The FBI is investigating a startup founder accused of using VC money to pay for her house and a Caribbean wedding

Shiloh Luckey, the founder and former CEO of ComplYant, a tax-compliance startup based in Los Angeles, is facing a federal investigation for alleged securities and bank fraud, as indicated by recent court documents. The Securities and Exchange Commission (SEC) has filed a civil complaint against her, accusing Luckey of violating securities laws by misappropriating millions in company funds for personal expenses, including her home, Super Bowl tickets, and an extravagant wedding in the Caribbean. The SEC claims that Luckey misrepresented the financial health of ComplYant, suggesting that the company generated impressive revenues, when in reality, it only reported a maximum of $620 in monthly income. When contacted for a comment, Luckey abruptly terminated the call, stating, "I don't have anything to offer you." The landscape for startups typically involves less regulatory oversight compared to publicly traded companies, leading some founders to exaggerate growth narratives as venture capitalists rush to invest. However, following high-profile scandals such as Theranos and FTX, regulators have adopted a stricter stance. SEC regional director Monique Winkler emphasized that misleading investors about revenue metrics is unacceptable, stating, "Startup founders cannot fake it until they make it by falsifying revenue metrics." Luckey, who previously went by Shiloh Johnson, established ComplYant in 2019 to assist small businesses in navigating complex tax regulations across states. The startup secured a significant $5.5 million seed funding round in 2022, led by Craft Ventures, a firm co-founded by investor David Sacks. Despite multiple attempts, Craft Ventures did not respond to inquiries for comment. After abruptly shutting down ComplYant last year, Luckey cut ties with over 50 employees, leading to delays in their final paychecks and reports of missing 401(k) contributions. In April of this year, she was informed by the FBI and the U.S. Attorney's Office about the criminal investigation into her activities, which prompted her to seek a pause in the ongoing civil case against her. The SEC alleges that Luckey routinely misled investors about the company’s performance, claiming monthly revenues surged from $2,500 in November 2020 to over $250,000 by September 2022, while actual revenues were closer to $250 a month. Additionally, Luckey falsely portrayed herself as a certified public accountant, despite lacking the necessary credentials. According to the SEC's complaint, she allegedly diverted $2.2 million for personal luxuries, including vacations to locations like Aspen and Miami Beach, as well as expenses for her wedding and living arrangements. Representing herself in court, Luckey has yet to respond formally to the SEC's charges. Despite the troubles surrounding her previous venture, Luckey continues to share tax and accounting tips on her TikTok channel, which has amassed nearly 24,000 followers. Recently, she launched a new startup named HabitLoop, aimed at helping individuals manage their finances, drawing from her own experiences with financial mismanagement. "I grew up with very poor financial habits," she admitted in a video introducing her new company. "This is something I built on hard lessons," she reflected.