Storm eBike Creator Sued for Fraud by His Own PR Agency
It seemed like a classic American success story. An unknown inventor with a great name — Storm Sondors — and a mysterious past raises millions of dollars overnight to fund his dream: an affordable electric bicycle for the masses.
(Indiegogo)
When the Storm Sondors eBike campaign finally closed on April 2, it was the second most successful in Indiegogo history, raising nearly $5.3 million from more than 12,000 funders, most of whom paid between $500 and $750 in the hopes of receiving a low-cost electric bicycle.
But the Storm Sondors saga has taken more twists and turns than a dime-store novel.
Crowdfund Insider has revealed that Ivars “Storm” Sondors is being sued by the PR firm that built and managed his crowdfunding campaign. Papers filed on April 9 in Los Angeles Superior Court accuse Sondors, his crowdfunding partner Jon Hopp, and the company he created, Pacific Storm Inc., of “contractual fraud” with regard to Agency 2.0.
(Agency 2.0)
The case docket is available via a paid search of the Los Angeles Superior Court Web site; documents filed with the court were not available at press time. However, in an emailed statement, Agency 2.0 CEO and founder Christopher Olenik wrote that his agency has yet to be paid for the work it did on the campaign for the bike, which was originally called the Storm eBike.
“The contractual fraud stems from the fact that Team Sondors hired Agency 2.0 for its services,” wrote Olenik. “An agreement to pay for services on a set percentage at a set time should be honored. Agency 2.0 has done its part in raising $5.28 million and has not been compensated as per agreed upon contract. Team Sondors actions to date have shown that he did not ever intend to honor their contractual obligations.”
Olenik adds that he’s hoping to resolve the issue without a protracted lawsuit. Sondors did not respond to email requests for comment by publication time.
Storm brewing
The Storm eBike campaign had already generated more than the usual share of controversy. Shortly after it launched, Yahoo Tech contacted ebike experts who questioned many of the claims made for the bike, its relative safety, and the company’s ability to fulfill thousands of orders with little or no room for profit. Specs provided for the bike on the Indiegogo campaign -- such as battery life, charging times, and range -- changed several times over the course of the crowdfunding campaign.
Read: A $500 eBike? Not So Fast.
Sondors was forced to change the name of the bike from “Storm eBike” to “Sondors eBike” under threat of a lawsuit from Prodeco Technologies of Oakland Park, Fla., which also markets a $1,300 eBike under the brand name Storm. Yahoo Tech obtained a copy of the cease and desist letter sent to Sondors, and confirmed the facts of the case with Prodeco.
Read: 10 Things You Must Know Before Investing in That Crazy Crowdfunding Scheme
This is not the first time Sondors has been accused of fraud. In the mid-2000s Sondors was president of A-HA Toys, a toy maker based in Lake Geneva, Wis., with offices in Chicago. According to a Google patent search, Sondors invented a toy helicopter and a pair of “dynamic dice.” The Indiegogo campaign claims that Sondors also designed several Happy Meals toys for McDonalds.
In 2008, Sondors was sued for fraud by ToyJobs, a recruiter in the toy industry, according to the ToyJobs Web site. The company accused Sondors of hiring employees found by ToyJobs without paying the company a commission. According to ToyJobs, the Superior Court in New Jersey awarded a default judgment of nearly $40,000 against Sondors in 2011.
When asked via email if his company had ever collected the money, ToyJobs CEO Tom Keoughan replied, “We’re working on it.”
The wisdom of crowdfunders?
Agency 2.0, Sondors’ partner in running the Indiegogo campaign, is no stranger to controversy itself. Prior to the Storm eBike, Agency 2.0’s most “successful” crowdfunding campaign had been for the Kreyos Smartwatch in June 2013. That campaign raised $1.5 million on Indiegogo before the company collapsed, leaving thousands of people who spent $100 or more on a watch with nothing in return.
Read: Indiegogo Campaign Never Delivers Product; Founder Spotted with New Ferrari
The Kreyos campaign was still featured prominently on Agency 2.0’s Web site at publication time, alongside other successful crowdfunding campaigns managed by the agency.
(Agency 2.0)
When asked about the Kreyos campaign last March, Agency 2.0 founder Chris Olenik responded via email:
“Kreyos is a campaign that I really wish had turned out the other way,” wrote Olenik. “At the end of the day, they went belly up…. I think the lesson learned here is first and foremost, know the manufacturing process and do your homework. This is vital. Ask more questions about how they plan to fulfill their obligations to those who believed in them. It is one thing to create an awesome product, it is another beast in itself to deliver at scale. With this campaign, it has taught me and my team to do our homework, it is our moral duty to the backers to do so.”
He added that his legal team does a background check on all of the firm's clients before launching a campaign and communicated with Sondors up to 100 times a day while the ebike campaign was running. Olenik is still listed as a member of Sondors’ team on the Indiegogo site, but not on the new GoSondors site.
Ship happens?
On the Indiegogo campaign page, Sondors claims to be steadily working toward a May ship date, and he has been regularly posting photos from facilities in China, where the eBikes are allegedly being built. Experts contacted by Yahoo Tech, however, say the parts shown in those photos do not match the components described in the Indiegogo campaign.
(Indiegogo)
Sondors also claims to have met with executives at Indiegogo in early April, including CEO Slava Rubin. Indiegogo declined to comment for this article.
“Crowdfunding is based on trust and we believe that this trust has been broken by Sondors,” adds Olenik. “We sincerely hope that the bikes are delivered and are delivered on time. Agency 2.0 has fulfilled all its obligations on the campaign; it is now in Team Sondors’ hands to deliver the bikes.”
Got more dirt on this or any other crowdfunding campaigns? Email me: ModFamily1@yahoo.com.
