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Are there any strict regulations in the U.S. when it comes to raising money through any means, AKA normal solicitation or using a third-party platform like Kickstarter, but using the funds NOT for specified purposes? I mean if there is no way to verify that funds raised were used on what we claimed, it can't be enforced/illegal -- and given the transparency of today's means this is getting easier to pull off.

So is raising funds for non-intended purposes (i.e., claiming to use money to start a business but using it to actually buy one a new car) actually truly illegal, i.e. something actually enforceable easily?

Because with the transparency and middle-man/proxy thanks to the internet, and easy means of getting around guaranteed proof of specified fund usage, it seems this is hardly truly illegal.

I mean, yeah, this can clearly be considered fraud or such, but enforceable-ness seems difficult.

marked as duplicate by BlueDogRanch, Nij, StephanS, ohwilleke, A. K. Apr 23 at 14:37

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  • Sanctioned conduct is illegal regardless of whether enforcement of lawful provisions is practicable at all. – Iñaki Viggers Apr 21 at 22:54
  • A woman and a homeless man are facing up to 20 years in prison for raising funds on GoFundMe by making up a sob-story and then using the funds personally. So yes, I'd say that they are very "enforceable". – Ron Beyer Apr 22 at 1:07
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it is the crime of fraud

For, example s192E of the NSW Crimes Act defines grad as:

(1) A person who, by any deception, dishonestly:

(a) obtains property belonging to another, or

(b) obtains any financial advantage or causes any financial disadvantage,

is guilty of the offence of fraud.

Maximum penalty: Imprisonment for 10 years.

The person(s) defrauded would be entitled to restitution as a civil matter.

  • Wouldn't that only be if the funds were raised with the intention of using them for a a purpose different to that stated? The question covers cases of honestly raising money through kickstarter and then later deciding to use the raised funds for a different purpose. – bdsl Apr 23 at 12:59
  • @bdsl where in the definition does it require intention? ‘Deception’ can be unintentional and that may mitigate the sentence but it satisfies the element. ‘Dishonesty’ can be the same. However, in the situation described, they are both deliberate- the fact that the deception and dishonesty happened after the money was transferred is irrelevant to the crime. – Dale M Apr 25 at 0:02

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