6D彩票网开户Lots of people want a word with Doug Monahan — government lawyers, crowdfunding backers, people from his past, and me.
6D彩票网开户I’d been trying to find him for over a year. As a reporter interested in crowdfunding disasters, I thought Monahan’s failed iBackpack project was one of the ultimate gadget pipe dreams gone bad. The beats were familiar: an idea that raised more than half a million dollars, only to never ship and leave behind thousands of angry backers. The difference in this story, however, is that for only the second time, the Federal Trade Commission is coming for the creator.
The agency claims Monahan took his backpack funds and spent them on “personal expenses,” including bitcoin purchases, ATM withdrawals, and credit card debt. The agency says he threatened backers who pursued him for their bags. The state of Texas is suing him, too. A lot of people want a piece of Monahan, but he’s not going down without a fight. He’s serving as his own lawyer to dispute the claims in court, and he invited me down to Texas to clear his name and reputation.
We meet at a Tex-Mex restaurant chain called Pappasito’s in Houston. It opened at 11AM, when we planned to meet, and by the time Monahan hobbles in a half-hour late, the restaurant is already closing because of tropical storm Imelda’s rain and flooding. The staff lets us stay. Monahan calls the place, which has a similar vibe to Chevys or Chili’s, the “best Tex-Mex restaurant in the world,” even though there are 16 locations in the Houston area alone.
Monahan is frailer and older than I imagined. In the few online photos I’d ever seen, he looks young with brown, spunky hair and wears a sweater layered over a collared shirt with a tie. Professional, a bit conservative. When Monahan shows up to our Tex-Mex meeting, he’s in light brown pants with an elastic waistband. His hair is overgrown, graying, and scraggly. To complement the pants, he wears an Andy Warhol-esque shirt with black-and-white flowers. The petals are blurred, as if being viewed through a kaleidoscope. The shirt has a stronger Austin energy than a Houston one, which makes some sense. Monahan spent years in Austin before moving back to Houston to handle this court case and be near his 92-year-old mother.
I ask why he thinks the FTC is going after him. “I am the poster child for fraud and crowdfunding,” he says sarcastically. “You’re looking at the Jesse James, the John Dillinger.”
He sold iBackpack as a high-tech wonder that would “revolutionize” backpacks and improve people’s lives, whether they’re eight or 80. On Indiegogo in 2015 and again in 2016, Monahan advertised the backpack as the bag of people’s dreams: it’d feature more than 50 pockets, include multiple external battery packs, RFID-blocking pouches, a precipitation hood, a USB hub, charging cables, a Bluetooth speaker, and a mobile hotspot for a portable Wi-Fi connection. That’s a lot of stuff in one bag that you could seemingly be talked into believing is useful. Yes, it does rain by me sometimes. Occasionally, I do wish I had a Bluetooth speaker in my bag. What IF I had a constant Wi-Fi connection? But the reality is that most of these things could be bought on their own and crammed into any old backpack. Monahan doesn’t see it that way; the iBackpack needed6D彩票网开户 to exist. “The whole backpack is built for power,” he tells me.
Thousands of people bought into Monahan’s project, netting him nearly $800,000 to bring the bag to life. He shipped a few beta units, but the vast majority of people never received anything. They haven’t seen the backpack in person. They don’t believe it’s real, and they started a 6D彩票网开户 group to organize ways to recoup their money and get the FTC’s attention. As far as they’re concerned, Monahan’s a grifter, and the FTC lawsuit was long-awaited and necessary. They track the case in the group, too. “Clearly Doug is a snake in the grass and hopefully the Federal Trade Commission hammers him,” one member of the group wrote.
6D彩票网开户Meanwhile, Monahan says they just don’t understand him or crowdfunding, in general. He’s not a bad guy, he says. It’s just that businesses fail sometimes, which is what he invited me to Texas to prove. Poking at Monahan’s past, however, suggests this isn’t a man with a one-time flub, but rather someone with a trail of failures. Is he a con-artist? An irresponsible businessman? Does the difference even matter?
6D彩票网开户At 63, Doug Monahan walks with a limp, and he’s on the shorter side, about five-foot-eight. He says he lost some height because doctors amputated an inch of his left leg after he broke it falling out of bed, the result of a diagnosis of deep vein thrombosis, or blood clots, and a subsequent hospital stay. He sent me a photo titled “NECROTIC LEG.pdf” that purported to show the wound that caused the amputation, but it’s not clear if it’s really his leg. I can tell he’s been sick, however, which Monahan reminds me of in our meetings. He brings it up in his court case, too. This is why the backpacks never shipped, he says.
The blood clots and hospital stay incapacitated him, as did the fall and amputation, and he couldn’t keep paying people or focusing on manufacturing. He got addicted to pain pills, too. At the same time, the batteries that were supposed to go in the bag represented a liability. The iBackpack drama occurred around the same time that Samsung Galaxy Note 7 batteries started catching fire, and he didn’t feel comfortable shipping lithium-ion batteries. Someone could have died, he says.
“I didn’t count on batteries exploding,” he says. “When [the backers] started saying they were going to shoot through my house, and ‘Fuck you, Doug, you motherfucker,’ and ‘Give us our backpack,’ no, I’m not going to give you the backpack because they might explode.” (Monahan claims a backer threatened him first, which pushed him to threaten in retaliation, which the FTC mentions in its complaint. Monahan has not provided evidence that he was threatened.)
But some backers spent $200 or more on the backpack, and they wanted their product — if it even existed.
After reading the court case and hearing from backers about how this bag isn’t real, I am surprised to see the backpack in front of me at Pappasito’s. How could it be here? Monahan slides the bag out from beneath the table and props it up on his lap. It exists, and it comes with a whole demo, which involves Monahan pulling out lots of external batteries (at least five). He keeps piling them up on the table. It seems an entire accessories line was stuffed into the bag: a flashlight, a car charger, and many external batteries, which he places next to his Texas-sized sangria and bacon-wrapped shrimp.
Everything he takes out looks like an off-the-shelf part that had been branded as an iBackpack product. The bag has some neat features. A rain hood is fun, and you can slip your arm through a slot to hoist the bag up as a shield. Ultimately, though, Monahan shows me a backpack with external batteries tucked into it and loops for a cable to connect them all. It’s less revelatory and more “a lot of things in one place.” He tells me an app was in the works for location tracking, but I never saw it loaded on a device; I only saw mock-ups.
An old friend of Monahan’s, Neil Ochs, tells me that he really did once live a lavish lifestyle, although he mostly spent his money in pursuit of women. When told about the iBackpack story, Ochs says Monahan worked hard to produce the bags. He says it’s “unfortunate” the FTC is suing Monahan.
6D彩票网开户“He bought laser eye surgery for girls,” Ochs says. “He bought boob jobs for girls. He put girls through college.” He says Monahan would charter jets and fly women to New Orleans to take them shopping while he drank wine.
His mansion, Ochs says, featured “hundreds of thousands of dollars” of stereo equipment, a margarita machine, a tanning bed, and Jet Skis. He makes Monahan’s house sound like a Texas version of the Playboy Mansion located right on Lake Austin.
6D彩票网开户Ochs remembers in the early 2000s, when Monahan first learned about Segway tours, Monahan wanted one for a party he was hosting but was told he’d be put on a waiting list. Instead, according to Ochs, he wrote a blank check to get one delivered to his house and paid two or three times what it should have cost. “It was a disgusting display of wealth,” Ochs says.
6D彩票网开户It’s hard to picture that life when I visit Monahan’s home now.
Nothing about his current living situation seems enviable, except for maybe his 2005 red Mercedes 500SL. His one-level Houston house smells like cigarettes. He says he quit opioids, but he clearly has other vices. He keeps margarita mix and wine in bulk. He pours one glass of wine while I’m there but then leaves it somewhere and pours another. I can’t tell if he has a bad memory or just can’t be bothered to fetch his glass. An ashtray sits next to his dozen or so computers, which he owns so he can “communicate with the world.” (Monahan mentions he used the dark web to purchase drugs in the past.)
6D彩票网开户He keeps lots of snacks around, too, like Reese’s, various cookies, trail mix, M&Ms, bagels. He also has bottles of Pepto-Bismol and Pedialyte out in the kitchen, as well as lotion for diabetic skin and tight socks for his blood clots. He can barely walk and needs to sit often. He installed handles on the walls for him to grab for support. He says people come over to take care of him, rub his back, cut his hair, cook, and clean. The windows behind his computer lab are blocked, so no natural light shines in.
6D彩票网开户But then, there again are the reminders of his past. Monahan dedicates a room to awards and press clippings. He shows me his “founding fathers,” or the credit cards he used to start Sunset Direct. He keeps his past business cards out alongside old, framed checks, like one for $6 million made out to Sunset Direct from Compaq, a settlement Monahan says the company paid him after he sued Compaq for allegedly not delivering business on a signed contract and supposedly stealing an idea for a discount program. Monahan wasn’t going to let a dollar go unpaid to him.
“I don’t need to make a shrine to myself in my own house,” he says, despite having built something akin to it.
Once Monahan sold Sunset Direct, he says, he “spent his millions” traveling around the world, on trips to Tokyo, Hawaii, and Europe. “Where didn’t6D彩票网开户 I go?” he asks. He thought the deep vein thrombosis, which runs in his family, would kill him eventually. Around 12 years ago, his doctor apparently told him he had two more years to live, so he burned through his cash, only to discover he had more time left on Earth. He needed a new way to make money. That’s when Monahan’s trail of destruction seemingly begins: first with a mobile app development company then with iBackpack.
He launched an app development company called Mobilezapp in 2010, and a former employee and a client claim it led to people losing hundreds of thousands of dollars. “It was an absolute scam,” the former employee tells me.
6D彩票网开户A former Mobilezapp customer, Doug Youmans, says Monahan stole $30,000 from him, which he paid up front to have a website as well as iOS and Android apps made. He and his business partner say they signed an agreement with Mobilezapp that stated they’d receive the assets within 90 days. They received little more than screenshots for two months and lost critical time to launch. Similar app ideas beat them to market.
“Because of Doug Monahan, I lost everything,” Youmans says. “It wasn’t just 30 grand, I lost everything. The guy ruined me.” (Monahan denies this incident ever happening.)
Monahan eventually moved on from Mobilezapp. By the time he reached this point in his career, he’d already sold his home next to Lake Austin, given up his multiple cars, and was living out of an Austin apartment. Around this time, he also faced several tax liens from the government and lawsuits over outstanding debt, although Monahan denies this. Short on cash and having seemingly made enemies at Mobilezapp, Monahan pivoted to backpacks.
6D彩票网开户How does someone decide backpacks are their calling? Monahan has a couple of explanations.
6D彩票网开户The first is that divine inspiration struck while sleeping over at a girlfriend’s house. When he woke up, his phone was dead. A classic problem. During my visit to his house, I notice he owns an iPhone X, a MacBook Pro, and an iPad. He’s a gadget guy with charging woes. “Rather than bringing over cables and saying, ‘I’m moving in, I’m bringing over all my cables and my toothbrush, and I’m here,’ I just show up with my backpack, and I got all my stuff with me.”
The second explanation for iBackpack’s existence, Monahan says, was realizing that crowdfunding could offer him lots of money to fund an idea. In fact, he took hints from one of Kickstarter’s most notorious feature-stuffed gadgets: a cooler with a Bluetooth speaker, USB chargers, and a built-in blender. It raised over $13 million on Kickstarter.
“I saw the Coolest Cooler, and I’m thinking, ‘Jesus, if people are going to give $14 million to a cooler for crying out loud that they only use every weekend, maybe, then what do they need?’” he asks. “They need a backpack. Everybody uses backpacks … I never in my wildest dreams thought I’d get $800,000 and have the FTC breathing down my neck calling me a lying, cheating, scumbag thief.”
What Monahan perhaps didn’t see coming was that Coolest Cooler wouldn’t ship to all its backers and would officially shut down its operation five years after its Kickstarter campaign went live. Its backers are also angry, as evidenced by comments . They, too, operate a 6D彩票网开户 group, and the Oregon Department of Justice investigated the company.
6D彩票网开户Former associates of Monahan say none of this iBackpack lore is true, however, and iBackpack is actually a stolen idea from a company called which was started in 2013 by a man named Charlie Erlandson whose company’s advertising suggested the team would harness the power of biometrics to build various products, like a pet facial recognition database. Erlandson named Monahan president of the company, and Zack 6D彩票网开户en, who worked as an engineer, says Monahan intrigued Erlandson because he had access to a database that could be used for marketing.
GeoValid planned to create a backpack that parents could use to track their kids. 6D彩票网开户en says Monahan was tasked with designing an app and website that could pair with the backpack. Monahan claimed he had contractors in Malta that could create these designs, 6D彩票网开户en recalls. (Monahan previously in relation to another one of his companies, called Daybreak Data, saying he planned to hire 1,000 people in the country to create the “Microsoft of Malta.” This never happened.) 6D彩票网开户en says the only progress the team witnessed amounted to, essentially, a PowerPoint with app and website designs.
6D彩票网开户During a final phone call with the team before quitting, 6D彩票网开户en says Monahan told them he was working with a separate team to design the backpack, even though GeoValid had hired a design agency in Austin.
6D彩票网开户Critically, the FTC said at the time that it accepted the core idea of crowdfunding and the risks involved, but it wanted to ensure backers’ money actually went toward a product — and that creators didn’t run off with it.
6D彩票网开户In Monahan’s case, the FTC alleges that he misused funds for “various personal expenses.” The agency is seeking relief in the form of refunds for backers and a “permanent injunction” to prevent him from ever using crowdfunding again. The FTC’s complaint states that Indiegogo staff began asking about the status of the backpacks in November 2016, and Monahan said they were in the “full production and shipping phase” and that the company had already shipped the backpack to “hundreds if not thousands” of backers. At the same time, the complaint says Monahan told backers they wouldn’t receive units until December 2016 and then delayed that date to the fall of 2017. No complete units were shipped, the FTC says. Monahan also shut down the iBackpack website, 6D彩票网开户 page, and all corporate email accounts, according to the complaint.
6D彩票网开户Monahan denies all of this.
“I was building a product line with a long-term plan to sell tens of thousands, and these 4,000 people were just funding it in the beginning. That’s it,” he says. “The plan wasn’t to just go, ‘Wham, bam, thank you, ma’am, here’s a bunch of backpacks.’ No, man, I want to sell 40,000 [backpacks] a month, not 4,000 backpacks. That’s not my game at all.”
To that end, backpacks have been successfully funded and shipped through crowdfunding platforms. Peak Design, for example, raised over $16 million on Kickstarter to create various bags, including backpacks. Peter Dering, the founder and CEO, says backpacks can definitely be complicated, but not always. “This is easy stuff,” Dering says when looking at Monahan’s iBackpack mock-ups. “There is nothing to this for a backpack manufacturer.”
He noted certain nonstandard features, like Monahan’s Chinese military Kevlar slot, can require multiple prototypes to get right. “Even though those do seem very trivial, they can be tricky,” he says.
“I think that [Monahan] very quickly could have gotten himself into a position where he can’t, even with the $800,000, fill the orders and make money,” he says. But Dering also notes bag creators only start spending money when they start filling orders. The development costs for backpacks are “not substantial at all.”
“He should have a majority of that money still if he hasn’t made the backpacks,” he says.
6D彩票网开户It’s unclear how Monahan spent the backers’ money, although he did send me a ledger that details his expenses, including his meals, office supply orders, furniture, liquor, bitcoin, and purchases from his own companies, like Mobilezapp. He also lists cash withdrawals and PayPal payments to contractors.
I ask Monahan to explain the bitcoin, which the FTC specifically calls out in its complaint. He says he bought crypto to pay contractors overseas and not for any darker purpose.
He says the FTC already offered to settle with him, and he’s deeply considering it. It took months for him to reach this point. The FTC is also seeking a default judgment against Monahan, saying he can’t actually serve as his own lawyer because he can’t represent iBackpack, a corporate entity. (An FTC spokesperson said the agency couldn’t comment on an ongoing case.) Monahan insists he’ll ship the backpacks, eventually, and that’s what he wants written in a settlement — that he has permission to keep pursuing the bags’ creation.
6D彩票网开户“I am fighting this tooth and nail all the way, for sure, but the backpacks are going out come hell or high water,” he says. “Every single person is going to get their backpack, and it’s going to be a good one. I put my name on the line here; I have — or I did have — a good reputation ... I built a big, successful company, and I had a failure here. No doubt it’s been a failure.”
Monahan’s on his own. Although he believes he’s operated with integrity, his former employees feel differently, and the backers despise him.
6D彩票网开户They contacted the FTC, along with the Better Business Bureau. They dug into his past and dropped everything they found, like the tax liens, his address, and his favorite Austin restaurant, in the 6D彩票网开户 group. They wanted the truth about iBackpack as well as refunds and revenge. The stated mission of the group is to “expose the iBackpack fraud, Expose Doug (or what ever his real name is) and get our hard earned money back from this campaign.”
In the group, old employees talk smack about Monahan, too, and share war stories from their time working with him. They make iBackpack as a company sound nightmarish. Monahan appears to have relied on contract workers’ cheaper labor and employed them to handle customer service, show off the batteries, and input data into spreadsheets.
6D彩票网开户Wally Cruz, a contractor in the Philippines, says four other people in the country worked for iBackpack as well as two other people in India. As part of their job, the team answered questions about the backpack and also handled social media. He says he always got paid but had to “beg” for the checks, and his tenure at the company represents the “darkest time” in his life.
“What I can tell you is he is really racist, misogynist, homophobic, and all that,” he says of Monahan. “He’s the worst person that I’ve ever encountered.”
6D彩票网开户Cruz recounted a time when Monahan told a female employee that he didn’t want anyone on his team that “looks like a pig.” Cruz says Monahan then didn’t pay her. Separately, Cruz recommended that his partner work for iBackpack, too, because the gig paid well. “We pretended to be straight guys,” he says, but Monahan figured out they were dating through Instagram and 6D彩票网开户. Monahan then told them they had to break up, which they pretended to do because the money, $1,000 per month, was too good to pass up.
Monahan says “that’s bullshit” and that he has no idea who Cruz is. “I am not homophobic, there’s no way.”
6D彩票网开户Even more strangely, Cruz says his first manager was fired for recruiting too many LGBTQ workers. After she left, Cruz’s direct manager became a 14-year-old based in Texas. “It’s really insane,” he says. One woman ghosted Monahan after realizing she had a 14-year-old as a boss, Cruz says. (The teen, who is now in college, did not return a request for comment.)
6D彩票网开户Monahan says he found the teen on the “backpack chats” and insinuates that the teen reached out to Monahan himself. He hired the teen to “take photos” and “help.” He says he let people pick whatever job titles they wanted, so according to his LinkedIn page, the teen settled on global director of social media.
6D彩票网开户Another former employee, Chris Justes, says he did data entry for Monahan. He found the job through Kickstarter because he was a backer first. Someone associated with iBackpack emailed people to ask if they wanted to work for Monahan, and Justes was told he could make 50 cents per data entry. He says he entered between 50 and 100 items per day. Still, he only received $50 when he started.
6D彩票网开户“I got paid the first month,” Justes says. “The second month I complained about not getting paid. The third month I didn’t get paid whatsoever, and that’s when they locked me out of the system.”
6D彩票网开户The team relied on video conferencing software GoToMeeting to stay in touch, which both Cruz and Justes mentioned. Justes says Monahan often looked unkempt in the meetings and would wear dirty shirts and boxer shorts in an old apartment during video calls.
“What are you doing, man? We’re supposed to be having a professional conversation about this up-and-coming business, and you’re sitting here in your underwear that’s dirtier than hell with two handguns?” Justes says.
Both Cruz and Justes say they never saw a real working version of iBackpack.
6D彩票网开户“There was only one working prototype, and that’s what Doug had in his hand,” Justes says, although it’s unclear what a working prototype even means in this case. Functional external batteries are easy to get, but location-tracking and an integrated charging system are not. The closest Monahan’s gotten, it seems, is stuffing a bunch of things in any old backpack.
6D彩票网开户Back at his house in Houston, Monahan decides he wants to show me what it’s really like to be on the other end of the government — to be fighting the man. He essentially crank calls the FTC’s lawyers with me in the room.
6D彩票网开户“It’s important that we document this, so you can hear that the FTC does not care if anybody gets a backpack,” he says. “They do not care at all. What they want is an RIP on me.”
He puts the lawyers on speakerphone, while the movie Yesterday blares in the background. I imagine he thinks the FTC lawyers will say something incriminating, that they’ll expose themselves as unfairly targeting him or something. That doesn’t happen. Instead, the lawyers proceed as expected. They ask about documents and for clarification on his address. It’s a boring, routine call. But then, Monahan pivots. He asks about “federal government aid” to help him get the backpacks and other failed crowdfunding projects to ship.
“I see, so you’re asking if we’re aware of a program that could get you money so that you could complete the backpack. Am I understanding that right?” the lawyer asks.
6D彩票网开户“Well not just me, but entrepreneurs,” Monahan replies. The lawyer says, no, he doesn’t know of any, isn’t knowledgeable about the topic, and doesn’t have any useful information to offer.
6D彩票网开户Then Monahan goes in again with the question he thinks will pin the whole story on them.
6D彩票网开户“How come I’m the poster child for bad crowdfunds,” he asks. “What did I do wrong, other than everything?”
6D彩票网开户The lawyers pause. Monahan waits. He’s ready for me to hear the truth.
6D彩票网开户“The basis for our lawsuit is that you took money from 4,000 or so people, about $800,000 worth, and that you made representations to them about what you were going to do with that money, and that those representations were not true,” the lawyer says.
The conversation then returns to procedure. “You’d think that they’d be the ones laughing versus me,” Monahan says to me, putting his phone on mute. “I think the only thing for me to do is6D彩票网开户 laugh. I’m glad I’m not sitting in a cell right now.”
Since September, Monahan and I have talked a bit. Calls can easily last an hour, and mostly involve him catching me up on the case or trying to flatter me. When he gets his “money back,” he wants to take me shopping. He wonders aloud why I haven’t won a Pulitzer.
6D彩票网开户“I really am a nice guy,” Monahan tells me in February.
But he admits he’s a mean boss, going as far as to claim he was once named “Asshole Boss of the Year,” although he couldn’t remember whether it was Businessweek or Techcrunch that bestowed him the title. (I couldn’t find a record of either.) I wonder whether his behavior is worse than the tech execs who berate their employees over Slack, the CEOs who accept billion-dollar payouts after their IPO goes awry, or the horrible cases when higher-ups turn a blind eye to workplace sexual harassment?
What frustrates Monahan is that other businesses fail, and the executives don’t have to respond to the FTC or State of Texas about why they did. He operated in that same realm until recently. He doesn’t fully understand why the FTC and the backers are so angry about iBackpack. He notes that $800,000 isn’t much money — not even enough to warrant a scam. Instead, he sees himself as someone who did what was necessary to make his business run. And because of circumstances outside his control, his business failed, just like any other tech company. For the first time, however, Monahan has to answer to angry customers, government lawyers, and a reporter for why he lost all this cash.
“The thing is, Ashley, I like myself whether anybody else in the world doesn’t,” he says. “I care about what you think of me, and I care about my really close friends, but the rest of the world? They don’t know anything about me, nor do they care.”
6D彩票网开户Monahan believes the entire ordeal is overblown. It’s almost inconceivable that a backpack could be his downfall. He says he did nothing wrong. He was just himself.
“All they want is their paycheck or their bag — it’s a transaction, and it’s not my job to be nice to people, either.”