Light Harmonic (LH Labs). Scam? USD$6 million not delivered since 2014

[PeterSt]

31 minutes ago, Jud said:

 

It's a quote from @Lee Scoggins' old article linked by @MikeyFresh above, where Lee says that, and which I quoted for irony.  Lee was saying at the time that this was one reason the criticism of LHL was undeserved. (He must not have read the IGG terms of service, which I did, and which LHL relied on years ago when refusing my request to refund my money.)

 

Hi Jud - I still think that I am talking about an other subject (think like a lawyer ;-). 

 

If the firm doesn’t raise enough money, the campaign ends and the money is returned to the investors.

and

By the time the campaign ended, LH had raised a whopping $1.2 million, light years ahead of their $38,000 goal.

 

... This tells me about a game under the watching eye of the law where enough money has been raised, but nothing tells that this should be refunded in whatever what-if situation. Now I don't know the Indiegogo TOS but I see too many crowd funding ventures with owners driving too large automobiles, leaving backers with nothing. As if the law allows for it almost explicitly - "only when not enough money has been raised, the money has to be returned to the investors" (which would not even be the same as implicitly, IMO).

So the problem with this model (and I think @John_Atkinson could have been hinting at that) is that a theoretical available fund for developing and producing the product can easily be used to buy a couple of Lambo's, while blaming the production costs can be left out of the scope (of law). "Hey, as the representatives of our great start-up, we obviously must show we're doing well, right ?". 

 

If is not really that long ago (25 years ?) that in my country a law was introduced that could blame managers for mismanagement and which allowed personal prosecution (the firm long gone because being broke). Thus killing my company but leaving me with a Lamborghini ? no.

This whole crowd funding thing seems to be about "you took the risk yourself, so now you have no formal means to complain". Also:

It really takes a giant group-hug to go after these guys, because each on his/her own obviously can't lead to anything.

 

I think it is known that situations like these can only be attacked by a commercial third-party instance who prosecutes on behalf of 1000s. So e.g. me could prosecute and swallow the process costs in advance and if I lose, then gone is that money. If I win, it is quite common that those who joined receive 50% of the appointed money (not necessarily the amount which was claimed) and I receive the other 50% (all agreed with participants in advance). So for the prosecutor quite a lot is at stake just the same - he doesn't like to lose easily for two reasons).

 

 

 

 

 

 

 

[Samuel T Cogley]

Since we're reviewing some of Lee Scoggins' LHL cheer-leading, this is just classic:

 

Quote

Light Harmonics developed a bulletin board-style forum for their virtual community of Geek fans – that LH called the Geek Force –to voice their opinions, requests, and concerns.  LH was able to leverage crowd-design to create a customer-centric world.  In fact, LH even solicited a vote on which enclosure design to deploy for a Geek Pulse accessory.  They also held a headphone-stand contest that they allowed members to vote on their favorite design.

 

and

 

Quote

The cheese has moved – the future of audio is already here.

 

Anyone who enjoys irony should read the entire article.  To say that Scoggins got LHL completely wrong would be extremely charitable.

[Jud]

Hi @PeterSt -

 

Yes, I think you'll see from posts #s 251-253 in this thread (and perhaps less obviously #s 263-264 giving some history of the LHL principal and the crowdfunding campaigns) that we've already been there.

[Jud]

12 minutes ago, Samuel T Cogley said:

Anyone who enjoys irony should read the entire article.  To say that Scoggins got LHL completely wrong would be extremely charitable.

 

Yes, though as I noted, this thread is mostly made up of people who also got LHL completely wrong to the extent of sending them money.

[Blake]

2 minutes ago, Jud said:

 

Yes, though as I noted, this thread is mostly made up of people who also got LHL completely wrong to the extent of sending them money.

 

Yes, guilty as charged.  A number of us in this thread are former members of the "Geek Force".  

[Jud]

3 hours ago, PeterSt said:

So the problem with this model (and I think @John_Atkinson could have been hinting at that) is that a theoretical available fund for developing and producing the product can easily be used to buy a couple of Lambo's, while blaming the production costs can be left out of the scope (of law). "Hey, as the representatives of our great start-up, we obviously must show we're doing well, right ?".

 

I wanted to mention, Peter, that in fact the three other crowdfunding ventures in which I've been involved (including, it must be said, the original Geek Out) resulted in my receiving a nicely functioning product in a timely fashion, these being (1) the already-mentioned Geek Out; (2) a security camera (which worked wonderfully - as I've already said, when the company could no longer keep going they fully refunded everyone's money after we'd had the use of the product for a year or more); and (3) a very nice pair of sunglasses (lenses of hardened urethane so they don't develop the little scratches that diminish visibility through polycarbonate lenses over time - https://shredoptics.com/ ).

 

However, you're perfectly correct that crowdfunding presents quite an opportunity for people who are reckless or deliberately unscrupulous with your money.

[marflao]

46 minutes ago, Blake said:

 

Yes, guilty as charged.  A number of us in this thread are former members of the "Geek Force".  

 

And what did I Iike the watch given by famous Gavin...not!

[bernardperu]

21 hours ago, Lee Scoggins said:

 

Not a bad idea.

 I believe an article on the LH Labs saga would help us a LOT. I think you will have the support of the vast majority of backers.

 

Here is some info that I have put together:

 

We should observe the following facts:

1) LH Labs has raised approximately 6 million dollars of our money.
2) LH Labs refuses to provide deadlines of delivery.
3) LH Labs refuses to provide refunds (even to those who would settle just for a portion of their initial investment).
4) LH Labs refuses to provide updates on % of delivered items for all products (5-8 in total), except for the Pulse which they claim has a 94% successful delivery rate. 
5) Most backers have not received their items and most items have not been delivered.
6) Larry Ho seems to be the Director of the company that has his initials (what a coincidence!). 

7) For many of their undelivered Indiegogo campaigns they reached over 3000% of their initial goal.

8) Larry Ho aims on staying in the audio industry and has moved to China.
 

 

For extra Forums with tons of unhappy clients check out LH Labs on Head-Fi.

 

It is my belief that they got carried out by greed from the very beginning. They led us to believe they had everything under control by conducting very sophisticated Indiegogo campaigns. The fact that they were selling very expensive DACs and actually delivering them(30k+) seemed to portray them as a well established firm. If you think about it, it is the perfect high-end audio scheme. On top of that, we audiophiles are not the average angry client who is willing to sacrifice peace of mind to target a malicious vendor-> we need the pece of mind to enjoy music! 

 

Please help us! If you need anything else, I would be very glad to help.

 

Thanks!

 

[bernardperu]

8 hours ago, PeterSt said:

 

Hi Jud - I still think that I am talking about an other subject (think like a lawyer ;-). 

 

 

 

 

Here is another lawyer's opinion. He is from the US. and sent me a private message on Head-Fi:

 

Please feel free to post any message of mine on computeraudiophile or superaudiobestfriends or anywhere else you think it might be useful, and so sorry for not writing back to you sooner! I've been incredibly busy, but have been meaning to write you back. With regards to your previous message:

Instead of focussing on serving Larry Ho personally, I think the better approach would be to find out where LH Labs is incorporated (or hire an attorney who's paralegal would do so). Hopefully you could find the information somewhere on their website, but if not, if its incorporated in the US, you could find it by doing a business search on each state's Secretary of State website (it would get tedious though). Once you are able to locate LH Labs, you'd be able to give proper notice to its agent of process, and even if can't locate that person, you can still give service by mail after attempting personal service.

When suing LH Labs, you would additionally want to name as co-defendants Larry Ho, Gavin, stuck limo (Jarek), and every other knucklehead who's been involved with the scam because part of your argument in the lawsuit is that LH Labs doesn't have a legitimate business purpose (it exists to defraud investors). As such, you can recover from the "company" as well as any of its members who worked to defraud backers (since they can be held personally liable).

If the state wanted to press criminal charges, similarly, all those same individuals could be indicted as co-conspirators.

You posted a really interesting article on the Geekwave thread, and I'd suggest digging deeper into that case https://www.theverge.com/circuitbreaker/2018/8/29/17793720/ftc-ibackpack-investigation-indiegogo-kickstarter. If you find out the case name and it's court location, you should be able to buy the documents filed in court for a small fee on the court'd website, and reviewing those filings would be very helpful since the facts of that case are so similar to what's going on here. I'd also research a little about the consumer protection laws available, since those can be quite powerful.

I'm really sorry to hear that you've sunk over $6,000 in this scam; sometimes I think that Head-fi polices the site so much that the audiophile community is overly kind to one another, causing us to let our guard down to real world predators who then take advantage of our expectation that everyone is honest and trustworthy.

Wish you the best moving forward, and always feel free to message me.

Warm regards,
Chris

[bernardperu]

5 hours ago, Samuel T Cogley said:

Since we're reviewing some of Lee Scoggins' LHL cheer-leading, this is just classic:

 

 

and

 

 

Anyone who enjoys irony should read the entire article.  To say that Scoggins got LHL completely wrong would be extremely charitable.

 

Man! So many of us were deceived by Larry Ho . . . 

 

How about having a unified front? 🙂 

[Angular Mo]

LH Labs may one day become a Business School Case Study on the hazards of when Crowd Funding veers toward Crowd Design.

 

The Pulse DAC/AMP was my first, and most expensive backing in the early days of crowd funding. I funded the base pulse, with only the Femto clock upgrade; Pulse Sfi.

When LH Labs proliferated into so many different variations, I became concerned about both the operating risk of their ability to keep track of the variations, and their ability to achieve the operating scale necessary to deliver, compensate employees, and invest in the requisite support structure.

 

So, I funded the base Pulse DAC/AMP, and later the Blue, and even later the Lightspeed Revive.  When they announced products before delivering on earlier ones, it became clear to me what was going on. The trigger-point for me, was their annoucement of the Wave.

 

I feel fortunate to have received delivery on all three products. The Pulse Sfi is OK, the Blue is likely better than I can appreciate, and the Revive is ahead of its time; USB-C and clean battery-power when so many, including Chord Mojo are still micro-USB.

 

I would hope that everyone who has lost money in this venture can move forward emotionally, accept that they won't get a product and realize these lessons;

 

1. mitigate the risk by limiting how much you are willing to lose.

2. Don't crowd-fund a product when similar ones already exist in the market.

3. Beware of the mass-customization and crowd-designs you seek; you may never get the product because the manufacturer may not have the capability to deiver, regradless of their good-faith intent.

 

I learned a lot from this venture, and have adjusted my crowd-funding spending accordingly.

[mansr]

6 minutes ago, bernardperu said:

I believe an article on the LH Labs saga would help us a LOT. I think you will have the support of the vast majority of backers.

Maybe Netflix can make a film about it.

[Blake]

Bernard, I've already researched this some time ago.  "LH Labs Corporation" is a Delaware corporation.  It was at one time registered to do business in California (where LH Labs is actually based).  However, this company is no longer authorized to do business in California, as of 2014 (taking a guess here, but there is a good chance they failed to file an annual report with the California Secretary of State and or other items/fees).   You would have to pay a small fee to find out if LH Labs Corporation remains in good standing in Delaware (I'd bet the answer is "no").   Larry also formed a separate company "LH Labs, Inc." which is a California corporation, but that entity is also administratively dissolved.  Technically, this status exposes Larry to personal liability as his corporate shield no longer exists.   There is zero chance any governmental agency will file criminal charges against Larry or his companies.  However, one could pursue him in civil court.  There are challenges to pursuing him in civil court, but it is a possibility.   DELAWARE SECRETARY OF STATE:   THIS IS NOT A STATEMENT OF GOOD STANDING
File Number:	5492983	Incorporation Date / Formation Date:	3/5/2014 (mm/dd/yyyy)
Entity Name:	LH LABS CORPORATION
Entity Kind:	Corporation	Entity Type:	General
Residency:	Domestic	State:	DELAWARE
REGISTERED AGENT INFORMATION
Name:	UNITED STATES CORPORATION AGENTS, INC.
Address:	300 DELAWARE AVE STE 210-A
City:	WILMINGTON	County:	New Castle
State:	DE	Postal Code:	19801
Phone:	302-777-0538

 

 

 

CALIFORNIA SECRETARY OF STATE:

 

Narrow search results: 

Entity Number	Registration Date	Status	Entity Name	Jurisdiction	Agent for Service of Process
C3687470	06/20/2014	SOS FORFEITED	LH LABS CORPORATION	DELAWARE	LEGALZOOM.COM, INC. (C2967349)
C2055672	09/16/1997	SOS/FTB SUSPENDED	LH LABS, INC.	CALIFORNIA	ALTON G. BURKHALTER

 

 

[bernardperu]

9 minutes ago, Blake said:

There is zero chance any governmental agency will file criminal charges against Larry or his companies.  However, one could pursue him in civil court.  There are challenges to pursuing him in civil court, but it is a possibility.

 

Why ZERO chances of criminal charges?

 

This article seems to suggest that the US. government can do the job on our behalf: https://www.theverge.com/circuitbreaker/2018/8/29/17793720/ftc-ibackpack-investigation-indiegogo-kickstarter

 

 

 

[Ralf11]

https://oag.ca.gov/cfs

 

https://consumercal.org/resources/consumer-complaint-directory/

 

 

[Blake]

Ok, "let's go with

14 minutes ago, bernardperu said:

 

Why ZERO chances of criminal charges?

 

This article seems to suggest that the US. government can do the job on our behalf: https://www.theverge.com/circuitbreaker/2018/8/29/17793720/ftc-ibackpack-investigation-indiegogo-kickstarter

 

 

 

 

Among the reasons is an overburdened system/lack of sufficient prosecution resources and burden of proof.  Perhaps "zero" was too strong, but the odds are slim IMHO.  

 

Your article notes an FTC investigation, but that is far from being prosecuted and convicted.  It never hurts to try though.  We can all file complaints and see what happens.

[marflao]

So it seems that Larry doesn't have to be concerned at all. 

Unbelievable.. 

[John_Atkinson]

22 hours ago, PeterSt said:

So the problem with this model (and I think @John_Atkinson could have been hinting at that) ...

 

I wrote about the difference between a Kickstarter campaign and one managed by Indiegogo in a CES report on the Geek Pulse announcement at https://www.stereophile.com/content/light-harmonic-lh-labs-indiegogo

 

John Atkinson

Editor, Stereophile

[Blake]

16 hours ago, marflao said:

So it seems that Larry doesn't have to be concerned at all. 

Unbelievable.. 

 

I don't think this is necessarily a lost cause. 

 

I think we can all safely assume Larry will not fulfill his obligations for the undelivered products.  We can also safely assume that without pressure, Larry will never provide refunds. 

 

What to do?  One idea is to start a thread here on AS, the purpose of which is to provide US resident victims with a step by step guide for suing Larry Ho individually, LH Labs Corporation, LH Labs Inc. and Light Harmonic in small claims court in your respective state.   I have links to guides for a few states already that I will be posting.  Frankly, it is easy to look up the process.  We can also use the thread for people to provide updates on what they have done and the status of their case.

 

In small claims court, you don't need an attorney (in fact, attorneys are not generally allowed in small claims courts).   If enough people sue, it could provide sufficient incentive to cause Larry to provide refunds (or at least partial refunds).  Larry et. al. will have default judgments against them all over the place as there is little chance they will be able to fly all over to defend themselves, plus, Larry doesn't have any defense.  Jarek has unwittingly provided quite a bit of ammunition in the various web fora.  You would also need to pay a process server to serve Larry in California.  We might be able to find a process server willing to do a reduced rate if we all use the particular process server.

 

We can put the word out on all the audio web fora, direct them to the thread here on AS, and people can follow the guides and sue.  I will start the thread in the next week.  Bottom line is, we all need to start suing him soon to avoid Statute of Limitations issues for breach of contract. 

 

Jarek, please inform Larry to reconsider his refusal to provide refunds.  

 

To get the ball rolling, here is the guide for those of you in Larry's home State, California:

 

https://www.legalzoom.com/articles/suing-in-california-small-claims-court-step-by-step

 

Larry's offices are located at:

 

5701 Lonetree Blvd., Suite 114
Rocklin, CA 95765

 

 

 

 

 

[Jud]

21 minutes ago, Blake said:

 

I don't think this is necessarily a lost cause. 

 

I think we can all safely assume Larry will not fulfill his obligations for the undelivered products.  We can also safely assume that without pressure, Larry will never provide refunds. 

 

What to do?  One idea is to start a thread here on AS, the purpose of which is to provide US resident victims with a step by step guide for suing Larry Ho individually, LH Labs Corporation, LH Labs Inc. and Light Harmonic in small claims court in your respective state.   I have links to guides for a few states already that I will be posting.  Frankly, it is easy to look up the process.  We can also use the thread for people to provide updates on what they have done and the status of their case.

 

In small claims court, you don't need an attorney (in fact, attorneys are not generally allowed in small claims courts).   If enough people sue, it could provide sufficient incentive to cause Larry to provide refunds (or at least partial refunds).  Larry et. al. will have default judgments against them all over the place as there is little chance they will be able to fly all over to defend themselves, plus, Larry doesn't have any defense.  Jarek has unwittingly provided quite a bit of ammunition in the various web fora.  You would also need to pay a process server to serve Larry in California.  We might be able to find a process server willing to do a reduced rate if we all use the particular process server.

 

We can put the word out on all the audio web fora, direct them to the thread here on AS, and people can follow the guides and sue.  I will start the thread in the next week.  Bottom line is, we all need to start suing him soon to avoid Statute of Limitations issues for breach of contract. 

 

Jarek, please inform Larry to reconsider his refusal to provide refunds.  

 

To get the ball rolling, here is the guide for those of you in Larry's home State, California:

 

https://www.legalzoom.com/articles/suing-in-california-small-claims-court-step-by-step

 

Larry's offices are located at:

 

5701 Lonetree Blvd., Suite 114
Rocklin, CA 95765

 

Best of luck and I might even try it too, but:

 

- Wonder how small claims court would be able to deal with issues such as whether LH has assumed the LHL liabilities and thus is proper party to sue;

 

- Because of the China/Taiwan connection, I wonder to what extent any money, or Mr. Ho himself, might easily be offshored.

[Jud]

8 hours ago, John_Atkinson said:

 

I wrote about the difference between a Kickstarter campaign and one managed by Indiegogo in a CES report on the Geek Pulse announcement at https://www.stereophile.com/content/light-harmonic-lh-labs-indiegogo

 

John Atkinson

Editor, Stereophile

 

The distinction you pointed out is that credit cards were charged immediately with IGG, but not until/unless the campaign reached its goal with Kickstarter.  That's a distinction unfortunately without a difference in the case of LHL, which didn't have a problem far exceeding its campaign goals relatively quickly.

[Blake]

25 minutes ago, Jud said:

 

Best of luck and I might even try it too, but:

 

- Wonder how small claims court would be able to deal with issues such as whether LH has assumed the LHL liabilities and thus is proper party to sue;

 

- Because of the China/Taiwan connection, I wonder to what extent any money, or Mr. Ho himself, might easily be offshored.

 

If by "LH" you mean Larry in his individual capacity- I intend to pierce the corporate veil and go after his personal assets.  If you are referring to Light Harmonic, your point is a good one but I will still add them.  Jarek has posted coments in the fora that provides me with good arguments that Light Harmonic has assumed LH Labs liabilities.  I will provide links to the pertinent comments by Jarek to aid in that argument.

 

P.S. To all:  Nothing I post is to be construed as legal advice or any offer to represent you.  I am not your lawyer.  I am not representing anyone, nor will I be representing anyone in the future.  You are advised to seek out your own counsel.

 

[Jud]

4 minutes ago, Blake said:

 

If by "LH" you mean Larry in his individual capacity- we are piercing the corporate veil and going after his personal assets.  If you are referring to Light Harmonic, your point is a good one but when suing, when in doubt, we add them.  Jarek has posted coments in the fora that provides us with good arguments that Light Harmonic has assumed LH Labs liabilities.  I will provide links to the pertinent comments by Jarek to aid in that argument.

 

Is there a viable Light Harmonic corp, as opposed to LH Labs (which appears to be administratively fini at this point)?  

 

In New Mexico, legal representation is allowed in small claims court.  Whether Light Harmonic or Mr. Ho would care to pay for it is another matter, of course.  If there is legal representation, then piercing the corporate veil is quite difficult.  Countersuits, even if frivolous, must also be taken into account if Mr. Ho wants to spend the money.

 

Then of course there's enforcing any judgment.  It takes time and money to get sheriffs out in CA to enforce other states' judgments by seizing assets and selling them (if anyone buys).  And I can just hear "I was *this* close to finishing, but now all the money and equipment I was going to use for that has gone for litigation."  I assume if there would be any hint of successful judgment, Mr. Ho and any cash or cash equivalents would leave the country, if they haven't already.

 

Sorry to be such a downer, but I do want folks to realize there's no free lunch here.  When anger is involved, however justified (hey, me too), we need to remember that they don't hand out satisfaction or justification in the courtroom, just money, or at least a judgment that you may or may not be able to convert to money.  So look at this from the point of view of a financial transaction, and whether this financial transaction looks like a winner to you.

[Ralf11]

23 minutes ago, Blake said:

 

If by "LH" you mean Larry in his individual capacity- I intend to pierce the corporate veil and go after his personal assets.  If you are referring to Light Harmonic, your point is a good one but I will still add them.  Jarek has posted coments in the fora that provides me with good arguments that Light Harmonic has assumed LH Labs liabilities.  I will provide links to the pertinent comments by Jarek to aid in that argument.

 

P.S. To all:  Nothing I post is to be construed as legal advice or any offer to represent you.  I am not your lawyer.  I am not representing anyone, nor will I be representing anyone in the future.  You are advised to seek out your own counsel.

 

 

Good to hear.  I posted some links upthread about Calif's Consumer Protection Office.

 

I believe that someone brought a class action in a Calif. small claims court - may have been again Honda Motors.  That might get his attention.

 

California has a very robust set of consumer protection laws in their Business Code. 

 

If your good buddy "Larry" owns any real property in Calif. that would be a fun target...

 

piercing the corporate veil is often used (or attempted) against corporate polluters, and some hazardous waste statutes do so explicitly - that case law, and books on it, may provide some useful information

[Blake]

@Jud:

 

Yes, you make good points.  Nobody should expect to to be fairly compensated and frankly, you should not expect to be compensated at all.  

 

Whether a moral victory is sufficient compensation for taking these actions is a decision everyone must make.  The costs should also be taken into consideration.   However, obtaining a judgment in small claims court will be relatively cheap.  Enforcing the judgment, not so easy.  But you can make Larry's life very, very difficult.

 

The idea is to provide incentive (particularly if lots of people file claims in small claims courts around the country) for him to refund on a prorata basis whatever money that remains, in order to avoid these hassles.  That is the ultimate goal for me.