

How We Uncovered the Biggest Fraud in Kickstarter History - tjohns
http://www.kickstartedmovie.com/#!kobe-beef-scam/c17i0

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ghshephard
The real irony would be if the the actual fraud here is kickstartedmovie
false-flag creating kobebeefjerky in order to promote their movie.

Now there's a meta-fraud for you.

~~~
MarkTanamil
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!

~~~
yebyen
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 :)

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citricsquid
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?

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Steko
"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._

~~~
citricsquid
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](http://www.kickstarter.com/profile/brandb)

[2]
[http://www.kickstarter.com/profile/1976351133](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!

~~~
frankdenbow
Well, Googamooga has their list of vendors and they are not on there. Easy to
verify: [http://brooklyn-lineup.googamooga.com/?sort=Food](http://brooklyn-
lineup.googamooga.com/?sort=Food)

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jechen
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?

~~~
bockris
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.

~~~
jckt
And no offence to beef-jerky lovers, but good beef is wasted when turned into
jerky...

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alex_doom
It's like putting ginger ale in top shelf Scotch. A waste!

~~~
MrMan
You got your reddit in my HN!

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jeangenie
Oddly enough they are hiring folks to prevent this right now:
[http://www.kickstarter.com/jobs/trust](http://www.kickstarter.com/jobs/trust)

Not affiliated in any way just thought it was interesting.

~~~
tomedme
I find it more interesting that they are crowdfunding unravelling the alleged
crowdfunding scam.

~~~
bdcravens
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)

~~~
tomedme
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.

------
citricsquid
Project link: [http://www.kickstarter.com/projects/kobered/kobe-
red-100-jap...](http://www.kickstarter.com/projects/kobered/kobe-
red-100-japanese-beer-fed-kobe-beef-jerky)

~~~
jrockway
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.

~~~
jyu
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)

~~~
chewxy
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.

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Noxchi
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.

~~~
wahnfrieden
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.

~~~
ghshephard
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.

~~~
wahnfrieden
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.

~~~
ghshephard
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)

~~~
wahnfrieden
"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.

~~~
corresation
A couple of interesting things on this-

[https://en.wikipedia.org/wiki/Geographical_indication](https://en.wikipedia.org/wiki/Geographical_indication)
[https://en.wikipedia.org/wiki/Geographical_indications_and_t...](https://en.wikipedia.org/wiki/Geographical_indications_and_traditional_specialities_in_the_European_Union)

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.

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Spooky23
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?

~~~
joonix
American "innovation" has just become "fad mashing." Take fads, mash them
together for no apparent reason other than to create a new superfad.

~~~
jlgreco
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.

~~~
Spooky23
So, if I posted a kickstarter project to launch a social, cloud-based app that
allowed you to organize photos along with dooing big data about kobe beef
mashups, I'd get traction?

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guizzy
Depends; can it organize pictures of my 3d printer? Does it have a flat UI?

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mikestew
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.

~~~
dagw
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.

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sbornia
That must be one of the most annoying videos I have seen. Why would anyone
talk like that?

~~~
lessnonymous
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)

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gcb0
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?

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aaron695
Beer fed cattle is pretty much an urban legend, this didn't tip anyone off?

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aptwebapps
So is there some point in this process where the cops might get involved?

~~~
bdcravens
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.

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lizzard
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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badkangaroo
wow, surprised that this doesn't happen more often...to be honest...

~~~
a_bonobo
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.

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culshaw
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...

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bredren
Identity validation, reputation and trust remain major pain points on the
internet.

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workbench
Totally expected this to be about that scammer Susan Wilson
[http://catfishwebworks.com/WordPress/why-millionaire-
susan-w...](http://catfishwebworks.com/WordPress/why-millionaire-susan-
wilsons-kickstarter-infuriated-reddit/)

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camus
Not the first , not the last. since Kickstarter takes a cut ... the only
potential victim is the backer.

