Former 3D printer co-owner allegedly embezzles crowdfunding money to build Sask. house

Click to play video: 'Cheap crowdfunded 3D printer fails to deliver as one partner accuses the other of embezzlement'
Cheap crowdfunded 3D printer fails to deliver as one partner accuses the other of embezzlement
Cheap crowdfunded 3D printer fails to deliver as one partner accuses the other of embezzlement – May 11, 2016

REGINA – A Saskatchewan man who co-founded a crowdfunding campaign to fund production of an affordable 3D printer is accusing the other founder of stealing more than $324,000 and using it to build a house.

In 2013, Rylan Grayston, from Yorkton, Sask., and David Boe launched a Kickstarter campaign to raise money to build a 3D printer and scanner, called the Peachy Printer, that would cost $100.

The campaign ended up raising $651,091 from 4,420 backers on Kickstarter. Another $74,167 was raised on Indiegogo.

Years passed, and the printers were never produced.

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Then, on May 11, 2016, Grayston alleged on the Peachy Printer Kickstarter campaign page and the company’s website that Boe had stolen $324,716.

“I completely trusted the guy at the time,” Grayston said in an interview with Global News. “I was very shocked when I found out.”

According to Grayston, he and Boe each owned 50 per cent of the Saskatoon-based company’s shares. Boe handled business administration and financial management, Grayston was in charge of product development and technical team management.

When the Kickstarter campaign ended in October 2013, Peachy Printer had not yet been incorporated, so Grayston said Boe used his personal bank account to receive the funds and hold them “in trust” until a corporate account was set up.

By December, Grayston says Boe had transferred $200,000 to the Peachy Printer corporate account for initial operating expenses. Prior to the campaign, Boe has invested $10,000 in the project as well.

Grayston later obtained statements from Boe’s account which he says show Boe had used the $324,716.01 for personal use. Lawyers allegedly advised Grayston to not contact authorities but pursue repayment.

Grayston says Boe did sign an agreement and to date has repaid $111,000. He has also resigned from the company and sold back his shares.

In a video on the Peachy Printer YouTube page, posted online May 10, Grayston confronts a man said to be Boe about the issue.

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At that time, the man identified as Boe apologized for spending $250,000 on his house.

“It’s something that I’ve done that I regret and I’m sorry for doing it,” the man in the video said. He also states that no one else in the company knew about his alleged misuse of the money.

“Everyone knows it’s wrong,” he said in the video. “I’m not trying to deny it. It is wrong and it’s not justifiable for me to do it.”

Global News has made repeated attempts to contact Mr. Boe but so far has not received a response.

In a report by the BBC, Boe is quoted as saying that the video “was taken under duress, extreme duress, at that date.” The BBC also reported that Boe declined to comment on the allegation that he had taken the money.

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Grayston indicated on his website that he reported to the Saskatoon police in October 2014.

“We brought the Saskatoon police in because we thought that this is a crime and it needs to be taken care of as such,” Grayston said.

Alyson Edwards, director of public affairs with the Saskatoon Police Service, confirmed in an email that “detectives from our Economic Crime Section have conducted some preliminary investigation, however they are still waiting for more information from the company’s owners.”

David Gallagher, a spokesman for Kickstarter, released the following statement:

“Anyone who abuses our system and the trust of our community exposes themselves to legal action. We’re reaching out to the law enforcement officials who are already looking into this case, and will assist however we can.”

Grayston says he is hopeful the situation can be resolved and wants to get his Peachy Printer project back on track in the future.

“The important questions here are is ‘will this set a precedent…for how Canada deals…with crowdfunding?'” Grayston said.

With files from David Baxter

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