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

[stuck limo]

On 10/28/2019 at 10:07 PM, Cecil said:

 

Jarek

 

Can I request that you report on this forum as soon as the first of the "five early models in production" is shipped and an update when all 5 are shipped, then progressive updates until all have been shipped?

 

As far as I'm aware the only remaining obstacle to shipping Vi DACs was the chassis issue and now that has been resolved I assume we can expect a steady stream going out to backers.

 

I and (from what I've heard) many others have already paid for shipping so that shouldn't be a barrier to delivery.

 

Are my expectations here reasonable?

 

 

 

 

Per your request:

 

I have an update: The assembly test is good and worked. After Christmas/New Year's, the final assembly will take place and the first 3 backers will receive their new Vi DAC Tubes with newly designed chassis. We originally had 5; 2 of them didn't work out but they may be able to be fixed.

After that, the new batch will start production (no exact timeline yet, still nailing that down with Larry). The production yield is expected to be much higher in the next production run. Those will ship out and we will hopefully be able to get all of the SE Tube backers their Vi.

More when I have it.

 

This will be going out on IGG tonight, but since we like to give the forums first notice of updates, here it is.

[labjr]

Judging by the way they changed from Kickstarter to IndieGoGo, leads me to believe it was a deliberate switch to deprive people of any opportunity to change their mind. Larry and Gavin were flying all over the world to trade shows and renting luxury automobiles. They didn't just get in over their heads. They were spending money like they had three days to live! LH & Co.should be the subject of an episode of American Greed.

[John Dyson]

53 minutes ago, labjr said:

Judging by the way they changed from Kickstarter to IndieGoGo, leads me to believe it was a deliberate switch to deprive people of any opportunity to change their mind. Larry and Gavin were flying all over the world to trade shows and renting luxury automobiles. They didn't just get in over their heads. They were spending money like they had three days to live! LH & Co.should be the subject of an episode of American Greed.

Whenever working in small companies, the most succesful were penny pinchers.   I learned that a really, nice fancy office didn't pay the bills.  Sure, one has to put on a little show, but being thrifty helps build up the resources of a potentially profitable company.

 

The days of the tech boom should be a lesson about waste in some cases.

 

John

 

[Currawong]

https://zhuanlan.zhihu.com/p/70374166

 

Translated summary: 

 

Quote

Outline:

For your convenience, here is an overview of the major deeds of this bad company:

------ 1. Geek Wave, a crowdfunding million-dollar player, has so far been silent

------ 2. The core product Da Vinci has a yield rate of nearly 0% and cannot be resolved after sale

------ 3. Routines were spotted in the US hifi circle, one shot for another place, the target turned to the Chinese market

------ 4. Earplug stella relies on plagiarism, exhibition design plagiarizes other company's creativity

------ 5. Arrears in arrears, deduction of employees' wages, old habits

 

Seems the Da Vinci was a complete dud with a 100% failure rate. If only everyone had known this years ago.

[tmtomh]

8 hours ago, stuck limo said:

 

 

 

The crowd turns....

 

So do you bill LH for your comments posted here as @stuck limo or only for the ones you make as @LHCommSquad?

[stuck limo]

39 minutes ago, tmtomh said:

 

So do you bill LH for your comments posted here as @stuck limo or only for the ones you make as @LHCommSquad?

 

I haven't collected a check from LH/L in months. I'm on a volunteer basis for now, at least temporarily. (my choice)

 

But to answer the question, I would only bill them for LHCommSquad comments. The LH account was only for work related purposes and for clarity over who I was to people. Occasionally there may a mistake on my part (in case anyone wants to dig) if I'm logged into the wrong account or something. But, no, they don't get billed for non LH stuff. 

[tmtomh]

10 hours ago, LHCommSquad said:

 

I haven't collected a check from LH/L in months. I'm on a volunteer basis for now, at least temporarily. (my choice)

 

But to answer the question, I would only bill them for LHCommSquad comments. The LH account was only for work related purposes and for clarity over who I was to people. Occasionally there may a mistake on my part (in case anyone wants to dig) if I'm logged into the wrong account or something. But, no, they don't get billed for non LH stuff. 

 

Thanks for the reply. One would think that not getting paid by LH would give you some empathy for the folks ripped off by them, but perhaps not.

 

Do you have any concern that someone newly coming to this thread who sees Stuck Limo posting comments that are in agreement with what LHCommSquad says would be misled by not knowing that both are the same person?

[stuck limo]

3 hours ago, tmtomh said:

 

Thanks for the reply. One would think that not getting paid by LH

 

No, I just simply didn't bill them.

[Jud]

So you may or may not be currently employed by a business that may or may not be a going concern here or in China. Seems about as clear and above board as everything else to do with these businesses.

[astrotoy]

If you haven't read last year's best selling book "Bad Blood" by John Carreyrou, it is definitely worth the read.  It is about Elizabeth Holmes, the founder of Theranos, who executed the biggest phony product scam in recent history.  Definitely has similarities to the LH Labs story, except on a much grander scale, with the Theranos machine.   We know one of the people involved who has probably the best quote in the book.

"….the pitfalls of using blood pricked from a finger. Unlike venous blood drawn from the arm, capillary blood was polluted by fluids from tissues and cells that interfered with tests and made measurements less accurate. “I’d be less surprised if they told us they were time travelers who came back from the twenty-seventh century than if they told us they cracked that nut,” he added.

 

However, one of the big mysteries was when Holmes realized that her dream machine would never work (or did she?) and it became a multibillion dollar scam. Also how did she fool such noted people as George Schultz, Henry Kissinger, James Mathis, Rupert Murdoch, etc. 

 

Larry

[labjr]

2 hours ago, LHCommSquad said:

 

No, I just simply didn't bill them.

This is preposterous. Typical LH Labs bullshit. Nobody works for free. And they certainly wouldn't work for free, claiming to represent a company that can;t even show their face.

 

This reminds me of a piece on American Greed, where this young age man somehow bought a number of small insurance companies in Southern states. He then took all the assets and spent tens of millions buying luxury homes and high end sport cars. When they finally caught up to him, he was afraid to face the music and his mother had to go to court with him.

[tmtomh]

8 hours ago, LHCommSquad said:

 

No, I just simply didn't bill them.

 

Thanks for the explanation.

 

How about the question I asked you before: Do you have any concern that someone newly coming to this thread who sees Stuck Limo posting comments that are in agreement with what LHCommSquad says would be misled by not knowing that both are the same person?

[stuck limo]

On 12/20/2019 at 11:20 PM, Currawong said:

https://zhuanlan.zhihu.com/p/70374166

 

Translated summary: 

 

 

Seems the Da Vinci was a complete dud with a 100% failure rate. If only everyone had known this years ago.

 

That information you are repeating is false. LH's Chinese office is aware of that post/page from 6 months ago, and it was already addressed in the Chinese market. The information came from a bad actor in Shanghai. The fail rate in the world market is is actually extremely low and we've sold 10 in China this year alone. We only have one in the office right now, swapping from a 120v to a 240v and that customer is actually thinking about upgrading to a Mk II version. Thanks.

[jsiegel]

On 12/20/2019 at 4:01 PM, John Dyson said:

This problem makes me wonder -- was this an overreach by an overly enthusiastic person who didn't realize what they were getting into, or was this a scam from day 1?

I can understand getting in over ones head, and development costs being overwhelming, but a person should not even THINK about selling something without the project being almost ready AT LEAST.   My own values say -- either work on an hourly basis, project completion basis or as a complete product that is already in manufacturing (hopefully recieving working units.)

 

Encouraging customers to double as investors is a dangerous game.  There is no equity as a customer -- esp if there is no contract.  The risk is very high for the consumer, and also the risk of reputation is high for the developer/seller.

 

As someone who has REALLY developed things in the past, and had both successful and unsuccessful projects -- in one case, the failing was my own health -- I could never try to pre-sell something that I don't have in-hand, ready for production, special components already in-hand.  TOO OFTEN, there need to be design changes, and will change the eventual specifications.  Also, there is the issue of component availability, as sometimes the component manufacturers can cause real problems.  Small manufacturers should purchase a fairly large supply of necessary and/or uncommon components for a big part of the product lifetime.  Some parts just 'disappear' pooft...

 

I just don't get it, how this situation should happen...   Apparently someone is a better salesman than product developer...  (Note that I didn't use the term 'engineer' for 'product developer  -- because being just an Electronics Engineer alone is NOT enough to produce a complex manufactured product -- unless that person can stay awake 48Hrs/day, and understands pacakging and a few other disicplines like FCC/EMC compliance  :-)).   I don't know the rules today, but I have been involved in several small company, small volume (<1k) products that still needed all of the regulatory compliance issues resolved.  Have things changed?

 

 

John

 

It is amazing how many products were unfinished. 

If they had been finished he could have teamed up with a chinese manufacturer or Drop (MassDrop) to execute production.  Instead we have a few sample products in the wild that are reported to have sort of worked at one time. 

 It would be nice to know how the "money" was spent. 

Did he get caught in the "we can make it still better" spiral?

Did he lose interest in each project before the troubling "production" details were finished?

Did the prototypes prove unproducible or way over production "budget"?

 

It seems that one project could have been finished with the 3-5 million and it would have funded the company thru each product in turn.  

 

Schiit Audio has boot strapped a very successful company in the same state with currently 29 products and have evolved/discontinued another dozen products in the same time we have waited for larry to finish one.   And Schiit didn't have the "benefit" of pre selling 10 products to get the cycle started.

 

Indiegogo should share some blame in keeping their 10% with no follow up.

[Jud]

I wonder if any other business in the history of Kickstarter and Indiegogo has had so many projects and customers left without products or refunds.

 

What an infamous distinction that would be!

[erniejade]

jsiegel funny you mention massdrop. I picked  up their Rdac and it only took a few months. Granted it shouldn't be on the same level as the VI tube but, how would  i know since i haven't  heard the Vi tube.  

[The Computer Audiophile]

Perpetrators of Crowdfunding Fraud Can't Hide From The Law Forever

For years, crowdfunding has been a bit like the Wild West of finance. But as the industry continues to grow, state and federal authorities are catching up to abusers of the system.

 

https://www.entrepreneur.com/article/329995

 

[Jud]

From Chris's link. Sounds familiar:

 

"In September 2016, the Oregon Justice Department confirmed that it was investigating the Coolest Cooler, according to The Oregonian newspaper. Although some backers had never received their perks, the product was being sold on Amazon, it reported. In 2017, the company settled with the Oregon Department of Justice, where they were required to deliver to over 800 people who still hadn’t gotten coolers, The Oregonian reported."

 

* * *

 

"[O]n August 29, 2018, The Verge reported the FTC is back investigating crowdfunding. After campaigns on both Indiegogo (2015) and Kickstarter (2016), the iBackPack netted over $700,000, it reported. But the backpacks haven’t shipped yet, The Verge reported, and iBackPack's website no longer works. The campaign runner last updated in 2017, according to the product's Kickstarter campaign page."

 

In terms of money collected and numbers of products not delivered, the LHL projects are bigger than both the situations described above.

 

If Larry Ho is reading this: Perhaps this would be a good time to think about the swift delivery of refunds.

 

[John Dyson]

44 minutes ago, jsiegel said:

It is amazing how many products were unfinished. 

If they had been finished he could have teamed up with a chinese manufacturer or Drop (MassDrop) to execute production.  Instead we have a few sample products in the wild that are reported to have sort of worked at one time. 

 It would be nice to know how the "money" was spent. 

Did he get caught in the "we can make it still better" spiral?

Did he lose interest in each project before the troubling "production" details were finished?

Did the prototypes prove unproducible or way over production "budget"?

 

It seems that one project could have been finished with the 3-5 million and it would have funded the company thru each product in turn.  

 

Schiit Audio has boot strapped a very successful company in the same state with currently 29 products and have evolved/discontinued another dozen products in the same time we have waited for larry to finish one.   And Schiit didn't have the "benefit" of pre selling 10 products to get the cycle started.

 

Indiegogo should share some blame in keeping their 10% with no follow up.

 

WRT the 'make it better' spiral.   I am stuck in that mode right now...  However, I haven't taken anybody's money while witholding the product.   I sure hope that grown-up developers realize that the only time that the developer can allow themselves to get caught in that spiral for an extended time is when they are working as a  hobbiest and not a professional.  Sometimes, I have been funded to do 'research' -- but most of the time, there is a focus towards a product.

By the time that a developer accepts someone elses money, they had BETTER have control over the development.

 

Kind of embarassing for that 'team' who took the money -- none of this is 'rocket science'.    If there is a risk of losing a critical developer (there almost always is), some kind of preparation for plan B is a good idea.   Also, key-man insurance and other kinds of back-ups are a good thing to consider.   When in that kind of situation where I am a key-person, just as a matter of respect, I have tried to help plan for back up.  One time, things did crash on me (health), and I feel intensly sad about the situation.   Being prepared is so important when money is involved.

 

From what I can gather, enough money was probably accepted to actually produce SOMETHING.   Obviously, something really badly went wrong (obviously -- long discussion in this forum), and an investigation (legal) would be apprporiate.   Simply trying to find the problem and make an example of the guilty parties might be good, or maybe just better understanding the problems would make the 'investors' feel more comfortable.   (My dad got taken in by something similar/with a different structure, and mistakenly didn't get equity for his investment...  Still not 100% sure if they were actually crooks.)

 

John

 

[Mike Rubin]

12 minutes ago, Jud said:

From Chris's link. Sounds familiar:

 

"In September 2016, the Oregon Justice Department confirmed that it was investigating the Coolest Cooler, according to The Oregonian newspaper. Although some backers had never received their perks, the product was being sold on Amazon, it reported. In 2017, the company settled with the Oregon Department of Justice, where they were required to deliver to over 800 people who still hadn’t gotten coolers, The Oregonian reported."

 

* * *

 

"[O]n August 29, 2018, The Verge reported the FTC is back investigating crowdfunding. After campaigns on both Indiegogo (2015) and Kickstarter (2016), the iBackPack netted over $700,000, it reported. But the backpacks haven’t shipped yet, The Verge reported, and iBackPack's website no longer works. The campaign runner last updated in 2017, according to the product's Kickstarter campaign page."

 

In terms of money collected and numbers of products not delivered, the LHL projects are bigger than both the situations described above.

 

If Larry Ho is reading this: Perhaps this would be a good time to think about the swift delivery of refunds.

 

 

Thanks, Chris and Jud. Terrific snd timely information.

 

In my cover letter to the California AG, I will make a point, especially, of calling attention to the Oregon AG action. I am certain that California' consumer protection attorneys already are aware of it, but I will point out that the LH case is a substantially larger dollar take that affected many more people.  

 

It's hard to get the FTC's attention these days, given our current Administration's admiration of rather than disdain for a well-crafted grift, but that might be Plan B because of the geographic scope of the LH victim population.

[Jud]

3 minutes ago, John Dyson said:

From what I can gather, enough money was probably accepted to actually produce SOMETHING

At least a couple of projects were fully funded within a few weeks (if that long), and quickly collected large multiples of their stated goals, meaning at an early date they had use of more money than they said they needed. And in some cases, the products were produced - not for backers, but sold commercially. LHL claims at one and the same time that funding for the commercially sold products was independent, and that production of the backers’ products that have already been paid for depends on sales of the commercial products.

[labjr]

1 hour ago, jsiegel said:

It is amazing how many products were unfinished. 

If they had been finished he could have teamed up with a chinese manufacturer or Drop (MassDrop) to execute production.  Instead we have a few sample products in the wild that are reported to have sort of worked at one time. 

 It would be nice to know how the "money" was spent. 

Did he get caught in the "we can make it still better" spiral?

Did he lose interest in each project before the troubling "production" details were finished?

Did the prototypes prove unproducible or way over production "budget"?

 

It seems that one project could have been finished with the 3-5 million and it would have funded the company thru each product in turn.  

 

Schiit Audio has boot strapped a very successful company in the same state with currently 29 products and have evolved/discontinued another dozen products in the same time we have waited for larry to finish one.   And Schiit didn't have the "benefit" of pre selling 10 products to get the cycle started.

 

Indiegogo should share some blame in keeping their 10% with no follow up.

Interesting article. I called and emailed Indiegogo while the LH campaign was going on, to inform them that this seemed like fraud. I even trolled the Indiegogo CEO on Twitter. They did absolutely nothing. They do not care. I was so outspoken about it everywhere, that my money(thousands) was refunded. I was lucky. I will never participate on anything on Indiegogo again. Hopefully new laws will prevent this from happening.

[tmtomh]

On 12/22/2019 at 5:01 PM, LHCommSquad said:

 

That information you are repeating is false. LH's Chinese office is aware of that post/page from 6 months ago, and it was already addressed in the Chinese market. The information came from a bad actor in Shanghai. The fail rate in the world market is is actually extremely low and we've sold 10 in China this year alone. We only have one in the office right now, swapping from a 120v to a 240v and that customer is actually thinking about upgrading to a Mk II version. Thanks.

 

So what is the failure rate?

[John Dyson]

1 minute ago, Jud said:

At least a couple of projects were fully funded within a few weeks (if that long), and quickly collected large multiples of their stated goals, meaning at an early date they had use of more money than they said they needed. And in some cases, the products were produced - not for backers, but sold commercially. LHL claims at one and the same time that funding for the commercially sold products was independent, and that production of the backers’ products that have already been paid for depends on sales of the commercial products.

What you described that they did -- almost definitely someone did something really wrong (like theft.)   If I had skin in the game, would be incredibly angry along with being incredulous -- wondering what-the-hell?   I know ZERO about the legal system.  I realize that there is probably no-way to 'punish', and probably no-way for the 'customers' to be at least somewhat compensated or at least meaningful apology, but it smells SOOOOO bad.  'My bad' is not good enough...  It is a regrettable/frustrating situation for sure.

 

John

[Jud]

18 minutes ago, John Dyson said:

If I had skin in the game, would be incredibly angry

 

Oddly, I'm not. I am not an angry or (despite being a lawyer) litigious person by nature. In fact after 40 years as an attorney, this is the very first time I will be taking legal action on my own behalf.

 

I simply feel the facts will show what they will show. They won't change if I work myself up into some sort of emotional state, so why waste the energy?