Monahan’s conduct is a violation of Section 5(a) of the FTC Act, which prohibits “unfair and deceptive acts or practices in or affecting commerce.”
According to the FTC, the permanent ban from crowdfunding is part of a settlement with iBackPack of Texas and Monahan in connection with its complaint against them.
Additionally, the Commission prohibited Monahan from misrepresenting his ability to deliver any product, service, or the term on which he will provide a refund.
Furthermore, the FTC imposed a judgment of nearly $800,000 against Monahan, which will be suspended due to his inability to pay. The full amount will be due once he is found to have misrepresented his finances.
In a statement, FTC Bureau of Consumer Protection Director Andrew Smith said, “Crowdfunding is a legitimate way to raise money for your business venture, so long as you use that money for the business and not yourself. When companies like iBackPack misuse the money they raise, that’s when the FTC steps in.”
