ComplYant founder Shiloh Luckey was arrested in Florida while trying to board a cruise ship. She was charged with fraud and money laundering. According to investigators, she spent millions of dollars received from venture capitalists on her own needs - buying a house in Los Angeles, a Tesla electric car, a luxurious wedding in the Caribbean and tickets to the Super Bowl.
ComplYant founder Shiloh Luckey was arrested in Florida while trying to board a cruise ship. She was charged with fraud and money laundering. According to investigators, she spent millions of dollars received from venture capitalists on her own needs - buying a house in Los Angeles, a Tesla electric car, a luxurious wedding in the Caribbean and tickets to the Super Bowl.
This is reported by Business Insider, citing the indictment of the US Department of Justice.
Shiloh Lucky founded ComplYant in 2019 as a service to help small businesses with their tax returns. The startup has raised $13.3 million in total, including $5.5 million in 2022 from leading fund Craft Ventures.
As prosecutors and the U.S. Securities and Exchange Commission (SEC) found out, Lucky convinced investors that the business was growing rapidly, although the startup's actual revenue did not exceed $620 per month and there were only four new users per month.
The founder posed as a certified public accountant (CPA) without having the appropriate license.
To buy a $1.5 million house in Los Angeles, Lucky wrote a check from a company account that was empty, transferred the funds to another bank, and closed the deal before the banks discovered the money was missing. She later covered the hole with money from new investments.
In addition, she embezzled funds from her employees' 401(k) retirement savings, and in 2024, the startup suddenly closed, and Lucky stopped communicating with the team.
While ComplYant was collapsing, Lucky was actively blogging on TikTok with nearly 24,000 followers, where she dispensed personal finance advice.
After the collapse of her first business, she even announced a new startup, HabitLoop, a “digital financial assistant,” claiming in a promotional video that she created it “based on her own hard lessons from living a life of hardship.” She didn’t have time to launch the product or raise funds for it.
Law enforcement officers charged Laki with 15 counts, including:
9 episodes of securities fraud;
3 episodes of electronic fraud;
1 episode of bank fraud;
2 episodes of money laundering.
The charges carry a potential sentence of up to a decade in prison. Lucki has been released on bail and is due to appear in federal court in Los Angeles in the coming weeks.
The ComplYant case once again highlighted a key vulnerability of the venture capital market: investors regularly write million-dollar checks to young companies with no financial history, relying only on the trust and words of the founders.
