" (和牛). Which is (Sino-)Japanese for, drumroll, "Japanese cow".
You can feed and raise it in the same manner in a different location.
I'm kinda shocked that anyone would have invested in it at all, fraud or no. Why would you desecrate Kobe beef by making jerky out of it?
American "innovation" has just become "fad mashing." Take fads, mash them together for no apparent reason other than to create a new superfad.
Wait a sec, that sounds like Japanese innovation! (I guess my point is that the reverse could happen anywhere... and I wouldn't mind tasting Kobe jerky if given the chance.)
Erm...sounds like Chinese innovation.
Closely modelled on the pop industry I see.
I think the real problem isn't the "mashing", but rather the buzzword bingo a lot of "trendy" places seem to be trying to play.
The real problem is that it works.
because foodie indie hipster startup kickstarter before it was cool.
Biggest as in "most boldly false from the start" or as in "dollar amount raised but didn't deliver"? If the latter, I think the secure USB key project was over $200K. Granted, I think the USB key folks started out hoping to make good.
Starting it out with the best intentions and failing to deliver due to naivety or unforeseen circumstances isn't in any way fraud. In fact I'd argue that that should be a perfectly acceptable and expected end for a significant percentage of kickstarter projects.
Biggest as in most spectacular, I expect. ZionEyez raised much more money but I don't think they had quite the level of shilling and aggesssiveness that this Kickstarter did. For instance, from the comments section:
> Might not be related but a Mike Walden just posted on my business's facebook calling me a child predator.(I've never gotten so much as a misdemeanor).
> And this is the funniest part, just a curious thing I found. The Facebook page for Kobe Red Jerky is: https://www.facebook.com/louis.friend.948 . > "Louis Friend" is an anagram for "Iron Sulfide", or more commonly known as "Fool's Gold". Funny, isn't it?!
> i'm already working on old mans ip address and info, give me 30 minutes and you will be able to give the police his home address.
Also some really spectacular trolling of the comments section in order to make it hard to find critical comments, including someone puporting to be a PETA supporter.
> Might not be related but a Mike Walden just posted on my business's facebook calling me a child predator.(I've never gotten so much as a misdemeanor).
> And this is the funniest part, just a curious thing I found. The Facebook page for Kobe Red Jerky is: https://www.facebook.com/louis.friend.948 . > "Louis Friend" is an anagram for "Iron Sulfide", or more commonly known as "Fool's Gold". Funny, isn't it?!
> i'm already working on old mans ip address and info, give me 30 minutes and you will be able to give the police his home address.
Also some really spectacular trolling of the comments section in order to make it hard to find critical comments, including someone puporting to be a PETA supporter.
That must be one of the most annoying videos I have seen. Why would anyone talk like that?
Funny thing is that it's a promo for their own Kickstarter project (Kickstarted the movie).
Based on the video revealing the fraud, there's no way I'll fund the movie. (Not that I've ever funded anything anyway)
Based on the video revealing the fraud, there's no way I'll fund the movie. (Not that I've ever funded anything anyway)
Seriously. They have a neat project, but this is one of those cases where they need to seriously seek out constructive criticism because that is just terrible. The narrator is trying to sound almost carnivalesque but the result is a slurred monotone of barely decipherable words.
Translation: we uncovered one of many scams in the history of a platform for collecting money that does zero verification of anything and that exists for a couple years. Which even come forward to back a project that goes against all their rules, but generated revenue.
I assume you expect a medal?
I assume you expect a medal?
Beer fed cattle is pretty much an urban legend, this didn't tip anyone off?
So is there some point in this process where the cops might get involved?
Since no money changed hands, no theft occurred. Fraud is still an issue, but it's not like the typical scam where it's obviously a criminal case.
It likely happens a lot but goes undetected, or doesn't make the news. Modest success would be less likely to get people investigating than overshooting the goal.
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wow, surprised that this doesn't happen more often...to be honest...
I think this project got the spotlight because of the large amount of money pledged, and the large difference between "money asked for" and "money pledged".
I think it's still possible to fraud people over kickstarter by staying under the radar: ask for little money, and if you receive not much (let's say under 5000? 1000?), no-one will bother to investigate whether your project worked out.
I think it's still possible to fraud people over kickstarter by staying under the radar: ask for little money, and if you receive not much (let's say under 5000? 1000?), no-one will bother to investigate whether your project worked out.
I would chalk it to the fact that if you have a really good idea for a new original product, one that is good enough and realistic enough that it would convince people to part with their money, you might as well try and make it a reality.
What happened in this case is that was a product that too few of the mostly technical-oriented Kickstarter audience understood was unrealistic.
What happened in this case is that was a product that too few of the mostly technical-oriented Kickstarter audience understood was unrealistic.
Seems to me they have already filmed it and they are trying to recoup the cost?
Isn't kickstarter to get the funds in the first place? The trailer suggests filming is complete...
Isn't kickstarter to get the funds in the first place? The trailer suggests filming is complete...
Identity validation, reputation and trust remain major pain points on the internet.
Totally expected this to be about that scammer Susan Wilson http://catfishwebworks.com/WordPress/why-millionaire-susan-w...
Not the first , not the last. since Kickstarter takes a cut ... the only potential victim is the backer.
Now there's a meta-fraud for you.