Lawsuit against Skully co-founders claims brothers blew funding

A few days ago, Skully, a San Francisco-based startup with hopes of building a digitally augmented motorcycle helmet, announced that it would be shutting its doors. The closure came a few weeks after Skully's board of directors forced out Marcus and Mitch Willer, the brothers who co-founded the company, reports TechCrunch. Now, the brothers and their company are facing a lawsuit by the brothers' assistant, Isabelle Faithauser, for using funding for personal uses, reports BuzzFeed News.

Faithauser claims the Willers "used the corporate entities of Skully in such a fraudulent manner as to render the corporate entity a sham." The suit, which was filed last month, also states that the brothers demanded Faithauser to participate in fraudulent bookkeeping procedures to defraud investors. The fraudulent tactics were used to trick investors into believing that the company was using funds for business purposes, when it was actually being used on personal expenses.

According to the suit, some alleged personal expenses include: a Dodge Viper, a second Dodge Viper (after the first one was involved in an accident), a weekend Lamborghini rental, personal rent for the brothers' apartment in San Francisco, four motorcycles, the brothers' restaurant meals, weekly apartment cleanings, $2,000 at a strip club called "De Ja Vu," $80,000 in cash to an unnamed co-founder (hidden as a trip to China), and much more.

Skully raised approximately $2.5 million in crowdfunding through IndieGogo – roughly 979 percent of the company's original goal of $250,000 – from 1,940 people. The money was supposed to be used on building helmets with a heads-up display, but the company kept pushing back its release date.

TechCrunch reports that backers who haven't received Skully's $1,500 AR-1 helmet won't get a refund. There's no official word on what kind of compensation backers will receive, but two other high-tech motorcycle companies, Ruroc and Fusar, are offering Skully backers with options.

We will continue to update the story as it progresses. Scroll down to read the lawsuit in its entirety, which was originally posted by BuzzFeed News.

Lawsuit Against Marcus Weller, Mitchell Weller, Skully Helmets, and Skully Inc.

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