Failed HUD Helmet Maker Skully Spent Funding On Strippers And Exotic Cars: Lawsuit

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In 2014, San Francisco tech startup Skully raised hype and money to build a Tony Stark-style digitally augmented motorcycle helmet. Almost $2.5 million later, the company’s shutting down. Now a lawsuit from within the company gives us some hints as to why: founders allegedly blew the R&D money on lap dances and fast cars.

Isabelle Faithhauer, a former executive assistant to Skully CEO Marcus Weller and his co-founder/brother Mitch Weller, claims the brothers “used the corporate entities of Skully in such a fraudulent manner as to render the corporate entity a sham.”

(Skully’s PR representatives have not yet responded to requests for comment.)

In the suit, Faithhauer claims the Wellers “routinely demanded [she] engage in fraudulent bookkeeping practices designed to defraud investors in Skully into believing that Skully funds were being used for business purposes, when in fact, the funds were being used to pay the personal expenses of the Wellers.”


Highlights of these alleged “personal expenses” include:

  • The brothers’ personal apartment rent in San Francisco’s Marina district
  • $80,000 in cash paid to an unnamed co-founder, hidden as expenses for a trip to China
  • A weekend Lamborghini rental.
  • A Dodge Viper.
  • A second Dodge Viper, after the first one was in an accident.
  • Four motorcycles
  • $2,000 on limos in Florida
  • $2,000 at a strip club called “De Ja Vu”
  • $2,345 on paintings
  • A first-class last-minute flight to Hawaii
  • And a whole list of other grievances related to the Wellers’ alleged refusal to pay Faithhauer’s overtime.

In hindsight, Skully appeared to be kind of shady for some time. The company continuously pushed back its promised release date while sucking down $2,446,824 from Indie GoGo backers—that’s 979 percent of the $250,000 “goal” they “needed” to get running.


But they sure did look real. People have worn and even reviewed the helmets. There was even a video announcing the commencement of “mass-production.”


The company website still invites you to sign up for updates, promising they are “now shipping.” But the last update to their Indie GoGo page, which happened on Monday, announced “Skully ceases operations.” The official statement in its entirety:

It is with great regret we must announce that SKULLY will formally cease operations, effective immediately. Over the past several weeks our management team has worked feverishly to raise additional capital but unforeseen challenges and circumstances, beyond our control, made this effort impossible. What this means now is that SKULLY will no longer be able to ship AR-1 Units or process refunds directly.

Substantially all of the assets of SKULLY are now subject to liens held by a secured creditor. The management team does not know if there will be any value above the amount of the secured debt. In addition, at this time, we are not aware whether there will be any distribution amounts available to unsecured creditors. SKULLY now plans to file a Chapter 7 Bankruptcy case within the next several weeks. You will receive notice from the Bankruptcy Court and instructions on how to file a claim.

Our team is devastated and deeply saddened that our valued partners, vendors, employees and customers have been negatively affected by what has transpired. We realize there are many unanswered questions and that this is a very upsetting situation. We are truly sorry.


Translation: “We’re gone and so is your money.”

As to the “unforeseen challenges and circumstances” that caused Skully’s piggybank to go depleted, scroll back up and read what the CEO’s assistant is claiming.


Or better yet, read the entire lawsuit as posted by BuzzFeed’s Nitasha Tiku:


The allegations in there are so insane they’d seem out of place in a Silicon Valley episode. And yet, they’re the best explanation of why more than $2 million did not turn into a cool new helmet almost 1,000 people paid to support.

It remains to be seen what kind of restitution backers will get. As it stands, at least two other helmet-tech companies, Fusar and Ruroc, are offering to credit “burned Skully customers” with their own products (while admitting said products are not comparable to what Skully promised.)


We will be following this suit closely and keep you updated as it develops and more of the story comes to light.